This is the fourth in a series of posts explaining what the Code of Ethics are and what they mean to you – the buyer or seller. This post will go into Articles 4 and 5 of the National Association of Realtors® Code of Ethics.
These 2 Articles define the 3-D’s of a Realtors® duties when they are looking to buy or sell a property that they have or will have ownership in. The 3-D’s are:
Remember … Not every real estate agent s 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 not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative.
REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.
Disclosure #1: (Article #4)
If a Realtor® is looking to purchase a property they must disclose, in writing, that they are a Realtor® before making an offer on the property. Further, if a Realtor® will have any ownership interest in a property, this must also be disclosed.
Example: Realtor® Rachael and her cousin, Jay, find a great 4-plex for sale. Realtor® Rachael must disclose, in writing, that she is a Realtor® to the owner, or the owners’ agent.
Disclosure #2: (Article #4)
If a Realtor® is selling his or her own property (or any property that he or she has ownership interest in) they must disclose, in writing, that they are a Realtor®. Most MLS systems have a specific location where this fact can be disclosed.
Disclosure #3: (Article #5)
If a Realtor® is acting as the listing agent (or providing any professional services for the listing) on a property that they own, or have any ownership interest in, this must be disclosed in writing, to all people interested in the property. Furthermore, if a Realtor® is acting as an agent in the purchase of a property that they will or possibly will have any ownership interest in, this fact must be disclosed, in writing to all people involved. Basically, if a Realtor® is representing themselves in the sale or purchase of a property, this must be disclosed. How? …in writing.
Why are these articles important?
Well, wouldn’t you want to know who you were about to enter into a major transaction with? You would want to know if you were about to play poker with a national poker champion, or Trivia Pursuit with a 5 time Jeopardy winner, right?
Realtors® are obligated to disclose their interest in the property that they are looking to buy or sell. It is only fair to the consumer.
Please take a moment to check out these other posts:
Understanding the Realtor® Code of Ethics … Article 1
Understanding the Code of Ethics -Article 2: Disclosure
Understanding the Realtor® Code of Ethics – Article 3: Cooperating & Compensation Posted By: Springs Realty Scoop – Colorado Springs Real Estate