National Association of Realtors Code of Ethics Overview

By: Jerry

For most people, "Realtor^®" is a term that's synonymous with "real estate agent".  This, however, is a common misconception.  Realtor^® is actually a trademarked term that only applies to members of the National Association of Realtors^® (NAR). 

Members are held to the highest professional and ethical standards, and are expected to adhere to the National Association of Realtors^® Code of Ethics. This gives buyers and sellers reassurance that the real estate professional they are working with is looking out for their best interest. Non-members aren't held to these higher standards, though each state does have guidelines for regulating real estate agents and their activities.

Quick Guide to the NAR Code of Ethics

The Code of Ethics addresses a Realtor's^® duties and obligations to clients and customers, the public and other Realtors^®. The code consists of 17-points that outline the following expectations:

1. A Realtor's^® first duty is to protect the interests of their client, and to treat all parties honestly.
2. Realtors^® shall avoid concealment or misrepresentation pertinent information in relation to the property or the transaction. Realtors^® also may not disclose confidential information.
3. Realtors^® shall cooperate with other brokers, except when the cooperation is not in the best interest of their client. Cooperation doesn't include compensation.
4. Realtors^® must disclose any personal share or interest in a property involved in a transaction.  In other words, when interested in buying or selling a property they must make it clear that they are representing themselves not a client.
5. Realtors^® shall avoid conflicts of interest, and must make their interest known to all parties if they do provide services for a transaction in which they have a personal interest.
6. Realtors^® shall not accept a commission, rebate, a fee, or other financial benefit without disclosing it to the client.
7. Realtors^® cannot be compensated by more than one party in a transaction without making it clear to all parties.
8. Realtors^® must maintain a special account (separate from their own personal account) for escrows, client's monies, trust funds and the like.
9. Realtors^® must assure that contracts, leases, agreements, etc. are in clear and understandable language in writing, and must be explained at the time of signing or initialing.
10. Realtors^® cannot deny professional services on the basis of race, religion, sex, family status, handicap or national origin.
11. Realtors^® cannot provide services outside of their field of competence (such as a residential realtor working in commercial real estate) without disclosing it to the client.
12. Realtors^® must adhere to truth in advertising and marketing, and must disclose their professional status in advertising.
13. Realtors^® shall not give legal advice, and shall advise clients to seek legal counsel when applicable.
14. Realtors^® shall make full disclosure of all pertinent facts if charged with unethical practice.
15. Realtors^® shall not make false or misleading statements about their competitors or their own businesses.
16. Realtors^® shall not work outside of the exclusive agreements with their clients.
17. Realtors^® agree to arbitration in the case of a violation.

The terms of the National Association of Realtors^® Code of Ethics are taken very seriously by the organization.  NAR exercises their oversight powers, and Realtors^® who violate the NAR Code of Ethics will face consequences that include. 

NAR has too much riding on their reputation for ethical standards to allow lapses.  The National Association of Realtors^® Code of Ethics assures that you, as a client, can expect only the best and most ethical treatment.