Professional Code of Ethics and Minimum Standards

Question 1

What are the four sections of the Code of Ethics?

Answer 1

Preamble
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®

Question 2

What does the Preamble contain?

Answer 2

Thoughts about how licensees should conduct themselves

Question 3

What part of the Code must be named in any complaint that is filed?

Answer 3

Only Articles can be named, never the Preamble. And Standards of Practice may be cited only in support of a named Article.

Question 4

How many Articles are included in the Code of Ethics?

Answer 4

17

Question 5

Who is responsible for enforcing the Code of Ethics?

Answer 5

Local Associations of REALTORS®

Question 6

What are the two forms of informal dispute resolution?

Answer 6

Ombudsman and Mediation

Question 7

Who do parties meet with in a real estate mediation process?

Answer 7

A trained third-party called a Mediator

Question 8

Which form of dispute resolution is typically used to resolve problems between broker members of an association?

Answer 8

Arbitration

Question 9

What is the primary obligation of a licensee?

Answer 9

Promote the interests of the client.

Question 10

Who is a prospect?

Answer 10

A purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the Realtor®.

Question 11

When can a listing broker stop submitting offers?

Answer 11

Upon closing unless the seller waives the obligation in writing.

Question 12

Article 1 requires Realtors® to obtain seller’s permission prior to disclosing what information?

Answer 12

The disclosure of multiple offers

Question 13

What are “non-material” factors?

Answer 13

Minor facts not being considered as “pertinent”

Question 14

When is a Realtor® allowed not to cooperate with another broker?

Answer 14

When cooperation is not in the clients’ best interest

Question 15

When must changes in compensation offered for cooperative services be communicated to the other Realtor®?

Answer 15

Prior to the time that Realtor® submits an offer to purchase/lease the property

Question 16

The obligation to cooperate does not necessary include what?

Answer 16

To share commissions, fees or compensation

Question 17

When do the Code of Ethics rules apply?

Answer 17

When a real estate agent is acting as an agent or in legally recognized nonagent capacities, such as transaction broker or facilitator

Question 18

Under what circumstances may Realtors® reveal confidential client information?

Answer 18

They can reveal confidential information:

• required by court order, or
• to prevent the client from committing a crime, or
• to defend a Realtor® against an accusation of wrongful conduct.

Question 19

What must Realtors® do in response to inquiries from buyers or cooperating brokers?

Answer 19

They must, with the sellers’ approval, disclose the existence of offers on the property.

Question 20

Under what circumstances are Realtors® not obligated to cooperate with other brokers?

Answer 20

When cooperation is not in the clients’ best interest.

Question 21

Much of the information incorporated into the professional code of ethics in real estate has come from three sources.

Answer 21

Federal and state laws which focus on anti-discrimination laws and fair trade practices
Real estate licensing regulation on the state level dealing primarily with agency issues and disclosures
Self-regulation by real estate associations that set standards for professional conduct

Question 22

The Code itself is comprised of four sections:

Answer 22

Preamble
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®

Question 23

Only NAR members

Answer 23

are subject to the Code of Ethics.

Question 24

Ombudsen

Answer 24

do not establish whether ethics violations have taken place. They foresee, recognize, and help settle misunderstandings and differences before they become full-fledged disputes that can result in charges of unethical behavior.

Question 25

Mediation

Answer 25

is the favored dispute resolution method of REALTOR® organizations because it is a way to generate a mutually-acceptable decision regarding a disagreement without having a judgment imposed by a hearing panel.

Question 26

Realtors® must exercise due diligence

Answer 26

and make reasonable efforts to protect clients against foreseeable contingencies and losses.