Ethics and Determining Market Value

A friend of mine considering selling his home in New York, recently pulled me aside from a social gathering, leaned in and asked, “Tom, you can be honest. Do Realtors sometimes suggest a lower list price than they should in order to help them sell a property faster? This is just between you and me,” he added with a wink.   

This got me thinking.  He is certainly not the only one preoccupied with this nagging suspicion about Realtors and their motives. It is natural to wonder, despite the rhetoric, “Do Realtors put their own best interests over their clients?”  And if so, how do I find one I can trust?  Fortunately, a little knowledge goes a long way in helping to assuage these concerns. 

Most real estate agents are members of the National Association of Realtors (NAR), and therefore members of a local board of Realtors.  The nice thing about these organizations are the systems support and training provided.  But what sets a Realtor® apart from a real estate license holder is his or her affiliation with the NAR and the NAR Code of Ethics by which they abide.  I give the NAR high marks for its commitment to ethics and its transference of high ideals to its members. 

The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.
(Excerpt, Preamble of the Code of Ethics and Standards of Practice of the National Association of Realtors 2016)

The NAR, founded in 1908, adopted the Code of Ethics in 1913 as its foundation, with the Golden Rule as its theme.  The Code of Ethics and Standards of Practice of the National Association establishes objective, enforceable ethical standards governing the professional conduct of REALTORS®. The very first Article of Duties to Clients and Customers states:

When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.

And in Standards of Practice, section 1-3:

Realtors®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

Of course, any group of professionals will operate at varying levels of integrity, but Realtors® have a prescribed number of continuing education hours that are mandatory, and at the core of this curriculum is the hefty Code of Ethics course, which must be reviewed every four years. Admittedly this does not guarantee every Realtor is always acting in their client’s best interest.  But it is my experience that most full-time agents do approach these matters with respect and sobriety.

That being said, if you wish to increase your odds of being well represented, you can narrow the field by considering individuals that have sought advanced education.  Many Realtors® choose to work beyond minimum standards, going on to earn professional industry designations such as the Graduate Realtor Institute (GRI) designation, and/or the Certified Residential Specialist (CRS) designation.  It is safe to say these agents identify strongly with their vocation and work hard to earn the trust of both their colleagues and the clients they represent. Not only does this mean you will be represented by someone that has an increased working knowledge of all aspects of selling real estate, it is also an indicator of a commitment to upholding the highest tenants of the profession.

Tom Ward
Associate Broker, CRS, GRI, e-Pro
Tom@PCNeighborhoods.com

Graduate REALTOR® Institute (GRI) & Certified Residential Specialist (CRS) are two frequently cited advanced education designations that REALTORS® strive to attain after obtaining their license with Division of Real Estate.

The GRI designation requires six specialized classes of real estate transactions, totaling 89 hours that is controlled by the UTAH ASSOCIATION OF REALTORS®.

The Certified Residential Specialist (CRS) requires obtaining the GRI designation, three specialized classes, 75 transactions within the last five years and additional elective credits. An annual membership fee is required for use of the CRS designation.

 DESIGNATION INFO FROM PARK CITY BOARD OF REALTORS