People have been talking more about acceptable business conduct the past few years. But just because corporate scandals at companies like Enron and WorldCom have increased the public discussion on ethics, that doesn’t mean the subject wasn’t important in the past.
Realtors, you’ll be glad to know, have made adherence to the highest ethical standards a priority since 1913. That’s when the Realtor Code of Ethics was first adopted. In fact, the Code of Ethics is the cornerstone of what distinguishes a Realtor from an ordinary real estate agent.
You can rely on standards and accountability
When someone in a profession pledges to abide by a code of conduct, you gain a measure of confidence that you will be treated well. But only if that code has meaningful standards and accountability. So what does the Code of Ethics mean for you when you hire a Realtor to help you buy or sell a home?
All real estate agents and brokers in Texas must abide by state laws. Only Realtors also pledge to abide by the Realtor Code of Ethics. This document spells out in detail what duties Realtors owe their clients and customers, the public, and each other. We’re not talking about a paragraph of general, lofty ideals. The Code of Ethics consists of more than 6,000 words that explain what you can expect from your Realtor. (For perspective, this column is about one-tenth that long.) The code breaks out expectations in 17 distinct areas.
A few examples of the ethical standards
You might want to read through the Code of Ethics before you hire a Realtor, just so you’ll know what to expect. But here are summaries of just a few of the standards of practice:
Treating all parties fairly – Realtors pledge to put the interests of our clients first. While that means that we have a primary responsibility to our clients, it does not give us free rein to act unethically with others. Realtors are required by our Code of Ethics to treat all parties honestly.
Submitting all offers – Realtors must submit all offers and counteroffers to a client until the transaction closes, unless the seller waives this obligation in writing.
Disclosure of ownership interest – Realtors may not present offers from themselves or their families or firms without disclosing in writing their true position. We also may not sell property we own without disclosing our ownership interest.
Truth in advertising – Realtors must always present a true picture in advertising. That applies whether an ad be for property or a Realtor’s services, and it applies to print ads, the Internet, for sale signs—anything that can be classified as a representation to the public.
These duties only brush the surface of what ethical standards you can expect from your Realtor. And the Realtor Code of Ethics is not a static document with outdated responsibilities. The code has been updated many times to address current business practices and new concerns. In fact, the National Association of Realtors has amended it 29 times since adoption, including every year since 1989.
How do I know if there’s teeth in this code?
Any real estate agent who wants to become a Realtor must pass a course on the Code of Ethics. Current Realtors also must periodically take a course that helps them keep in mind their responsibilities and goes over any recent changes to the code.
What happens when you feel that a Realtor has breeched the conduct laid out in the Code of Ethics? The first thing I would recommend is to talk with that agent or the agent’s sponsoring broker. Sometimes, opening up the lines of communications helps you solve the problem. If you can’t resolve the situation that way or with the help of a Realtor ombudsman, you can file an ethics complaint against a Realtor, based on a specific article from the Code of Ethics. Chances are you never will have to do so. But it’s good to know that standards are in place for your benefit.
You can find the full text of the Realtor Code of Ethics on www.TexasRealEstate.com.