Every year at this time, many people reflect on what they are thankful for. One thing that most REALTORS® won’t have on their list—but maybe should—is the Code of Ethics.
The Code of Ethics was adopted in 1913 and was one of the first codifications of ethical duties adopted by any business group.
So, why should you be thankful for the Code of Ethics?
- It is what sets REALTORS® apart from real estate licensees—it is a promise to be held to a higher standard.
- It ensures clients and customers are served by requiring REALTORS® to cooperate with each other in furthering clients’ best interests.
- It creates standards and requirements to govern how REALTORS® interact with each other, which is above and beyond what the law requires. For example, the Code of Ethics requires REALTOR® listing agents to confirm, in writing, that an offer has been submitted to the seller or that the requirement has been waived by the seller. This means that, unlike when dealing with a real estate licensee listing agent who is not a REALTOR®, you will know whether your client’s offer has been presented.
Like all good standards, the Code of Ethics is a living document that evolves as business practices evolve to ensure that REALTORS® continue to hold themselves to the highest standards. This includes two changes adopted by the NAR Board of Directors that become effective January 1, 2022.
- Standard of Practice 1-8 was updated to require cooperating brokers to confirm, in writing, that any counter-offer has been provided to the buyer or tenant when requested by the listing agent. This duty already exists for listing agents in Standard of Practice 1-7. While we are currently in a seller’s market, this change will become relevant when the market shifts.
- Standard of Practice 12-1 was changed to reflect the changes in MLS policies related to advertising services as “free.” Under the new Standard of Practice, REALTORS® cannot represent that their services are free or at no cost to the client unless the REALTOR® will receive no financial compensation from any source for the services.
If you want to learn more about why you should be thankful for the Code of Ethics, and other aspects of being a REALTOR®, check out NAR’s C2EX program (and as a bonus, getting and maintaining your C2EX endorsement satisfies your REALTOR® Ethics training requirement!).