Questions and Answers
What year was the National Association of Realtors (NAR) formed?
What was the first year the Code of Ethics was established?
What do the articles of the Code of Ethics outline?
Duties to clients and customers.
What is the primary focus of Article 1?
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What does Article 2 require realtors to avoid?
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What must realtors disclose according to Article 4?
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What does Article 9 require regarding agreements?
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What is prohibited by Article 10?
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What type of statements does Article 15 prohibit?
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Who is referred to as a complainant?
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What is the role of the grievance committee?
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What does arbitration refer to in the NAR context?
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What is meant by procuring cause?
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Who can use the REALTOR registered trademark?
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Study Notes
National Association of Realtors (NAR)
- Formed in 1908, NAR created the Code of Ethics in 1913 as a standard of practice in real estate.
Code of Ethics
- Introduced in 1913, it encompasses a preamble, articles, standards of practice, and case interpretations.
Articles Overview
- Articles outline the duties of realtors towards clients and customers, ensuring ethical behavior and professionalism.
Article 1
- Realtors must promote and protect their clients' interests and maintain confidentiality.
Article 2
- Obligation to avoid exaggeration, misrepresentation, or concealment of essential facts in real estate transactions.
Article 3
- Emphasizes cooperation between realtors and mandates disclosure of all offers to relevant parties.
Article 4
- Requires disclosure of any personal interest in a transaction by the real estate agent.
Article 5
- Realtors must disclose any interests in related professional services or parties involved in a transaction.
Article 6
- Prohibits accepting commissions or profits from expenditures without the client's consent and knowledge.
Article 7
- Must disclose compensation received from multiple parties, ensuring informed consent from clients.
Article 8
- Mandates the maintenance of clients' funds in a separate account to prevent commingling.
Article 9
- Ensures that agreements are clear and understandable, with copies provided to all parties involved.
Article 10
- Prohibits blockbusting and panic selling practices, protecting clients from unethical sales tactics.
Article 11
- Requires competency in providing opinions of value and adhering strictly to relevant laws; suggests using expert assistance when necessary.
Article 12
- Mandates truthful advertising, ensuring that realtors present accurate information.
Article 13
- Prohibits unauthorized practice of law in real estate transactions by realtors.
Article 14
- Stipulates due process for enforcement of the Code of Ethics, ensuring fair handling of complaints.
Article 15
- Prohibits false or misleading statements in all forms of communication and marketing.
Article 16
- Forbids interference in exclusive brokerage relationships between realtors.
Article 17
- Provides guidelines for dispute resolution, favoring arbitration over litigation for resolving issues.
Complaint Process
- A complainant is someone who files an ethics complaint, while the respondent is the individual the complaint is against.
Local Association
- Local boards of realtors enforce the Code of Ethics within the region.
Grievance Committee
- This committee decides on the validity of a filed complaint.
Professional Standards Committee
- Holds hearings and assesses complaints to determine appropriate action or penalties.
Board of Directors
- Reviews and ratifies the decisions of the Professional Standards Committee and imposes penalties where necessary.
Mediation
- A process where both parties collaborate to reach a mutually agreeable solution before escalating to arbitration.
Arbitration
- If mediation fails, disputes are resolved through an arbitration hearing, where decisions are binding.
Arbitration Worksheet
- A tool that guides parties through critical questions to achieve a fair resolution in compensation disputes.
Procuring Cause
- Describes an uninterrupted series of events that lead to the sale of a property, essential for establishing commission rights.
Realtor Definition
- A realtor is any licensed real estate professional who is a member of NAR and affiliated state or local boards, using the registered trademark "Realtor."
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Description
Test your knowledge of the National Association of Realtors' Code of Ethics with this set of flashcards. Each card highlights key terms and definitions, helping you understand the foundation and principles established since 1908. Perfect for real estate professionals looking to reinforce their ethics knowledge.
