The NAR Code of Ethics and Standards of Practice are guiding principles for professionals in the real estate industry to ensure the protection of homebuyers and sellers and define appropriate conduct. Agents seeking the Realtor designation are required to complete training on the Code of Ethics every two years.
According to NAR, the code was adopted in 1913, and it was the reason for the association’s founding. Up to that point, no standards existed for real estate and few existed for any industry.
The code was modeled on ethical codes for medicine, engineering and law, and it sets out the Golden Rule: that a Realtor should do unto others as he would have them do unto him. The overarching motivation of the code is to ensure that consumers are served by requiring Realtors to cooperate with one another in a way that furthers consumer interests.
The Code of Ethics includes 4 major sections: the Preamble, Duties to Clients and Customers, Duties to the Public, and Duties to Realtors.
The preamble establishes ideals for the industry. It includes the morals all Realtors should seek to uphold. Its lofty, subjective language means it cannot be used in disciplinary action against a Realtor. The remaining sections, however, detail specific expectations for those with the Realtor designation.
Duties to Clients and Customers requires Realtors to represent properties appropriately, disclose personal interest, and protect the best interest of the client.
Duties to the Public prohibits discrimination, false advertising, and unlawfulness.
Duties to Realtors sets out that Realtors should not make misleading statements about other Realtors, that they should not solicit clients already under contract with another Realtor, and that disputes shall be settled in arbitration before the Realtor Board.
For specific language, please consult the full code here.
In 2014, NAR changed its ethics training requirement from once every four years to once every two years. The requirement states that Realtors must complete 2.5 hours of ethics education within the two-year cycle. The training may be completed online or through a local Realtor association.
Now you know what the NAR Code of Ethics is. Questions or feedback? Leave them in the comments. Or for more on the industry, see How the Real Estate Industry Works.