The NAR Code of Ethics: How They Apply to Everyday Business

The National Association of Realtors® Code of Ethics is a set of ethics guidelines, articles and rules set forth to govern the ethical behavior of all Realtor Members of the Association. Each member takes a pledge to follows these principles as part of their membership to a higher authority known as the National Association of Realtors. With the Code of Ethics, the National Association of Realtors sets rules and stipulations for Realtors in (1) Duties to Clients and Customers; (2) Duties to the Public: and, (3) Duties to other Realtor Members. This article is about what parts of the Code apply to almost daily practice of real estate. I hope you find this useful.

While some of the duties and standards written within the Code do not apply to everyday practices of real estate, many of the ethical guidelines do. With over a decade of licensed real estate experience, I have personally observed many of the sections of the Code being misapplied, possibly forgotten or, worst, totally ignored. The last observation of “totally ignored” is inexcusable and is what gives some Realtors and brokerages a bad name among both other Realtor Members and the public.

Consider this article a refresher course as to the duties and mindset all Realtor Members should have and uphold when both operating in business and dealing with clients, customers and members of the public.

The Difference Between a Realtor and Real Estate Agent

Many members of the public and, sadly, some real estate agents do not understand is the actual difference between a Realtor and a real estate agent. In our state, Texas, the State Commission issues a real estate license. There are two types of real estate license in the state of Texas – (1) Salesperson; and, (2) Broker. Each new license holder must start their career as a salesperson and work directly under a sponsoring broker. Simply getting your real estate license does not make you a member of the National Association of Realtors. A license holder would then have to join a local Realtor board to become a Realtor member. A license holder may practice real estate without being a Realtor.

A Realtor member is a license holder who has chosen to join a professional organization to adhere to an even stricter policy of ethics and rules as a National Association of Realtors member.

Remember this – you must have a real estate license to be amember of the National Association of Realtors. But, you do not have to be a member of the National Association of Realtors to hold a real estate license. In fact, most commercial real estate salespersons are not members of the National Association of Realtors. Why? Because the MLS, which is controlled by the local Realtor associations, is primarily geared toward residential real estate and not commercial. Therefore, most commercial brokers do not consider it greatly beneficial to be a part of the local Realtor Association(s).