Code of Ethics – Agency Law and Ethics

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Ethics

What is ethics?

Ethics are the moral standards, rules, principals or code of conduct that governs how we act.

Ethics are not universal and can be different for various groups and/or locations.

Examples: While it is “ethical” in America to walk down the street with a woman who is not your wife or relative, this is considered “unethical” behavior can be punishable by death in some other countries. This is not a jab on any other country, just an example that in other parts of the world people do not believe or see things the same. Offering someone food with your left hand may be a major cause of disrespect for some because of someone’s customs and traditions.

Morals

What are morals and how do they differ from ethical behavior and thoughts?

Ethics generally deals with social norms of a group or segment of the population while morals are your individual beliefs within those ethical norms.
Morally a defense attorney may not like their client, however ethically they must diligently represent them.

OR

You may morally dislike your client, but you can’t ethically let them be taken advantage of.

Article 1 of the NAR Code of Ethics:

Duties to Clients and Customers:

When representing a buyer, seller, landlord, tenant or other clients, Realtors® pledge themselves to protect and promote the best interests of their clients.

Although this obligation is primary to their client, it does not relieve their obligation to treat all parties HONESTLY.

In the Preamble of the Code, it says that we should treat others as we would like to be treated.

That brings us to Article 10:  Realtors® shall not deny equal professional services to any person for reason of race, color, religion, sex, handicap, familial status or national origin. Realtors shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, religion, sex, handicap, familial status or national origin.

Quick Quiz

Fill in the Blank:
Ethics generally deals with  norms of a group or segment of the population while morals are your individual beliefs within those ethical .

Article 11:

The services which Realtors provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage.

Realtors shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or services or unless the facts are fully disclosed to the client.

If you were to  meet a buyer that is wanting to purchase a church or factory, and you have not idea, training, tools or even what the first step may be to help them with their goal, you should by all means refer this to someone who you know they will be in good hands and have your clients best interests in mind with their knowledge and experience.

Quick Quiz

Fill in the Blank:
The services which Realtors provide to their and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they .

Brokers Right to a Commission.

This information below is here because of ethics and moral decisions. Sometimes sellers or buyers like not to have to pay a commission and may be unethical or commit fraud, or just go with the selling agent and listing agents backs in order to save the cost of commission.  In order for the broker to receive a commission there must be an employment agreement/listing agreement and it must be:

1. In writing in clear and unambiguous language

2. fully set forth all material terms including the terms of broker compensation

3. have a definite duration or expiration date showing dates of inception and expiration

4 and be signed by all parties to the agreement.

COMMISSION AGREEMENTS SHOULD NOT BE ADDRESSED IN THE PURCHASE CONTRACT.

The listing agent is due to a commission if the listing agent procures a ready willing and able buyer who can pay the list price for the property and agrees to the seller’s terms with no other subject to from the buyer, regardless of whether the seller sells or refuses to sell.

If however, the buyer has a subject to in the contract, such as subject to an inspection, then the listing agent’s commission is not earned.

Remember that the listing agreement is not a binding agreement to sell. Read your listing and buyer broker employment agreements carefully.

The Buyer-Broker Employment Agreement is between the buyer and the buyer’s agent.

Of course, if all goes well and the transaction is transferred from the buyer to seller then the buyer’s agent should receive a commission agreed upon between the buyer and the buyer’s agent less any seller credit of commission offered by the listing agent from their commission.

If the transaction is not completed and is prevented by the buyer’s breach or with the consent of the buyer other than as provided in the purchase contract the total compensation is due and payable by the buyer.

Quick Quiz

Fill in the Blank:
The Buyer-Broker Employment Agreement is the buyer and the buyer’s

 

 

 

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