4 Top Ethical Responsibilities of a Real Estate Professional

Oct 11, 2016
Obtaining a license is only the beginning of your advanced education. The learning process continues every day, and real estate professionals learn not only by doing, but also by studying the examples set by seasoned professionals. You can profit from continuing education, using your accredited business standards to boost client trust and your reputation. It is particularly important to gain an understanding of the ethics issues that confront realtors and brokers.

While laws governing real estate transactions are well defined, some of these rules can be fluid and open to interpretation. In an increasingly litigious society, it is all too easy to convey a perception of bias or wrongdoing. Ethical issues affect real estate professionals every day, and recent statistics suggest that upwards of 25 percent of realtors will face a lawsuit at some point in their careers.  It is wise to know how to protect yourself, in addition to carrying insurance against that possibility.

Today, the 4 major ethical responsibilities of real estate professionals can be classified as:

Duty to Clients 
As an agent or broker representing either the seller or the buyer, your primary duty is to "protect and promote" your client's interest, as defined by Article 3 of the Realtor Code. This principle would include property details as well as any information regarding timing, financing or "acceptable" offer amounts. Remember that it is better to say nothing than to disclose information that could be detrimental to your client.

Full Disclosure 
Whether you represent the seller or the buyer, be aware that you are responsible for pertinent details concerning a property. If you are the listing agent, the street address is not enough. You must also confirm the lot and block and you should know the zoning as well as pertinent neighborhood information. The owner is responsible for the property disclosure, but it is your duty to assure that it is complete, up-to-date and accurate as far as you can determine. If you act as buyer's agent, you are responsible for sharing property information with the prospective buyer, but you are constrained from passing judgment about the neighborhood, its safety and its suitability for certain types of people; i.e. families, singles or retirees. Instead, point to reliable sources for statistical information.

Limits of Knowledge and Expertise 
Be wary about offering opinions on properties that you show. Even if asked, you as an agent are most likely not qualified to judge quality of construction, roof condition, costs to repair or renovate, or an opinion about the likely appraisal value. Resist those temptations and suggest that your clients contact a home inspector, or seek professional advice. If you are uncertain about how to handle a specific situation, seek the advice of an associate or your own professional advisers.

Code of Conduct 
Familiarize yourself with the professional Code of Conduct, be honest in all your dealings, respectful to your clients and to fellow realtors, and conduct your business with integrity.

In addition, never cease learning. Professional development seminars, and continuing education courses offered by the Real Estate Institute of Canada are perfect vehicles for expanding your knowledge, widening your horizons and assuring that you are the best you can be in a field that demands the best you can give it.
The standards are designed to enhance the experience of buying and selling as well as to protect brokers and agents. Never ignore the "do's and don'ts" of these important principles.
Gareth R. Jones, FRI CRES

Written by Gareth R. Jones, FRI CRES

Gareth is a real estate broker with over 28 years of experience in residential and commercial real estate. He is Executive Vice-President at REIC and serves as a Board Director and Chairman of the Commercial Committee at TREB. Gareth previously worked for major real estate firms such as Right At Home Realty, Royal LePage, Johnston & Daniel Division, RE/MAX, and CIBC as a commercial mortgage manager.