How much do you really know about the real estate Code of Ethics? No matter where you are in your real estate journey, the code of ethics can help you mediate disputes — or avoid disputes altogether. Here are the basic concepts you need to know about ethics in real estate.
Rooted in History
The first Code of Ethics for real estate was written in 1913 and was adopted by real estate agents in an effort to legitimize the profession. Because clients trust real estate agents with the largest financial decisions of their lives, agents at that time — and even today — wanted a way to signal their professionalism. They wanted to say, “We can be trusted.”
Today, the National Association of REALTORS® adheres by a modernized version of the code which you can view in its entirety online at their website.
Do you know what to do when ethical complaints arise? Learn more about ethics in our sister site’s course Drama and the Code of Ethics.
Is every real estate agent bound by the code?
While the code is helpful for all real estate agents, the specific NAR code is something that licensed REALTORS® subscribe to. However, even if you’re not a licensed REALTOR®, using the code as a guideline for how you conduct business might be a helpful practice to get into. Especially if you’re working with other professionals who will use the official Code of Ethics to help determine their business practices.
What does the Code of Ethics cover?
The official Code of Ethics details how REALTORS® should act with various parties such as:
- Your duties to clients and customers
- Your duties to the public
- Your duties to other REALTORS®
Within each relationship are several responsibilities the real estate agent must uphold to the other party in order to abide by the code. If you ever have a question about whether taking on a certain client or facilitating a particular transaction would be considered OK by other real estate agents, chances are a guideline for your situation has already been explained in the code. This is why it is important to familiarize yourself with the Code of Ethics before you begin a career in real estate and also throughout your career in case you’ve forgotten some of the important elements.
What are the basic ethical tenets of real estate?
Some of the basic tenets professed in the vision for real estate include the fact that all REALTORS® ought to:
- Have a patriotic duty
- Be diligent in their preparation
- Remain zealous to improve standards
- Demonstrate competency in the industry
- Adhere to qualities of fairness
- Operate with high integrity
- Aspire to lofty ideals
Real estate agents collectively decided to create a vision for real estate that embodies these ethical values because of the need to create public trust in the profession. Violating the code, or not upholding the core tenets, eats away at public trust for real estate agents making your job harder in so many ways. Adhering to the same standards helps present a consistent message to the public about what they can expect when they work with a real estate agent.
What happens if someone violates the real estate Code of Ethics?
A violation of the Code of Ethics can result in several outcomes. Often it’s used as a teachable moment, as many violations occur because the real estate agent has not properly familiarized themselves with the code. Generally, formal proceedings can take the form of an ethical complaint or an arbitration request.
Get to know the Code of Ethics
Learning the ins and outs of the Code of Ethics will help you do business to the highest ethical standard. Familiarize yourself with the details of the Code of Ethics so that you can help continue to legitimize the real estate profession and create more public trust in real estate agents.
Grow your ethical knowledge! Enroll in our sister site’s course, Drama and the Code of Ethics, today.
About the course author: Len Elder, JD, DREI, CDEI, is the author and developer of this course. During his career, Len has accumulated over 30,000 hours of live classroom presentations and teaching. He has excelled to the top of his field and is recognized nationally as an author, speaker, course developer, and a Distinguished Real Estate Instructor (DREI) by the National Real Estate Educators Association.