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Adoption of the Code By adopting the Rules of Conduct, the association became the first business — with the exception of a now-defunct association of printers — outside of medicine, engineering and law to adopt a code of ethics. Local boards initially were asked to voluntarily adopt the rules; however mandatory adoption was made a condition of membership in 1924. In 1978, William D. North, former executive vice president and general counsel of the National Association of REALTORS® (NAR), called the Code an “unusual Gift of Vision: the vision of those who dreamed that the business of real estate could become a profession, the vision of those who believed that the search for the highest and best use of the land required the highest and best measures of professional responsibility, and the vision of those who recognized private ownership of the land

as indispensable to political democracy and a free and prosperous citizenry.” He also noted that the unifying rationale, which continues in today’s version, is the concept of “Service to the Public.” It is interesting to look at the language of the first Rules of Conduct, which consisted of 23 statements divided into Duties to Clients and Duties to Other Brokers. For example, under Duties to Clients, we find the following: •

Be absolutely honest, truthful, faithful and efficient … and [your client] is entitled to the best service the real estate man can give — his information, talent, time, services, loyalty, confidence and fidelity. (Well said.) Be conservative in giving advice and, where not well posted, refrain from giving opinion of value. (Some may wish this was still part of the Code.) Do not depreciate the price of property unless the price is too high; ask that the price be reasonable, and tell the owner that it must be

so if he expects his agent to make an attempt to sell it. (Wouldn’t it be fun to be able to say this to the seller with the inflated price?) Obtain sole agency, in writing, if it is property worthy of a special effort to sell. (Even in 1913, the concept of exclusive agency as being in the best interests of the parties was understood.) Do not give special information to inquiries over the telephone, or otherwise, unless they are willing to give their names and addresses. Let them understand that the broker deals in the open and expects them to do likewise. (I’m not sure how many telephones existed then, but I love the statement “the broker deals in the open and expects them to do likewise”.) An agent should always exact the regular real estate commission of the association of which he is a member, and always give his client to understand at the beginning that he is entitled to such and


and their adoption [is] recommended everywhere as far as possible.” The motion was carried by voice vote.


Profile for Lauren Bizorik

March 2013 - Wisconsin Real Estate Magazine  

The Code of Ethics Begins Its 2nd Century

March 2013 - Wisconsin Real Estate Magazine  

The Code of Ethics Begins Its 2nd Century