The Code of Ethics - Bite your tongue!

The Code Of Ethics and Standards Of Practice.

A recent conversation between myself and Randy Hooker brought up some interesting thoughts on the National Association of Realtor®'s Code Of Ethics.  For those of you unfamiliar with the Code (as we call it, also referred to as the COE), it is basically a set of guidelines to help determine our duties to clients and customers, the public, and other Realtors®.  Within the code, we are taught to apply these ethics to our daily practice of real estate and it also sets forth a system to deal with those that break the Code.

I love the fact that the National Association of Realtors® has put forth this set of 17 Articles in order to help define our business and I take the idea of ethics quite seriously as in this business, as with many others, there is always a potential for unethical actions that could bring harm to the consumer as well as our industry as a whole.

The responsibility of a Realtor®.

Randy and I were talking about the responsibilities of being an agent and best serving our clients.  We were discussing Trulia Voices and bank foreclosures.  Trulia Voices is a great idea, if you've not used it before its pretty simple - people post questions and people answer them.  Typically its consumers asking questions and agents responding, but sometimes it works the other way around.  There has been a lot of debate over the value of Trulia Voices and the potential problems it brings.  As for bank foreclosures, we both agreed that the current state of them in the MLS is unacceptable and its a shame the banks don't care much or know about it.  These foreclosed properties are lucky to get one photo and a line description.  Without showcasing the property, the bank is losing out on potential buyers (in our opinion).  We both wished there were good solutions to the problems.

Of course, the simplest solution would be for Randy and I to rule the world and list all these properties and answer all the questions on Trulia Voices (no offense to all you other great agents out there, but it was Randy and I talking, so we took it upon ourselves to rule the world).  Of course, that's not going to happen and in reality, there are plenty of excellent agents out there who could join our team.  But there are plenty that couldn't join.  They're just no good.  Yep, I said it - there are Realtors® out there that are no good.  They're bad at their jobs, they do a disservice to their clients, they flirt with legal disaster, and they give the rest of us a bad name.  I'm not talking about the ones who slip up here or there - people make mistakes.  The ones who do it consistently time and time again - those were the targets of our ire.

I wish I could paint a rosy picture for you and tell you all Realtors® are perfect and do everything in their client's best interest, but that would make me a liar.  Because of my own ethical code, I wouldn't want to do that.  So, yes, there are bad Realtors® out there.  I don't have some magic list, but in some ways, I wish I did.  The problem with our own Code Of Ethics is that it protects us against each other.  Ever wonder why Realtors® always ask, "Are you working with a Realtor®?"  Its because we're afraid you might have a contractual agency-relationship with another agent and we could get in big trouble for getting in the way of that relationship. 

So how does the Code Of Ethics create a problem?

Article 15 of the Code Of Ethics deals with how we relate to other Realtors®.  Its basic tenet is that we shouldn't "trash talk" other agents (I'm putting it simply there).  In making this Article, my guess is that the National Association Of Realtors was attempting to stop agents from saying things about other agents in order to gain business (ie, "Oh him?  He smokes crack," "You're working with who?  They ripped off their last client," or "That agent?  I heard he eats babies and runs a small-time meth lab out of his office.")  Obviously, this type of business practice is idiotic and not-so-ethical, but things like these happen everyday in all types of businesses.  Competitors trying to run the other into the ground through rumor, false statement, and misleading comments.  Its not the way I would choose to run my business, but there are those that would (ie, politicians).

The problem arises when you want to "call someone out" for what they're doing that isn't in the best interest of the client or the public.  I know a lot of people keep the "if you don't have something nice to say, don't say it at all" idealism going in real estate, but the fact is - if someone's giving a client sub-par service than that consumer deserves to know.  Of course, this brings up a conundrum - whose idea of "best interest" is right.  Because of this little snag, its next to impossible to get around the Code and "call someone out" for their actions (or more typically, their lack of them).  So at the end of the day, those of us who want the world to get the best from real estate and improve the client's experience (and perception of the industry) just have to lead by example and do our best as trying to correct the situation (via open discussion with the client about their agent) really isn't within our reach.

I love real estate, but (and I've stated this before) we sometimes get a bit touchy about the subject of ethics and what to do about the agent who's giving us all a bad name.  I've seen many posts here on ActiveRain revolving around "taking the high road" or "best not to air our (Realtors®) dirty laundry in public" and I have to politely disagree.  If this industry is to move forward and adapt to work with a changing society, then we need to discuss things openly and honestly - with the public involved.  Locking out the public, just creates a secret society that will fuel the images of corruption and greed within the consumer's mind.  It does us no good to not involve the public in our growth as they are the people we serve (I sound like I should be running for City Council) and without them, we're a huge number of our of jobless people with useless licenses.

photo courtesy of ^Berd

Article 15
REALTORS^® shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices. (Amended 1/92)

Standard of Practice 15-1

REALTORS^® shall not knowingly or recklessly file false or unfounded ethics complaints. (Adopted 1/00)

Standard of Practice 15-2

The obligation to refrain from making false or misleading statements about competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means. (Adopted 1/07)