By Mark Hite, President
Greater Chattanooga Association of REALTORS®
The Preamble to the Code of Ethics and Standards of Practice of the National Association of REALTORS® (NAR) begins:
Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization.
NAR, with 1.2 million members, is comprised of real estate licensees from 54 states and territorial associations. However, all real estate licensees are not necessarily members of NAR and thus subject to the Code of Ethics. This distinction is very important, regardless of the type of transaction you are considering - buying/selling a home, land or commercial transaction.
The Code of Ethics is divided into three distinct sections:
1. Duties to Clients and Customers
2. Duties to the Public
3. Duties to REALTORS®
Let’s examine these sections and their importance.
Duties to Clients and Customers states, “REALTORS® pledge themselves to protect and promote the interests of their client.” REALTORS® further pledge to “avoid misrepresentation or concealment of pertinent facts” and “shall cooperate with other brokers except when cooperation is not in the client’s best interest.” In addition, there is strict guidance related to compensation received during and potentially outside of a real estate transaction. As one can imagine, all these areas have potential for misunderstanding and therefore are addressed in thorough detail.
Duties to the Public begins with a clear admonishment against discrimination: “REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation or gender identity.” This section addresses advertising practices as well, directing REALTORS® to “be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.” The constant evolution of social media has presented many challenges in recent years to this section as new advertising venues are created almost daily.
The final section, Duties to REALTORS®, provides clear direction that “REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” To put it simply, if you don’t have something nice to say, then it’s best to say nothing at all. From this most basic principle, this section continues with detail on how REALTORS® treat fellow REALTORS® and the clients of those REALTORS®.
If you are considering a real estate transaction, you can now see why it’s important to work with a REALTOR® member of NAR verses someone who only holds a real estate license and is not subject this Code of Ethics.