CoE of the NATIONAL ASSOCIATION OF REALTORS ®, part II

January 11th, 2009

This is part II in a series of posts discussing the Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS ®

Part I can be found here.

The Code of Ethics is about ethics and integrity, but the sad fact is that if you don’t have either, then the CoE isn’t going to give them to you. On the other hand, the CoE can be a good way for the public to understand how real estate should be conducted and what minimum standards they must expect from a real estate transaction. The problem is that most people don’t know that the CoE exists. Maybe I can do a little to change that.

Article 1, details the definitions of clients, customers, and the public, and our duties to each. We are bound to treat everyone fairly and honestly. Which should be a no-brainer, right?

Duties to Clients and Customers

Article 1
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly. (Amended 1/01)

  • Standard of Practice 1-1
    • REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics. (Amended 1/93)
  • Standard of Practice 1-2
  • The duties imposed by the Code of Ethics encompass all real estate-related activities and transactions whether conducted in person, electronically, or through any other means.

    The duties the Code of Ethics imposes are applicable whether REALTORS® are acting as agents or in legally recognized non-agency capacities except that any duty imposed exclusively on agents by law or regulation shall not be imposed by this Code of Ethics on REALTORS® acting in non-agency capacities.

    As used in this Code of Ethics, “client” means the person(s) or entity(ies) with whom a REALTOR® or a REALTOR®’s firm has an agency or legally recognized non-agency relationship; “customer” means a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the REALTOR® or the REALTOR®’s firm; “prospect” means a purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the REALTOR® or REALTOR®’s firm; “agent” means a real estate licensee (including brokers and sales associates) acting in an agency relationship as defined by state law or regulation; and “broker” means a real estate licensee (including brokers and sales associates) acting as an agent or in a legally recognized non-agency capacity. (Adopted 1/95, Amended 1/07)

    Clients: We have entered into an agreement of some sort. Typically, either the Buyer Broker Agreement, or the Exclusive Right to Sell.

    Customers: Typically, the other party in a real estate transaction. If my client is a seller, then the buyer is a customer. They receive information, services, and benefits from me as part of the transaction, and I must treat them with honesty.

    Let’s just cut to the chase: I owe everyone who might benefit from my service, honesty. Well, let’s think about that for the briefest of moments- that means everyone, doesn’t it? If you are reading this from Timbuktu, and we will never have a business or personal contact, you are still reading this to learn, so yeah, you are benefiting from my service, so yeah, I’m being honest.

    In the next post in this series, we will continue with Article 1 and delve into the nitty gritty of representation, and presenting offers.

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