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Welcome to…. RI 410: The Code IS Good Business. Objectives. Discuss the evolution of the NAR Code. Define and apply the terms agent , client, customer, informed consent, procuring cause, mediation, and arbitration. Apply NAR Code to business practices and case studies.
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Welcome to… RI 410: The Code IS Good Business
Objectives Discuss the evolution of the NAR Code. Define and apply the terms agent, client,customer, informed consent, procuring cause, mediation, and arbitration. Apply NAR Code to business practices and case studies. Describe the process, benefits, and limitations of arbitration and mediation.
Characteristics of the Code • Adopted in 1913 • A condition of membership since 1924 • Comprehensive blueprint • Basic tenets of honesty and competence expressed in 17 Articles
History of the Code • A living document • Standards of Practice clarify Articles • Relationship to license law • In conflict, law supersedes the Code
Major Sections of the Code Duties to clients and customers Duties to the public Duties to other Realtors
Client The person or entity with whom a licensee or firm has an agency or legally recognized non-agency relationship.
Customer The party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the Realtors or the Realtor’s firm.
Informed Consent A person’s approval based on a full disclosure of facts needed to make the decision intelligently (i.e., knowledge of liability involved, alternatives).
Agent A real estate licensee acting in an agency relationship as defined by state law or regulation.
The introduction to the NAR COE. Sets the tone for the following Articles. Exhorts members to follow a high standard of conduct. The Preamble
Realtors who cannot meet the challenges of the Preamble are not subject to penalties. The language is aspirational rather than subject to enforcement. The Preamble (cont’d)
Article 1 Promote interest of client. Treat all parties honestly.
Article 2 Avoid exaggeration, misrepresentation, or concealment of pertinent facts.
Article 3 Cooperate with other brokers.
Article 4 Make true position known.
Immediate Family includes but is not limited to: • Realtors • Spouses • Siblings • Parents and grandparents • Children (by birth or adoption) • Grandchildren and other descendants.
Article 5 Do not undertake to provide professional services without disclosure of present and future interests.
Article 6 Do not accept commissions, rebates, or profits on expenditures for clients without permission.
Article 7 Do not accept compensation from more than one party without permission.
Article 8 Keep escrow monies in a special account.
Article 9 Obtain all agreements in writing.
Article 10 Provide fair housing opportunities and equal service.
Article 11 Provide competent service.
Article 12 Present a true picture in advertisements.
Article 13 Do not engage in the unauthorized practice of law.
Article 14 Place all pertinent facts before the proper tribunals.
Article 15 Do not make false statements about competitors.
Article 16 Do not engage in any practice or take any action inconsistent with exclusive representation.
Article 17 Submit disputes to arbitration.
Successful Transaction A sale that closes or a lease that is executed.
Procuring Cause The uninterrupted series of causal events which result in a successful transaction.
When and how was the original introduction of the buyer made? Did the original introduction start an uninterrupted series of events leading to the sale? Did the real estate practitioner who made the original introduction maintain contact with the buyers? Did the real estate practitioner engage in conduct that prompted the buyer to look elsewhere for assistance? Procuring Cause: Who Gets the Commission? (These questions were adapted from www.realtor.org/toolkits/close28.)
5. If more than one cooperating broker was involved, was the second broker aware of the prior introduction of the buyer to the property? 6. Was the introduction of a second broker an intrusion into the transaction or the result of estrangement or abandonment by the original broker? 7. Did the cooperating broker initiate a separate series of events, not dependent on the original broker’s efforts, that led to the successful transaction? Procuring Cause: Who Gets the Commission? These questions were adapted from www.realtor.org/toolkits/close28.)
Mediation • Mediator’s role • Voluntary service • Advantages and disadvantages • Process
Four basic types of contractual relationships • Listing Contract between the seller and the listing broker. • Sales Contract between the buyer and the seller. • Buyer Agency Contract between the buyer and the buyer agent. • MLS Contract between the listing broker and all cooperating brokers.
