If you are thinking of buying a home, it is critically important to choose a Realtor® to help you with your purchase, as opposed to just a licensed real estate agent. Why? Because Realtors® adhere to a strict code of ethics.
In 1908, the National Association of Realtors® (NAR) was formed. In 1913, NAR established and adopted the Realtor Code of Ethics. The intent was to establish a level of professionalism similar to doctors and attorneys of the day.
When a real estate agent first gets a license, it is just the first step to starting a real estate career. While there is no law that requires an agent to become a Realtor, becoming one advances an agent’s career with a higher level of knowledge, expertise, and professionalism. If an agent chooses to become a Realtor, the agent joins the National Association of Realtors (NAR), which has over a million members across the country.
Once the agent becomes a member of that group, that Realtor is required to subscribe to a strict code of ethics. This code of ethics reflects a Realtor’s dedication to integrity, fairness, and responsibility, and pledge to protect the interests of their clients. In addition, as part of the code of ethics, a Realtor makes a commitment to take real estate classes beyond what is required to get a license. This greater education includes a study of the code of ethics and additional education to maintain competency in a chosen field of expertise.
Every three years, a Realtor must take a four-hour ethics course. The foundations upon which the Realtor code of ethics is based does not greatly change over time, but ethical responses to new topics and situations do shift. The course serves as a refresher class because over a three-year time span the code of ethics evolves to adapt to current markets and technology. Realtors need to advance and adjust to new circumstances and innovations.
The code is comprised of 17 articles and those articles are divided up into three different categories. Under those 17 articles, there are a total of 87 standards of practice. These standards of practice serve as an ethical and professional guide for Realtors encountering almost any situation.
The different categories that the articles are divided up into are Duties to Clients and Customers, Duties to the Public and Duties to Other Realtors.
Duties to clients and customers
This is the largest section of the code. There are nine articles in this section along with 36 standards of practice.
This section covers topics including treating clients honestly, disclosing pertinent facts, cooperating with other Realtors, disclosing possible ownership interests, disclosing all compensation relative to the transaction, accounting of funds, and putting all contracts in writing.
Duties to the public
The next section of the code includes five articles and 25 standards of practice. Topics covered are fair housing, competency, truth in advertising, avoiding practice of law, and participating in professional standards.
Duties to other Realtors
The last section contains three articles and 28 standards of practice. It covers comments about other Realtors, the respect of agency, and mediation of incidents between Realtors.
The real estate industry is evolving and the code of ethics changes with it. Prior to 1989, the code was seldom modified. Since that time, and with the advent of the Internet, the code has been revised almost every year.
If you would like to review the entire code and standards of practice, it is available at this link: nar.realtor/about-nar/governing-documents/code-of-ethics/2020-code-of-ethics-standards-of-practice.
By Duane Duggan. Duane has been a Realtor for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. He has been awarded two of the highest honors bestowed by RE/MAX International: The Lifetime Achievement Award and the Circle of Legends Award. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail DuaneDuggan@boulderco.com, call 303.441.5611 or visit BoulderPropertyNetwork.com.