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Welcome to Part 9 in my series where I (attempt to) break down the Realtor® Code of Ethics into digestible, understandable pieces. This post is about Article 11, and covers a Realtors® area(s) of expertise.
According to the National Association of Realtors® Preamble to the Code of Ethics, "The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations." This is an excellent statement that should be burned into the minds of all real estate professionals.
Article 11 The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.
REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.
This Article is very important to me, as I am a BIG proponent of NOT being a Jack of All Trades, and believe that agents who try to do everything are really doing a disservice to their clients. But, what does this mean?
Basically, Realtors® should not do things that are out of their "scope" of expertise. Or, if they do decide to, then it is wise to either: a.) Get help from someone who is an expert, or b.) Go it alone, but fully disclose the fact that they are not an expert, to their client(s).
For example, Derek and I are Residential Brokers, dealing with Monument and Colorado Springs Real Estate. If we were to get a client who was interested in purchasing a home in Pueblo, we would refer them to an agent that we trusted in Pueblo. Yes, we are licensed to practice real estate in the entire state of Colorado, but how fair would it be to our client if we tried to sell them a property in an area that we know nothing about? Not fair at all. We do not know the Pueblo housing market well enough to represent their interests effectively.
This is more than geographic, as it also covers different types of property. We want to be THE expert in residential homes in Colorado Springs and Monument. If we have a client who is looking for a ranch on 100 acres for farming, we will refer them to a trusted ranch specialist. If we have a client who is looking to buy a strip mall, we refer them to a trusted commercial Realtor®. And so on... We are not interested in being a Jack of all trades and a master of none.
Another time where we really see Article 11 come into play is when a Realtor® puts together the famous "CMA" (Current Market Analysis). Realtors® do this all the time, and there is nothing wrong with it, but we all must remember that most Realtors® are not licensed appraisers. So, in order for a CMA to be "acceptable" under the Code of Ethics, it must contain the following:
identification of the subject property
defined value or price
limiting conditions, including statements of purpose(s) and intended user(s)
any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants
basis for the opinion, including applicable market data
if the opinion is not an appraisal, a statement to that effect
Another item that this Article covers is Realtor® consultation. Sometimes a Realtor® may provide "consultive services to clients which involve advice or counsel for a fee (not a commission)" and this is completely acceptable, so long as the information is provided in an objective manner and the fee "shall not be contingent on the substance of the advice or counsel given."
Overall, Realtors® provide the best service to their clients when they stick to what they are good at, where they are good at it. There are plenty of other experts out there to cover everything else.
Colorado Springs Area & Real Estate Information Our original thoughts, ideas, frustrations, compliments and ramblings about the real estate and related industries. Food for thought ... Get you thinking ... Learn something new ... That is our goal. Enjoy!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.