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REALTOR® versus Agent with Just a Real Estate License.

By
Home Builder with Bristol Restoration, Inc 661-294-1812 CSLB 878868

The showdown: REALTOR® versus real estate agent, you know, the guy with just a real estate license who has not joined the ranks of the ethical elite.

Which person is better equipped to represent buyers and sellers in a real estate transaction, the REALTOR® or the person with just a real estate license? 

Consider this, both the REALTOR® and the person with "just a real estate license" have an ethical and legal code of conduct in business according state laws and both still have fiduciary responsibilities to their clients when conducting a real estate transaction. Being a REALTOR® means you have paid a fee to join the National Association of REALTORS®, a national organization that has developed a code of ethics containing 17 Articles of enforceable conduct by the organization. These codes are definitive and give real estate professionals a standard in conducting their own business and gives other agents, sellers, and buyers, an idea on how they can expect to be treated by the REALTOR®. That does not mean that a real estate agent that is not part of the organization does not, should not, and is IS NOT required to adhere to ethical standards, specially since many of of these ethical obligations are also in many state legal guidelines that apply to anyone with a real estate license conducting real estate business.

As a licensed contractor in the real estate industry, we deal with both REALTORS® and non-REALTORS®. We have seen incredibly dishonest and downright unethical acts by BOTH. We also have quite a few Dr. Phil moments listening to REALTORS® complain about other REALTORS®. I am not convinced that if every real estate agent joined the National Association of REALTORS® the problems would go away or diminish in any measurable way.  As one REALTOR® told me, "The gloves have come off, and this market is revealing the worst in people."

This market has the opportunity to reveal the best in all agents and real estate professionals (agents, contractors, title, escrow, lenders, etc) . This can be an incredible time for our industry to show we have ethical standards that we actually believe and practice!  

Whatever the issue between REALTORS® is, it nearly always falls under the category of ethics; with some of the greatest areas being exagerrating, misrepresenting, and concealing material facts, truth in adverstising, cooperating with the agents, and bad mouthing other agents. 

Some past blogs on the following subjects involving conversations with REALTORS®:

Not Knowing Fiduciary Duties

Who is Responsible for Disclosures

Not Revealing Material Facts

Committing Moral and Ethical Fraud

With that said, I am a supporter of the National Association of REALTORS®.  There should be a great sense of pride in joining an organization that represents the highest standards of ethics in an industry. BUT, being a REALTOR® does not automatically give an agent ethics or standards in the way they conduct business, and agents that are not REALTORS® does not disqualify them from having high ethical standards. Greed, selfishness, fear, pride, ego, and jealousy can all pollute the heart of REALTORS® and non-REALTORS® alike and influence day to day activities and decisions, including business.  It really is a matter of the heart. A REALTOR® and "that person with just a license" are on a level playing field when this is considered. In fact, as a REALTOR®, if you don't hold true to the values of being a REALTOR®, maybe you are really "just the person with real estate license?"

When you became a REALTOR®, it should not have been about joining an organization out of pressure or because everyone else was doing it, but about joining because of principles, principles that you agree to and would conduct your business by whether you were a REALTOR® or the guy with just a real estate license.

To all REALTORS®, maybe it's time to renew your vows based on the 17 Code of Ethics for REALTORS®  Go ahead, say them aloud, use them in developing your mission statement, your business plan... and keep them in your heart :) 

#1) I shall put the interests of buyers and sellers ahead of my own and to treat all parties honestly.

#2) I shall refrain from exaggerating, misrepresenting or concealing material facts; and is obligated to investigate and disclose when situations reasonably warrant.

#3) I shall cooperate with other brokers / agents when it is in the best interests of the client to do so.

#4) I shall disclose if I represent family members who own or are about to buy real estate, or if I myself am a principal in a real estate transaction, and that I am licensed to sell real estate.

#5) I shall not provide professional services in a transction where I have a present or contemplated interest without disclosing that interest.

#6) I shall not collect any commissions without the seller's knowledge nor accept fees from a third-party without the seller's express consent.

#7) I shall refuse fees from more than one party without all parties' informed consent.

#8) I shall not co-mingle client funds with their own.

#9) I shall attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.

#10) I shall not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, or national origin.

#11) I shall expect to be competent, to conform to standards of practice and refuse to provide services for which I am unqualified.

#12) I shall engage in truth in advertising.

#13) I shall not practice law unless I am a lawyer.

#14) I shall cooperate if charges are brought against me and present all evidence requested.

#15) I shall not bad mouth competition and agree not to file unfounded ethics complaints.

#16) I shall not solicit another REALTOR'S client nor interfere in a contractual relationship.

#17) I shall submit to arbitration to settle matters and not seek legal remedies in the judicial system. 

By the way:  I think any one of these 17 items are great blogging material and ideas for our Active Rain community. Would love to hear stories and real life examples that illustrate the importance of why these are considered ethical standards; the good, bad, and ugly consequences of following and not following them in your real estate business.

Posted by

  661.294.1812

25020 Avenue Stanford #110

Santa Clarita, CA 91355

Comments (35)

Ginger Moore
Wilkinson & Associates Realty - Gastonia, NC

very nice, educational post. nice graphics.  thanks for sharing! Happy New Year:)

Jan 01, 2010 03:24 AM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

I'm a Realtor and have been since I got my RE license. But I've never felt that I'm a member of any elite organization and more importantly I don't think anyone I've ever worked with gave a hoot or knows the dif. If it makes you feel good to belong to a professional organization then by all means join. But your ethics go with you no matter how many organizations you belong to. It's the person not the organization that makes the PROFESSIONAL.

Jan 01, 2010 03:57 AM
Anonymous
Ed Westerman

Jerry,   Excellent follow up to the post from two days ago.  I commented there and will follow up here.  Your writing is so much better than mine I hate to try to express my ideas in public.  BUT, I will.

"In fact, as a REALTOR®, if you don't hold true to the values of being a REALTOR®, maybe you are really "just the person with real estate license?"

This comment, in my opinion is very derogatory to every non NAR member.  You degrade non members to being "just the person with real estate license".  I do not take personal offense, everyone has there right to an opinion.  But other people might.  As I stated in response to your previous post--"Honest and Ethical behavior comes from the heart and integrity of the individual, not from paying dues and signing papers to be a member."  I may take you up on the offer to write personal stories of ethical situations that may be good examples of bad behavior.  An honest person that has had a proper upbringing which includes being taught right from wrong and good from bad should not have to read the Code of Ethics to be able to make the right decision.  If the right decision does not slap you in the face when a situation arises, one should question oneself about their lifes condition and the status of their soul.

Now let me rant about NAR.  They are a political organization using our money to supposidly represent us to the public and to the government.  They do not specifically represent my views.  They have promoted the first time home buyers credit and other ways of spending tax money and driving our country deeper in debt.  These views I definitely oppose.  Based on the remarks on AR I believe that a lot of members do not agree with the direction the NAR has taken in some situations that they have so tauted.  Roger's comment (#10) is so true.  If you want access to the local MLS to be able to properly represent Buyers and Sellers, then you must become an NAR member.  So, being a Realtor does not become a personal choice and it is not to be a member of an organization to BE ABLE to live by the Code of Ethics, but is rather a forced membership that mandates the Code on every member to allow them to be able to work and make a living.  Does this then make each member a better person and more amenible to living by the Code.  I personally doubt it.  Like most sheepal in our society, they sign, they work, they hope they don't make a mistake, and hope they don't get caught if they do.

Jerry,  I very much enjoy your writing.  Hope I did not take away from any of your great post.  HAPPY AND PROSPEROUS NEW YEAR.

 

Ed Westerman

Country Lifestyle Realty, L.L.C.

Jan 01, 2010 04:07 AM
#18
Vanessa Stalets
RE/MAX Elite - Brentwood, TN
REALTOR, Brentwood TN Homes, Real Estate

I agree that "bad apples" can be found on all sides, equal opportunity sliminess if you will. I also think that what comes around goes around I only wish sometimes I could help it along..lol Just kidding...sort of. I too would love to see a blog series on each of the articles in the code of ethics. Hint...Jason, Katarina, Lenn, anyone...

Jan 01, 2010 04:48 AM
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

If NAR enforced their code of conduct and if NAR were more accountable to both its members and the consumer, the term "real estate agent" and "REALTOR®"  would not be used interchangably.  The difference would resonate with the public.   Sadly, NAR has done little to enhance the image of REALTORS - with there "now is a great time to buy/sell real estate" ads only enhancing the cringe factor.

Jan 01, 2010 05:26 AM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Jerry,  Belonging, or not, to various national organizations does not ensure the individual agent adheres to a code of ethgics.   Sadly, we all know of Realtors who should be drummed out of our business.  A very few bad apples help define the public perception we all have to klive with !   Happy 2010 to you !

Jan 01, 2010 05:54 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

You summed it up really well.  I sometimes struggle with the NAR, CAR, and local board in some of the things done or not done; but over all being a member helps us to be better agents.  I would not buy or sell without a Realtor.

Jan 01, 2010 06:12 AM
Dana Gibby
Vanguard Commercial, LLC - Jackson, GA
Asst. Living Facilities

Jerry,

I agreed with you until you made this comment: "In fact, as a REALTOR®, if you don't hold true to the values of being a REALTOR®, maybe you are really "just the person with real estate license?"

I was a member of NAR as well as several local boards. I found them to be of no advantage to my business, the agents/brokers to be clickish and NAR in opposition to my political views. I also have first hand knowledge of agents who violated state laws, were reported and nothing was done. 

You may not have meant that statement as a slight toward non NAR members but it sure comes off like one.

Jan 01, 2010 09:21 AM
Bristol Restoration
Bristol Restoration, Inc 661-294-1812 - Santa Clarita, CA
When you need it done right and done right now!

Denny, yes it goes across the board to all industry professionals.

Roger, good points, thanks for contributing that informaiton.

John, thanks for the re-blog!

Jan 01, 2010 11:18 AM
Bristol Restoration
Bristol Restoration, Inc 661-294-1812 - Santa Clarita, CA
When you need it done right and done right now!

Karen, I agree, most clients don't know the difference and it boils down to trust and the individual, REALTOR® or not.

John and Janis, your ethics will follow you, so true.

Ed, very nice points and well thought out and written comment. 

Jan 01, 2010 11:53 AM
Bristol Restoration
Bristol Restoration, Inc 661-294-1812 - Santa Clarita, CA
When you need it done right and done right now!

Ed and Dana,

To clarify the statement "In fact, as a REALTOR®, if you don't hold true to the values of being a REALTOR®, maybe you are really "just the person with real estate license?"  If you are a NAR member and you are not adhering to the code of ethics of the organization, then what good is it be a part of an organization with such an emphases on ethics, other than being forced to join for MLS and local associations reasons such as Roger (#10) has stated in his comment. If that is the majority of the cases for people joining, then the code of ethics for NAR has become more of NAR's mission statement and perhaps not one all their members fully embrace.

The statement, in context of the blog, is not meant to be a slight on non-NAR agent in any way. If an agent thinks they are getting some type of ethical advantage just by joining NAR, and not abiding by the code of ethics, then they have missed the meaning of NAR, and being a member or not being member really has made no difference in that agent's beliefs and practices in regards to ethical values.

The code of ethics is an essential core to NAR, even going back to when it was founded. NAR has become a major force in every area, i.e. the local MLS's, of the real estate industry at many local levels, to say the least, and will continue to evolve and reposition itself as the market evolves. BUT, the essential core to it's existence is the code of ethics. If you don't believe in and abide by the code of ethics, you have missed the core meaning to be part of the organization and it has become more of a necessity for business rather than a choice based on what NAR stands for.

Jan 01, 2010 12:29 PM
Gary Pike
Better Homes and Gardens Real Estate Metro Brokers - Powder Springs, GA

Wow a lot of good stuff here.  Would I join the NAR if I wasn't forced to by my broker or local MLS?  Probably not since I don't see what it does for me and the issues it wants me to put my name on and address to my Congressman are not the same as mine.  Would I join it to be part of a trade that represents honesty and integrity that's enforced? Yes, but I don't see that happening.  I do my best to adhere to the Code of Ethics but not because I am forced to join the NAR but because it is good business to do so.  I think I will take the advise of blogging what each Article means (to me) for the sole reason that it will make me remember them better which will lead to appling the smaller details of them into my practice.

Jan 01, 2010 11:12 PM
Martin E. Kalisker, Esq.
Natick, MA
Real Estate Law From A Practical Perspective

Just because someone is a "card carrying member" of the NAR, does not necessarily mean that they conduct their business in accordance with the Code of Conduct, but it does mean that our local and state boards of Realtors do have "teeth" to sanction or discipline persons who don't conform to our Code of Conduct.

I'm a licensed CPA (inactive).  When I got licensed there was a category of accountants that were called "general accountants".  In other words, they were grandfathered in to public accountancy when the states implemented the Uniform CPA exam and state licensure laws.  Were these individual "bad" accountants?  I doubt it, but they also did not have the ongoing education, lobbying support or tools that licensed CPA had available to them.  Over the years, there are very few practicing general accountants out there.  I would hope that the public also sees the value of a Realtor® over a non-member. 

One way to do that is to tighten licensure requirements and start treating our business like a career, not a part-time job where we get paid to unlock a door for showing.  More proactive audits of business practices should be expended by the States to enforce federal and State Fair Housing Laws, Realtor Ethics must be part of every re-certification for licensure and elimination of "inactive Realtors" being eligible for referral fees.

Jan 02, 2010 02:01 AM
Kathy Opatka
RE/MAX CROSSROADS - Ocean City, MD
Serving Ocean City, MD, & The Delaware Beaches

Since I follow the CoE..... I'm going to try to be more patient with those who don't!!!!

Jan 02, 2010 04:00 AM
Roger Johnson
Hickory, NC

You can easily see how deep the problem goes now with comment above by Weichert.  They are using the terms "Realtor" and Real Estate Agent" interchangeably.  If people within the business don't know the difference, how can the general public ever attempt to gain any understanding of the difference?  States enforce licensing law upon state licensed real estate agents.  A Realtor is a real estate agent that is a member of NAR.  Big difference.

As to the NAR Code of Ethics, state real estate laws vary, but for NC, this "code" is basically just a re-hash of state law.  So, if given the choice, why would I pay to join something that is promoting what I'm already required, by law, to do anyway?

Jan 02, 2010 04:04 AM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

LOL, I like the recite your vows again moment.  I just can't understand why an agent would not join NAR?  Why not be joined with a group that promotes ethical behavior?  Money?  Well, then I'm saying you don't want to deal with that Realtor.  Not that you can't be broke & have good ethical standards mind you.

Jan 02, 2010 05:04 AM
Margaret Hickman
Keller Williams Realty - Cenla Partners - Pineville, LA
REALTOR®, GRI, ABR®, SRS

Excellent article!  In our market, the main problem I see with non-REALTORS is their properties are not listed in our MLS, so the rest of us don't know they are there.  Do they tell their clients that exposure to agents from other companies is limited because of their non-participation?  I would think probably not, because any serious seller wants his/her property sold as quickly as possible and as close to list price as possible.  How is someone moving into the area supposed to know about it?  Every internet shopper knows where to find listings--realtor.com, franchise web sites, etc.  A non-MLS member generally doesn't get the same web exposure.

As to ethics, you are right.  Simply being a member of NAR does not make a person ethical.  (There are consequences for violations, however, and having served on an ethics panel for our local Board, I can tell you how seriously charges are handled.)  Ethics boils down to honor and morality.  You either have it or you don't. 

Jan 02, 2010 05:36 AM
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

I equate NAR to the "union"  I'm not sure I want to join the union.  Seems like they waste a lot of money.

Jan 03, 2010 12:46 PM
Jennifer Palmer
Integrity Mortgage Group - Escondido, CA

Good article, but I think the question you asked in your article should be reworded:  How do we go about minimizing the offenses.  I used to be a Realtor up until 2005, and since then have just maintained my license without belonging the the Association. I am now a Mortgage Broker who likes to stay current with the real estate side of things.

The answer lies with each individual.  Do you have morals or not?  Do you believe in honesty, fairness, and ethics or not? 

My latest experience was an Agent/Loan Officer that offered to accept my clients offer, if my client would use him.  Talk about a "Code" violation.  So, I called his Broker.  Maybe that's the solution:  call the Broker and if that doesn't work, call the DRE.  Stop letting people get away with it, afterall it's usually that type of un-ethical, un-caring person that gives us all a bad name.

I think I'll write a blog about this.

 

Jan 04, 2010 08:11 AM
Anonymous
Irja Kujala

I agree with a previous comment that NAR is kind of like a union for real estate agents. Some unions are good and do good for their members, some are not. In any event, it makes me wonder about the union if you are forced to join.

Jan 08, 2010 05:11 AM
#35