This is second in a series of posts describing what the Code of Ethics are and what they mean to you – the buyer or seller. Please check out Let’s All Understand the Realtor® Code of Ethics … Article 1 for some general information regarding the difference between a real estate agent and a Realtor®.
A Realtor® is a member of the National Association of Realtors® (NAR) – the world’s largest professional association, and who is bound by a strict Code of Ethics.
“REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.”
-This basically means that Realtors® are only obligated to “discover” adverse facts about a property that is in their “scope” of expertise. They are not required to discover, nor are they permitted to discover, defects that are outside their area of expertise. Meaning, it is not a Realtor’s® job to inspect anything (like a furnace, roof, plumbing, etc.) but should recommend an inspection be done by a licensed/ certified professional, should there be a question regarding the integrity or defect in a property. Honestly, a Realtor’s® profession is based on contract law, negotiations, market knowledge, etc., right? Let a professional plumber deal with plumbing, the certified electrician deal with the electrical issues, the HVAC specialist determine the workability of the furnace … Basically- a Realtor® should stick to what they are good at, and leave all the other stuff to other profesionals.
– On the other hand, if a defect on a property IS known by a Realtor®, they are bound, through the code of ethics to disclose these known defects. For example, if a seller tells their Realtor® that there has been recent problems with the basement flooding, the Realtor® must disclose this to anyone interested in purchasing the property. It is the whole Golen Rule philosophy – Do unto others as you would have others do unto you.