Code of Ethics: Conclusion

The first realtor code of ethics was written in 1913, 100 years ago. It was presented at the National Association of Realtors (known then as the National Association of Real Estate Exchanges) annual convention in Winnipeg, Canada, in July. So, in recognition of the 100th birthday (July, 2013), I wanted to mention the duties that were important then.

The code was called the “Ethics of the Real Estate Profession—Adopted by National Association of Real Estate Exchanges.” This code was divided into 2 sections. The first was called “Duties to Clients” and the second section was called “Duties to Other Brokers.”

During that time, there were curbside real estate agents, robber barons, & sharks. There was misleading advertising, land fraud, forged deeds and notes, and other unscrupulous acts. In 1908, several real estate groups got together to create a national group. They communicated by letters and met annually. The reputable agents were dismayed that there continued to be illegal acts. The agents agreed that, at the annual meeting of 1913, they would create a code of ethics by which the agents would agree to behave. For more information about the NAR code, you can view this video:  http://www.realtor.org/videos/video-origins-of-the-code-of-ethics

There have been changes during the past 100 years. However, we who are real estate agents belonging to the National Association of Realtors have agreed to abide by the current Code of Ethics and can call ourselves a Realtor. The current Code of Ethics is available here: http://www.realtor.org/governance/governing-documents/the-code-of-ethics

As Realtors in Colorado, we are required to take an ethics class every 4 years. It is important to me to treat the buying public, my clients, and other brokers with respect and protect the trust in me and in the land. Yes, I take it seriously.

Code of Ethics: Duties to Other Brokers

The first realtor code of ethics was written in 1913, 100 years ago. It was divided into 2 sections. The first was called “Duties to Clients” and there were 10 duties. The second section was called “Duties to Other Brokers” and there were 13 of those. I mentioned the duties to clients previously & now here are the duties to other brokers.

Briefly, the duties to clients were

1. Respect the listings of other agents and co-operate with him or her to sell, as long as the other agent has the most suitable property.
2. Advise a seller to renew the selling contract with the other agent, rather than solicit the listing yourself, provided the other agent has made a reasonable attempt to sell the property.
3. Always be fair and honest when co-operating with other brokers and always speak well of the competition, refusing to judge based on rumors.
4. Advertise facts about the property and do not criticize a competitor’s proposition.
5. Give an honest opinion of a competitor’s proposition when asked by a prospective buyer, even if it results in a sale by a competitor.
6. Refuse to put a “For Sale” or “For Rent” sign on a property that already has a competitor’s sign placed on it, provided it is with the owner’s permission.
7. If an agent cannot efficiently handle a proposition, it should be referred to a competitor who can.
8. Seek co-operation with other members in the Association when selling listings, unless there is a particular deal or buyer already expected, and be willing to equally divide the regular commission with any member of the Association who can produce a buyer.
9. When settling differences, agree to friendly arbitration by the Real Estate Association rather than through the courts of law.
10. Do not disregard other agents. Work with the owner’s regular agent when selling the property to a live buyer and don’t insist on handling the entire deal and getting all the commission.
11. As a broker, do not put your name in the newspaper in connection with a deal unless you are a party to that deal and are receiving a part of the commission. Otherwise, the publicity is a sham and the deception hurts everyone.
12. When a sale or exchange is handled by two agents, each agent shall get due credit in the report of the sale or exchange.
13. Do not relay property,--i.e., giving property information to one agent that was obtained from another agent—unless the property is exceptional and the third agent knows that the property information is not coming directly from the first agent. A broker who relays represents neither side and is not entitled to the same consideration as either of the other agents.

Code of Ethics: Introduction

The cover of the original Code of
Ethics, from the archives of
Realtor.org

The first realtor code of ethics was written in 1913, 100 years ago. It was presented at the National Association of Realtors (known then as the National Association of Real Estate Exchanges) annual convention in Winnipeg, Canada, in July. So, in recognition of the 100^th birthday (July, 2013), I wanted to mention the duties that were important then.

The code was called the “Ethics of the Real Estate Profession—Adopted by National Association of Real Estate Exchanges.” This code was divided into 2 sections. The first was called “Duties to Clients” and there were 10 duties. Also at that time, the client was always the seller, not the buyer. The second section was called “Duties to Other Brokers” and there were 13 of those. I will cover those in the next section.

Briefly, the duties to clients were
1. Be a good employee to your client, the employer.
2. Be conservative in giving advice.
3. Inspect the client’s property.
4. Ask that the owner price the property at a reasonable amount so it can be sold.
5. Obtain written sole agency, if the property is worthy of special effort to sell it.
6. Advocate for mentioning real consideration in the deed.
7. Do not give special information to anyone unless they are willing to disclose their names and addresses, letting them know that realtors work in the open.
8. Do not ask for a net price on the property unless the realtor notifies the client that he or she wants to buy it for himself or herself.
9. Request that the client refrain from discussing price with a prospective buyer, but refer the buyer to the broker.
10. Always exact the regular real estate commission of the Association of which he or she is a member and let the client know at the beginning that it is expected.

NAR Code of Ethics at 100

Last week I mentioned that the National Association of Realtors has a Code of Ethics that turns 100 this year. I wanted to talk a little more about the Code's history.

The NAR's Code of Ethics was written at the NAR's annual convention, held in July of 1913, five years after the NAR was founded in 1908. It took five years to write the Code because NAR members spent that time in conversation with each other, deciding what a code of ethics for realtors ought to look like. This was before license laws and most other regulations governing real estate existed, and the Code was seen as a declaration of the real estate industry’s principles and beliefs. The Code of Ethics continues to be a living document that undergoes annual revision.

One change to the Code was the Preamble, added in 1924 and written by A. H. Barnhisel of Tacoma, Washington. The Preamble is a statement of values that 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. REALTORS should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment.

 The language is so important and inspiring that it is displayed in etched glass at the NAR building in Washington, D.C.

Photo by Allan Sledge, retrieved from Realtor Magazine slideshow.

Inside Real Estate: NAR Code of Ethics

The National Associate of Realtors has a code of ethics and a set of standards of practice that guide Realtors, a code that is 100 years old this year.

Here's part of the Preamble:

In recognition and appreciation of their obligations to clients, customers, the public, and each other, REALTORS continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. REALTORS having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm, bring such matters to the attention of the appropriate Board or Association of REALTORS.

You can read the rest online, including translations into Chinese (Simplified and Traditional), Korean, Spanish, Tagalog, and Vietnamese.