The Competent Broker:  Chapter Twelve

The REALTOR® Code of Ethics

If the National Association of REALTORS® really wants to demonstrate the high ethical standards that they proclaim, they should ban single-agent dual agency.

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The primary requirement for becoming a REALTOR® is agreeing to abide by the REALTOR® Code of Ethics.  The National Association of REALTORS® describes it as one of the first codifications of ethical duties adopted by any business group.4  It consists of seventeen articles describing REALTOR® duties to clients and customers, to the public, and to other REALTORS®.

But it is worth noting that, whatever NAR’s ethical goals and aspirations for its members, they have not banned single-agent dual agency.  And whatever the merits of the REALTOR® Code of Ethics, it does not ban this primary source of unethical behavior.  Note:  Not one source of unethical behavior; rather, the primary source.  Yes of course, there are others.  And on an individual basis, some much worse than the results of a typical dual agency.  But in terms of widespread practice and acceptance, nothing comes close to dual agency.  It is far and away the most prevalent and insidious ethical dereliction of the profession.

The Code of Ethics does a reasonable, even arguably comprehensive, job of addressing other ethical issues.  In fact, I cannot think of any other problem that it fails to address.  Plus NAR does a great job of updating the Code as new issues emerge.  And they are constantly emerging.

But other than requiring disclosure, the Code is totally silent on dual agency.  And as Bill Gassett pointed out in Chapter Six, disclosure alone is wholly insufficient.  In fact, disclosure gives the illusion of a high ethical standard that does not exist.  I would go so far to say that even with disclosure, single-agent dual agency is incompatible with high ethical standards.  You can have one or the other, but not both.

This is a huge ethical problem for the industry and it is totally ignored by the Code of Ethics.  This is a dichotomy that can only be explained, I think, by understanding the acceptability of this clearly unethical behavior among brokers.

I want to be fair:  Our earlier chapter on Dual Agency came largely from the website of REALTOR® Magazine.  So this issue is alive and brewing in the organization.  But really, it is not a complicated issue.  It’s just not.  As Bill Gassett said:  It is a function of greed.  That’s what it boils down to.  It would simply take a little backbone to do the right thing.  And if some members don’t like it, well I assure you, we’d be better off without them.

Now I am a dues-paying member of the National Association of REALTORS®.  I am also a member of our state and local associations.  I am a member in good standing of all three of these organizations, and after publication of this work, I hope to remain so.  Why?  Well, most brokers, myself included, could not effectively practice real estate and conduct business without being a REALTOR®.

The REALTORS® provide the forms and the Multiple Listing Service (MLS).  And regardless of what you think of this arrangement, the forms and MLS are very valuable indeed.  And no other group is in a position to replicate either of these benefits.  The REALTORS® also provide arbitration for disputes between members.  A valuable service which, thankfully, I have never had to use.

My point is, on the whole, I think these organizations probably get more right, than they get wrong.  Nevertheless, I see the dual agency problem as a huge lapse.  And a lost opportunity to provide a leading ethical example.  I call on NAR to ban single-agent dual agency.


Fellow REALTORS®, please join me.

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4. See the National Association of REALTORS® website: