NAR Code of Ethics

Definition

The NAR Code of Ethics is a set of guidelines established by the National Association of Realtors to promote professionalism and ethical conduct among real estate agents. This code emphasizes the importance of integrity, honesty, and fairness in all real estate transactions, fostering trust between realtors, clients, and the public. Adhering to these ethical standards helps protect the interests of consumers and enhances the reputation of the real estate industry as a whole.

5 Must Know Facts For Your Next Test

1. The NAR Code of Ethics has been in effect since 1913, making it one of the oldest codes of ethics in any profession.
2. There are 17 articles within the NAR Code of Ethics that address various aspects of real estate practice and outline the responsibilities of realtors toward clients, the public, and other professionals.
3. Realtors are required to complete ethics training every two years to remain compliant with the NAR Code of Ethics and maintain their membership.
4. Violations of the NAR Code of Ethics can result in disciplinary action by local realtor boards, including fines or suspension of membership.
5. The Code promotes transparency and accountability, encouraging realtors to disclose any conflicts of interest and providing clients with clear and accurate information.

Review Questions

• How does the NAR Code of Ethics enhance professionalism in real estate transactions?
  • The NAR Code of Ethics enhances professionalism by providing a framework for ethical behavior that realtors must follow. By establishing clear guidelines on honesty, integrity, and fairness, it ensures that realtors act in their clients' best interests while maintaining transparency in their dealings. This fosters trust not only between realtors and their clients but also within the broader community, contributing to a more reputable industry overall.
• Discuss how the NAR Code of Ethics addresses issues related to fair housing and discrimination in real estate practices.
  • The NAR Code of Ethics includes provisions that align with fair housing principles, emphasizing the obligation of realtors to treat all individuals fairly and without discrimination. Realtors are encouraged to promote equal opportunity in housing and are held accountable for ensuring compliance with laws such as the Fair Housing Act. This connection reinforces the importance of creating an inclusive environment within the real estate market while protecting consumer rights.
• Evaluate the impact of mandatory ethics training on realtors' adherence to the NAR Code of Ethics over time.
  • Mandatory ethics training for realtors plays a crucial role in reinforcing adherence to the NAR Code of Ethics. By requiring continuing education every two years, it ensures that realtors remain updated on ethical standards and best practices. This ongoing training not only helps prevent violations but also cultivates a culture of ethical awareness among professionals. As a result, this commitment to ethics contributes positively to the public perception of the real estate industry and promotes trust among consumers.

Related terms

Realtor: A licensed real estate professional who is a member of the National Association of Realtors and adheres to its Code of Ethics.

Professionalism: The conduct, aims, or qualities that characterize a profession or professional person, including adherence to ethical standards.

Fair Housing Act: A federal law that prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, or disability.