Realtor® Code of Ethics Reloaded
This article signals the adventurous and daunting launch of an in-depth series concerning the Realtor® Code of Ethics. The recently released 2015 NAR Membership Survey revealed that association members place a significant amount of importance and value on the Realtor® Code of Ethics. Unfortunately, while most members willingly agree to abide by the Code of Ethics, very few truly understand their full meaning and the resultant impact they should have on their daily conduct and actions. My goal in writing this series is to dissect and define the major articles of the COE, and to explain their practical application in our everyday business practices.
But before I begin, let me preface this series with the humble confession that I am certainly not without fault or error. I am reminded of the Biblical account in the Gospel of John where a woman was caught in adultery, and Jesus turned to her accusers and said, "Let him who has never sinned cast the first stone!" Even those of us with the best or most innocent of intentions can occasionally find ourselves having a lapse of good judgment, make poor decisions, and potentially violate the code we swore to uphold.
The word ‘ethics’ comes from the Greek word ‘ethikos’ and its root ‘ethos’ which means ‘character.’ The Free Dictionary defines ethics as “the rules or standards governing the conduct of a person or the member of a profession.”
To discover the background of the Realtor® Code of Ethics, rather than expending an inordinate amount of time re-inventing the wheel, I would kindly defer to an excellent video that was prepared and presented at the 2013 NAR Convention by Doreen Roberts, Broker/Owner of MasterKey Real Estate in Fremont CA. The full version runs 26 minutes and is definitely worth your time in better understanding the history of our association, and how our current version of the COE came into existence.
To access the full-length video, go to:
To access a shorter, condensed version, go to:
As the video details, in May of 1908, the National Association of Real Estate Exchanges was formed, later to evolve into our present-day National Association of Realtors®. The Golden Rule was adopted as our guiding principle in 1911, and five years later, at the Winnipeg Convention, the first draft of the Code of Ethics was approved.
As the video further notes, rather ironically, the very first person elected as President of the National Association of Real Estate Exchanges was August H. Frederick. Though a prominent businessman, church leader, and aspiring politician, he was later indicted and convicted of swindling a poor widow.
In 1924, the Preamble, along with the Golden Rule, were added to the Code of Ethics, and remain basically unchanged to this day.
Back in the formative years, the real estate landscape was rife with fraudulent robber barons, curbstoners, and swindlers preying on the innocent, unsuspecting public, by charging exorbitant prices, forging deeds, and selling non-existent properties. The growing real estate industry in that day was desperately in need of a moral compass to guide its practices.
Our current version of the Realtor® Code of Ethics stands as a lasting testament to the founding members of our association who tirelessly strived to create and live-out high ethical standards of practice for our industry.
We find ourselves on somewhat similar ground today. Never before has our industry as a whole suffered such a low public rating and reputation among professions. Many of the causes of our jaded public perceptions can be attributed to ethics being compromised.
If we genuinely desire to collectively elevate the professionalism of our association and effectively ‘raise the bar’ in the real estate industry, then we owe it to ourselves, our fellow REALTORS®, and our clients, to understand more intimately the various Articles of the Realtor® Code of Ethics, and how they apply in practical, everyday experience.
To quote a portion of the preamble:
“Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and patriotic duty to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing themselves. REALTORS®, therefore, are zealous to maintain and improve the standards of their calling and share with the fellow REALTORS® a common responsibility for its integrity and honor.”
To this end, it is my sincere hope that this series of articles will indeed aid in better preparing us all in becoming zealous towards maintaining and improving the standards of our calling!
Look for my next article in the Code of Ethics Reloaded Series: “The Preamble & Golden Rule”