File this post under the heading of caveat emptor

When I practiced real estate in Washington, D.C., I had to be a member of the National Association of Realtors (NAR).  Although joining was relatively costly, I came to understand that the NAR’s Code of Ethics made my professional life infinitely better than it otherwise would have been.

The way things work in New York City has made the contrast between brokers in D.C. and those without NAR membership blindingly bright (like the rooms in those new condos with floor-to-ceiling windows).

Rare is the broker who is a member of the NAR here, so I dropped my affiliation after I moved my business to Manhattan and the Upper West Side.  At the same time, I have long regretted that NAR membership wasn’t a requirement for everybody who works in real estate in the Big Apple.

What brings this situation to mind is the 22.5 hours I spent last week on the continuing education required of brokers every two years for renewal of their license.  One of the modules that I elected, a three-hour course on ethics, quoted the preamble of the NAR’s Code of Ethics.  Although you might think the information below could be boring, I think you’ll find that it can save buyers, sellers and brokers alike from unpleasant, unethical and even illegal situations.  Most important, it could prevent a transaction from derailing.  The preamble:

“REALTORS®, when acting as agents, have a fiduciary duty to their clients (the party that engages the services of the licensee and for whom the licensee works) that comes with a whole set of duties and ethical expectations. These duties include loyalty, confidentiality, honesty, obedience, disclosure, the duty to account for clients’ funds, and the duty to use skill, care and diligence in all dealings.

“Ethical standards also apply to relationships between REALTORS® and their customers (the party with whom the licensee works, but with whom the licensee has no fiduciary obligation).REALTORS®, when acting as agents, have a fiduciary duty to their clients (the party that engages the services of the licensee and for whom the licensee works) that comes with a whole set of duties and ethical expectations. These duties include loyalty, confidentiality, honesty, obedience, disclosure, the duty to account for clients’ funds, and the duty to use skill, care and diligence in all dealings.

“Ethical standards also apply to relationships between REALTORS® and their customers (the party with whom the licensee works, but with whom the licensee has no fiduciary obligation).”

As you can imagine, the Code of Ethics is long and detailed.  Continue reading

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