Ethics is defined as “a system of moral principles.” It is perhaps one of the most important qualities of any professional to have strong ethics, as one cannot succeed without them. The field of real estate is no exception to this rule; in fact, the real estate practitioner is bound by a code of ethics. But are these ethical codes really enforced?
The real estate ethics dilemma is frustrating. Although every profession has issues with unethical associates, in real estate the problems can be mired in legal consequences due to the protections afforded buyers and sellers of real property. This places a great burden on brokerages and governing boards to make sure members are well trained and cognizant of the rules by which they are bound.
The most important thing to remember when dealing with ethics in any field is that adherence to a set of rules is only going to be as important to those following the rules as training and support will allow. Training has to be constant as well, as laws, rules and market trends are continuously fluctuating.
In order to prevent ethical violations it may be necessary to evaluate Realtor training.
After obtaining a license the new agent must find a brokerage; most require new agents to complete training courses before being able to go out and work with clients. In California, for example, these training courses are not mandated by any state governing board so it is up to the individual brokerages to train their agents, and the level of training will vary depending on the brokerage standards.
Many brokerages provide minimal training and feel the agent will gain the most experience from working through real transactions. Normally this is good advice, but in a field where one mistake can create serious legal consequences (for the agent, brokerage and most importantly, the clients), I believe higher levels of training are necessary in addition to hands-on experience.
Throughout my career as a Realtor I have seen many ethical violations. Some of these have been unintended and blatantly misrepresent client interests. Others were the product of bad judgment or even intentional acts to manipulate transactions. I have seen top producers violate the ethics code multiple times. This is unacceptable.
It should be simple to obtain better adherence to uniformity and enforcement of rules amongst Realtors without creating a socialist real estate model. Each state may be different, but the National Association of Realtors (NAR) can step in and enforce national standards which states use and apply in creating avenues for adherence. NAR has a vested interest in protecting the reputation of its members. The rest is up to the state and local governing associations.
What can these associations do to prevent ethical violations?
First, initial training needs to be mandated, and every agent should be privy to the same type of training. It should include thorough review of all legal documents involved in transactions, negotiating skills, role playing and ethics. Such training should not be left to individual brokerages, but should be required for all agents and overseen by governing boards, or at least by a partnership between the association and state agencies (which some states may already follow).
Second, training should be ongoing. Presently the Department of Real Estate in California requires Realtors to participate in 35 hours of continuing education in order to renew their license every four years. These classes should be continually evaluated and revised if necessary, especially classes dealing with ethical issues and legal ramifications. Other states may have different practices and rules, but the idea to keep things updated is important across the board.
Finally, brokerages need to stay on top of their agents. Many brokerages do this already but many do not. The more the company is involved the higher the chance of resolving any legal issues that may arise later.
For lack of a better word, “policing” agents is tough. But the better the training and the continuity of it, hopefully the more respect agents and the public will have for the profession, leading to better ethics practices