The National Association of Realtors (NAR) Code of Ethics is a set of rules and guidelines which act as a pathway to integrity and professionalism for any real estate agent who has joined the trade association known as the National Association of Realtors. This strict code of ethics is beneficial to both the realtor and the client as it ensures that the realtor always maintains a high degree of professionalism throughout the real estate process.
Every member of the National Association of Realtors must take hours of instruction about this code of ethics in order to become a member of this association. The code of ethics aims to make sure that all realtors treat everyone ethnically and fairly and it exists to keep realtors accountable to their clients and to foster a more professional environment. We take pride in upholding the NAR code of ethics in every real estate transaction we participate in.
What is the National Association of Realtors (NAR)?
The National Association of Realtors is the single largest trade association in America, as it consists of more than 1.3 million members and extends to both residential and commercial real estate. The NAR is primarily meant to provide current and prospective real estate professionals with the means and resources to foster a successful career in the real estate market. Due to the strict code of ethics and hours of instruction that each member must receive in order to remain a member, it also provides you as a prospective home buyer or seller with the means of identifying which real estate professionals you can trust. This licensing is similar to the numerous licenses that contractors, physicians, and other professionals are required to receive in order to continue to practice in their respective industries.
The National Association of Realtors was originally founded in 1908 and has maintained a code of ethics since 1913. Although it changed names several times in the years since its founding, its core vision has always remained the same. While the basic purpose of this association is to help members become more successful and foster a diverse network of professionals, the association as a whole aims to shape the real estate industry and be the primary advocate in the support of the rights of people to use, own, and transfer property. This association also strives to develop high standards when it comes to real estate business practices in order for buyers and sellers to find a real estate professional that will provide for their every need in the selling and buying process. Members of the NAR are also provided with the opportunity to trade certain real estate information and do research with the many resources available through the organization.
If you are considering the sale or purchase of a home, you can be confident that you’re being provided with quality service when requesting the aid of a trained and professional realtor belonging to the National Association of Realtors.
The National Association of Realtors Code of Ethics
The code of ethics is a vastly important aspect of the National Association of Realtors and has existed since the beginning of the association itself. This code of ethics is designed to ensure that the realtors who are members of the NAR treat everyone ethnically and fairly during their real estate endeavors. This code of ethics extends to the clients and customers, the public, and other realtors who are also members of the NAR. An extensive set of guidelines is included for each of these three groups and involves similar instructions, all of which is meant to help the realtor grow professionally and represent the association in a favorable light.
The primary reason that this code of ethics is as effective as it is among the realtors within the NAR is due to the fact that it’s stricly enforced, which is evident by the fact that whenever a dispute may occur, complaints can be filed through the NAR about a specific realtor and that a wide range of sanctions and disciplinary action can be taken if the complaint is justified and a realtor has been found to have violated the code of ethics.
Every real estate professional who wishes to become a part of the NAR must go through a substantial amount of education and instruction about the code before they are admitted into the association, which means that as a client — you have peace of mind that you are making the right decision when selecting a realtor. Once a prospective realtor has completed a lengthy course that takes several hours to finish, they are submitted to become members of the association and will earn their NAR license, which designates them as a realtor.
However, the code of ethics is altered from time to time and the necessity to stay mindful of its instruction is ever important, which is why the NAR requires members to take continuing education every two years about the code of ethics, which will ensure that the realtor keeps their license and always accounts for what this code of ethics stands for.
Code of Ethics: Duties to Clients & Customers
The first portion of the code of ethics focuses on the responsibilities and duties that the realtor has to the clients and customers that they represent in a real estate transaction of any kind. Articles 1-9 of the code of ethics center around the many duties that a realtor has to their clients and customers. These articles are comprehensive, as they have been altered every year and are designed to be as structured as possible. Each article within this portion of the code of ethics pertains to situations when the realtor is representing any seller, buyer, tenant, landlord, or other client.
Article 1 of the clients and customers portion of the code of ethics asks the realtor to pledge themselves to always work to achieve what is in the interests of the client, although the realtor must behave honestly in regards to all parties, not just the one they’re representing. Article 2 focuses on making sure that the realtor doesn’t misrepresent or exaggerate certain facts that relate to the property within the transaction, while Article 3 states that the realtor must cooperate with the broker in the sharing of information and fees with them unless it’s not in the best interests of the client. Articles 4-8 primarily focus on how the realtor should deal with finances in regards to the services they provide, which is seen in Article 7 where realtors are unable to accept compensation from additional parties involved in the transaction without disclosing this information to all parties involved and receiving permission from their client. As for Article 9, it makes sure that all agreements pertaining to the transaction of property should be written clearly in a manner that everyone can understand and without omitting or obfuscating specific details of the transaction.
While some of these articles may seem very similar to one another, each of these rules are essential towards ensuring that the realtor conducts themselves professionally during every aspect of the transaction and any dealings that they have with their client. By following these guidelines, both the realtor and their clients benefit from the honesty and transparency that the code of ethics calls for. When you are attempting to purchase or sell a home, you can be certain that the realtor has no hidden agenda and is working for your interests alone, which can be a comforting thought when you’re dealing with the extensive process that occurs when buying or selling a property.
Code of Ethics: Duties to the Public
The second portion of the code of ethics aims to details how a realtor must conduct themselves to any member of the public before they have become a client, which is primarily designed to ensure that the realtor does not discriminate when deciding whether or not to assist someone when their services are requested. Articles 10-14 are essential towards making sure that all members of the public are dealt with fairly, which is displayed in Article 10 wherein realtors must not deny their services to anyone with the reasoning of this denial being due to their sex, color, race, religion, sexual orientation, gender identity, national origin, or familial status. The guidelines in Article 10 also apply to realtors who are hiring employees to work within their real estate agency or firm.
As for Article 11, it notes that all services that are provided by the realtors to their customers and clients must conform to the usual practice standard within the real estate industry, especially in regards to the real estate disciplines that each specific realtor specializes in, such as real estate appraisal or land brokerage. This is designed to ensure that the realtor does not attempt to provide their client with a service that is outside their area of expertise without the assistance of another real estate professional who is competent in this area. Article 12 is aimed at making sure that all advertisements and marketing by the realtor are honest and truthful, while Article 13 centers around the fact that realtors must not venture into the practice of law but should instead recommend legal counsel when their client requires it. Article 14 highlights how the realtor must not attempt to interfere in any way when they are being charged with breaking the code of ethics and must cooperate completely with the NAR.
Code of Ethics: Duties to Realtors
The third portion of the NAR Code of Ethics is designed to ensure that every member of the National Association of Realtors treats their peers with respect, courtesy, and trust while also outlining numerous instructions on how to interact with other realtors. Articles 15-17 highlight how a realtor must act with other realtors who are also members of the NAR.
When taking a look at Article 15, it tells other realtors that they must not recklessly or knowingly make statements that are false or misleading about other realtors or professionals outside of the NAR. This article also extends to making such statements about their business practices or their real estate business as a whole. Article 16 is mainly designed to ensure that realtors don’t take any actions that would interfere with the brokerage relationships that other realtors have with their clients, while Article 17 aims to detail how a realtor must act when a dispute occurs with another realtor, whether this dispute happens during a real estate transaction or in some other situation.
Are you looking for a Realtor®?
As not only certified members of the National Association of Realtors but residents of this wonderful community, Nicki & Karen of Sotheby’s International Realty have years of experience buying and selling luxury homes and estates in the Conejo Valley.
With years of local Southern California Luxury Real Estate experience, resources, and professional networks at our disposal, you can be sure that we have what it takes to get you the best price for the home of your dreams! Contact us today or start your search with our free to use MLS search feature!