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Ethics is Our Business – Syllabus

Text of the 2015 Code of Ethics

Ethics

This course is designed to meet the requirements of Professional Standards Policy #47 (New Member Orientation Program) and Professional Standards Policy #48 (Quadrennial REALTOR® Ethics Training) as found in the National Association of REALTORS® Code of Ethics and Arbitration Manual. NAR case studies are included.

Benefits to Consumer

The benefit to the consumer when a licensee has successfully completed this course is that the agent will have a systematic guide to understanding ethical dilemmas related to everyday real estate practice with appropriate actions and expected decision making processes.

Upon completion of this course the student will be able to:

Introduction to and History of the Code of Ethics Share knowledge of the beginning and process of the Code
Business Ethics Describe the concept of general business ethics
Structure of the Code Identify at least two of the aspirational concepts in the Preamble to the Code of Ethics
Duties to clients and customers Identify the three major sections to the Code of Ethics
Articles 3 through 9 Discuss key concepts associated with the Articles
Duties to the Public Discuss the difference between the Articles of the Code of Ethics and the Standards of Practice
Duties to REALTORS® Demonstrate knowledge of responsibilities to fellow REALTORS®®
Mediation and Arbitration Identify key terms associated with ethics complaints and arbitration claims
Enforcement of the Code of Ethics Describe at least three factors upon which a procuring cause arbitration claim is  decided
The Complaint Process Explain the complaint process
Disclosure Express knowledge of the relationships between various Articles of the Code regarding disclosure requirement
Accounting, Reasonable Care and Diligence Describe the fiduciary duties of accounting, reasonable care and diligence owed to clients and customers as required in the Articles and Standards.
Honesty and Confidentiality Identify Articles and Standards related to the fiduciary duties of honesty  owned to clients and customers
Obedience, Loyalty & Confidentiality Outline and implement the fiduciary duties of obedience, loyalty  and confidentiality

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Sample of course content.

Case Study

REALTOR® Augusta, a cooperating broker, had shown four houses to Buyer Bailey, and Mrs. Bailey had asked to see one of them a second time. There was a third inspection, and a fourth. They seemed at the point of decision, but said they would like to “sleep on it.”

When there was no word the next day, REALTOR® Augusta called.

Buyer Bailey said:

  • he was a bit hesitant on the price
  • that some transfers of executives in his company had been rumored
  • that this could affect him within the year
  • he hesitated to buy at a price that might mean taking a loss if he should be transferred within a year

REALTOR® Augusta tried to reassure the prospect by telephone. Then REALTOR® Augusta dictated a letter stating that the house was an exceptional bargain at the asking price and “our office guarantees to get your money out of it for you any time in the next year if you should need to sell.”

Buyer Bailey came in and signed the contract. Six months later, Buyer Bailey came to REALTOR® Augusta as a seller. He was being transferred. He would need to get his equity out of the house to be able to afford a purchase in the new community.

REALTOR® Augusta listed the house at the price Buyer Bailey had paid for it.

After a month there had been no offers. Buyer Bailey reminded REALTOR® Augusta of his written assurance that his office had guaranteed he would get his money out of the house within the year. REALTOR® Augusta explained that the market had become much less active and that Buyer Bailey might have to reduce his price by $15,000 to $20,000 to attract a buyer.

Whereupon, Buyer Bailey filed a complaint with the Board of REALTORS® charging REALTOR® Augusta with misrepresentation, exaggeration, and failure to make good a commitment.

After examination of the complaint, the Grievance Committee referred it to the Professional Standards Committee for a hearing. In response to questioning by the Hearing Panel, REALTOR® Augusta admitted that he had written the letter to Buyer Bailey in good faith and, at the time the letter was written, he had been certain that his office could obtain a price for the property that would ensure Buyer Bailey was “getting his money out of the house.”

However, REALTOR® Augusta explained that although he had held such an opinion in good faith, the market had softened and now the circumstances were different.

The Hearing Panel reminded REALTOR® Augusta that the pertinent fact being considered was not his opinion at the time of the previous sale as compared to his opinion now, but rather his written “guarantee” to Buyer Bailey and his current failure to make good his written commitment.

It was the conclusion of the Hearing Panel that REALTOR® Augusta was in violation of Article 2 for having engaged in misrepresentation.