New Member Orientation - Greater Lehigh Valley Realtors

Transcription

2014
New Member Orientation
Table of Contents
Intro to the Lehigh Valley
Association of Realtors®
Page:
1
Intro to the Pennsylvania
Page:
11
Intro to the National
Page:
14
Government Affairs
Page:
19
REALTOR® Safety
Page:
22
Antitrust
Page:
48
Fair Housing
Page:
63
New Member Code of
Ethics Training
Page:
101
1
Lehigh Valley Association of Realtors®
Websites……
https://IMS.LVAR.ORG:
Internet Member Services site
Update Personal Profile (email address, phone numbers, passwords, profile picture….etc.) Online payments
Calendar of events Registration to Association events such as Continuing Education,
Membership breakfast, MLS Training and other events End of the year report print out of
dues and fees paid for tax preparation purposes.
We highly suggest and recommend that you save the ims.lvar.org site to your “Favorites” or
save as an “Icon” onto your desktop for easier accessibility.
Since LVAR does NOT mail any invoices, it is the member’s responsibility to go to the IMS site
and retrieve any invoices.
 1st Qtr MLS= Jan/Feb/March
 2nd Qtr MLS= April/May/June
 3rd Qtr MLS= July/Aug/Sept
 4th Qtr MLS= Oct/Nov/ Dec
WWW.LVAR.ORG:
Member’s only site
Membership forms Supra Key & iBox system Information LVAR Bylaws MLS &
Association Rules and Regulations PAR & NAR Member Rosters Market Update Millage
Rates Public Access Site  Lehigh Valley Real Estate Weekly  Government Affairs & much
more
WWW.LVAR-MLS.COM:
Multiple Listing Service
Enter Listings Create Hot sheets Client Prospecting Single Sign-On to Members only site
 Tax Tool and much more.
2
The Association Staff
Staff
Ryan Conrad - RCE, e-Pro
Chief Executive Officer
eMail: [email protected]
Direct Dial: (484) 821-0501
Melody Bradford
Sales Director
Mia Mecleary - e-Pro
Chief Operating Officer
Direct Dial: (484) 821-0508
Direct Dial: (484) 821-0511
Melissa Arranz - * e-Pro
Art Director
Marsha Culle, e-Pro
Office Manager
Kimberly Harrison
Assitant Art Director
eMail: [email protected] Direct Dial: (484) 821-0503
Direct Dial: (484) 821-0509
Direct Dial: (484) 821-0514
Michael Naratil - e-Pro
MLS Director
Mallory L. Vough- e-Pro
E-Communications Specialist
Call
Cheryl Graham - e-Pro
Membership Administrator
Direct Dial: (484) 821-0502
Sharon Adams - e-Pro
Administrative Assistant to the COO
Jamie M. BowmanDirector of Professional Development
Or
Direct Dial: (484) 821-0506
Email Us!
Taylor W. Munoz
Regional Government Affairs Director
Direct Dial: (484) 821-0512
3
10 South Commerce Way, Bethlehem, PA 18017 * 800-893-9969 * Fax (610) 882-4144
www.lvar.org
Dear Member;
The Lehigh Valley Association of REALTORS is dedicated to providing you the tools you
need to manage your membership account. We are excited to introduce to you, Internet
Member Services (IMS), a secure site where you can view and pay your bills, as well as
manage your account yourself, 24 hours a day, 7 days a week.
Members can access their accounts online quickly and easily by logging onto
https://ims.lvar.org (start address without entering “www”). For easier accessibility, save the
IMS site as a “favorite” or as a “desk top icon”.
LVAR encourages all the members to become familiar with the IMS and its capabilities to
update your personal profile, pay for invoices, print statements and/or receipts, register
for Association events and meetings. The IMS system accepts Visa/MasterCard/Discover
and TeleCheck.
Since the Association Does NOT Mail the Annual dues billings or Quarterly MLS fees, it is
the member’s responsibility to go to the IMS site and retrieve invoices. Additionally,
the Association does not accept cash payments and all credit card transactions are
processed by members thru the IMS site.
We are excited to offer the IMS system and its capabilities while also continuing to reduce
costs at the Association. While we are convinced you will find this new site secure and easy
to use, you may choose to simply go to the site, print your bill and mail in your payment to
the PO BOX: LVAR, PO BOX 20487, Lehigh Valley, PA 18002
If you should have any questions or need additional assistance, please contact the
Association Office at (610)-882-4100.
Sincerely
Mia A. Mecleary, e-Pro
Chief Operating Officer
4
About LVAR
Organizational Overview
LVAR is a not for profit trade association established
in 1996 by the merger of the former AllentownLehigh County Association, the Bethlehem
Association and the Eastern Northampton County
Association of REALTORS®. The merger has directly
benefited home buyers and sellers by providing a
wider exposure of properties throughout the Lehigh
Valley.
LVAR has approximately 2000 members who
market property in the Lehigh Valley in Eastern
Pennsylvania. Members of the Association promise
strict adherence to the Code of Ethics of the National
Association of REALTORS®.
The Code, adopted in 1913, is a criterion of
excellence and a paradigm for a realistic standard of
performance. Today, we also focus on social
responsibilities and consumer concerns. LVAR
offers dispute resolution services between buyers
and sellers, mediation and arbitration for members
to settle business disputes and Code of Ethics
enforcement.
When is a Real Estate Agent
a REALTOR®?
When they are a member of the National Association
of REALTORS®, The Voice for Real Estate--the
world's largest professional association. The term
REALTOR® is a registered collective membership
mark that identifies a real estate professional who is
a member of the NATIONAL ASSOCIATION OF
REALTORS® and subscribes to its strict Code of
Ethics.
Founded in 1908, NAR has grown from its original
nucleus of 120 to over 1,000,000 members
today. NAR is composed of REALTORS® who are
involved in residential and commercial real estate as
brokers, salespeople, property managers,
appraisers, counselors, and others engaged in all
aspects of the real estate industry.
Members belong to one or more of some 1,700 local
associations/boards and 54 state and territory
associations of REALTORS®. They can join one of
our many institutes, societies, and
councils. Additionally, NAR offers members the
opportunity to be active in our appraisal and
international real estate specialty
sections. REALTORS® are pledged to a strict Code of
Ethics and Standards of Practice.
Within the real estate community, LVAR's focus for
the future is on enhancing technological services
and providing more comprehensive information.
Working for America's property owners, the
National Association provides a facility for
professional development, research and exchange of
information among its members and to the public
and government for the purpose of preserving the
free enterprise system and the right to own real
property.
5
LVAR Benefits
When you become a member of the Lehigh Valley
Association of REALTORS®, it's like hiring your own
group of real estate support personnel.
*Networking Opportunities
Your association, over 2,000 members strong, allows
you many networking opportunities, not only with our
members but with other organizations as
well. Working relationships have been formed with the
Lehigh Valley Builder's Association, Joint Planning
Commission and Economic Development groups
fostering the exchange of ideas and information.
*A Team of Professionals
Whether you have questions regarding technology
or industry statistics, you have a valuable resource
in the team of professionals at LVAR.
*Continuing Education
Special events such as golf outings, holiday dinners, and
breakfast and lunch seminars provide the backdrop for
making connections in a relaxed, social atmosphere.
In today's competitive environment, keeping on top
of current issues, marketing techniques, and
innovative technology is necessary for success. Your
membership includes discounted prices on
informative courses.
*Publications & Printed Materials
 We publish an informative quarterly
newsletter, RealNews, which features
professional and legislative information
 Our own publication, the Lehigh Valley Real
Estate Weekly, offers you cost-effective member
rates, along with free creative ad design.
 The Weekly offers you a vehicle to reach
potential home buyers with print
and online catalog. Ads hyperlink back to your
website. Archived editions kept online for 6
weeks.
As a new member you will receive a one day
orientation session to familiarize yourself with the
benefits available through the association. You'll
receive an education on how our services will help
you increase your business.
*Lehigh Valley Real Estate Academy
Our in-house real estate school offers a wide range
of courses including those with content targeted to
the interests of REALTORS® in the Lehigh Valley
area. As a member of LVAR, you will receive
discounts on some of the courses offered.
*Legislative Support
Open lines of communication have been established
with key members in government positions allowing
your voice to be heard on political issues. Our
affiliation with the NAR's REALTOR® Political Action
Committee, or RPAC, also provides legislative financial
support.
*Preferred Pricing
As a member, you will get LVAR preferred pricing on
a variety of equipment and services including:
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Our Government Affairs Director will keep the
association current with the latest issues happening in
Harrisburg and Washington D.C.
REALTOR®
VIP Programs through the National
Association of REALTORS®
Computer software
Maps
LVAR Training Room rental
Safety Products
6
LVAR Services
*Code of Ethics
*Visual Appeal
As members of the Lehigh Valley Association of
REALTORS®, we are responsible to each other and
ourselves in upholding the real estate Code of
Ethics. Adherence to the Code of Ethics is mandatory in
maintaining membership status.
As a partner in our MLS service, you'll have access to
valuable information to help you conduct your
business.
As an added MLS membership benefit, agents have the
ability to upload multiple photos directly to their
listing. This creates a more realistic conception of the
home and generates interest in the properties. For a
fee agents can have the Lehigh Valley Association of
REALTORS® office scan photos for upload to their
listing.
*Hands-On Training
*Valuable Information
Our technology team provides hands-on training for the
Multiple Listing Service program. Classes are held in
our state-of-the-art training facility equipped with
wireless high speed Internet. Sign up for one of our
training classes today, by logging on to the IMS site
As part of your membership dues, you'll receive up-todate statistics and pertinent data to assist buyers and
sellers including:
 Review monthly statistical reports by school
district
 Access public records and county tax
information
 Analyze a regular supply of housing statistics
made available to the media and local, state and
public officials
 Installation of Internet for public access,
includes valuable information on living in the
Lehigh Valley, Educational Institutions,
Demographics, Cultural Events, Healthcare
Facilities and Transportation
*Knowledge & Support
As a member, you know you can depend on our team of
professionals to assist you in any way possible. We
have experts in the real estate industry assigned to
specialized roles within our organization. Whether you
have operational questions or custom billing on your
membership dues, the Lehigh Valley Association of
REALTORS® will direct you to the team member that
will best serve you.
*Effective Communication
*Financially Fit
The Lehigh Valley Association of REALTORS® realizes
that the key to success in the industry relies on
effective communications. We are dedicated to the
expedient distribution of information. As a member of
our MLS service, you'll benefit from the following
services:
Membership dues are billed annually using our
system's tracking software. Invoicing is provided in
two formats, both individually and by office. VISA,
MasterCard, Discover Card and personal checks are
accepted for payment.
*Resolution System
 Quarterly Comparable Information available
either by download or purchased on CD
With the assistance of the Pennsylvania Association of
REALTORS®, LVAR has implemented a Home
Seller/Home Buyer Dispute Resolution System. The
most cost-effective way to settle differences between
buyers and sellers. Disputes are settled outside the
courtroom in a friendly atmosphere conducive to
mutually beneficial solutions.
 Communications via letter, email, MLS
broadcast notices and through our quarterly
newsletter, RealNews
 Additional, timely information will be available
to members through our members only site
(www.lvar.org) including Current Legal Issues,
Continuing Education Courses and upcoming
LVAR events
7
(continued)
Bylaws of The Lehigh Valley Association of
Realtors®
Bylaws of The Lehigh Valley Association of
Realtors®
We encourage you to download the Bylaws in its entirety
on the member site www.lvar.org site
We encourage you to download the Bylaws in its entirety
on the member site www.lvar.org site
SECTION 4. NEW MEMBER ORIENTATION
Applicants for REALTOR® membership and provisional
REALTOR® members (where applicable) shall complete
an orientation program which includes the Code of Ethics
of not less than two hours and thirty minutes of
instructional time. This requirement does not apply to
applicants for REALTOR® membership or provisional
members who have completed comparable orientation in
another association, provided that REALTOR®
membership has been continuous, or that any break in
membership is for one year or less.Failure to satisfy this
requirement within 180 days of the date of application
(or, alternately, the date that provisional membership was
granted), will result in denial of the membership
application or termination of provisional membership.
Members suspended for failing to meet the requirement
for the four (4)-year cycle (2008 through 2012) will have
until December 31, 2012 to meet the requirement.
Failure to meet the requirement by that time will result in
automatic termination of membership. Failure to meet the
requirement for the second (2012 through 2016) cycle
and subsequent four (4)-year cycles will result in
suspension of membership for the first two months
(January and February) of the year following the end of
any four (4)-year cycle or until the requirement is met,
whichever occurs sooner. On March 1 of that year, the
membership of a member who is still suspended as of that
date will be automatically terminated. (Adopted 1/01,
revised 5/05)
NOTE: Orientation programs must meet the learning
objectives and minimum criteria established from time to
time by the NATIONAL ASSOCIATION OF REALTORS®.
SECTION 5. CONTINUING MEMBER CODE OF ETHICS
TRAINING
Effective January 1, 2001, through December 31, 2004,
and for successive four year periods thereafter, each
REALTOR® member of the association shall be required to
complete quadrennial ethics training of not less than two
hours and thirty minutes of instructional time. This
requirement will be satisfied upon presentation of
documentation that the member has completed a course
of instruction conducted by this or another association,
the State Association of REALTORS®, the National
Association of REALTORS®, or any other recognized
educational institution or provider which meets the
learning objectives and minimum criteria established by
the NATIONAL ASSOCIATION OF REALTORS® from time
to time. REALTOR® members who have completed
training as a requirement in another association and
REALTOR® members who have completed the New
Member Code of Ethics Orientation during any four-year
cycle shall not be required to complete additional training
until a new four-year cycle commences. Failure to satisfy
this requirement shall be considered a violation of
membership duty for which REALTOR® membership shall
be suspended until such time as the training is completed.
8
MLS Rules & Regulations
Finable Offenses
MLS Data Compliance Tool
We encourage you to download the MLS Rules and
Regulations in its entirety on the member site
www.lvar.org site
Violations are monitored by our Data Compliance Tool.
Here are a few of the commonly violated rules:
SECTION 5.4.2-PHOTOS MUST BE UPLOADED INTO
THE SYSTEM WITHIN 72 HOURS of THE LISTING
BEING SUBMITTED INTO THE MLS
primary photo shall be an exterior front view of property
and no photos shall contain any Real Estate Company
visible contact information, logos, names, telephone
numbers, fax numbers, email addresses or website
addresses. Inclusion of such information shall be
considered a Major Violation and subject to the fines as
specified in Section 13.3.1.
Section 5.4.1- MARKETING REMARKS must only
describe the physical traits of the property for sale and its
vicinity. Agent name(s), any phone numbers, internet
addresses, email addresses or URLs are not permitted in
the Marketing Remarks area of the MLS. Inclusion of such
information shall be considered a Major Violation and
subject to the fines as specified in Section 13.3.1. Those
names(s), phone numbers, internet addresses or email
addresses may only be entered into the Agent Only
Remarks.
SECTION 13.3- VIOLATION CATEGORIES AND FINE
AMOUNTS
All violations of the MLS Rules and Regulations have been
catagorized as either Major Violations or Minor Violations.
Fines will be levied upon notification to the MLS of
violation and the fine will be immediately assessed the
Participant and due upon receipt. Failure to pay fines as
assessed will be a violation and subject to additional fines
and possible suspension of MLS access.
Section 13.6.4 – FAILURE TO SUBMIT ROOM SIZE AND
LEVELS in the Listing Detail shall be considered a Minor
Violation and subject to the fines as specified in Section
13.3.2.
Section 13.3.1 Major Violations - Fines for major
violations will be as follows: 1st offense per user
within a calendar year - $100.00; 2nd offense per
user within a calendar year - $250.00; and 3rd and
subsequent offenses per user within a calendar year
- $500.00.
Section 13.7.1 – FAILURE TO SUBMIT THE STATUS
CHANGE WITHIN 72 HOURS shall be considered a Major
13.3.1. This Section is further defined to mean "If the
property is unavailable for showing the status has
changed and must be changed in the MLS."
Section 13.3.2 Minor Violations - Fines for minor
violations will be as follows: 1st offense per user within
a calendar year - $25.00; 2nd offense per user within a
calendar year - $50.00; and 3rd and subsequent
offenses per user within a calendar year - $100.00.
Section 13.7.2 – FAILURE TO SUBMIT THE CORRECT
SALES PRICE shall be considered a Major Violation and
subject to the fines as specified in Section 13.3.1.
Section 13.6.5 – FAILURE TO ENTER CORRECT AREA IN
THE LISTING DETAIL shall be considered a Minor
13.3.2.
If an MLS violation occurs, you will be notified of the
offense as follows:
SECTION 5.7 - PROVIDING THIRD PARTIES
UNAUTHORIZED ACCESS TO MLS SYSTEM
A) WARNING EMAIL – A warning email is sent to
the Broker, the Agent & the Office email
address.
Providing any unauthorized access to the MLS system is
strictly prohibited. Any participant found to have provided
such access will be subject to a $1,000 fine.
SECTION 13.10 - UNAUTHORIZED DISSEMINATION OF
MLS ACCESS
Dissemination of your MLS Access codes to the system
shall be considered a violation in excess of a Major
Violation and shall be subject to a fine in the amount of
$1,000.
There is a 72 hour time frame to correct the violation.
If it is not corrected within the allotted time:
9
B) VIOLATION EMAIL - A violation email is sent, a
fine has been applied for failure to correct the
violation. The email is sent to the Broker, the
Agent & the Office email address. Timeframe of
payment, appeal options and more are detailed
& explained in the email.
The terms REALTOR® and REALTOR®are trademarks of the NATIONAL ASSOCIATION OF
REALTOR®. The trademarks, along with the Code of Ethics and Standards of Practice, set members
apart from other real estate licensees. NAR has adopted certain rules intended to preserve the value
of the REALTOR®trademarks for all members, current and future. Take this quiz to see how much
you know about the proper use of the REALTOR® trademarks.
1. Which of the following terms is NOT one of the
REALTOR® trademarks owned by NAR?
a.
b.
c.
d.
7 . Which of the following would be an incorrect use
of the term REALTOR® in a Web site domain name?
REALTOR®
REALTORS®
BROKER-OWNER®
REALTOR-ASSOCIATE®
a.
b.
c.
d.
8 . How may the principal of a real estate company
who is a REALTOR® use the REALTOR®
trademarks in company advertisements, if the
company has both member and non-member
salespeople?
2. Which of the following is the incorrect way to
write or display the term REALTOR®?
a.
b.
c.
d.
REALTOR®
REALTOR
Realtor®
realtor®
a.
The REALTOR® trademarks may only be used
with the name of the principal of the firm.
b. The REALTOR® trademarks may be used
with the names of the firm, the principal,
and all of the salespeople who hold
membership. But the trademarks may not
be used in connection with the names of the
non-member salespeople.
c. The REALTOR® trademarks may only be used
with the name of the firm.
d. The REALTOR® trademarks may not be used at
all in the advertising of the firm.
3. When the term REALTOR® is used with a
member's name, it should appear as follows:
a.
b.
c.
d.
William Smith REALTOR®
William Smith, REALTOR®
William Smith, realtor®
William Smith REALTOR®
4. The term REALTOR® is used correctly in the
following phrase:
a.
b.
c.
d.
9 . Which is true with regard to the color of the
Block "R" Logo?
Bob Smith, Your REALTOR® for Life
Tom Jones — The Commercial REALTOR®
Mary White / South Dakota's Top REALTOR®
Jane Brown — REALTOR® and Lakefront
Realty's top salesperson
a.
The official colors of the Block "R" Logo are red
and green.
b. The color of the block and the term
REALTOR® below the block will always be
the same.
c. When using a single color, the logo may only be
printed in blue or black.
d. There are no limits on the number of colors
that may be used to create the logo.
5. When an NAR member identifies his or her
profession, it is correct to say:
a.
b.
c.
d.
I am a commercial REALTOR®
I am a real estate broker and a REALTOR®
I am an independent REALTOR®
I am a top REALTOR®
10 . Which of the following is a true statement
regarding how the Block "R" Logo may be used?
a.
6 . The term REALTOR® when used with a real
estate company name should appear as follows:
a.
b.
c.
d.
www.RealtorJohnSmith.com
www.NorthShoreRealtor.com
www.MaryJonesRealtor.com
www.BobSmiththeRealtor.com
Sunshine Company, REALTORS®
Sunshine REALTORS® Company
Sunshine, REALTORS®, Company
Sunshine Company REALTORS®
10
Combined with other geometric shapes to
provide a more colorful appearance.
b. As the first letter in a word beginning with the
letter "R".
c. On advertising promotional materials as
long as the member's name and address
also appear on those materials.
d. On the business card of a non-member
salesperson affiliated with a REALTOR®
principal
11
Governance
What Is PAR?
PAR's governing body is its Board of Directors,
which is responsible for formulating the policies of
the Association. PAR officers guide and lead the
organization.
The Pennsylvania Association of REALTORS® (PAR)
represents Pennsylvania REALTORS® and is the
Voice for Real Estate in Pennsylvania. The objectives
of the Association:
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PAR is divided into nine geographical districts, each
represented by a PAR District Vice President. These
individuals serve as a liaison between PAR and the
membership at large.
PAR's organizational structure includes the
following committees:
Maintain high standards of practice
Create unity in the real estate field
Promote the economic and educational
advantages of members
Support legislation concerning real estate
interests
Cooperate with other organizations for the
betterment of the Commonwealth
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Membership
With a membership of 30,000, PAR is one of the
largest trade associations in Pennsylvania, and
among the top 10 largest state REALTOR®
associations. Membership in the REALTOR®
organization is three-tiered; members automatically
belong to the local, state and national associations
upon joining.
The terms "REALTOR®" and "real estate agent" are
not synonymous. The term "REALTOR®" is owned
and protected by the NATIONAL ASSOCIATION OF
REALTORS® and is reserved for members only.
Members of REALTOR® organizations at the local,
state, and national levels are privileged to use the
REALTOR® designation, which distinguishes them
from non-member brokers and salespersons and
indicates that they subscribe to a strict Code of
Ethics.
Commercial, Industrial and Investment
Committee
Equal Opportunity Committee
Finance Committee
Grievance Committee
Issues Mobilization Committee
Legislative Committee
Professional Standards Committee
REALTORS® Political Action Committee
Standard Forms Committee
In addition, advisory groups, task forces and forums
encourage widespread member input and
participation. These other venues allow members
to provide feedback to PAR, exchange ideas, or find
out about important current issues.
PAR's 20-person staff is responsible for the
administration and carries out the day-to-day
operations of the Association. Patrice Merzanis,
CAE, is PAR's Executive Vice President.
History
PAR was chartered in Philadelphia as the
Pennsylvania Real Estate Association in 1920. The
Association moved to Harrisburg in 1943, and in
1974 changed its name to Pennsylvania Association
of REALTORS®. The Association has grown to
include 50 member boards/associations.
Among the accomplishments over the years, PAR
pioneered and sponsored the legislation which
created the Pennsylvania Real Estate License Law in
1929, establishing the State Real Estate Commission.
The Commission is a regulatory body which falls
under the purview of the Commonwealth of
Pennsylvania, and is separate and independent from
PAR.
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The Benefits of Membership
Contact Information:
The REALTOR® designation indicates credibility
and professionalism to both clients and colleagues.
Membership provides a forum for sharing and
networking with fellow practitioners. Membership
also brings with it significant benefits and services,
including:
PAR Offices are open Monday through Friday from
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8:00 a.m. to 5:00 p.m.
Address:
500 North 12th Street
Lemoyne, PA 17043-1213
Legislative/Regulatory Advocacy-PAR
provides representation in Pennsylvania
government, looking out for members' rights
and their business interests.
Standard Forms-PAR offers numerous
forms used in real estate transactions, as
well as information about forms usage and
updates.
Phone:
800.555.3390 (toll-free)
Fax:
717.561.8796
Legal Hotline:
Legal Hotline-The legal hotline offers
members on-the-spot legal information
about Pennsylvania real estate law.
The legal hotline is a FREE
service to REALTOR® members.
Education- Mandatory Continuing
Education and Designation programs are a
primary member service offered through the
Pennsylvania REALTORS® Institute.
Publications-The Pennsylvania REALTOR®, PAR's
Web site, Fax on Demand service, and other
communication tools keep members apprised of
industry trends and informed about issues that they
need to succeed in business.
Pennsylvania Realtors®
Legal Hotline:
(800) 727-5345
Communications/Public Relations-As the Voice
for Real Estate In Pennsylvania, PAR is in contact
with news media statewide in order to promote the
REALTOR® image and make the pubic aware of the
benefits of using a REALTOR®.
Service is free but only when you call
between:
Meetings, Conventions, and Forums-These events
provide members with an opportunity for
professional development and networking. Business
meetings, held four times per year, allow members
to meet to analyze and formulate policies on issues
affecting the industry and the Association.
.9:00a.m. – 11:00a.m.
&
1:00p.m. – 3:00p.m.
13
For additional information, please visit
NAR’s website below.
14
The NATIONAL ASSOCIATION OF REALTORS®
was founded as the National Association of Real
Estate Exchanges on May 12, 1908 at the YMCA
Auditorium in Chicago, IL. Three earlier attempts
(beginning in 1891) at organizing a national real
estate group were unsuccessful. With 120 founding
members, 19 Boards, and one State Association, the
National Association of Real Estate Exchanges'
objective was "to unite the real estate men of
America for the purpose of effectively exerting a
combined influence upon matters affecting real
estate interests."
In 1989, the Association adopted The Voice for Real
Estate as its theme and as part of its official logo.
Along with this theme, the Association encouraged
more members to include the REALTOR® emblem
on their business cards and stationery.
In 1998, a national Public Awareness Campaign was
launched to educate consumers about the vital role
REALTORS® play in the real estate transaction.
The Association became the largest trade association
in the United States in the early 1970s, with over
400,000 members. Today, the National Association
of REALTORS® has over 850,000 members, 54 State
Associations (including Guam, Puerto Rico, and the
Virgin Islands) and more than 1,500 local
Associations.
The Association's founding boards included the
Baltimore, MD; Bellingham, WA; Chicago, IL;
Cincinnati, OH; Cleveland, OH; Detroit, MI; Duluth,
MN; Gary, IN; Kansas City, MO; Los Angeles, CA;
Milwaukee, WI; Minneapolis, MN; Omaha, NE;
Philadelphia, PA; St. Louis, MO; St. Paul, MN; Seattle,
WA; Sioux City, IA; and Tacoma, WA, boards and the
California State Realty Federation (now the
California Association of REALTORS®). The Code of
Ethics was adopted in 1913 with the Golden Rule as
its theme.
The REALTORS® Political Action Committee
(RPAC)
The REALTORS® Political Action Committee (RPAC)
is currently one of the largest trade association
PACs. RPAC's predecessor, the REALTORS®
Washington Committee, was established in 1943 to
assist the federal government in providing housing
for members of the armed forces and other activities
in support of the war effort.
In 1916, the National Association of Real Estate
Exchange's name was changed to The National
Association of Real Estate Boards.
In 1969 the Association formed the Real Estate
Political Action Committee (REPAC) to solicit
voluntary contributions from the Association's
members and pool those funds to make
contributions to candidates running for public office.
REPAC's name was changed to the REALTORS®
Political Action Committee (RPAC) in 1974.
The term “REALTOR,” identifying real estate agents
as members of the National Association of Real
Estate Boards and subscribers to its strict Code of
Ethics, was devised by Charles N. Chadbourn, a past
president of the Minneapolis Real Estate Board, and
was first used to designate members of the
Minneapolis organization. The Minneapolis Board
gave all rights to the word "Realtor" to the National
Association in 1916.
RPAC remained the nation's largest business trade
association PAC with disbursements of $3.7 million
dollars to the federal candidates and national
political committees in the 2000 election cycle. In
the 1988-1990 election cycle, NAR members
contributed a record $5.2 million to RPAC. This total
represents only a portion given; a percentage of each
RPAC dollar stays for use by state and local RPAC
committees. In 1997 and 1998, the National
Association of REALTORS® ranked 11th in Fortune
Magazine’s “Washington Power 25” listing of the 25
most powerful lobbying organizations in
Washington.
In 1949 and 1950 respectively, the Patent and
Trademark Office registrations for the term
REALTOR® and the REALTOR® emblem were
approved. Dictionary publishers began to list the
definition of "REALTOR" as a member of the
National Association in 1967.
15
The Issue of Taxation
"Unfair taxation," said Alexander Sacket Taylor,
NAR's second president, in 1910, "is the most
formidable foe of real estate." Ensuring the fair
taxation of property owners and preserving the
economic benefits of home ownership have been
among the primary lobbying goals of the National
Association of REALTORS® throughout its history.
Member Services
Since its inception, the Association has provided a
number of benefits and services for its members.
The Association's Library was founded in 1923, and
with over 15,000 volumes, is the largest real estate
library in the United States.
In 1997, Membership Records, the Library and
Customer Service were merged into Information
Central, a one-stop point of contact for members.
Through Information Central, members can place
product orders, request information from the Virtual
Library and obtain assistance with Realtor.org.
A committee on taxation was one of the first
standing committees formed by the Association's
founders in 1908. When the current federal income
tax system went into effect in 1913, NAR's members
called on their congressmen to change the law so
that rents collected by landlords would not be
taxable -- the Association's first grassroots lobbying
effort. In 1920, the Association supported Congress
in its passage of legislation enabling the mortgage
interest deduction.
In addition to the award-winning service from
Information Central, the National Association of
REALTORS® offers members discounts on various
products and services for business and home
through the REALTOR® VIP Program. The National
Association of REALTORS® actively works for its
members in many ways to keep REALTORS® at the
center of the real estate transaction—through
lobbying efforts, public awareness campaigns and
the nation’s largest real estate website, Realtor.com.
Other NAR tax-related victories include: Elimination
of the “quick-profits” tax (which discouraged people
from buying a home that they intended to quickly
resell for a profit) after World War II; in 1951, the
deferral of capital gains taxes on the sale of a home if
another home of equal or greater value was
purchased within a year; expansion of tax relief to
the elderly in home sales; successfully fighting the
reduction of the mortgage interest deductions from
$1 million to $250,000; and expanding the capital
gains deduction for homeowners to $250,000 for
singles, $500,000 for couples.
Research
The Association began keeping statistics on housing
and property values as early as 1909. Its first
statistical department was formed in 1917, and the
first research department in 1920. The Association
has provided statistical data for the support of its
lobbying efforts and for use by various federal
agencies since the early 1920s. The monthly Existing
Home Sales report was started in 1968, and
continues to be an important indicator of the
nation's economic health. Today, NAR's research
group conducts surveys and prepares reports on the
home buying and selling process, REALTOR®
demographics, real estate firm structures,
commercial property markets, and other aspects of
the real estate industry.
When the traditional tax status of the independent
contractor real estate salesperson came under attack
by the IRS, NAR was instrumental in the enactment
of a provision in the Revenue Act of 1978. The 1982
tax act, provides a safe-harbor test for real estate
sales people that, if satisfied, determines their status
as independent contractors for federal tax purposes.
More recently, the battle for full deductibility of
health insurance premiums for self-employed real
estate professionals, to be phased in over the next
several years, has been passed and is now available.
The taxation of real property is only one of many
legislative and regulatory issues the Association's
Government Affairs staff has worked on over the
decades — work which continues into the 21st
century.
16
NAR & Technology
Never before have REALTORS® had such an
extraordinary amount of information available at
their fingertips. The very first computer system used
at the National Association of REALTORS® was
installed in September 1973. Computerized multiple
listing services (MLS) became a reality in 1975, and
by the early 1980s the idea that computers would
soon replace traditional paper MLS directories was
quickly becoming a reality. The National Association
of REALTORS® has launched several programs over
the years to help the industry take advantage of
computer technology, including REINET and RCSMLS in the 1980s.
International
NAR has been involved in the international arena for
nearly half a century. In the early 1950s, the
Association helped establish the International Real
Estate Federation (FIABCI), and has since hosted
and participated in several public forums on housing
and property rights issues around the world. In
1981, NAR formed an International Policy
Committee to expand its affiliation with real estate
organizations in other nations and pursue a
leadership role in the global marketplace. The
Association's International Section (now called the
CIPS Network) was formed in 1992. Currently, the
Association maintains bilateral reciprocal agreement
with 62 real estate associations in 52 countries. In
May of 2001 the International Consortium of Real
Estate Associations (ICREA) was formed around a
multilateral agreement, with 23 founding members.
NAR took the lead in the formation of this new
organization and is a member of its Executive
Committee and co-chair. In 2002, NAR signed the
group's Transnational Referral Protocol, providing
NAR members access to an easy and safe system for
cross-border referrals.
In the 1990s, NAR saw progress on several
technology fronts. REALTOR.COM, the official
Internet site of the National Association of
REALTORS®, was launched in 1997, giving
consumers a powerful tool to help them connect
with REALTORS® and find a new home. Today,
Realtor.com features over 2.1 million property
listings viewed by over 5 million consumers each
month and is recognized as one of the most
successful business Web sites on the Internet.
NAR in the 21st Century
Real estate has changed and grown more complex
since 1908 -- from handwritten notes and 3x5 index
cards to cell phones and Internet property listings.
REALTORS® will be working with many different
groups in the coming years, including Internet-savvy
home buyers, aging Baby Boomers, young people
buying their first homes, international investors and
recent immigrants. REALTORS® bring their
knowledge and expertise to the real estate buying
and selling process, guiding consumers in making
make the right decisions and helping to shape the
future of the industry.
Launched in 2001, REALTOR.org is a valuable tool
providing REALTORS® with almost instant access to
the information and services they need, including
the latest HUD forms, online registration for the
annual convention, and industry news.
The National Realtors Database System, NRDS, an
Internet database allowing local associations to post
member records, was launched in 1998. When a
record is entered into the system the state
association and the national association have
immediate access, eliminating duplication and giving
members faster service. One benefit of NRDS is that
it gives REALTORS® the ability to update their own
information in their individual records online.
As it reaches its 100th year, the National
Association of REALTORS® continues to pursue its
objective of keeping the REALTOR® at the center of
the real estate transaction, promoting the interests
of its members among consumers and policy makers
and in the increasingly competitive real estate
marketplace.
In 1999, the REALTOR® Electronic Commerce
Network was established. This new initiative
promises to give REALTORS® easy online access to
a variety of products and services from the National
Association and state and local boards.
17
For additional information, please visit
NAR’s website below.
18
19
GOVERNMENT AFFAIRS
“TOOLS YOU CAN USE”
MUNICIPAL INFORMATION DATABASE
LVAR maintains a website that includes information
on each of the 62 municipalities in both Lehigh and
Northampton Counties. The information includes
residential resale and rental inspection requirements,
real estate sign regulations, moving permits, building
codes, and municipal contact information. To access
this valuable information, simply log on to your
members only website, www.lvar.org , then click on
“Government Affairs” then “Municipal Information.”
RESPOND TO CALLS-TO-ACTION
Often, legislation is proposed at the local, state, or
federal level that will impact the real estate industry.
If legislation REALTORS® support or oppose is
gaining momentum, we must take action to ensure
elected officials know our position. In these cases,
LVAR, PAR, or NAR will issue a Call-to-Action to your
e-mail which requires your help! In as little as two
clicks of a mouse, you can send a pre-written letter to
your legislator to let them know where REALTORS®
stand. Visit www.realtoractioncenter.com to make
sure you’re signed up to receive these important emails.
MONTHLY GOVERNMENT AFFAIRS REPORT
LVAR recognizes that REALTORS® simply do not have
the time to stay up on current legislative and political
issues impacting their business. That’s why every
month, LVAR compiles short summaries of priority
real estate related legislative and political news
happening on the local, state, and federal levels and emails it member-wide. This valuable tool helps you
stay on top of what’s happening in the industry so you
can be one step ahead of your clients.
BECOME A KEY CONTACT MEMBER
If you have a positive one-on-one personal
relationship with a local, state, or federal legislator in
the Lehigh Valley, this program is for you! The
objective of the Key Contact network is to promote
high quality contacts with individual legislators on
matters of importance to the real estate industry.
Help LVAR build our grassroots Key Contact Team
from the ground up!
GOVERNMENT AFFAIRS WEBSITE
Keep up with all the government affairs news and
issues by logging on to www.lvar.org and clicking on
the “Government Affairs” link. There you’ll find
updated information on what’s happening in
government affairs at LVAR, PAR, and NAR. You’ll also
find municipal information, Government Affairs
Committee minutes, important links, election
information, a link to invest in RPAC, and much more.
JOIN THE GOVERNMENT AFFAIRS COMMITTEE
Every year, seats become available on LVAR’s
Government Affairs Committee (GAC). Let us know if
you are interested in serving. The GAC meets once a
month and covers all aspects of government affairs,
with particular emphasis on developing and
maintaining high quality relationships with local,
state, and federal officials in the Lehigh Valley. The
GAC reviews and proactively monitors legislative
issues that impact the real estate industry.
Additionally, elected officials meet with the GAC as
part of our Roundtable Discussion Series.
INVEST IN RPAC
By investing to the REALTORS® Political Action
Committee (RPAC), you are protecting your future in
real estate. It is imperative that REALTORS® support
and fund political candidates who recognize our needs
and those of property owners in the Lehigh Valley.
Invest online by logging on the IMS or send a check
made out to RPAC to LVAR’s office (10 S. Commerce
Way, Bethlehem 18107).
For questions or further information on any of these
programs, contact:
Taylor W. Muñoz
Regional Government Affairs Director
Email: [email protected]
Direct dial: 484-821-90512
20
• RPAC is non-partisan
RPAC does not contribute to elected official based on
their party affiliation or ideology – RPAC contributes
to those who support issues and positions favorable
to the real estate industry.
What is RPAC?
RPAC stands for the REALTORS® Political Action
Committee. Its goal is to organize the members of
our association as a concerned, involved political
constituency. RPAC raises voluntary funds from our
members for use in making contributions to political
candidates at the federal, state, and local levels who
understand the needs and concerns of REALTORS®
and the real estate industry. Investing in RPAC is
investing in your business.
• RPAC does NOT buy votes
RPAC helps to elect candidates who share our
philosophy, or will at least listen to the REALTOR®
viewpoint. RPAC-supported candidates will not
always support us on every vote, but they will usually
be more favorable to our point of view. RPAC has an
outstanding track record in helping to elect people
who will be responsive to the needs of REALTORS®.
• Everyday, decisions are made in Washington DC,
Harrisburg, and around the Lehigh Valley by our
government officials. These decisions can and often do
have a significant impact on the real estate
industry. Examples of these issues are proposals to
increase the Realty Transfer Tax; put a 6% Sales
Tax on Commissions; allowing banks in Real Estate;
Property tax rates, and many more.
• RPAC investments are not an investment in a
candidate, but an investment in your future. There is
strength in numbers. Your investment will insure a
strong voice for our industry.
• One of the most important tools you have as
REALTORS® to make sure elected officials hear our
industry’s voice is through an investment to RPAC.
RPAC is the vehicle we use to help elect
candidates who understand and recognize the needs
of REALTORS® and property owners.
There are two easy ways to invest:
Mail a personal check payable to “RPAC” to:
LVAR
PO BOX 20487
Lehigh Valley, PA 18002
• By investing in RPAC, you are pooling your financial
resources with other REALTORS® in order to
maximize the effect of your contribution.
or make a safe contribution online using a credit
card. We accept Visa, MasterCard, and Discover.
Go to: www.lehighvalleyarea.com or log on to
http://ims.lvar.org
• Here are a few of the benefits you get from investing
in RPAC:
 It allows us to provide financial support to
elected officials who support the real estate
industry.
 It helps open doors to lawmakers, and gives
REALTORS® a chance to be heard on an issue
before it’s too late. It helps us “get a seat at the
table”.
 It makes a legitimate political player of the
real estate industry, forcing elected officials to
take our position seriously.
21
22
Section 1: INTRODUCTION
Learn from Others’ Experiences
Every year, real estate agents around the country are
threatened, robbed, or physically or sexually
assaulted while fulfilling the everyday requirements
of their jobs. Some even lose their lives. By learning
from these unfortunate and sometimes tragic
incidents, we can make adjustments to the way we do
business and avoid violent crimes. Here are a few
examples from across North America.
Ohio
A woman REALTOR® was preparing to close up an
open house at about 6 p.m., and was talking on her
cell phone to a prospective buyer, when the doorbell
rang. She opened the door and found a man wearing a
ski mask standing on the step asking to see the house.
After asking the man to leave several times, she shut
and locked the door. But when she went in the home’s
garage to lock it, the man grabbed her. She fought off
the attack and the man ran away.
(Source: Journal News, February 3, 2009)
www.journalnews.com/search/content/oh/story/news/local/2009/02/03/hjn02040
9assaultfolo.html
Nevada
A man broke into a vacant home for sale, and when the
real estate agent arrived to have the broken window,
fixed, he attacked her, beating her and stealing her car.
California police caught the suspect after a high-speed
chase near Los Angeles several hours after the attack,
and identified him as the same person who was caught
trespassing at Nellis Air Force Base just a few days
before the attack. Police still do not know why the man
broke into the property.
(Source: LasVegas Now.com, March 26, 2008)
http://blogs.lasvegasnow.com/nellis-sunrise/2008/03/26/8075538/
British Columbia, Canada
Local police are still trying to solve the murder of a
young real estate agent in February 2008. The 24-yearold woman was found stabbed to death in a vacant home
that she was believed to be showing. She had received a
call that day from a woman requesting a showing of the
luxury home, and was reportedly met by a man and a
woman at the property. The agent’s coworkers were
quoted as saying she had a “bad feeling” about the
appointment.
(SOURCE: Saanich News, February 3, 2009)
www.bclocalnews.com/vancouver_island_south/saanichnews/news/388
90469.html
New Mexico
A 24-year-old woman accused of posing as a wealthy
homebuyer robbed a Santa Fe real estate agent. The
female agent told police that she showed the woman,
who was wearing a violet-colored burka, two
properties, and in the basement of the second
residence, the
woman drew a gun and threatened to kill her.
The woman forced the agent to drive her to the bank,
where the two went inside. The agent withdrew all
$8,000 in her account, and, despite her attempts to
alert the teller, the armed woman in the burka took
the money and got away. However, she was
apprehended by
police later.
(SOURCE: Santa Fe New Mexican, April 14, 2008)
www.santafenewmexican.com/Local%20News/Woman-held-in-Realtorrobbery
23
4. Ask that they share information on any relevant
local crimes.
Once you have placed agent safety at the forefront of
your police representative’s mind, ask if he or she can
let you know as soon as possible if any crimes are
committed against real estate professionals in your
community. Criminals often repeat their behavior,
whether it is robbing a lone real estate agent in a
vacant property or even rape or murder. The sooner
you know that something, even something minor, has
happened to a real estate professional in your area,
the sooner you can alert your own agents to a specific
danger.
Know Your Local Safety
Resources
Regardless of where you live and work, your
number one resource for local safety information is
your local police department. Here are five ways you
can enlist your local police to help you keep your
agents safe:
1. Ask for an in-house safety presentation.
Call the nearest police station and ask for the public
education officer or safety education officer.
Ask that person if the department can schedule a
presentation for your office to address personal and
professional safety. Schedule a time when all your
agents can attend.
Note that the police may need some time and input
to customize a presentation for you, but the police
can help educate your agents about general and
specific dangers, and give them some concrete
advice for avoiding those dangers.
5. Ask the fire department for help.
Check with your local fire department to find out what
guidance and education they can provide for your
office. They may assist you with fire drills and
evacuation drills that are appropriate for your office
setting.
2. Ask if they can provide agent safety
information.
Some police departments provide safety
information specific to real estate professionals.
You’ll find valuable tips for our industry on the Web
sites of the city of Baton Rouge, Louisiana
(www.brgov.com/dept/brpd/safety.htm) and
Eugene, Oregon (www.eugene-or.gov and search on
“Realty Personal Safety Guidelines”), to name a few.
(See the “Safety Resources” handout online for
more.) Perhaps your police department is also
interested in educating real estate professionals on
specific safety issues. Once you’ve contacted your
public education officer, ask if your local police
department is interested in posting or providing
similar information.
Know Your Community
In addition to working directly with your local police
and fire departments, there are ways to stay informed
on what’s happening in your town. Make it a goal to
learn about crimes as they occur and share this
information with everyone in your office. You’ll all be
able to stay alert to trends in theft and burglary,
personal attacks, and vandalism. Information sources
include:
 Your local paper may have a “police blotter” section
that lists recent arrests.
Neighborhood watch groups and crime-buster
groups usually know everything that happens in a
specific neighborhood. If you can’t find a group like
this in your area, ask the police department for the
closest one. You can also start your own.
3. Ask if they can make a commitment to keep
your agents safe.
Establish a relationship with your local police
department with the first two steps listed here.
Once they understand your commitment to the
safety of your agents, ask them if they can, on
request, have a squad car drive by scheduled open
houses. You might also ask if an officer can perform
a safety evaluation of your office building and make
any recommendations for making it more secure
such as replacing locks or installing bars on
windows.
 Many local police departments have Web sites that
list recent crimes and arrests.
Join your chamber of commerce and network with
other businesspeople.
 Your state or local REALTOR® Association may
provide this information. Check their Web
site and if they don’t have a news section, contact
them about adding one.
24
— Establish a distress code, a secret word or phrase
that is not commonly used but can be worked into any
conversation for cases where you feel that you are in
danger.
Use this if the person you are with can overhear the
conversation, but you don’t want to alarm them. The
distress code could be something as simple as “Hi, this
is Jane. I’m at [address].
Could you e-mail me the red file?” You can make up
your own distress code, i.e. DOG FOOD (when you
don’t have a dog) or I’m going to MAYDAY Lane (and
there is no Mayday Lane).
The distress code should be used if you are uneasy,
but do not feel you are in danger. If you are in
immediate danger – leave the area. Do not hesitate to
call 9-1-1. See the “Protect Yourself with a Distress
Code System” handout for more information.
Section 2: SAFETY ON THE JOB
Safety at Property Showings
When meeting a client alone, you can minimize your
risk by adopting these safety precautions:
— When you have a new client, ask him/her to stop
by your office and complete a Prospect Identification
Form (an example of this form is online at
www.REALTOR.org/Safety), preferably in the
presence of an associate. Get the client’s car make and
license number.
Photocopy their driver’s license and retain this
information at your office.
— Call references and verify their employment and
current address, and retain this information at your
office.
— Check county property records to confirm the
ownership of a property before you go to a listing
appointment or approach a for-sale-by-owner listing.
The more information you have, the easier and faster
it is for police to catch a perpetrator if you become a
victim.
— Preview the property and don’t go into a
neighborhood that you perceive as unsafe. Be familiar
with the area so you know the location of the nearest
police station. Drive there immediately if you feel you
are in danger.
— Introduce the prospect to someone in your office. A
would-be assailant does not like to be noticed or
receive exposure, knowing a person could pick
him/her out of a police lineup.
— In showing a property, always leave the front door
unlocked for a quick exit while you and the client are
inside. As you enter each room, stand near the door.
— Never list a property as “vacant.” This is an open
invitation to criminals.
— Prepare a scenario so that you can leave, or
encourage someone who makes you uncomfortable
to leave. Examples: Your cell phone or beeper went off
and you have to call your office, you left some
important information in your car, or another agent
with buyers is on his way.
— Be sure to use the lockbox property-key procedure
that has been established to improve real estate agent
safety. A reliable, secure lockbox system such as those
made by REALTOR Benefits® Program partner
SentriLock (www.sentrilock.com) ensures that keys
don’t fall into the wrong hands.
— It is better to not display purses while at a
property. Lock your purse in the car trunk
before you arrive. Carry only non-valuable business
items (except for your cell phone), and do not wear
expensive jewelry or watches, or appear to be
carrying large sums of money.
— Try and call the office once an hour to let people
know where you are.
— Park at the curb in front of the property rather than
in the driveway. You will attract much more attention
running and screaming to the curb area. It is much
easier to escape in your vehicle if you don’t have to
back out of a driveway. Besides, parked in a driveway,
another vehicle could purposefully or accidentally
trap you.
— Always let someone know where you are going and
when you will be back; leave the name and phone
number of the client you are meeting.
— At the beginning of the showing, mention to the
client that you have another appointment to show the
house within a short time.
(Sources: Louisiana REALTORS® Association; Washington Real Estate Safety
Council; City of Albuquerque, NM; Nevada County Association of REALTORS®; City
of Mesa, AZ)
25
Fight or Flight?
Escape is the Best Self-Defense
Protect Yourself with SelfDefense Skills
Yell “fire” to get attention.
Run and call 9-1-1 when you can.
Take a self-defense training course/class.
If you strike, mean it.
Guidelines For Choosing A Self-Defense Course
Self-defense is much more than learning how to
physically attack someone; a good course covers
critical thinking about defense strategies,
assertiveness, powerful communication skills, and
easy-to-remember physical techniques. The instructor
should respect and respond to your fears and
concerns. Essentially, a good course is based on
intelligence and not muscle.
It offers tools for enabling a person to connect with
his or her own strength and power.
Look for a class with a broad focus, which will include
information on how to recognize dangerous
individuals and situations, how to avoid them and
how to react in an attack.
Many health clubs, community colleges and martial
arts studios offer these classes. Here are steps you can
take to find the best self-defense class for you:
When faced with danger, trust yourself and stay as
calm as possible. Think rationally and evaluate your
options. There is no one right way to respond to a
confrontation, because each is different. The response
depends on the circumstances: location of the attack,
your personal resources, the characteristics of the
assailant and the presence of weapons.
There are many strategies that are effective, but you
must rely on your own judgment to choose the best
one:
No resistance - Not resisting may be the proper
choice in a situation. An attacker with a gun or a knife
may put you in a situation where you think it is safer
to do what he/she says.
If someone tries to rob you — give up your property;
don’t give up your life.
1. Ask family, friends and colleagues if they have
recommendations.
You’ll be surprised how many people are taking or
have taken a self-defense course. Ask around and see
which classes or instructors they recommend. (You
might also find out which programs to avoid.)
Stalling for time - Appear to go along with the
attacker. This may give you time to assess
the situation. When his/her guard is down, try to
escape.
2. Make sure you are allowed to watch classes in
progress before you sign up.
Be wary of any institution that only offers one-on-one,
private instruction; it is difficult to gauge the progress
you’re making if you cannot see your classmates
performing the same techniques. In addition, one of
the most beneficial aspects of studying in a school is
the variety of body types and skill levels of the other
students with which you will be working.
Distraction and then flight - Obviously you should
try to get away—but whether you can get away
depends on your shoes, your clothing, your physical
stamina, the terrain and how close your predator is.
Verbal assertiveness - If someone is coming toward
you, hold out your hands in front of you and yell,
“Stop” or “Stay Back!” When interviewed, rapists said
they’d leave a woman alone if she yelled or showed
that she was not afraid to fight back.
3. Meet the instructors.
You will rely on these people for your knowledge.
Watch to see if they appear genuinely concerned with
students’ progress. Also check their communication
and teaching style to see if these will work for you.
Physical resistance - If you decide to respond
physically, remember that your first priority
is to get away. Act quickly and decisively to throw the
attacker off guard while you escape.
Make a conscious effort to get an accurate description
of your attacker(s). Even the smallest details may give
authorities a clue to finding the suspect.
4. Check for safety precautions.
When watching possible classes, look for a controlled
environment and the use of padded safety equipment.
Avoid any place that ascribes to the “no pain, no gain”
theory.
(Source: Washington Real Estate Safety Council)
26
Protect Yourself with a Distress
Code System
Protect Yourself with Self-Defense Skills CONT .,
5. Look for programs that offer options,
techniques, and a way of analyzing situations.
Good self-defense programs do not tell an individual
what she should or should not do. A program may
point out what usually works best in most situations,
but each situation is unique and the final decision
rests with the person actually confronted by
the situation.
An important part of ensuring that you stay safe on
the job, on the road and at home is preparing some
“safety nets” in advance. One such precaution is
having a distress code system in place.
Establish a voice stress code, a secret word or phrase
phone or in-person conversation for cases where you
feel that you are in danger. Use this if the person you
are with can overhear the conversation, but you don’t
want to alarm them.
6. Empowerment is the goal of a good self-defense
program.
The individual’s right to make decisions about her
participation must be respected. Pressure should not
be brought to bear in any way to get someone to
participate in an activity if she’s hesitant or
unwilling.
The distress code could be something as simple as “Hi,
this is Jane. I’m at [address]. Could you e-mail me the
red file?” You can make up your own distress code,
i.e. DOG FOOD (when you don’t have a dog) or I’m
going to MAYDAY Lane (and there is no Mayday
Lane). It may make the most sense for everyone in
your office to share a single distress code; this will be
easiest to remember for everyone.
Self-Defense Resources:
“How to Defend Yourself”
by Lindsay Toler
http://education.missouri.edu/news/articles/2007FA/tips_2007_11_12_selfdefense
Ask Men.com: How to Defend Yourself in a Fight
www.askmen.com/fashion/how_to_150/180_how_to.
html
The colleague who receives your distress code will be
alerted that you may be in danger.
With your pre-arranged signal, they will know to call
9-1-1 on your behalf, or, after asking a few careful
questions, can arrange to meet you so that you are not
alone, or call you back and ask you to leave to respond
to an “emergency situation.”
BillFitzpatrick.com -Master Self-defense
http://billfitzpatrick.com/selfdefense
The distress code should be used if you are uneasy,
but do not feel you are in danger. If you are in
immediate danger, leave the area.
How to Defend Yourself
www.wikihow.com/Defend-Yourself
Do not hesitate to call 9-1-1 in an emergency.
Authorities agree that most rapists and thieves are
looking for easy targets. Be assertive and leave a
dangerous situation early, but have a distress code for
times you feel uneasy.
The American Women’s Self-Defense Association
(AWSDA) - www.awsda.org
Defend University’s Principles of Self-Defense
www.defendu.com/wsdi/principles.htm
Share and practice your distress code with your office,
your colleagues and your family
and friends.
“Basic Self-Defense for Women” by Kirsten Lasinski
GoogoBits.com - www.googobits.com/articles/1254basic-selfdefense-for-women.html
(Source: Washington Real Estate Safety Council)
Sixwise.com
www.sixwise.com/newsletters/07/09/26/15_key_tip
s_to_defend_yourself_if_you_ever_must_defend_
yourself_in_a_fight.htm
(Source: Defend University)
27
Showing and Managing
Commercial Property
Safety at Open Houses
An open house can be a great sales tool, but it also
exposes you to numerous unfamiliar people for the
first time. Stay safe by practicing these guidelines.
Property management may be one of the most
dangerous careers in real estate because you are
typically showing vacant properties to prospective
customers. Here are several things to keep in mind:
— If possible, always try to have at least one other
person working with you at the open house.
— Communication plays a vital role when you’re
showing vacant property. Know who you are dealing
with. Insist that you have information recorded both
at the office and with you about the client.
— Check your cell phone’s strength and signal prior
to the open house. Have emergency numbers
programmed on speed dial, and keep your phone
with you at all times.
— Upon entering a house for the first time, check all
rooms and determine several “escape” routes. Make
sure all deadbolt locks are unlocked to facilitate a
faster escape.
— Notify a colleague of your schedule and
whereabouts.
— Be sure your cell phone is serviceable in the area
in which you are showing the property.
— Make sure that if you were to escape by the back
door, you could escape from the backyard.
Frequently, high fences surround yards that contain
swimming pools or hot tubs.
— When the property is vacant, be aware of the
time of day you are showing the property.
Showing a property at dusk or after dark, with no
electricity on in the space you are showing, is not
advisable.
— Place one of your business cards, with the date
and time written on the back, in a kitchen cabinet.
Note on it if you were the first to arrive or if clients
were waiting.
— Get to know all prospective clients before
showing the property. Use your intuition. If you feel
uneasy, have someone else with you, or don’t show
the property.
— Have all open house visitors sign in. Ask for full
name, address, phone number and email.
— When showing the house, always walk behind the
prospect. Direct them; don’t lead them. Say, for
example, “The kitchen is on your left,” and gesture
for them to go ahead of you.
— Have policies in place regarding rental collection
and disposition of a property. All of the real estate
safety practices are applicable in commercial sales
and property management, and are even more
relevant since you are usually dealing with vacant
locations. Be sure you review all the safety
awareness procedures and implement the best
measures to
provide protection from assailants.
— Avoid attics, basements, and getting trapped in
small rooms.
— Communicate frequently with the office, your
answering service, a friend or a relative that you will
be calling in every hour on the hour. And if you don’t
call, they are to call you.
— Inform a neighbor that you will be showing the
house and ask if he or she would keep
an eye and ear open for anything out of the ordinary.
(Source: Georgia Association of REALTORS®)
CONTINUED
28
Share Safety Tips with Your
Clients
Safety at Open Houses
— Don’t assume that everyone has left the premises at
the end of an open house. Check all of the rooms and
the backyard prior to locking the doors. Be prepared
to defend yourself, if necessary.
Share the safety message with your clients! They, too,
can be vulnerable as they allow strangers into their
homes, or visit other people’s property. Give them this
valuable advice to help them protect themselves
against crime:
If you are showing model homes, here are four
tips that can help keep you safe:
— Remind your clients that strangers will be walking
through their home during showings or open houses.
Tell them to hide any valuables in a safe place. This
includes items they might not initially think would
attract interest, like prescription medications or
alcohol or information that could be used for identity
theft. In one reported incident, an individual was
going through medicine cabinets at open houses and
stealing the owners’ prescription drugs.
— If possible, always try to have at least one other
person working with you at the home.
— When a person comes through the office to view a
model home, have them complete a guest register that
includes their full name, address, phone number,
e-mail, and vehicle information.
— Keep your cell phone and your car keys with you at
all times. Keep your handbag locked in the trunk of
your vehicle.
— Warn your clients that not all agents, buyers and
sellers are who they say they are. Strangers who stop
by unannounced should be asked to make an
appointment with the listing agent. Stress, that your
clients should never to show a home without the
presence of an agent.
— When closing the model homes for the night, never
assume that the home is vacant. Check the interior of
the house prior to locking the doors, working from the
top floor to the bottom, back of the house to the front,
locking the doors behind you. Be familiar enough with
each home to know the exits. Be aware of your
surroundings. Be prepared to protect yourself.
— Instruct your clients that they are responsible for
their pets. If possible, animals should be removed
during showings. Make clients aware that buyers and
agents are sometimes attacked, and the owner will be
held liable.
(Sources: Washington Real Estate Safety Council; City of Mesa, AZ; Nevada County
Board of REALTORS®; Georgia Real Estate Commission).
— At an open house, be alert to the pattern of visitors’
arrivals, especially near the end of showing hours. In
some areas, a group of thieves will show up together
near the end of the open house and, while a string of
“potential buyers” distracts the agent, the rest of the
group walks through the house, stealing any valuables
they come across.
— Finally, when you leave a client’s property, whether
after an open house or a standard showing, make sure
that all doors and windows are locked. Thieves
commonly use open houses to scout for valuables and
possible points of entry, then return after the agent
leaves.
— Let your clients know that you will take all of the
above safety precautions, but that when they return
home, they should immediately verify that all doors
are locked and all valuables accounted for.
(Source: Nevada County Association of REALTORS® (CA); Realty Times)
29
Safety on the Road
Safety on the Road CONT .,
Parking Lot Safety:
Don’t Become an Easy Target!
As a REALTOR®, you spend a great deal of time in
your car. These tips may help protect you from
dangerous situations while in your car:
— Don’t approach your vehicle if a van or other large
vehicle with tinted windows is parked next to it. Find
a security guard to walk you to your car, or look for a
nearby couple walking to their car and say something
like, “That vehicle wasn’t there when I parked. Would
you mind making sure I get into my car safely?”
— Your office should keep a file on each agent’s
vehicle, including the make, year, model, color and
license plate number.
— Whenever possible, take separate cars to a
showing. When you leave your car, lock it.
— Have your key ready to open the car door. Never
stand next to your car searching through your purse.
Robbers, car-jackers and sexual predators all watch
for this type of distraction.
— Wear a visible company identification card at all
times. It is also best to drive a vehicle clearly marked
with your company name. These will be invaluable for
identification if you need to get assistance.
— Once in your car, lock the doors immediately.
— Get moving. Don’t sit inside of your vehicle
adjusting the stereo, rummaging through bags or your
purse, or talking on your phone, especially if the lot is
not well populated.
— When you’re alone getting into your car, the first
thing you should do is lock the doors. Be observant
when approaching your car, looking underneath and
in the back seat before entering.
— If you have an unlocking button or keyless entry
system, make sure you unlock only the driver door.
Unlocking all doors allows a predator to simply slide
into your car from the passenger side.
— Keep roadside breakdown essentials in the trunk,
including flares, a tire-inflation canister, basic hand
tools, spare belts and hoses, water, a flashlight and a
first-aid kit. Have your vehicle inspected regularly,
keep it well maintained and learn how to change a flat
tire.
— Make sure that your dome light is always
functioning properly. As you unlock your vehicle
at night, glance into the back seat and make sure that
an attacker has not gained access to your car.
— Dress for the weather. If your car breaks down or
you need to escape a dangerous situation on foot, you
could find yourself exposed to harsh weather
conditions for an extended period of time. In the
winter, bring a coat with you and keep a blanket in the
trunk of your car along with some spare warm
clothes.
Auto Accident Scams
An apparent auto accident may not be an accident at
all, but rather a scam. Learn to recognize auto
accident scams to help prevent you and your family
from becoming victims.
— If you’re driving at night and are approached by a
vehicle with blue lights, exercise caution. Call 9-1-1 to
identify the vehicle, turn on your flashers to
acknowledge that you see the police car, and keep
moving until you’re in a well-lit area. A legitimate law
enforcement official will understand your caution.
Swoop and Squat
Two vehicles work as a team to set up an accident.
One vehicle pulls in front of an innocent driver and
the other alongside, blocking the victim in. The lead
car stops short, causing the victim to rear-end him.
The car that pulled up alongside serves as a block and
prevents the victim from avoiding a collision.
— Avoid aggressive drivers. Don’t create a situation
that may provoke another motorist such as tailgating
or flashing your lights. Use your horn sparingly, and if
you are being followed too closely, move over and let
the driver pass you. If you do encounter an angry
driver, avoid eye contact and give them plenty of
room. If you are concerned for your safety, call 9-1-1.
Drive Down
As an innocent driver tries to merge into traffic, the
suspect driver yields, waving on the other driver. As
this innocent driver merges, the suspect driver
intentionally collides with the victim and denies
giving him the right of way.
30
Cell Phone Safety
Safety on the Road CONT .,
Start and Stop
Stopped in the same lane of traffic, the suspect’s
vehicle is positioned directly in front of the victim.
The suspect starts to move forward as does the
innocent driver.
For no reason, the suspect vehicle suddenly stops
short, causing the victim to rear-end him.
Your mobile phone can be a lifeline for situations from
car breakdowns and getting lost on your way to a
property showing, to potentially threatening
situations. Keep a fully charged cell phone with you
during your workday and after work, including while
you’re showing a property or hosting an open house.
Here are some “do’s and don’ts” for making the best
use of your cell phone:
Sideswiping in a Two-lane Turn
At an intersection that has two left turn lanes, the
suspect crosses the centerline, intentionally
sideswiping the victim’s car. The suspect then alleges
that the victim caused the collision by entering his
lane.
— To best prepare for an emergency, pre-program
important numbers into your phone.
These may include your office, your roadside
assistance service or garage, and 9-1-1.
ATM Safety
— Try to plan your visits to automatic teller during
the day, rather than after dark.
— In case you are incapacitated in an emergency such
as a car accident, you can help responders identify
who they should contact by using the acronym “I.C.E.”:
In Case of Emergency. Simply enter ICE before the
name of the person or people you want contacted,
such as ICE Larry. This is becoming an accepted
standard across the U.S.
— Choose an ATM location in a busy public place.
— If possible, take along a friend who can watch the
surroundings while you are conducting your
transactions.
— Be careful with giving confidential information
such as bank account numbers over your cell phone.
Eavesdropping is a genuine problem for users of
analog cell phones and cordless phones.
The FM radio signals these phones transmit are easily
monitored using readily available radio receivers,
commonly called scanners.
Digital cellular and cordless phones are dramatically
less vulnerable to eavesdropping. Also be aware of
your surroundings and eavesdroppers when talking
on your cell phone in public.
— Pre-plan your transaction carefully, and don’t
spend too much time at the machine.
— When you make a withdrawal, quickly place the
money in your purse or wallet and leave as soon as
you finish your transaction.
— Watch out for people waiting around an ATM –
they may not really be customers. If someone offers to
let you go ahead of them, decline politely and leave.
Using Your Phone Behind the Wheel
The safest tip of all is: Don’t make or accept cell phone
calls while you’re driving. This has been proven to be
a distraction and many states and cities have laws
prohibiting using a cell phone while driving. But if you
must and are legally permitted to use your phone
while driving, follow this advice for best safety
practices:
— Keep your hands on the wheel, not on your phone.
— Keep your eyes on the road. Learn how to operate
your phone without looking at it.
— When visiting a drive-through ATM, keep your
doors locked and be prepared to drive away quickly. If
anyone approaches your car, roll up your window and
drive off.
— If you have not finished your transaction, and a
suspicious character approaches you, press the
CANCEL button, receive your card and leave quickly.
(Sources: REALTOR® Magazine; Louisiana REALTORS®; Washington Real Estate
Safety Council; City of Mesa, AZ; City of Albuquerque, NM; Allstate; Road and Travel
magazine; Illinois Secretary of State’s office)
Memorize the location of all the controls, so you can
press the buttons you need without ever taking your
eyes off the road.
CONTINUED
31
Cell Phone Safety
Section 3: Safety at the Office
CONTINUED
Protect Yourself with Smart
Marketing Materials
— Practice off-road. If your phone is new, practice
using it and the voice mail system while your car is
stopped.
Consider these tips in preparing or updating the
information you use to get business:
— Use a hands-free model. A hands-free unit lets you
keep both hands on the wheel while you talk on the
phone. Attach the microphone to the visor just above
your line of vision, so you can keep your eyes on the
road.
— Stay in your lane. Don’t get so wrapped up in a
conversation that you drift into the other lane. Pull
into the right-hand lane while talking, so you only
have to worry about traffic to the left.
— All of your marketing materials should be polished
and professional. Don’t use alluring or provocative
photography in advertising, on the Web or on your
business cards. There are many documented cases of
criminals actually circling photographs of their wouldbe victims in newspaper advertisements. These
victims were targeted because of their appearance
in the photograph.
— Use speed dialing. Program frequently called
numbers and your local emergency number into the
speed dial feature of your phone for easy, one-touch
dialing. When available, use auto answer or voiceactivated dialing.
— Limit the amount of personal information you
share. Don’t use your full name with middle name or
initial. Use your office address rather than your home
address—or list no address at all. Giving out too much
of the wrong information can make you a target.
— Never dial while driving. If you must dial manually,
do so only when stopped. Pull off the road, or have a
passenger dial for you.
— Concentrate on your professional proficiency
rather than personal information in newspapers,
resumes and business cards.
— Take a message. Let your voice mail pick up your
calls in tricky driving situations. It’s easy to retrieve
your messages later on.
— Be careful how much personal information you
give verbally as well. Getting to know your client does
not need to include personal information about your
children, where you live and who you live with.
— Know when to stop talking. Keep phone
conversations brief so you can concentrate on your
driving. If a long discussion is required, if the topic is
stressful or emotional, or if driving becomes
hazardous, end your call and continue when you’re
not in traffic.
— All agents in your office should use only their first
initial and last name on their “For Sale” signs to
conceal gender and prevent anyone other than a
personal acquaintance or current client asking for you
by name.
— Know when to pull over. If you need to make a call
or answer an incoming call that requires your
attention, stop driving. Pull over in a safe and
convenient location before taking your eyes off the
road.
(Sources: Washington Real Estate Safety Council; Louisiana REALTORS®
Association; Nevada County Association of REALTORS®)
— Keep the phone in its holder. Make sure your
phone is securely in its holder when you’re not using
it.
— Don’t take notes while driving. If you need to jot
something down, pull off the road.
(Sources: Canada Safety Council; Spybusters.com)
32
Safety at the Office
Safety at the Office CONT .,
Personal Valuables and Equipment
Apply the following safety procedures to help keep
you and your belongings safe at the office:
— Never leave valuables, purses or wallets tucked
behind counters or on desks.
General Security Measures
— Lock away personal letterhead and business cards
to avoid use by unauthorized people.
— Know staff in other nearby businesses and be
aware of their schedules.
— Ensure all doors other than the main entrance are
secured.
— Mark equipment for easy identification in the event
of theft or damage. Maintain an inventory of all
marked items.
— Make certain windows are not obscured so that
passersby can see in.
— Lock up audio/visual equipment when not in use.
— Secure spare and master keys in locked cabinets.
— Make sure there is a clear exit route from the
service desk to the door.
Protect Client Information
— Never allow visitors to wander freely about the
business. Have the person whom they want to see
come to the front office area and escort the individual
to the meeting area.
Most offices keep sensitive personal information on
their computers and/or in paper files—
names, Social Security numbers, credit card or other
account data—that identifies customers or
Employees.
If this sensitive data falls into the wrong hands, it can
lead to fraud or identity theft. State and federal laws
govern how personal information should be disposed
of. Specifically, the Federal Trade Commission (FTC)
has a Disposal Rule that requires businesses to adopt
appropriate disposal practices that are reasonable
and appropriate to prevent the unauthorized access to
– or use of – information in a consumer report. Be
sure you check for applicable laws that will dictate
how you handle and dispose of personal information.
— Have a visitor log book and policy on issuing visitor
tags that limit access to certain areas and hours of the
day.
— If you encounter an individual while working late
or alone, indicate to that person that you are not
alone. Say something like, “My supervisor will be right
with you and should be able to assist you.”
— Keep personal information private. Avoid
discussing where you live, after-work or vacation
plans in front of customers, new coworkers or anyone
with whom you are not comfortable.
A sound data security plan is built on 5 key
principles:
— Install a spare phone in the storage room.
1. Take stock. Know what personal information you
have in your files and on your computers.
Effective data security starts with assessing what
information you have and who has access to it.
Understanding how personal information moves into,
through, and out of your business and who has—or
could have—access to it is essential to assessing
security vulnerabilities.
— Install an alarm, (preferably both audible and
monitored). Have alarm buttons in strategic spots; i.e.
panic buttons at the reception area.
— Install surveillance cameras that will monitor the
front entrance, the reception area, and other areas
that are accessible to the public.
33
Safety at the Office CONT .,
Section 4: Safety at HOME
Safety at Home
2. Scale down. Keep only what you need. If you don’t
have a legitimate business need for sensitive
identifying information, don’t keep it. In fact, don’t
even collect it. If you have a legitimate business need
for the information, keep it only as long as it’s
necessary. If only one or two employees need access
to personal information, make sure access is limited
to only those employees.
Many real estate professionals have home offices.
Whether you work at home or not, you might want to
consider additional steps to secure your home.
Burglars usually leave if they can’t break in within
ninety seconds. Anything that slows down a thief by
even a minute or two can keep your house from being
robbed.
The Home Safety Council has a wealth of information
on making your home safer. Visit their Web site at
www.mysafehome.org and get a personalized
checklist to meet your personal home safety needs.
In addition, here are a few tips:
3. Lock it. Protect the information that you keep. The
most effective data security plans include physical
security, electronic security, employee training, and
the security practices of contractors and service
providers.
— Consider investing in an alarm system if you don’t
already have one. If you do, make sure you have a
panic button feature in the room you use as an office.
4. Pitch it. Properly dispose of what you no longer
need to ensure that it cannot be read or
reconstructed. Check your state laws regarding
destruction of personal information to make sure
you’re in compliance.
— Your home should have deadbolts with full oneinch bolts on all entry doors. These should be installed
in addition to existing locksets.
If you have a door with glass panels within three feet
of the lock, you should have a double-cylinder
deadbolt, which requires a key on both sides so that a
burglar cannot simply break the glass and reach
through to unlock the door. If a door has conventional
glass panels, consider replacing them with
shatterproof glass or with polycarbonate material.
5. Plan ahead. Create a plan to respond to security
incidents. Have a plan in place to respond if there is a
security breach. Designate a senior member of your
staff to coordinate and implement the response plan.
Access to Your Office
— Restrict office keys to those who need them.
Maintain a record of keys, including issue and return
dates, name and signature of recipient and an outline
of the consequences should an important key be
missing.
— If you have just moved in to a house or apartment,
have all locks replaced or re-keyed immediately.
— If you must provide copies of your keys to
housekeepers, contractors or other workers, be sure
to give as few keys as possible—for example, just one
key that opens one door.
If you terminate a worker who has your key, consider
changing the lock, even if you get your key back.
— Mark office keys with “Do Not Duplicate.”
— Establish a rule that keys are not to be hidden or
left unguarded on desks or cabinets and enforce that
rule.
— Have a procedure in place for collecting keys and
IDs from terminated employees.
— Place a wooden rod in the track of a sliding glass
door so it can’t be opened from outside. To prevent
sliding doors from being lifted from their frames,
install shims along the top frames; these fit in the
tracks between the top of the door and frame and
prevent the door from being raised high enough to be
removed.
— Treat doors with coded locking systems as you
would a key. Codes are released to appropriate
individuals only, and should be changed as those
individuals leave your employment. Have a procedure
in place for the release of these codes.
(Sources: Sonoma County Crime Crushers; Federal Trade Commission)
34
Safety at Home CONT .,
Protect Your Personal and
Electronic Information
(Identity Theft)
— Pay special attention to your basement windows.
Bushes or trees may hide these windows, providing a
place for criminals to work without being seen.
Consider reinforcing the windows with security bars,
wire mesh or Plexiglas.
Identity theft is a serious and costly crime. People
whose identities have been stolen can spend months
or years cleaning up the mess thieves have made of
their good name and credit record. In the meantime,
victims may lose job opportunities, be refused loans,
housing or cars, or even get arrested for crimes they
didn’t commit.
— Install a deadbolt lock on the door of your office, so
that it becomes a “safe room” that you can lock
yourself into if you are threatened. If the office is on
an upper floor, plan an escape route from the room;
consider keeping a rope ladder in the room.
— Burglars prefer to work in the dark. Leave porch
and garage lights on while you sleep. Also consider
installing motion-detector lights if you live in a highcrime area or near a highway. Burglars strike 40
percent more often within three blocks of major
thoroughfares, which offer easy escape.
Top 10 Tips for Identity Theft Prevention
The following tips can help you lower your risk of
becoming a victim.
1. The best defense is a good offense.
Contact the fraud department of any of the
three consumer reporting companies— Equifax,
Experian and Trans Union—to place a fraud alert on
your credit report. The fraud alert automatically lets
credit card companies and other creditors know they
must contact you before opening any new accounts or
making any changes to your existing accounts. You
only need to contact one of the three companies
to place an alert; that company will transfer the alert
to the other two.
— Prune any shrubbery that hides doors or windows.
Remove tree limbs that allow access to reach second
story windows.
— The first thing a burglar looks for is a hidden key,
and is well acquainted with the hiding places. If you
insist on hiding a key, never hide it anywhere near the
entrance. More important, never leave a revealing
note on the door.
Equifax®: 1-800-525-6285; www.equifax.com; P.O.
Box 740241, Atlanta, GA 30374-0241
— If you’re going to be away for two days or more,
suspend deliveries of newspapers, bottled water, and
other delivery items.
ExperianSM: 1-888-EXPERIAN (397-3742);
www.experian.com; P.O. Box 9532, Allen, TX 75013
— Keep garage windows covered. There is a lot about
your garage you don’t want potential criminals to
know about—such as whether someone is home, or if
there are tools or ladders available to help break in to
your home. If you have an attached garage, make
sure the door that connects your house to the garage
is a solid core exterior door with a deadbolt lock.
TransUnion®: 1-800-680-7289;
www.transunion.com; Fraud Victim Assistance
Division, P.O. Box 6790, Fullerton, CA 92834-6790
2. Don’t get caught by “phishing”.
Scam artists “phish” for victims’ information by
posing as representatives of banks, stores or
government agencies.
This is done over the phone, through regular mail, and
especially via e-mail. Don’t respond to a request to
verify your account number or password. Don’t give
out your personal information unless you made the
contact. Legitimate companies will not request this
kind of information in this way.
— Even though you have a telephone in your home
office, keep a charged mobile phone with you at all
times. Program any emergency phone numbers as
speed-dials on your office line as well as your mobile
phone.
— For a detailed security analysis of your home,
contact a bonded professional locksmith who is an
accredited member of a national locksmith
association. At no cost to you, your police and sheriff’s
department will be glad to help when needed. Call
them immediately if you see, hear or have a good
reason to suspect that a crime is being committed.
(Sources: Nevada County Association of REALTORS®; City of Baton Rouge, LA; Home
Safety Council; Kwikset)
35
3. Keep your identity from getting trashed.
Invest in a paper shredder and shred all papers with
personal information before you throw them away.
Shred unwanted credit card applications and
“convenience checks” that come in the mail, credit
card receipts with your account number, outdated
financial papers and papers containing your clients’
personal information.
8. Stop pre-approved credit offers.
Stop most pre-approved credit card offers by calling
toll-free 888-5OPTOUT (888-567-8688) to have your
name removed from credit bureau marketing lists.
These mail packages are valuable for identity thieves
who steal mail and fill out applications in your name.
9. Ask questions.
Ask questions whenever you are asked for personal
information that seems inappropriate. Ask how the
information will be used and if it will be shared. Ask
how it will be protected. Explain that you’re
concerned about identity theft. If you’re not satisfied
with the answers, consider going somewhere else.
4. Control your personal financial information.
Many states have laws requiring banks and other
financial institutions to get your permission before
sharing your personal financial information with
outside companies. You also have the right to limit the
sharing of your personal financial information with
most of your companies’ affiliates. Write to your
companies that you want to “opt-out” of sharing your
personal financial information with their affiliates.
10. Check your credit reports — for free.
One of the best ways to protect yourself from identity
theft is to monitor your credit history.
You can get one free credit report every year from
each of the three national credit bureaus.
Request all three reports at once, or order from a
different bureau every four months. (More
comprehensive monitoring services from the credit
bureaus cost from $44 to over $100 per year.) Order
your free annual credit reports by phone, toll-free, at
877-322-8228, or online at
www.annualcreditreport.com.
5. Shield your computer from viruses and spies.
Protect your personal information on your home
computer. Use passwords with at least eight
characters, including a combination of letters,
numbers, and symbols. Use firewall and virus
protection software and update it regularly.
Download free software only from sites you know and
trust, and don’t install software without knowing
what it is. Set browser security to at least “medium.”
Don’t click on links in pop-up windows or in spam
e-mail, and don’t download any file from an e-mail
address you don’t know.
If you think your identity has been stolen, here’s
what to do now:
— Contact the fraud departments of any one of the
three major credit bureaus to place a fraud alert on
your credit file. The fraud alert requests creditors to
contact you before opening any new accounts or
making any changes to your existing accounts. As
soon as the credit bureau confirms your fraud alert,
the other two credit bureaus will be automatically
notified to place fraud alerts. Once the alert is placed,
you may order a free copy of your credit report from
all three major credit bureaus.
6. Click with caution
When shopping online, check out a Web site before
entering your credit card number or other personal
information. Read the privacy policy and look for
opportunities to opt out of information sharing. (If
there is no privacy policy posted, shop elsewhere!)
Enter personal information only on secure Web pages
with “https” in the address bar and a closed padlock
symbol at the bottom of the browser window. These
are signs that your information will be encrypted or
scrambled, protecting it from hackers. If you don’t see
these signs, order by telephone. Also, you should
always use a credit card rather than a debit card to
make online purchases.
— Close the accounts that you know or believe have
been tampered with or opened fraudulently.
Use the ID Theft Affidavit when disputing new
unauthorized accounts.
— File a police report. Get a copy of the report to
submit to your creditors and others that may require
proof of the crime.
7. Check your bills and bank statements.
Open your credit card bills and bank statements right
away. Check for any unauthorized charges or
withdrawals and report them immediately. Call if bills
don’t arrive on time. It may mean that someone has
changed contact information to hide fraudulent
charges.
— File your complaint with the Federal Trade
Commission. The FTC maintains a database of identity
theft cases used by law enforcement agencies for
investigations.
(Sources: The Federal Trade Commission, The Office of Privacy Protection in the
California Department of Consumer Affairs)
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52 SAFETY TIPS
The 10-Second Rule
Share knowledge, awareness, and
empowerment with your members year-round
Inattention is one of the main reasons people find
themselves in dangerous situations. Take a few
precious seconds during the course of your day to
assess your surroundings.
Tip #1
Have your excuse ready.
Part of being prepared to deal with a threatening
situation is having “an out.” Prepare a scenario in
advance so that you can leave—or you can encourage
someone who makes you uncomfortable to leave.
Examples: Your cell phone or pager went off and you
have to call your office, you left some important
information in your car, or another agent with buyers
is on his way.
Take 2 Seconds when you arrive at your destination.
— Is there any questionable activity in the area?
— Are you parked in a well-lit, visible location?
— Can you be blocked in the driveway by a prospect’s
vehicle?
Take 2 Seconds after you step out of your car.
— Are there suspicious people around?
— Do you know exactly where you’re going?
Tip #2
Checking in
When you have a new client, ask him/her to stop by
your office and complete a Prospect Identification
Form (Find a copy online at
www.REALTOR.org/Safety). Also, photocopy their
driver’s license and retain this information at your
office. Be certain to properly discard this personal
information when you no longer need it.
Take 2 Seconds as you walk towards your destination.
— Are people coming and going or is the area
unusually quiet?
— Do you observe any obstacles or hiding places in
the parking lot or along the street?
— Is anyone loitering in the area?
Take 2 Seconds at the door.
— Do you have an uneasy feeling as you’re walking
in?
— Is someone following you in?
Tip #3
Touch base.
Always let someone know where you are going and
when you will be back; leave the name and phone
number of the client you are meeting and schedule a
time for your office to call you to check in.
Take 2 Seconds as soon as you enter your destination.
— Does anything seem out of place?
— Is anyone present who shouldn’t be there or who
isn’t expected?
10 Seconds TOTAL
Tip #4
Open House: it ain’t over till it’s over
Don’t assume that everyone has left the premises at
the end of an open house. Check all of the rooms and
the backyard prior to locking the doors. Be prepared
to defend yourself, if necessary.
Taking in your surroundings lets you spot and avoid
danger. Make it a habit. Then share it
with someone else.
(Appeared in “What You Can Do About Safety,” REALTOR® Magazine,
September 2000. Courtesy Night Owl/Vector Security, Landover, MD.)
Tip #5
“My next client will be here soon…”
At the beginning of the showing, mention to the client
that you have another appointment to show the house
within a short time.
37
Tip #6
Block identity theft.
Contact the fraud department of any of the three
consumer reporting companies— Equifax®,
ExperianSM and Trans Union®—to place a fraud alert
on your credit report. The fraud alert automatically
lets credit card companies and other creditors know
they must contact you before opening any new
accounts or making any changes to your existing
accounts.
Tip #11
Got cell service, everywhere?
When you’re showing commercial property, thick
walls and/or remote locations may interfere with
mobile phone reception. Check in advance to be sure
your phone is serviceable in the area in which you are
showing the property.
Tip #7
Auto safety: 99% preparation
Keep roadside breakdown essentials in the trunk,
including flares, a tire-inflation canister, basic hand
tools, spare belts and hoses, water, a flashlight and a
first-aid kit. Have your vehicle inspected regularly,
keep it well maintained and learn how to change a flat
tire.
Tip #12
Shield your computer from e-mail viruses.
Computer viruses can impair and seriously damage
your computer. Viruses are often distributed via
attachments in e-mail spam. Never open an
attachment from someone you don’t know, and, if you
receive a strange or impersonal-sounding message
from a familiar address, check with that person to
make sure that they really sent it.
Tip #8
Wear your REALTOR® ID
Always wear visible company identification such as a
badge. It is also best to drive a vehicle clearly marked
with your company name. These will be invaluable for
identification if you need to get assistance.
Tip #13
Choose flight over fight.
While every real estate agent should take a basic selfdefense course, the primary goal in any threatening
situation is to escape from immediate danger and call
for help.
Tip #9
Pick up some self-defense skills
The best way to find a good self-defense class is to
learn what is available, and then make a decision.
Many health clubs, martial arts studios and
community colleges offer some type of class. You can
also ask your peers, friends and family if they have
taken a self-defense class that they would
recommend.
Tip #14
Establish an office distress code.
Create a voice distress code, a secret word or phrase
conversation for cases where you feel that you are in
danger. Use this if the person you are with can
overhear the conversation, but you don’t want to
alarm them. Example: “Hi, this is Jennifer. I’m with Mr.
Henderson at the Elm Street listing. Could you e-mail
me the RED FILE?”
Tip #10
Bring up the rear
When showing a home, always have your prospect
walk in front of you. Don’t lead them, but rather,
direct them from a position slightly behind them. You
can gesture for them to go ahead of you and say, for
example, “The master suite is in the back of the
house.”
Tip #15
Take 2 seconds when you arrive at your
destination to check out potential dangers:
• Is there any questionable activity in the area?
• Are you parked in a well-lit, visible location?
• Can you be blocked in the driveway by another
vehicle?
38
Tip #16
Shed some light on safety
Burglars prefer to work in the dark, so leave porch
and garage lights on while you sleep. Also consider
installing motion-detector lights if you live in a highcrime area or near a highway. Burglars strike 40
percent more often within three blocks of major
thoroughfares, which offer easy escape.
Tip #22
Take two seconds as you walk towards your
destination to check out potential risks.
• Are people coming and going or is the area
unusually quiet?
Tip #17
You are not alone.
If you encounter an individual while working late or
alone in your office, indicate to that person that you
are not alone. Say something like, “Let me check with
my supervisor to see whether she’s able to see you
now.”
• Is anyone loitering in the area?
• Do you observe any obstacles or hiding places in the
parking lot or along the street?
Tip #23
Carry less
If you carry a purse, lock it in your car trunk before
arriving at an appointment. Carry only non-valuable
business items (except for your cell phone), and do
not wear expensive jewelry or watches, or appear to
be carrying large sums of money.
Tip #18
Your e-mail is public.
Don’t send any vital or private information via e-mail.
Keep in mind that unlike Web sites, e-mail is never
secure.
Tip #24
Protect your clients
Warn your clients that not all agents, buyers and
sellers are who they say they are. Strangers who stop
by unannounced should be asked to make an
appointment with the listing agent. Stress that your
clients should never to show a home without the
presence of an agent.
Tip #19
Lock up client keys.
Be sure to use the lockbox property-key procedure
that has been established to improve real estate agent
safety. A reliable, secure lockbox system such as those
made by NAR REALTOR Benefits® Partner SentriLock
(www.sentrilock.com) ensures that keys don’t fall into
the wrong hands.
Tip #24
Keep your basement burglar-free.
When safeguarding your home, pay special attention
to all basement windows. If any bushes or trees hide
these windows, this can provide a place for burglars
to break in without being seen. Consider reinforcing
your basement windows with security bars, wire
mesh or Plexiglas®.
Tip #20
Shop online safely.
When shopping online, check out a Web site before
entering your credit card number or other personal
information. Enter this information only on secure
Web pages with addresses that start with "https" and
have a closed padlock symbol at the bottom of the
browser window. These are signs that your
information will be encrypted or scrambled,
protecting it from hackers.
Tip #26
Don’t get parked in.
When showing property or meeting someone, park
your car in front of the property rather than in the
driveway. You will avoid having your car blocked in,
you’ll have an easier time escaping in your vehicle,
and you will attract lots of attention running and
screaming to your car at the curb area.
Tip #21
Nothing personal…
When talking to clients and prospects, be friendly but
still keep your personal information private. This
means avoiding mention of where you live, your afterwork or vacation plans, and similar details.
39
Tip #27
Track open house comings and goings
Place one of your business cards, with the date and
time written on the back, in a kitchen cabinet. Note on
it if you were the first to arrive or if clients were
waiting.
Tip #33
No hidden keys,
The first thing a burglar looks for is a hidden key, and
is well acquainted with the hiding places. If you insist
on hiding a key, never hide it anywhere near the
entrance. More important, never leave a revealing
note on the door.
Tip #28
Monitor your financial accounts.
Open your credit card bills and bank statements right
away. Check for any unauthorized charges or
withdrawals and report them immediately. Call if bills
don’t arrive on time. It may mean that someone has
changed contact information to hide fraudulent
charges.
Tip #34
Lock it and look,
When you’re alone getting into your car, the first thing
you should do is lock the doors. Be observant when
approaching your car; look underneath and in the
back seat before entering.
Tip #35
Rely on good neighbors.
Inform a neighbor that you will be hosting an open
house, and ask if he or she would keep an eye and ear
open for anything out of the ordinary.
Tip #29
Plan ahead with escape routes.
Upon entering an open house property for the first
time, check each room and determine at least two
“escape” routes. Make sure all deadbolt locks are
unlocked for easy access to the outside.
Tip #36
Be prepared: pre-program!
To best prepare for an emergency, pre-program
important numbers into your cell phone. These may
include your office, your roadside assistance service
or garage, and 9-1-1.
Tip #30
Keep it professional.
All of your marketing materials should be polished
and professional. Don’t use alluring or provocative
photography in advertising, on the Web or on your
business cards. There are many documented cases of
criminals actually circling photographs of their wouldbe victims in newspaper advertisements.
Tip #37
Beware of “phishers.”
Don’t respond to e-mails requesting personal or
private information such as passwords, credit card
numbers or bank account numbers. Even if a message
appears to be from your bank or a trusted vendor,
credible companies never request private information
this way.
Tip #31
Send clients a safety reminder.
Remind clients who are selling that strangers will be
walking through their home. Tell them to put any
valuables in a secure hiding place. This includes
prescription drugs.
Tip #38
Scam alert!
At an open house, be alert to visitors’ comings and
goings, especially near the end of showing hours.
Police have reported groups of criminals that target
open houses, showing up en masse near the end of the
afternoon. While several "clients" distract the agent,
others go through the house and steal anything they
can quickly take.
Tip #32
Best practices for model home showings.
When a person comes through the office to view a
model home, have them complete a guest register that
includes their full name, address, phone number, email, and vehicle information.
40
Tip #39
Take two seconds to pause and look around as you
enter your destination.
• Does anything seem out of place?
• Is anyone present who shouldn’t be there or who
isn’t expected?
Tip #46
Secure your garage
Help keep your home safe by covering garage windows.
There is a lot about your garage you don't want potential
criminals to know about—such as whether someone is
home, or if there are tools or ladders available to help
break in to your home. If you have an attached garage,
make sure the door that connects your house to the
garage is a solid core exterior door with a deadbolt lock.
Tip #40
Don’t dial and drive.
If you must use your cell phone while driving, follow
this advice for best safety practices: Use a hands-free
model so that you can keep your hands on the wheel;
learn to operate your phone without looking at it—
you should practice this before getting behind the
wheel; and don’t dial while driving. And check your
local laws for what’s legal and what’s not!
Tip #47
Sound the alarms.
Consider investing in an alarm system if you don’t
already have one. If you do, make sure you have a panic
button feature you can easily use in the room you use as
an office.
Tip #48
Ask an expert for home security advice.
For a detailed security analysis of your home, contact a
bonded professional locksmith who is an accredited
member of a state or national locksmith association. At
no cost to you, your police and sheriff's department will
be glad to help when needed.
Tip #41
Make your clients your “safety partners.”
Inform clients who are selling that while you are
taking safety precautions, and that you've checked
and locked the home before leaving, they should
immediately double-check all locks and scout for
missing items immediately upon their return, in case
you've missed any less-than-obvious means of entry.
Tip #49
When in doubt, shred!
Thoroughly shred all papers with personal information
before you throw them away. Shred unwanted credit
card applications and "convenience checks" that come in
the mail, credit card receipts with your account number,
outdated financial papers and papers containing your
clients’ personal information.
Tip #42
Don’t use the “V word”
When describing a listing, never say that a property is
“vacant.” This may be an invitation to criminals.
Tip #43
Check suspicious e-mails.
Before you act on an e-mail request, check a list of the
latest e-mail scams on the Federal Trade
Commission’s Web site at
http://www.ftc.gov/bcp/menu-internet.htm.
Tip #50
Keep your cell phone handy.
Always carry a charged mobile phone. Clip your phone
on and make it part of your everyday apparel for
immediate accessibility.
Tip #44
Check your locks.
Your home should have deadbolts with full one-inch
bolts on all entry doors in addition to existing
locksets. Any door with glass panels within three feet
of the lock should have a double-cylinder deadbolt,
which requires a key on both sides.
Tip #51
From dawn till dusk.
When showing a vacant commercial site, be aware of the
time of day you meet a client. Showing a property at
dusk or after dark, with no electricity on in the space you
are showing, is not advisable.
Tip #52
Opportunity for self-study of REALTOR® Safety skills.
Get industry-specific safety training any time,
anywhere— Visit www.REALTOR.org/Safety to learn
more.
Tip #45
No clutter = safe.
Keep your office safe: Ensure all doors other than the
main entrance are secured, and all windows are clear
so that passersby can see in. Also keep a clear exit
route from the service desk to the door.
41
42
43
44
45
46
QUIZ: REALTOR® Safety
5. When holding an open house, I should:
1. Before showing a home for the first time,
I should ask the sellers:
a.
b.
c.
d.
Have you ever seen ghosts in the house?
Do you mind if I turn on the television?
Do you have any dogs?
All of the above
2. To find a first-rate self-defense course in my
area, I should:
a.
b.
c.
d.
Ask family and friends for recommendations
Look for a course with a broad focus
Meet the instructors before signing up
All of the above
b.
c.
d.
Treat every potential buyer like an escaped
convict
Be especially wary of men who come to view the
home alone
Remind sellers to put all valuables in a safe place
All of the above
b.
c.
b.
Check all rooms before anyone arrives and
determine several “escape” routes. Make sure all
deadbolt locks are unlocked to facilitate a faster
escape
c.
Don’t assume that everyone has left the
premises at the end of the day. Check all rooms
and the backyard prior to locking the doors, and
be prepared to defend myself
d.
All of the above
a.
Asking them to meet me at the brokerage office
b.
Finding out their motivation for buying or
selling
c.
Writing their first name and e-mail address on a
note card and leaving it with a colleague
d.
All of the above
7. The 10-second rule is a smart and quick way to
keep safety at the forefront throughout the day.
How does it work?
4. One way to stay safe on the job is to have a
distress voice signal for when you want to call for
help without alarming someone who can
overhear you. To create such a signal, I should:
a.
Inform a neighbor that I’ll be showing the house
and ask if he or she would keep an eye and ear
open for anything out of the ordinary
6. When meeting prospective clients for the first
time, I can stay safe by:
3. To protect against theft during a home showing, I
should:
a.
a.
Establish a secret phrase that’s not commonly
used but can be worked into any phone or inperson conversation when I’m feeling uneasy
about a situation
Carry a dog whistle that is mute to humans but
will irritate canines, and blow into the whistle
whenever I’m feeling uneasy about a situation
Think of a common distress word such as “help”
or “fire” that I can shout to grab everyone’s
attention when I’m feeling uneasy about a
situation
a.
I take 10 seconds to review self-defense
strategies right before getting out of the car
b.
I breathe deeply and count backwards from 10
to gain composure before meeting new people
c.
I take 10 seconds as I arrive at each destination
to evaluate my surroundings and check for
anything that’s out of the ordinary
d.
All of the above
8. When I’m working at the office, I should take this
safety precaution:
d. All of the above
47
a.
Make sure that my desk is not visible from the
front door
b.
Secure all unused doors and windows, especially
if they’re in the rear of the office or out of sight
and earshot
c.
Listen to music on headphones to boost my
concentration
d.
All of the above
© Copyright, 2006, by the NATIONAL ASSOCIATION OF REALTORS®
Antitrust Compliance Guide
for REALTORS® and
REALTOR-ASSOCIATES®
48
INTRODUCTION
Today, REALTORS® are in a precarious position. They
serve their clients and customers in an environment
of mounting legal complexity. Failure to understand
and anticipate these complexities can lead to litigation
of monumental proportions. This is especially true in
the area of antitrust.
Antitrust Sensitivity
The purpose of this handbook is not to convert real
estate brokers and salespeople into antitrust lawyers
or counselors. Rather, this guide is intended to
sensitize brokers and salespeople to the antitrust “red
flags” that will inevitably arise in their day-to-day
business affairs, and in their participation in their local
board or association of REALTORS®.
able to take measures to ensure that their conduct
complies with the dictates of the antitrust laws. This
Guide offers advice on both the ways brokers and
agents may run afoul of the antitrust laws, as well as
the structure of an antitrust compliance program for
real estate firms and sales associates.
An antitrust compliance program is a business
necessity for several reasons. Brokers must institute
an office compliance program because they will be
held responsible for conduct of their sales associates.
A brokerage firm cannot avoid antitrust liability simply
because it did not authorize the price-fixing scheme
undertaken by its sales associates and sales associates
from another firm. Ignorance is never an excuse for
any violation of the law. Therefore, continuous
education and training of sales associates is essential.
Antitrust sensitivity is an imperative for real estate
brokers in today’s marketplace. Real estate and
housing are a vital part of the American economy, and
therefore, a concern of government at all levels. This
means that the real estate brokerage business is
under constant scrutiny, and any anticompetitive
conduct is likely to be detected and prosecuted.
But more importantly, antitrust education and
compliance can lead to confidence and freedom to
vigorously pursue legitimate business activity.
Real estate brokers vigorously compete to secure an
inventory of listing to offer for sale. But at the same
time, brokers regularly cooperate with one another as
subagents, buyers’ agents or non-agent “transaction
brokers” or “facilitators” to identify a ready, willing,
and able buyer. This dual tradition of competition and
cooperation, which is unique to the real estate
profession, presents opportunities for antitrust
suspicion, and occasionally misconduct, almost on a
daily basis. In today’s business environment, antitrust
sensitivity is a prerequisite for survival.
Real estate brokers and salespeople must also
constantly remind themselves that the outcome of
the courtroom trails, particularly antitrust trails, does
not necessarily depend upon what actually happened
at the time an alleged violation occurred. The
outcome of a trail depends entirely upon what the
“trier of fact,” either a judge or a jury, believed took
place. As a result, antitrust compliance programs are
concerned as much with avoiding conduct that
creates the appearance of a conspiracy in restraint of
trade as with conduct that actually constitutes such a
conspiracy. Nowhere is the opportunity greater to
create appearances that real estate brokers are
conspiring to restrain competition than in sales
associates’ dealings with actual and potential clients
and customers.
The Value of Antitrust Compliance Programs
An in medicine, the cause of a disease must be
determined before a cure can be sought or
preventative measures undertaken. The same is true
with legal liability in general and antitrust liability in
particular. Brokers and salespeople who can identify
the source of potential antitrust vulnerability will be
Too often, brokers and sales people are overly
inhibited in their conduct by their ignorance of what
they can say and do without limiting unreasonable
risks of antitrust or other legal ability.
49
4. Association meetings. Associations are groups of
competitors who come together to promote their
common business interests. As such, they are
vulnerable to allegations that agreements by
members to use identical business practices are illegal
conspiracies.
4 Antitrust Traps to Avoid
Although the subject of avoiding possible antitrust
violations covers many areas, a few of the most
sensitive antitrust concerns include:
1. Price/term fixing. In most businesses, including real
estate, many competitors may charge similar prices
for the same services. This isn't illegal as long as each
competitor sets prices independently. An antitrust
violation occurs when you discuss and actually agree
to charge the same prices or offer exactly the same
terms as one or more of your competitors.
Avoid problems by: Remaining alert to discussions at
meetings relating to commission rates, pricing
structures, listing policies, or marketing practices of
other brokers.
Portions adapted from Real Estate Brokerage, 5th edition, Cyr,
Sobeck, and McAdams, Dearborn Financial Publishing, 1999
Avoid problems by: Establishing your company's fees,
commission splits, and listing terms independently
and without any discussion with competitors. Even
informal conversations where you have no intention
of actually setting prices could be misinterpreted as
the basis of a price-fixing agreement.
TIP: Any business or marketing plan that’s principal goal is
to adversely affect a competitor could be considered a
violation of antitrust law. —Jodi Tuttle, “What You Don’t Know
®
About Antitrust Can Ruin You,” Indiana REALTOR , May 2001
6 Simple Antitrust Prevention Tips
2. Territorial assignments. Agreements between
competitors to divide the market geographically, by
price range, type of property, or some other
segmentation are considered anticompetitive because
they conspire to establish dominance in a particular
market. This isn't the same as an individual company’s
practice of specializing in certain properties such as
historic buildings or custom-built housing.
Compliance with antitrust laws doesn't involve a lot of
expense and rigorous documentation. It does require that
you and your company’s salespeople have a clear
understanding of the law, a sensitivity to potential problem
areas, and a consistent commitment to avoiding
circumstance that might imply violations.
1. Analyze market conditions, transaction costs, and income
to justify your company's prices or fees. Even if they
happen to be the same as the competition's, you will be
able to defend against inferences of conspiracy.
Avoid problems by: Documenting your decisions to
focus on certain property types with marketing and
demographic studies.
2. Never preprint commission percentages or listing periods
into your listing agreements. —Jodi Tuttle, general counsel for
3. Boycotts. Boycotts occur when a group of
businesses agree not to do business with a particular
party. A typical group boycott allegation in the real
estate brokerage business involves a claim that two or
more brokerages have agreed to refuse to cooperate,
or to cooperate on less favorable terms, with a third
brokerage company. The intent is to eliminate that
company as a competitor or to force it to abandon
certain practices. Another form of boycott would
occur if several companies collectively determined not
to use a particular service provider, such as a certain
newspaper.
the Indiana Association of REALTORS®, “What You Don’t Know About
Antitrust Can Ruin You,” Indiana REALTOR®, May 2001
3. Develop a written antitrust compliance policy for your
company. Brokers may be held liable if salespeople violate
antitrust laws.
4. Teach sales associates the proper way to differentiate
themselves from competitors by emphasizing the quality
and service the company provides rather than disparaging
the competition.
5. Instruct your sales associates on the meaning of antitrust
law, and train them not to discuss your company's pricing
and commission policies with competitors.
Avoid problems by: Making decisions on whether to
do business with other real estate companies or
service providers based on your company’s own
judgments, goals, and experiences.
6. Never use the word "standard" or "prevailing" when
describing your fees and services.
Adapted from, “Antitrust,” Allen Sakai, Washington REALTOR® , The
Washington Association of REALTORS®, October 1992
50
even if each of the other competitors had
independently decided to implement the particular
policy.
REALATIONS WITH CUSTOMERS AND CLIENTS
Establishing the Company Commission Rate
Once of the most fundamental decisions that any
business must make is establishing the price it will
charge for its products or services. Real estate
brokerage firms are no different. Each must establish
the fee it will charge for professional services
rendered to clients. This is true whether the fee is a
commission charges to the seller for successfully
procuring a ready, willing, and able buyer for the
seller’s property, the fee is charged to a buyer for
representing him as a buyer’s agent, or the fee
applicable to the broker providing some other real
estate services.
It is therefore imperative that brokers never discuss or
reveal their intentions concerning fees or other
competitive business activities with or to competitors.
Such actions taint not only the subsequent decisions
made by the broker who raised the subject but also
the decision of other competitors to whom the
discussions or announcements were directed.
Not only must brokers avoid any discussions that
could imply that commissions or commission splits are
the result of collusion or agreement, but they should
also take positive steps to establish that they
unilaterally determine their commission rates and
splits.
The keys to avoid antitrust vulnerability based upon
the fees a broker establishes for professional services
rendered to a client are as follows:

Establish the fees unilaterally without
consultation or discussion with persons
affiliated with any other competing firm

Ensure that when the company’s brokers or
salespeople discuss fees with actual or
potential clients they use words that clearly
convey to the listener the fact that the
company does, in fact, price its services
independently
When a firm establishes its commission rate or fee
structure, it must understand that antitrust
conspiracies may and have been found with little
evidence that the alleged conspirators actually
consulted or reached agreement with another before
making a competitive business decision, such as
establishing a fee structure. One court held that it
was enough for a competitor to announce to one or
more competitors his intention to take a particular
action, where the competitors then adopted the same
course of action within a short period of time. The
announcement was construed as an invitation to
conspire, and the subsequent action by the other
competitors construed as an acceptance of this
invitation. The inference of conspiracy was drawn
Each time a broker changes the firm’s commission
rate or commission split he should document the
business reasons for that decision. This
documentation could take the form of a memo to the
firm’s sales manager and salespeople, and that is
maintained in the firm’s files, explaining the basis for
the decision in terms of the firm’s current costs and
expenses and prevailing economic conditions. The
memo Should make apparent to the reader that the
decision was unilaterally made based upon the
particular economic circumstances facing the firm.
The firm’s sales associates must also take care to
present pricing policies to the clients in a manner
which confirms that the fees or prices were
independently established. This means they should
never respond to a question about fees by referring to
the pricing policies of the other competitors or to a
policy of the local board or association of REALTORS®
that supposedly prohibits or discourages price
competition. Sales associates should never use
statements such as the following:
51

“This is the rate every firm charges”

“I’d like to lower the commission, but no one
else in the MLS will show your house unless
the commission is XX%”

“Before you decide to list with XYZ Realty you
should know that because they are ‘discount’
brokers, members of the association won’t
show their listings”

“I’d like to (reduce the commission…..shorten
the listing term…. Accept an exclusive agency
listing), but if I do the MLS won’t accept the
listing”
Firms that have established company policies on the
length, type or variability of Compensation rates must
train their salespeople to explain these policies to
clients in the language of competition. This means
communicating to the client how the firm’s policies
will allow the client to best achieve their real estate
goals. If a firm’s policies cannot be explained in these
terms, competitive forces will ultimately compel the
firm to modify its policies or, alternatively, be driven
out of business. The purpose of the antitrust laws is
to preserve the efficient operation of these
competitive market forces.
Under no circumstances should a client be told that
the firm’s terms must be accepted because “this is
what all brokers do” or “no one else will cooperate
unless you accept the listing on these terms”. This
“language of conspiracy” suggests that the firm’s
policies are the result of the concerted marketplace.
If a judge or jury later relies on this language to infer a
conspiracy, the reasonableness of that inference is
likely to be affirmed on appeal, whether or not a
conspiracy actually existed.
Salespeople who make these statements are antitrust
accidents waiting to happen. They are a danger to
their broker, their association of REALTORS®, and all
other competitors in the market.
Brokers and salespeople must learn to explain and, if
necessary, defend their firm’s pricing policies and
other competitive business decisions in terms that are
consistent with competition, not conspiracy. If the
firm cannot or will not reduce its commission upon a
client’s request, sales associates should point out the
value of the services the client will receive for the fee
charged and how these services are most likely to lead
to a transaction at the fair price in the shortest period
of time. Because time is money, a fast and efficient
transaction can often save a client much more than a
reduction in the commission.
RELATIONS WITH COMPETITORS
Establishing the Company Policy on Compensation
for Cooperating Brokers
A Per se illegal price fixing conspiracy may involve not
only the price a firm charges customers or clients, but
also the prices it pays for goods and services. The real
estate brokerage business is characterized by both
competition and cooperation among competitors.
Competition occurs to secure the listing. Cooperation
occurs when other firms are invited, through MLS or
otherwise, to assist in finding a ready, willing and able
purchaser or tenant. Listing brokers traditionally
initiate these cooperative efforts of other brokers by
offering the successful cooperating broker a portion
of the commission received from the seller, often
called a commission “split”.
Establishing Other Listing Policies
The commission rate is not the only “price” that can
be unlawfully fixed by competing real estate brokers.
Conspiracies to fix the length of a listing, the type of
listing accepted (exclusive right to sell, exclusive
agency, or open), or the formula upon which
compensation will be based (flat fee, percentage
depending upon the sales price) also may be per se
illegal. In short, price-fixing includes an agreement to
fix any economic term of the listing agreement.
Conspiracies among competitors to fix the
compensation paid for the cooperative efforts of
other brokers are also per se illegal. For this reason ,
brokers must determine their cooperative
52
Compensation policies in the same unilateral and
independent manner that they establish the
commission or fees charged to clients. Listing and
cooperating brokers may, of course, deiscuss or
negotiate the compensation they will pay to each
other. But these discussions should never include
representatives of a third office or extend to address
what each will offer to pay to other offices.
By the same token, sales associates should be
specifically directed never to suggest to potential
clients that they should not do business with another
firm because other brokers will not cooperate with
that firm. When comparing their split policies with
those of other firms, sales associates should point out
to potential clients that the efforts of other firms are
important to the marketing effort, and cooperative
compensation is offered to other offices as an
incentive to sell the potential client’s property.
Moreover, under no circumstances should sales
associates suggest that other firms have agreed not to
cooperate with firms that offer less than a particular
commission split.
Varying Compensation Among Cooperating Offices
From time to time, a broker may decide to offer one
or more potential cooperating offices a different
amount for their services than the broker offers to
other cooperating office. This freedom to vary
cooperative compensation offers from office to office
is permitted by the antitrust laws, and is consistent
with the fundamental proposition that cooperative
compensation offers are to be determined unilaterally
by each broker.
Nevertheless, varying compensation offers among
cooperating office can lead to allegation that the
variations were the product of conspiracy to boycott
or “punish” another brokerage office, especially if a
lesser amount is being offered.
The lesser cooperative compensation offered is
frequently motivated by a reduction in the
cooperative compensation offered by other offices. In
other words, “I’ll give you what you give me” – also
known as a reciprocal split. On other occasions, the
decision to offer the lesser compensation is motivated
simply by an objection to the potential cooperating
office’s general business practices, or by alleged
substandard performance by the firm in other
cooperative transactions between the two companies.
Although a firm may independently determine to
offer a particular firm a smaller commission split than
is offered to other firms, a potential problem arises
when other firms may make a similar determination,
even when all firms have in fact acted unilaterally and
independently. When two or more firms elect to offer
a third firm the same lesser cooperative
compensation during the same period of time, an
inference is raised that the firms are acting pursuant
to a conspiracy, rather than independently.
If a claim of conspiracy is asserted, this inference must
be rebutted with countervailing evidence that the
decision to offer lesser compensation was individually
and independently made. The best evidence to rebut
the inference of conspiracy is evidence of a rational
business motivation and conscious business decisionmaking, such as the additional costs incurred by the
listing office, when dealing with the cooperating office
at issue.
This need to rebut the inference of conspiracy
demonstrates the antitrust danger inherent in a real
estate firm’s decision to vary its compensation offers
among cooperating offices. Any decision to vary the
firm’s compensation offers should be carefully
considered. This is especially true is the firm is aware
that another firm has already lowered its cooperative
compensation offer to the same firm. If the decision
is nevertheless made to lower the offer, the business
reasons for the decision should be documented in a
memo, circulated to the firm’s sales associates, and
maintained in the firm’s files. The memo should make
clear that the decision was based upon an
independent assessment of the circumstances facing
the firm at the time.
53
Article 16 – Duty Not to Solicit the Client of Another
REALTOR®
Ethical Duties Affecting Broker Cooperation
Cooperation among competitors is the norm in the
real estate business. For the most part, this
cooperation results in a more competitive and more
efficient real estate industry. But cooperation among
competitors can also be the basis of actual or
perceived antitrust violations, such as price-fixing or
group boycotts. The REALTORS® Code of Ethics
contains several Articles and Standards of Practice
that promote pro-competitive cooperation among
real estate brokers. However, since broker
cooperation can also present an actual opportunity
for illegal collective conduct among a group of
brokers, special care must be taken to ensure that the
Articles of the Code that deal with REALTORS®’
business relationships with other brokers are clearly
understood and applied strictly according to their
specific terms.
Article 16 of the REALTORS® Code of Ethics provides
that:
REALTORS® shall not engage in any practice or
take any action inconsistent with the agency
or other exclusive relationships recognized by
law that other REALTORS® have with clients.
Article 16 principally forbids REALTORS® from
engaging in targeted solicitation of persons the
REALTOR® knows, or reasonably should have known,
to have an exclusive relationship with another
REALTOR®. Significantly, Standards of Practice 16-4
and 16-5 limit the board scope of the restriction on
competitive behavior, and permit a REALTOR®
desiring to solicit a specific potential client to ask the
REALTOR® with the exclusive relationship to disclose
when that relationship will terminate. The REALTOR®
will then know when that potential client is free to
consider the services of other brokers. If the
REALTOR® refuses to disclose the listing termination
date, the other REALTOR® is relieved of any duty
under Article 16 to refrain from immediately soliciting
that REALTOR®’s client.
Article 3 – Duty to Cooperate
Article 3 of the REALTORS® Code of Ethics Provides
that:
REALTORS® shall cooperate with other
brokers except when cooperation is not in the
client’s best interest. The obligation to
cooperate does not include the obligation to
share commissions, fees or to otherwise
compensate another broker.
Standards of Practice 16-2 further states that Article
16 does not forbid REALTORS® from making general
announcements of the availability of their services
using techniques such as direct mail, or other forms of
general media advertising, even if some of the
recipients of the REALTOR®’s promotional material
are persons with preexisting exclusive listings with
other REALTORS®.
This Article confers upon all REALTORS® an ethical
obligation to engage the services of other brokers in
the marketing of the client’s property. It is important
to note that the duty to invite cooperation includes
cooperation from other brokers, not only other
REALTORS®. Article 3 creates a presumption that
cooperation among REALTORS®, and among
REALTORS® and other real estate brokers, is the norm.
Deviations from this practice are likewise presumed to
be the exception. If an Article 3 complaint is filed, the
burden is on the REALTOR® withholding cooperation
to explain his conduct by showing that cooperation
under the circumstances was not in the client’s best
interests.
Since Article 16 prohibits a limited form of activity
that is ordinarily viewed as typical competitive
conduct, e.g., solicitation of business, it is imperative
that REALTORS® understand that Article 16 only
prohibits solicitations that are specifically targeted at
persons the REALTOR® knows, or should have known,
to have preexisting relationships with another
REALTOR®. Article 16 is also narrowly limited to
prevent claims that it’s purpose is to prevent, rather
than to protect an even encourage, competitive
54
A common issue presented by Article 12 is whether it
prohibits advertising that compares one REALTOR®’s
accomplishments with those of another REALTOR®, or
so-called “comparative” advertising. Some have
argued that advertising implying that the skills of one
REALTOR® are superior to those of another REALTOR®
is necessarily untrue under Article 12 at least as far as
the REALTOR® who suffered the unfavorable
comparison is concerned.
behavior among real estate brokers.
A solicitation campaign would be considered targeted
if it were aimed, for example, only at sellers whose
names appeared in an MLS compilation or whose
homes had for sale signs on display. This limited ban
on otherwise legitimate competitive conduct is
considered justified because REALTORS® are
simultaneously obligated under Article 3 to cooperate
with all other brokers on mutually agreeable terms.
The cooperation contemplated by Article 3 is unlikely
to occur if a potential consequence of the cooperation
is the solicitation of the REALTORS®.
The interpretation of Article 12 is over-broad. An
association of REALTORS® would likely violate the
antitrust laws if it applied Article 12 to prohibit
comparative advertising altogether.
Nevertheless, Article 16’s ban on solicitation is
extremely limited, and efforts to expand Article 16
beyond its intended scope are almost certain to
create unreasonable risks of antitrust liability.
Article 12, properly construed, only prohibits
advertising that is objectively untrue or deceptive.
Advertising is untrue or deceptive if it contains factual
assertions that are untrue, or assertions that may be
true, but when taken in context lead a reasonable
consumer to reach factually inaccurate conclusions.
Comparative Advertising
Courts have held that truthful, non-deceptive
advertising is beneficial to consumers and, therefore,
pro-competitive. Conversely, any rule of private trade
association that restricts the ability of association
members to advertise truthfully is almost certain to
risk violating the antitrust laws. Therefore, it is
essential that Article 12 of the REALTORS® Code of
Ethics governing advertising by REALTORS® be
construed only to prohibit advertising that can
reasonably be found to be deceptive or not
presenting a true picture to the public. In particular,
Article 12 does not prohibit otherwise truthful
advertising that is thought to be distasteful,
unprofessional overly aggressive, or offensive.
A “factually inaccurate conclusion” plainly does not
include a conclusion that one REALTOR® provides
services that are superior to those of another
REALTOR®. Claims of superiority are inherently
incapable of objective proof. Furthermore, claims
designed to induce a consumer to believe that one
product or service is better than another is the
primary objective of all advertising.
In short, most restrictions on advertising are highly
suspect under the antitrust laws, and such restrictions
should apply only to proscribe false or misleading
advertising. Truthful advertising, even if it offends
some competitors, is considered to be procompetitive and restrictions imposed upon such
advertising by trade associations will violate the
antitrust laws.
Article 12 of the REALTORS® Code of Ethics provides
that:
REALTORS® shall be careful at all times to
present a true picture in their advertising and
representation to the public. REALTORS® shall
also ensure that their professional status (e.g.,
broker appraiser, property manager, etc.) or
status as REALTORS® is clearly identifiable in
any such advertising.
55
RELATIONS WITH AN ASSOCIATION OF
REALTORS®


Participation in Board Meetings

A broker who participates in the affairs of an
association of REALTORS® should be alert to
discussions at the association meeting relating to
commission levels, pricing structures, or marketing
practices of other brokers. Brokers who find
themselves in the midst of such discussions should
immediately suggest that the topic be changed and, if
unsuccessful, should promptly leave the meeting. If
minutes of the meeting are being taken, they should
insist that their departure be noted for the record.



Charge discount or flat fee commissions
Engage in comparative but otherwise truthful
advertising
Act in the capacity of buyer’s brokers,
transactions brokers or facilitators
Offer variable commissions depending upon
whether the property is sold cooperatively or
in-house
Accept open or exclusive agency listings
Employ general mass media advertising
campaigns that reach persons whose
properties are already listed with other
REALTORS®
REALTORS® who pursue grievances seeking to prohibit
these types of practices, or who apply the Code to
discipline REALTORS® who employ them, are misusing
the Code of Ethics and exposing themselves and their
associations to antitrust liability.
Use and Abuse of the REALTORS® Code of Ethics
The united States Supreme Court has held that
industry self-regulation by code of ethics is a
legitimate trade association function so long as the
Code can be shown to promote competition by
improving industry performance or efficiency. Codes
of ethics may not under any circumstances be used to
discourage or eliminate competition by, for example,
prohibiting or restricting creative, innovative or
“alternative” business practices, no matter how
“undignified”, “aggressive”, or “nontraditional” such
competitive practice may appear to be.
Service on an Association’s Professional Standards
Committee
A REALTOR® who serves on a professional Standards
Committee must constantly be aware of the
sensitivity of that position. It is classic human nature
for a person who is the recipient of an adverse finding
by a grievance or arbitration panel to conclude that
the panel was not interested in the merits of the case
but rather was engaged in an unlawful
anticompetitive vendetta. A Professional Standards
Committee member must therefore be exceedingly
careful that no aspect of the grievance or arbitration
proceeding gives even the appearance of prejudice or
unfairness.
The REALTORS® Code of Ethics is no exception. The
Code of Ethics, as interpreted and applied through the
official standards of Practice and Case Interpretations,
has withstood analysis by federal and state antitrust
enforcement agencies and competent private
antitrust attorneys. Various Articles also have
withstood legal challenges in several states.
Relations with other Service Providers and
Organizations
The REALTORS® Code of Ethics can nevertheless be
misused and abused. REALTORS® cannot insulate
themselves from antitrust charges by asserting that
they were only invoking the grievance or arbitration
facilities of a local association. The REALTORS® Code
of Ethics does not regulate pricing, listing policies, or
otherwise truthful advertising practices of
REALTORS®. Thus, the Code is never violated by
REALTORS® who do the following:
An allegation of a group boycott is the most common
antitrust claim asserted against real estate brokers. A
group boycott is per se illegal if the purpose of the
boycotters is to deny a business access to goods or
services necessary for it to compete in the
marketplace. Real estate brokers can become the
targets of boycott allegations if two or more brokers
agree to refuse to cooperate with a third broker,
56
It is important to understand, however, that a joint
venture to create a “homes magazine” cannot include
an agreement among the brokers in the venture, or
the board members, that they will only advertise in
the homes guide and not in the local newspaper.
Such an agreement is the functional equivalent of an
agreement to boycott the newspaper and could be
held per se illegal. All those entitled to advertise in
the publication must retain their freedom to advertise
wherever else they may find beneficial to do so.
or to cooperate only on unfavorable terms or
conditions.
Another type of per se illegal group boycott is one
targeted at a supplier or purchaser, rather than a
competitor, of the alleged conspirators. Concerted
refusals to deal with suppliers or purchasers will be
treated as per se illegal whenever they involve the
purposeful elimination of competition, regardless of
the ultimate motive or objective of the alleged
conspirators. As a result, real estate brokers may not
employ group boycotts as a weapon against the
providers of other goods or services necessary or
useful in the practice of real estate brokerage.
“Code of Mutual Understanding”
with Other Industry Groups
In their day-to-day business affairs, real estate brokers
regularly deal with persons in other sectors of the real
estate industry, or in real estate-related businesses
such as appraising, mortgage lending, the practice of
law, or insurance. Often an association of REALTORS®
will create formal relationships with associations
representing these other businesses, such as a local
home builders or bar associations, to discuss
problems or issues of common concern. These
relationships, whether formal or informal, sometimes
include attempts by the two industry groups to
establish “codes of mutual understanding” or other
agreements setting forth generally accepted business
practices that the two industries should observe when
dealing with one another.
Newspapers and “Homes” Magazines
A specific example of a common temptation for
brokers to engage in a group boycott occurs when
brokers become frustrated with the advertising rates
or other practices of a local newspaper. This
frustration can lead to suggestion that brokers
collectively agree to reduce their advertising, or
refuse to advertise altogether, unless and until the
newspaper lowers its advertising prices or changes its
policies. Such a suggestion, if implemented, would
constitute a per se illegal group boycott.
A lawful alternative to a concerted refusal to deal with
a newspaper occurs when brokers and/or associations
of REALTORS® instead create an alternative
advertising vehicle, such as a “homes magazine” or
guide. These are publications that contain
advertisements for individually listed properties and,
in some cases, firm advertisements. Such publications
are distributed at no charge to the public at
restaurants, train stations, grocery stores, airports, or
other locations with a high volume of pedestrian
traffic. The creation of such publications, whether
through a local board of REALTORS® or through an
outside publisher, is pro-competitive conduct that the
antitrust laws encourage. Rather than organizing a
boycott of an alleged monopolist, purchasers of the
allegedly monopolized product have joined together
to offer a competitive alternative.
While these agreements or codes may well be an
efficient way of reconciling differences between the
two industries, they also present potentially serious
antitrust risks. This is especially true if the codes
address such matters as pricing or compensation
practices, advertising, or any other matters that deal
with competition between or among persons in the
two industries. IS such agreements are negotiated,
either formally through an association of REALTORS®
and its industry counterpart, or informally between
major firms in the two industries, these agreements
should be reviewed by competent antitrust counsel
before they are implemented.
57
OFFICE COMPLIANCE PROGRAM
Reporting Sources of Potential Liability
Salesperson Education
Salespeople must be instructed to report to their
brokers or sales manager any suggestions by
salespeople from other firms that could be
interpreted as an invitation to fix commissions or
boycott a competitor. Failure to do so should be
grounds for discipline. Once an incident has been
reported, a broker should immediately take steps to
disavow any participation by his firm in such a
scheme. If one of the firm’s salespeople initiated the
discussions, that salesperson should be disciplined.
The ability of real estate brokers to ensure that their
firm will comply with the antitrust laws is in direct
proportion to their ability and willingness to educate
their salespeople. This commitment to education is
imperative because, like it or not, a broke will be held
liable for the actions and statements of salespeople
who are acting on the broker’s behalf. It is foolhardy
to accept this liability without any effort to limit it.
The first step a broker should take in coming to grips
with this responsibility and liability under the antitrust
laws is to be sure the firm’s salespeople have at least
a working knowledge of how the antitrust laws are
applied in the real estate industry. A broker should
insist that each salesperson attend an antitrust legal
education program at least once every two years.
This antitrust education program could be offered by
the board of REALTORS® or conducted by the broker,
the firm’s sales manager, or legal counsel. In addition,
all new salespersons should be required to attend a
company orientation program that includes a
presentation on antitrust compliance.
Document Retention & Destruction
Every real estate firm should establish an office-wide
document retention and destruction policy. Certain
legal documents, such as corporate articles of
incorporation, bylaws, and minutes, should be
permanently kept on file. Contracts with suppliers
and vendors should be kept for at least four years
after the contract has expired. Financial records and
transaction files, particularly those having tax
implications, should also be kept for at least four
years.
Access to Legal Counsel
Every real estate firm should have access to
competent legal counsel. If the firm’s corporate
counsel does not have antitrust expertise, the counsel
should be asked to identify other counsel to be
consulted when antitrust issues arise. Antitrust legal
advice may be sought whenever the firm intends to
adjust its commission rates, fees paid to cooperating
firms, or whenever the firm plans to implement a
business strategy that may adversely affect its
competitors.
Antitrust Orientation and Office Policy
Every real estate brokerage firm should have a written
office-wide antitrust compliance policy that is
applicable to every employee and independent
contractor-brokers, salespeople, and secretaries alike.
During the antitrust compliance portion of the
orientation, it should be announced that the firm has
a strict antitrust compliance policy, and that
deviations from the policy will not be tolerated. Each
salesperson should be provided with a written copy of
this policy and asked to sign an acknowledgement
that he or she has read and understood the policy and
agrees to abide by it.
In addition, correspondence and records of
communications with the firm’s attorney should be
kept in a segregated file, and should not be
disseminated outside the firm without prior
consultation with the attorney. Limited distribution of
attorney-related documents is necessary to preserve
the attorney-client privilege of confidentiality.
58
Standard Form Contracts
CONCLUSION
If the firm uses standard form listing contracts, those
forms should not contain any preprinted commission
rates, predetermined listing periods, automatic
renewal clauses, or predetermined protection
periods.
In their day-to-day business decisions concerning the
fees they charge clients or the compensation they pay
to cooperating offices, real estate brokers must be
absolutely certain that their decisions are the result of
independent business judgments about market
conditions facing the firm. Consultations with
competitors about these decisions can result in
otherwise reasonable actions being held to be per se
illegal, or even felonies.
Responding to an Antitrust
Investigation or Complaint
Despite a REALTORS® efforts to ensure that the firms
salespeople are complying with the antitrust laws, the
fir may nevertheless become the object of an antitrust
investigation or complaint. Most actions initiated by
government antitrust investigation of the person or
firm that the agency suspects may have violated the
law. Brokers should have an office policy that
requires salespeople to refer all requests for
information from government antitrust enforcement
agency to the broker or sales manager.
An antitrust compliance program is essential for every
real estate brokerage firm. The written program
should be straightforward and understandable by the
firm’s salespeople, and kept current as laws and their
interpretations change. Furthermore, the importance
of adherence to the policy by the firm’s salespeople
should be communicated from the highest levels of
the company. Salespeople cannot be expected to
take seriously a policy that senior management does
not consider a priority.
If a representative of an antitrust enforcement agency
inquires about the business affairs of a REALTOR® or
REALTOR® firm, or if a formal subpoena or a
complaint is received, the matte should be referred
immediately to the firm’s attorney. All subsequent
correspondence and communications with the
government agency or plaintiff should be through the
firm’s lawyer. The REALTOR® should also immediately
contact their association of REALTORS®, state
association, and the General Counsel’s Office of the
NATIONAL ASSOCIATION OF REALTORS® so that any
assistance available from these organizations can
be provided as quickly as possible.
Finally, antitrust compliance is not simply a means to
avoid treble damage liability and costly and
protracted litigation. Universal antitrust compliance
ensures the ability of all competitors to succeed to the
extent their skill, industry and foresight will permit.
Once the firm’s salespeople understand the “rules of
the road”, they are free to focus their energies on the
legitimate pursuit of additional listings, sales, and
income opportunities for themselves and the firm.
59
APPENDIX A
APPENDIX B
Dangerous Words & Phrases
Antitrust Compliance Policies of (Name of Firm)
The following are examples of words or phrases
occasionally used by salespeople that would permit a
judge or jury to infer that real estate brokers are
engaged in an illegal conspiracy:

“I’d like to lower the commission rate but the
board has a rule…..”

“This is the rate that everyone charges.”

“The MLS will not accept less than a 120-day
listing.”

“Before you list with XYZ Realty, you should
know that nobody works on their listings.”

“If John Doe was really professional (or
ethical), he would have joined the board.”

“The board requires all REALTOR® firms to
make their salespeople join.”

“The best way to deal with John Doe is to
boycott him.”

“If you valued your services as a professional,
you wouldn’t cut your commission.”

“No board member will accept a listing for less
than ninety days.”

“If he was really a professional, he wouldn’t
use the part-timers.”
1. The commission rates of our firm are based
upon the cost of the services we provide, the
value of these services to our clients, and
competitive market conditions. Our
commission rates are not determined by
agreement with, or recommendation or
suggestion from, any person not a party to a
listing agreement with our firm.
2. Salespersons affiliated with this firm shall not
participate in any discussion with any person
affiliated with, or employed by, any other real
estate firm concerning the commission rates
charged by this firm, or any other real estate
firm in our community.
3. When soliciting a listing, or negotiating a
listing agreement, no salesperson affiliate
with this firm shall make any reference to a
“prevailing” commission or any other words
or phrases which may suggest that
commission rates are uniform or standard in
our marketing area.
4. The amount of cooperative compensation, or
commission split, offered by this firm to
cooperating brokers is determined by the
level of service we can expect a cooperating
office to perform, and the amount of
compensation necessary to induce
cooperation under prevailing market
conditions. Commission splits are not
intended, and may not be used, to induce or
compel any other real estate firm to our
marketing area to raise or lower the
commission they charge to their client.
60
APPENDIX B
APPENDIX C
Antitrust Compliance Policies of (Name of Firm)
(continued)
Antitrust Self-Test
5. When soliciting or negotiating a listing
agreement, no salesperson affiliated
with this office shall disparage the
business practices of any other real
estate firm, nor suggest that this
office, or any other real estate firm.
Listing presentations shall focus
exclusively upon the level of service
and professionalism provided by this
office, the results we have achieved
for other clients, and the value the
client can expect to receive for the
fees we charge. Potential clients
should be invited, and encouraged, to
compare the value of our services to
those of any other real estate firm in
our marketing area. Likewise, any
salesperson who is invited by a
potential client to compare our
services with those of any other real
estate firm should do so by
emphasizing the nature and quality of
the services we provide.
6. Whenever a salesperson is unsure
about the proper way to respond to
the concerns of an actual or potential
client or customer, or whenever a
salesperson has been present during
an unauthorized discussion of fees or
commissions, he should contact his
principal broker or sales manager
immediately. If necessary, the broker
or manager will consult our firm’s
attorney.
True or False (Circle One)
T
F
1. Since real estate salespeople are
independent contractors, a broker
will not be held liable if one of his
salespeople agrees with a salesperson
from another firm to fix real estate
commissions.
T
F
2. If I am present at a meeting where
two of my competitors agree to fix
commissions, I can avoid liability for
their conduct so long as I remain
silent.
T
F
3. Even though my salespeople are
independent contractors, I may
establish the commission rate for my
firm and require them to charge that
rate.
T
F
4. I recently hired a salesperson who
has 20 years of experience at another
firm. With such vast experience, there
should not be any need for this person
to participate in an antitrust
orientation program.
T
F
5. The best way to persuade a seller
that he should not insist on an open
listing is to tell him that the MLS will
not accept open listings.
T
F
6. It is unethical for a REALTOR® to
charge a seller a higher commission
rate if the property is sold through a
cooperating broker than if the
property is sold-in-house.
T
F
7. A seller who wants to negotiate a
reduced commission rate should be
told that the rate we charge is the
same as all other firms in town.
I have read, understand, and agree to abide by, the
policies and procedures set forth above.
____________________________________________
(Name of Salesperson)
(Date)
61
APPENDIX C
Antitrust Self-Test
True or False (Circle One)
T
F
8. A REALTOR® who operates an
unprofessional flat fee business model
may be violating the Code of Ethics.
T
F
9. If one of my salespeople
participates in a price-fixing
discussion, my firm cannot be held
liable unless I have personal
knowledge of the salesperson’s
conduct.
T
F
10. If I impose and enforce an antitrust
compliance program within my firm, I
will not be sued for an antitrust
violation.
For a complete listing of the business solutions offered from the
NATIONAL ASSOCIATION OF REALTORS®, visit us online at the
REALTOR® Benefits section of www.REALTOR.org.
Antitrust and Real Estate
Antitrust Compliance Guide for REALTORS® and REALTORASSOCIATES®, was produced/published by The NATIONAL
ASSOCIATION OF REALTORS®©2006
62
63
11. T
F
According to Federal Fair Housing
Law, it is illegal to discriminate on the
basis of familial status.
The phrase "perfect for mature
persons" is viewed by many families
with children as expressing a
Preference for households without
children, therefore should not be used
when advertising a property.
12. T
F
The Fair Housing Act is a section
written within the Civil Rights Act of
1968.
Showing houses only in neighborhoods
specifically requested by the buyer is
prohibited by the Fair Housing Act.
13. T
F
Equal Professional Service procedures
are defined by Federal Fair Housing
Law.
14. T
F
Part of a good fair housing program is
to put regular procedures in place,
collect objective information from
prospective buyers, allow prospects to
set their own limits, provide prospects
plenty of choices, and document all
communication.
15. T
F
There are no exemptions to the Civil
Rights Act of 1866.
16. T
F
The Fair Housing Act has some
exemptions.
17. T
F
Examples of physical impairments
include multiple sclerosis, cancer and
diabetes.
18. T
F
Using photographs of white married
couples in advertisements always
indicates discriminatory intent.
19. T
F
If local laws do not prohibit
discrimination based on handicap, the
federal law prevails.
The term handicap does not include
illegal use of a controlled substance.
20. T
F
Some states and local governments
prohibit discrimination based on
unfavorable discharge from the
military.
One purpose of a Prospective Equal
Service Report is to help REALTORS®
keep uniform records of prospective
customers.
21. T
F
Anyone who perceives that they have
been injured as the result of a
discriminatory act, including real
estate professionals and testers can
file a complaint.
OPTIONAL PRE-COURSE QUIZ
For each of the following statements, circle “T” if the
statement is true and “F” if the
statement is false.
1. T
2. T
3. T
F
F
F
Murphy's Law and FSBO exemptions
allow owners of property to advertise
properties with limited discriminatory
language.
4. T
F
The definition of “familial status”
includes households with children
under 18 years of age.
5. T
F
Liabilities of non-compliance of fair
housing law are limited to actual
damages, not punitive damages.
6. T
F
7. T
F
It is unlawful to use the term "senior
housing" when marketing 55 and over
housing.
There is no time limit for filing a fair
housing complaint.
8. T
F
9. T
10. T
F
F
When selecting properties to show a
buyer, you should try and select
homes that are listed at the upper
and lower end of the buyer's
affordability range.
64
22. T
F
Federal Fair Housing Law applies to all
properties including vacant land that
can be used for housing.
23. T
F
An experienced professional in real
estate should decide which factors
are important for a buyer to consider
when looking at properties.
24. T
F
Sharing information to the seller of a
property about the familial status of a
buyer could result in discriminatory
accusations.
25. T
F
A buyer’s agent should disclose the
presence of a group home for autistic
children when showing houses on the
same block.
65
WHAT IS FAIR HOUSING?
Everyone is protected by fair housing laws
Fair Housing
Your instructor will provide information of any
additional protected classes in this location. States and
municipalities may have state/local fair housing laws
that may include additional protected classes. Note
these additional classes in the chart below.
Fair housing means every person has the same
opportunities to purchase, lease, or occupy residential
real property.
Fair housing laws prohibit certain activities in an effort
to sustain an environment in which all persons are
afforded equal housing opportunities. For example,
fair housing laws prohibit:





refusal to show, sell, or rent a property
differing treatment
panic selling or blockbusting steering
discriminatory advertising or statements
threats or interference with a person’s fair
housing rights
Currently, federal fair housing laws protect seven
classes of persons. State and municipal laws may
protect other classes. Examples of additional classes
protected by state and local governments include age,
source of income, occupation, marital status, sexual
orientation, and unfavorable discharge from the
military. It is important to look at the definitions and
clearly understand the
Federal Protected Classes







Race
Color
Religion
Sex
Handicap
Familial Status
National Origin
FEDERAL
STATE OF
Race
Color
Religion
Sex
Handicap
Familial Status
National Origin
Which Law Prevails?
What if, for example, the local law does not prohibit
discrimination based on handicap, but the federal law
does? The federal law prevails. Federal statutes should
be considered as the minimum laws.
However, you must comply with local, state, and
federal laws at all times. An overall rule of thumb is to
comply with the law that places the greatest burden or
provides the greatest protection against discrimination.
Easy way to remember the protected classes
REALTORS®
Can
Really
Sell
Houses
Fast
Now
Race
Color
Religion
Sex
Handicap
Familial Status
National Origin
Note: The Fair Housing Act uses the term “handicap,” rather
than the more commonly used term, “disability.” The
definition of “handicap” in the Fair Housing Act is the same as
the definition of “disability” in the Americans with Disabilities
Act (ADA). However, the Fair Housing Act applies to housing,
and the ADA applies to employment and access to commercial
establishments such as real estate sales offices and boards of
REALTORS®.
CITY OF
66
The Fair Housing Act uses the term “handicap” with
respect to a person who:
 has a physical or mental impairment that
substantially limits one or more major life
activities.
 has a record of such impairment.
 is regarded as having such an impairment.
Declaration of Independence
The Declaration of Independence affirms that “all men
were created equal, but the U.S. Constitution said that
slaves were considered to be “three-fifths of a person
Dred Scott Case
As a result of the Dred Scott decision in 1856, the
Supreme Court determined that black persons had
only the rights or privileges granted by those who
held the power or the government, and had no rights
which” the white man was bound to respect.”
Examples of people who are considered handicapped
are individuals with:
 Impairments in walking, seeing, or hearing.
 A history of mental illness, heart disease,
cancer, cerebral palsy, multiple sclerosis,
diabetes, AIDS, HIV.
 Individuals who have successfully completed
or are participating in a drug treatment
program.
13th and 14th Amendments
After the War Between the States, there was a flurry
of legislative activity about granting full citizenship to
former slaves. The 13th amendment, ratified in 1865,
abolished slavery. The 14th Amendment, ratified in
1870, guaranteed all persons dues process and equal
protection under the law.
Civil Rights Act of 1866
Enacted by the Reconstruction Congress, The 1866
Civil Rights Act specifically guarantees that all US
citizens have the same right to inherit, purchase,
lease, sell, hold and convey real and personal property
as is enjoyed by white persons.”
Examples of people who are not considered
handicapped are individuals who are:
 Transvestites.
 Current users of illegal substances.
 Persons who pose a threat to the health and
safety of others.
 Smokers.
Plessy V. Ferguson
In 1896, a Supreme Court decision effectively halted
any further development toward true racial equality
by holding that “separate but Equal” facilities are
constitutionally permissible. This decision was
reversed 58 year later, in 1954, by the Brown v.
(Topeka, Kansas) Board of Education Supreme Court
decision.
HISTORICAL BACKGROUND
Historical Presentation and Discussion
Federal fair housing laws prohibit housing
discrimination based on race, color, religion, sex
handicap, familial status, or national origin. This is a
culmination of many earlier laws and constitutional
rights to ensure all citizens the freedoms and liberties
they deserve.
1789
1856
1866
1866
1874
1968
1974
1988
1995
Fair Housing Act / Civil Rights Act of 1968
Title VIII of the Civil Rights Act of 1968 , now known as
the Fair Housing Act, was specifically enacted to
prohibit discrimination in housing and was the
beginning of a comprehensive body of statutes
governing private and public housing in the United
States.
United Stated Constitution
Dred Scott Decision
13th & 14th Amendments to the
United States Constitution
Civil Rights Act
Plessy V. Ferguson
Federal Fair Housing Act
Fair Housing Act Amendment
Fair Housing Act Amendment
Congress clarified the Housing
for Older Persons exemption
67
Fair Housing Act / Amendments
FAIR HOUSING TODAY
A 1974 Amendment added “sex” whether male or
female, as a protected group.
1989 HUD Survey
In 1989, the United States Department of Housing and
Urban Development (HUD) commissioned a
Housing Discrimination Survey (HDS) to identify and
provide an understanding of the barriers of
discrimination in the housing market. The HDS
measured the treatment of testers posing as
homebuyers in 3,800 audits in 25 metropolitan areas.
The survey results painted a bleak picture of
discrimination in the housing market and indicated
differential treatment in all stages of each search.
A 1988 Amendment added “handicap” and “familial
status” as protected groups and made changes in
enforcement of the law, which will be covered later in
the course.
1995 – Congress clarified the Housing for Older
Persons exemption.
The Civil Rights Act of 1866 and the Federal Fair
Housing Act of 1968, as amended, are the foundation
of fair housing law in the United States.
This brief overview of the history is important because
understanding its implications is critical to the
success of the real estate industry.
The survey results, as well as subsequent survey
results, indicate that in over half of the visits to
housing providers, African-American or Hispanic
homebuyers received less favorable treatment than
Caucasian homebuyers. This treatment occurred in
both sales and rental situations. Differences reported
include the number of housing options offered and
the level of service provided to homebuyers.
DOES EQUAL OPPORTUNITY EXIST TODAY?
In general, it is unlawful for a real estate professional
or firm to discriminate in making a rental property
available, making the full enjoyment of that property
available, or imposing terms and conditions because
of race, religion, color, sex, handicap, familiar status,
or nationality.
The HDS serves as a reminder that discrimination
continues in the housing market today. It affirms the
need for the real estate industry to be vigilant in
promoting fairness and equal opportunities in
housing. A 1999 study by HUD determines the levels
of discrimination.
Does Equal Opportunity in Housing Exist Today?
Discussion Questions
1. Do you think we have made progress in terms
of ending discrimination in housing?
Market Diversity
Today, any acknowledgment of discrimination in the
housing industry must be combined with an
awareness of the population's increasing diversity.
The reality of expanding diversity of our society
including nontraditional families, immigrants, aging
population, single parents and others make fair
housing laws even more important.
2. How does discrimination in housing impact
your business?
3. Have you noticed any changes in how real
estate professionals address the issue of
housing discrimination today, as compared to
five or ten years ago. If yes, how?
68
According to Harvard University Joint Center for
Housing Studies, the U.S. population growth will fall to
just .80 percent annually between 2000 to 2010. The
population growth will see a relatively fast growth in
minority populations (including Hispanics, as well as
African-Americans, Asian-Americans, and Native
Americans) and a significant slowdown in the
Caucasian population growth. This spurt of minority
population growth is largely due to immigration or
higher rates of natural increase. As a result, the U.S.
population will become increasingly diverse over the
next 15 years.
Fair Housing Exemptions
There are no exemptions to the Civil Rights Act of
1866, which states that "all citizens of the United
States shall have the same right to inherit, purchase,
lease, sell, hold and convey real and personal property
as is enjoyed by white persons." Discrimination based
on race or color is always illegal.
The Fair Housing Act has some exemptions.
 FSBO exemption
 Mrs. Murphy’s exemption
 Religious organizations and private clubs
 Housing for older persons
The minority share of the overall population is
expected to expand from 24 percent in 1990 to 32
percent in 2010. Housing trends estimate the Asian
population will post the highest growth rate of all
racial and ethnic groups. In the 1990s thus far,
immigrants have accounted for almost one-third of
the overall population growth. In total, the minority
population will increase by 16.8 million in the 1990s
and 17.8 million in the first decade of the 21st
century. Source: The State of the Nation's Housing
1996 Harvard University Joint Center for Housing
Studies.
NOTE: The Mrs. Murphy and FSBO exemptions do not
apply to advertising. It is always unlawful to use
discriminatory advertisements or statements.
For Sale By Owner Properties Exemption
The owner does not own, or have ownership interest
in more than three single-family houses at any
one time.
The house is sold or rented without the use of a real
estate agent, broker, or any other person in the
business of selling or renting dwellings.
The growing diversity of households in the United
States will profoundly effect the role of real estate
professionals to provide equal service to all customers
and clients. Working with a diverse customer/client
base expands business opportunities.
The owner does not reside in the property at the
time of the sale or was not the most recent
resident prior to the sale (This exemption applies to
only one such sale in a 24-month period.)
The house must be sold or rented without the use of
discriminatory advertising.
69
To qualify as 55 and over housing
Mrs. Murphy’s Exemptions

Mrs. Murphy’s exemption is the common description
of the exemption that applies to an owner occupied
building with four or fewer units.

Case Study: For example, in a 1998 case, (HUD v.
Gruzdaitis) an administrative judge has ordered a
Buffalo, New York landlord to pay $25,000 in
compensatory damages and a $25,000 civil
penalty, after finding, that the landlord had
uttered profanities and spit on a black woman who
was inquiring about an apartment for rent in his
building.
The judge found that because the landlord lived in
the two-unit building he was exempt for all
provisions except that which makes it unlawful to
make a discriminatory statement
in connection with the rental of a dwelling. The
judge also ruled that the landlord had violated the
law by intimidating, threatening, or interfering
with the prospective tenant in the exercise of her
right to inquire about the availability of housing.

Real estate professionals who market housing to older
persons should make sure that the facility or
community has stated, in writing, that it complies
with the requirements for the exemption. In addition,
he/she should have no actual knowledge that the
facility or community is not, or will not be, eligible for
the exemption.
Religious organizations or private clubs also have
exemptions under fair housing laws. Religious
organizations that own dwellings may limit the sale,
rental, or occupancy of such dwellings to persons
belonging to the religious organization or club.
Exempt dwellings may not be used for commercial
purposes, and religious membership must not be
restricted because of race, color, or national origin.
Avoid the use of the term “adult” when marketing 55and-over housing. The use of the term “adult” does
not demonstrate an intent as housing for older
persons and may trigger complaints that such housing
does not qualify for the exemption. When describing
55-and-over housing, apply the terms “senior
housing” or “55-andover housing” to represent the
community’s intent to provide housing for older
persons.
Similarly, private clubs that own lodgings may limit
the rental or occupancy of such lodgings to their
members or give preference to members. Again, such
exempt dwellings cannot be used for commercial
purposes.
Housing for older persons refers to three types of
housing:



At least 80 percent of the occupied units must
be occupied by at least one person who is 55
years of age or older
The housing facility or community must
publish and adhere to policies and procedures
that demonstrate this intent to be housing for
older persons
The housing facility or community must
comply with rules issued by the Secretary of
HUD for verification of occupancy
Senior housing that is provided under federal
or state programs
Housing that is intended for and solely
occupied by persons 62 years of age or older
Housing intended and operated for occupancy
by persons 55 years of age or older
70
LESSON 2: WORKING WITH SELLERS
CASE STUDY # 1 : DISCRIMINATION
Lesson 2 - Working with Sellers Objectives
Case Study

Given scenarios, identify discriminatory
practices of sellers

Describe methods to protect against damages
caused by discriminatory practices

Develop a listing procedure that will provide
protection and educate the seller about fair
housing laws

Comply with proper procedures when
reporting acts of discrimination

Determine the proper inclusions when asked
to provide a copy of the covenants or
restrictions of record relating to the use of a
property
An elderly Caucasian couple lists their home for sale
at $130,000 with sales associate Smith. They wish to
move into a condominium. Their home, an older
structure that is in good condition, is located in a
neighborhood where many Italian families reside.
After an open house, listing agent Smith receives two
offers on the home. The first offer is from Mr. and
Mrs. Jorge Rivera. The second offer is from Mr. and
Mrs. Tony Castiglione. The first offer is for 100
percent of the asking price, and the second offer is for
95 percent of the asking price. The first offer is solid -the buyers were pre-qualified, and they want to close
as soon as possible. Furthermore, their offer does not
include an inspection contingency. The second offer is
contingent on the buyers selling their own home,
which has been on the market for six months. The
second offer also includes a standard inspection
contingency. The sellers instruct Smith to accept Mr.
and Mrs. Castiglione’s offer.
Q. Do you suspect discrimination? If so, why?
Q. How would you handle this situation?
Discussion
It appears that the sellers’ decision to accept Mr. and Mrs.
Castiglione’s offer, which has a contingency clause, isn't
based on financial reasons. The Riveras’ offer is for $6,500
more and does not include an inspection contingency. Smith
should talk about the value of the first offer, and remind the
sellers that even if the Castigliones sell their home, their
deal will be slower to close than the offer presented by the
Riveras because of the home-sale contingency.
Smith should ask the sellers why the offer that will clearly
provide the most benefit is being rejected. Smith should then
listen, without interruption, to their response. After hearing
the sellers’ response if a discriminatory reason is given, or
the rationale does not appear to be reasonable, Smith
should remind them of their obligation to comply with fair
housing laws, as discussed when the listing was taken. Smith
should document all facts and circumstances of the offer in
an effort to protect herself against possible charges of
presenting offers in a discriminatory manner.
71
The listing agreement was terminated, but Arias
continued to independently work with the Banais.
CASE STUDY # 1 : DISCRIMINATION?
Before informing the Castigliones that their offer has
been accepted (and before informing the Riveras that
their offer has been rejected), Smith should discuss
the circumstances of this situation with the fair
housing officer or broker in her firm. Proper guidance
in responding to the buyers must be obtained prior to
notifying them of a rejection, an acceptance, or a
counter-offer.
The Administrative Law Judge (ALJ) found the Banais
in violation of the Fair Housing Act and ordered them
to pay the complainants damages in the amount of
$70,000 and a civil penalty of $10,000 to HUD.
The ALJ found that by answering the question about
the complainants’ race, Arias had “facilitated and
participated in Mrs. Banai’s refusal to rent to the
complainants,” thereby violating the Fair Housing Act.
However, there was no evidence to suggest that Arias
was a willing accomplice in the discrimination. In fact,
she tried to dissuade Mrs. Banai from her decision,
and she continued to assist the complainants in their
housing search.
A seller is entitled to know who submits a contract.
However, sometimes a seller asks questions about a
homebuyer’s identity to obtain information about the
homebuyer’s race, color, religion, handicap, sex,
familial status, or national origin. Sales associates
should only identify homebuyers by:
name
occupation
present residence
or other qualities that do not to relate to a
protected class
Arias was ordered to pay a civil fine of $100 and
attend fair housing training. Because Arias was
employed by Manhattan as a rental agent, Manhattan
was also vicariously liable for Arias’ actions.
The ALJ found Manhattan less culpable than Arias,
because it tried to dissuade Mrs. Banai from carrying
out the discrimination, and when unsuccessful in that
attempt, it terminated the agency relationship with
the Banais. As the ALJ pointed out, there was nothing
else the brokerage firm could have done.
A seller cannot use this information to discriminate on
the basis of any of the protected classes.
CASE STUDY #2: HUD V. BANAI
HUD v.Banai, 2 Fair Housing-Fair Lending
(P-H), p 25,095 (HUDALJ Feb. 3, 1995)
A civil penalty was not imposed on Manhatttan
because it immediately took appropriate action to
disassociate itself from the Banais.
In HUD v.Banai, 2 Fair Housing-Fair Lending (P-H), p
25,095 (HUDALJ Feb. 3, 1995), a sales associate who
answered a landlord’s question about the race of
prospective tenants was found to have violated the
Fair Housing Act.
In HUD v. Banai, a couple, the Banai, engaged the
services of Sylvia Arias, a rental agent with Manhattan
Group Real Estate, Inc., to rent their house in
Hollywood, Florida. Arias showed the home to a
couple who were very interested in the rental. She
called the Banais to inform them of their prospects.
Mrs. Banai specifically asked Arias whether the couple
were “black,” she responded that they were, and Mrs.
Banai stated her refusal to rent the house to black
people. Arias responded that, “We are not supposed
to discriminate in that way.” She relayed the incident
to her supervisor at Manhattan, who informed her
that the firm would have to terminate the listing
agreement because it could not be a party to
discriminatory practices.
All of the respondents were permanently enjoined
from discriminating with respect to housing based on
race or color.
This decision marks the first time an ALJ has found a
sales associate in violation of the Fair Housing Act
based on truthfully answering a landlord’s inquiry
about a prospect’s race.
72
CASE STUDY # 2 : DISCUSSION
Listing Procedures
Discussion Questions and Suggested Answers
When obtaining a listing, a real estate sales associate
should:
 Express a commitment to abide by the law
 Give the seller NAR’s “What Everyone Should
Know…” brochure
 Review the contents of this brochure with the
seller
 Read and discuss any fair housing language or
clauses in the listing agreement
 Obtain seller’s written commitment to abide
by the law (this may be achieved with the
listing agreement)
Q. Why is it dangerous to answer a seller’s question
about a buyer’s race?
Q. What actions would you take if one of your
coworkers sought your advice on how to answer a
question about a prospective homebuyer’s race?
Q. What other factors may have contributed to the
ALJ’s decision?
When a seller refuses to abide by the law, the sales
associate has no choice but to refuse the listing. A
sales associate should report the incident to the fair
housing officer or broker of his or her firm.
Discussion
There is now case law that clearly indicates it is a
violation of fair housing laws to truthfully answer an
inquiry from a landlord about a prospect’s race.
A seller may express a commitment to fair housing
and then not follow through with the appropriate
actions. Some sellers conduct themselves in a manner
that is overtly at odds with the law. Sales associates
must recognize that sellers who refuse to show their
property to prospective homebuyers in one or more
of the protected classes are in direct violation of the
law. In such situations, sales associates must report
the incident to the fair housing officer or broker of the
firm. If the situation cannot be changed, it is
necessary to terminate the listing agreement.
Advise should be given to a coworker to cancel a
listing if a seller is persistent in asking about a buyer’s
race. The agent should remind the seller of the fair
housing laws and then cancel the listing. Also,
supporting the buyer’s efforts to fight discrimination
will help protect the co-worker. The ALJ may have
been swayed by the fact that Arias continued to work
with the Banais, even after they displayed
discriminatory behavior.
LISTING PROCEDURES
Listing presentations are ideal opportunities for sales
associates to educate sellers about fair housing issues.
During a listing presentation, the sales associate and
the seller typically discuss how a home will be
marketed and advertised. Marketing and advertising
methods are used to attract buyers. Make sure that
you and your seller’s actions do not exclude, limit, or
show preference based on race, color, religion, sex,
handicap, familial status, or national origin.
Other discriminatory acts or statements are more
subtle. Sometimes it is difficult to know a seller’s true
motivation. Even suspected discrimination should be
reported to the sales associate’s fair housing officer or
broker.
Obtaining a Listing
Take advantage of your opportunities to educate a
seller about the fair housing laws before the listing
agreement is signed.
73
REPORTING ACTS OF DISCRIMINATION
Protect Your Fair Housing Rights
What should be done when it appears that someone
is in violation of fair housing laws? To protect a
homebuyer’s rights to equal opportunity in housing
and to avoid participating in discriminatory acts, take
the following steps.
You also may have a cause of action against the
discriminating party and can file a complaint on your
own behalf. Acts of discrimination may be reported to
the Department of Housing and Urban Development
(HUD), state and local government human rights or
civil rights agencies, or private fair housing groups.
Contact the Department of Housing and Urban
Development at 800-669-9777 or 800-543-8294 for
more information.
What should you do if:
 The discriminating party is your client or not the
client of anyone else.
Talk to the party who appears to be violating the law,
and explain fair housing laws to that person.
Ask that person to act in a non-discriminatory fashion.
This often resolves the matter and results in the
homebuyer obtaining access to housing as guaranteed
by fair housing laws. Follow up with a letter
summarizing your discussion.
CONDOMINIUMS & HOMEOWNER
ASSOCIATIONS
The Fair Housing Act applies to all residential property
and vacant land that can be used for housing.
Condominiums, cooperatives, and houses in
homeowner associations are covered by the law. The
actions of a condominium or homeowner association
are subject to the Fair Housing Act.
 The discriminating party is the client of another
sales associate.
Talk to the other sales associate, and explain your
concerns. Ask the other sales associate to speak
with the client to end the discriminatory behavior.
Follow up with a letter that summarizes the
discussion.
Members of an association may be liable for the
discriminatory acts of the association’s board of
directors or agents. A board’s actions may be
reviewed during an investigation of a fair housing
complaint.
 The discrimination has not ended or been
corrected, and the discriminating party is your
client.
End your relationship with that client by terminating
the listing. Inform the homebuyer of what has
occurred, and state your belief that discrimination
was involved. Provide the homebuyer with
information about where to file a complaint. Provide
follow-up letters to the client and the homebuyer that
summarize the discussion and actions taken.
Associations may claim the Housing for Older Persons
exemption and lawfully exclude families with
children, if the association and property meet the
requirements of the exemption. To be exempt under
the 55-and-over provisions of the Housing for Older
Persons exemption, 80 percent of the occupied units
must be occupied by at least one person who is 55
years of age or older, and the facility or community
must be intended and operated for persons 55 years
of age or older. The community should not portray
itself as an “adult” community.
 The discrimination has not ended, and the
discriminating party is not your client.
Inform the homebuyer of what has occurred, and
state your belief that discrimination was involved.
Provide the homebuyer with information about where
to file a complaint. Follow up with a letter to the
homebuyer that summarizes the discussion.
 The discrimination has not ended, and the
discriminating party is another Realtor®.
In addition to the above, you may file an ethics
complaint with the appropriate local REALTOR®
association alleging a violation of Article 10 of the
NAR Code of Ethics.
74
UNENFORCEABLE RESTRICTIONS
LESSON 3 : ADVERTISING AND
PROMOTIONS
Deed and Property Covenants or Restrictions of
Record
Lesson 3 - Advertising and Promotion
Objectives
During the history of our country, some persons have
placed restrictions on property based on race, color,
religion, sex, handicap, familial status, or national
origin. Generally, these restrictions are void and
unenforceable, with limited exceptions for particular
types of religious housing and housing for older
persons. The publication of these void restrictions
may convey a message that the restrictions continue
to be valid. Any time a sales associate or broker is
asked to provide a copy of the covenants or
restrictions of record relating to the use of a property
the following message should be included:




 These documents may contain restrictions or
covenants based on race, color, religion, sex,
handicap, familial status, or national origin. Such
restrictions or covenants generally are void and
unenforceable as violations of fair housing laws.
State the guidelines that should be used to
avoid any discriminatory preferences
Analyze advertising terms, phrases, symbols,
and/or illustrations, that do not convey
discriminatory preferences or impose
limitations
Develop advertisements that comply with
federal fair housing law
Determine the restrictions and guidelines for
developing a marketing plan which includes
target marketing
ADVERTISING EXERCISE
Description
This house has been on the market for about six
months as a “for sale by owner” (FSBO). The house
has approximately 650 square feet of habitable living
space, and a small, unfinished basement. There is one
bedroom, one bathroom, and a combination living
room/dining room/kitchen. There are two closets, one
of which is in the bedroom.
 Be assured that all property is marketed and made
available without discrimination based on race, color,
religion, sex, handicap, familial status, or national
origin. Should you have any questions regarding such
restrictions, please contact your attorney.
 Any attempt to limit your rights to housing because
of race, color, religion, sex, handicap, familial status,
or national origin should be immediately reported to
your real estate broker.
Notes:
Write your advertising copy here.
75
DISCRIMINATORY LANGUAGE
ADVERTISING / PROMOTION GUIDELINES
Discriminatory Language - Example #1 includes
language that implies adults only or no children. The
term “empty nesters” is discriminatory.
Advertisements and Promotion Guidelines
Like most fair housing issues, matters that related to
marketing are often subject to interpretation. Often,
there are no “right” or “wrong” answers to questions
of interpretation. The issues vary with each and every
case. Begin with the language of the law for guidance.
Common sense should also prevail. Ask yourself:
“Does my marketing plan – including
newspaper/magazine advertisements, media
purchases, and mailings -- express a preference,
limitation, or discrimination?” You will find that these
questions may be difficult to answer.
Multiple Listing Service As Publisher
During the past few years, MLSs have recognized their
liability for publishing notices in violation of Section
804(c) of the Fair Housing Act. This has occurred
because brokers have included what is perceived as
discriminatory advertising in the “remarks” section of
the MLS, and HUD has viewed the MLS as the
publisher of such information. The MLS’s affected
have undertaken increased efforts to educate their
participants about fair housing advertising. To lessen
their legal liability, they now closely monitor the
words and phrases used to describe properties.
Discriminatory Language - Example #2 uses the
phrase “mature person”. This is a violation of fair
housing laws because it shows a preference for adults.
ADVERTISING LANGUAGE GUIDELINES
Focus on describing the property (not the tenant,
purchaser, seller, owner, or neighbors).
Non-Discriminatory Language
NOTES:
76
HOW WOULD YOU ADVERTISE THIS HOUSE?
Scenario
A sales associate shows you a property advertisement
that she has written for you to review and provide
feedback. The property she is advertising is the small
home shown in Overhead 20. You notice that the
advertisement contains the phrase “retire in style,” and
you are concerned that this language could violate the
Fair Housing Act.
Regarding the racial claim, the Seventh Circuit found
that Jancik did not expressly indicate a racial preference,
but that the context of Jancik’s racial questions indicated
intent to discriminate. Because Jancik’s questions about
race came directly after questions regarding other
unlawful preferences, and because he had never rented
to a black tenant, the court affirmed the ALJ’s decision
that Jancik discriminated on the basis of race.
Approaches to becoming more sensitive to language that
may express a preference, limitation or discrimination:

Q. How should you talk to and work with the sales
associate to help her determine whether this
advertisement implies discrimination against a protected
class?


A. Whenever advertisements or notices are developed
for housing sales and rentals, the person who develops
the advertisement copy should ask the following
questions before writing the copy.
Do you intend to exclude, limit, or show a preference for
prospects under any of the protected classes?
For example, in the scenario presented above, does the
sales associate intend to say that prospects with
children are not wanted? If so, the advertisement would
probably be found in violation of the Fair Housing Act.
Remember, the law prohibits the expression of such a
preference, limitation, or discrimination and makes it
unlawful to discriminate against a protected class.


Ask questions of your coworkers, especially if
you work in a diverse office environment.
Talk to community groups about equal housing
opportunity issues.
Be aware of word lists (these indicate possible
concerns and should not be used as absolutes)
Use HUD’s advice reference and HUD’s
guidelines in the Fair Housing Handbook.
See the memo from Assistant Secretary for Fair
Housing and Equal Opportunity, Roberta
Achtenburg (January 9, 1995), Appendix D
What are some of the ways that you learn about, and
become sensitive to, language that may express a
preference, limitation, or discrimination in advertising?
Notes
Q. Would people or groups of people in the community
where a property is being advertised interpret its
message as an expression of a preference, limitation, or
discrimination?
A. In other words, do people without children in the
market area view the advertisement or the phrase
“retire in style” as a preference for a buyer without
children? If a “reasonable” person with children believes
that the advertisement phrase “retire in style,” is an
expression of a preference or limitation based on familial
status, the law has been violated. A “reasonable” person
is neither the most sensitive nor the most callous
member of a particular group, but one who represents
the opinions of the broadest spectrum of that group.
Consider how the courts have been advertising.
Remember, the same word can be used many different
ways and with many different results.
When a word is challenged, HUD examines its use in
context to determine if discrimination, within the
meaning of fair housing laws, is a likely result.
The key lies in whether an advertisement communicates
discriminatory intent.
77
VISUAL PRESENTATION IN
ADVERTISEMENTS
TARGET MARKETING & FAIR HOUSING
Marketing is much more than just writing advertisements.
Developing a good marketing plan is an important step
toward selling or renting a property and expanding one’s
customer and client base. The way a firm and/or property
is marketed is also covered by the Fair Housing Act. Any
marketing plan, including the selection of media and
publications for advertisements that indicates a
preference, limitation, or discrimination based on race,
color, religion, sex, handicap, familial status, or national
origin is a violation of the Fair Housing Act.
The Fair Housing Act prohibits the use of human models
in photographs, drawings, or other graphics used in
advertisements to indicate exclusiveness based on race,
origin. When human models are used in display
advertisements, they should be clearly definable as
reasonably representing majority and minority groups in
the community. Similarly, advertisements that feature
human models should include a reasonable
representation of persons of both sexes, families with
children, and people with disabilities. Models used
should portray persons in an equal social setting and
indicate to the general public that housing is open to all
without regard to race, color, religion, sex, handicap,
familial status, or national origin, and is not for the
exclusive use of one such group.
Most marketing professionals claim that target marketing
is an excellent way to reach buyers. Target marketing
involves two basic steps:
 knowing the audience (developing a market profile)
 engaging in activities that are designed to reach that
audience
Suggested Answer / Notes
The use of target marketing takes on new significance
when the “product” is a home instead of a candy bar.
When promoting a home for sale, target marketing may
be perceived as discriminatory. During a listing
presentation discussion, it is likely that the seller and the
listing agent will discuss potential buyers for a home.
When targeting a specific “audience,” a sales associate
should ask whether race, color, religion, sex, familial
status, handicap, or national origin are issues because
targeting on these bases is illegal.
It may convey discriminatory intent. Several questions
must be answered to determine if the advertisement
violates fair housing laws.
Question:
When marketing a home for sale, what are some of the
differences between legal and illegal target marketing?
First, are there any other advertisements for this
townhouse community in the paper that show a diverse
group of models?
Suggested Answers / Notes:
Once again, the purpose is to generate discussion.
Examples of illegal target marketing include, but are not
limited to, the following:
Question
Consider an advertisement for a community of
townhomes that runs in the local newspaper. The same
advertisement ran every Sunday for almost eight
months. This advertisement shows multiple photographs
of young, Caucasian, single persons. Does it convey
discriminatory intent?
Second, is the advertisement, including the Fair Housing
logo, shown in other diverse publications or
publications with general readership?


Third, ask yourself if the advertisement in any way shows
a preference, limitation, or discrimination based on
race, color, religion, sex, handicap, familial status, or
national origin. Keep in mind, in no instance should
the use of human models indicate exclusiveness because
of race, color, religion, sex, handicap, familial status, or
national origin.


78

Advertising only in select editions of the local
newspaper
Advertising only in a strategically-limited
geographic area that is populated by particular
ethnic or religious groups of people
Limiting advertisements to small papers or free
journals (as opposed to general circulation
papers), because these publications cater to
particular ethnic or religious groups of people
Using only “niche” publications that do not have
general readership and that cater to particular
ethnic or religious groups
Promoting the home only in selected sales offices
To meet that exemption, housing must be solely for
persons over the age of 62 or be intended and operated
for persons 55 years of age and older and have, in at least
80 percent of the occupied units, at least one resident 55
years of age or older. In no instance should housing be
marketed as “adult” housing. Use of the term “adult” in
marketing is generally illegal and invites scrutiny. Housing
that meets the requirements for the Housing for
Older Persons exemption should be marketed as “55 and
Over,” “Housing for Older Persons,” or “Senior
Housing.”
ILLEGAL TARGET MARKETING
Examples of Illegal Target Marketing
 Advertise only in select editions of the local
newspaper
 Advertise only in strategically-limited
geographical area that is populated by particular
racial, ethnic, or religious groups of people.
 Limit advertising to small papers or free journals
(as opposed to generic circulation papers)
because these publications cater to particular
racial, ethnic, or religious groups of people.
 Use only niche publications that do not have
generic readership, and these publications cater
to particular racial, ethnic, or religious groups of
people.
 Promote the home only in selected sales offices
Marketing decisions should be based on how the market
will interpret the information provided. The intent
behind the decision may not be a factor. However, if
families with children interpret the marketing efforts to
mean that children are not welcome, the marketing
efforts likely have violated the Fair Housing Act.
Target Marketing Considerations
Through the NAR Code of Ethics, REALTORS® agree to
provide equal professional service without
discrimination based on race, color, religion, sex,
handicap, familial status, or national origin. Fair housing
laws also prohibit such discrimination.
ILLEGAL TARGET MARKETING
Article 10 of the NAR Code of Ethics
In addition to fair housing laws, REALTORS® must also
abide by the NAR Code of Ethics as it relates to fair
housing. REALTORS® shall not deny equal professional
services to any person for reasons of race, color, religion,
sex, handicap, familial status, or national origin.
REALTORS® shall not be parties to any plan or agreement
to discriminate against a person or persons on the basis of
national origin. (Amended 1/90)
Expressing a preference, limitation, or discrimination in
connection with the sale or rental of housing is a
violation of the Fair Housing Act. Selecting media or
locations for advertising the sale or rental of dwellings
that deny particular segments of the housing market
information about housing opportunities because of
national origin is also a violation of the law. Targeting a
market whose customers can be identified by race,
origin may deny housing market information to others
and violate the law.
Standard of Practice 10-1 of the NAR Code of Ethics
REALTORS® shall not volunteer information regarding the
racial, religious or ethnic composition of any
neighborhood and shall not engage in any activity which
may result in panic selling. REALTORS® shall not print,
display or circulate any statement or advertisement with
respect to the selling or renting of a property that
indicates any preference, limitations or discrimination
based on race, color, religion, sex, handicap, familial
status or national origin. (Adopted 1/94)
Although many housing choices are driven by household
makeup (e.g., the number and ages of children or the
absence of children), it is unlawful to market housing
opportunities in a manner that denies housing market
information to families with children or that expresses a
preference for households without children.
The only type of housing that can legally be targeted to
senior citizens or retirees is housing that meets the
requirements for the Housing for Older Persons
exemption under the Fair Housing Act.
79
Consider the following target marketing example
Sales associate Jean has a new listing she that thinks will
sell to an older couple. She advertises the property
in a local publication with a significant senior citizen
readership. This is the only advertisement that Jean
places.
Sales associate Ken has a new listing that is very similar
to the property that Jean is selling. It, too, is a
small home that is located in an older, established
neighborhood. Even though Ken suspects that the home
will have a greater appeal to elderly persons, he
advertises in a variety of publications.
Jean receives five responses to her advertisement from
senior citizens. Ken gets 16 responses to his
advertisements from couples with young children, senior
citizens and singles.
Lesson 4 - Working With Buyers Objectives
 Determine the similarities of the fair housing law
when working with sellers and buyers
 State recommended language and guidelines for
a buyer’s representative agreement
 Explain and list benefits of systematic procedures
such as the Equal Professional Service (EPS)
Model
 State the benefits of obtaining objective
information
 Identify potential steering situations and describe
strategies to avoid them
 Develop an office procedure to protect against
damages and convey a message of fair housing
support
 Describe self testing methods that will evaluate
compliance within fair housing laws and uncover
potential problem areas
Working with Buyers
The importance of being consistent when working with
sellers has been discussed. It is a listing agent’s
responsibility to make a seller aware of fair housing laws.
It is also necessary for a seller to understand the listing
agent’s commitment to equal opportunity housing.
Q. Which sales associate may be violating fair housing
laws with their marketing campaign?
A. Jean not only may be violating the fair housing laws,
but she is also not expanding her marketing efforts to
reach a high number of potential homebuyers. Jean
should not limit her marketing efforts to one local
publication. Because the publication is known to have
significant senior readership, this may be interpreted as
showing a preference for this type of buyer. This strategy
may be interpreted as discriminatory in an attempt to
exclude families with children from responding to the
advertisement.
Consistency is equally important when working with
prospective buyers. Standard procedures should be
followed for listing presentations and listing agreement
signings. A listing agreement is a legal contract, and its
execution must be made with care.
In contrast, meetings with new prospects may appear to
be less formal than taking a listing. Some sales associates
may prefer to work with prospects on an informal basis.
However, from a business and fair housing standpoint, a
less formal approach is not always prudent.
Q. Why?
Consistency can be initiated and maintained with the use
of systematic procedures in the office, and such standard
procedures offer many benefits. For example, many
offices have systematic procedures for documenting
information about prospective buyers.
A. Because the publication Jean advertised in is known to
have significant senior leadership, this may be
interpreted as showing a preference for this type of
buyer. This strategy may be interpreted as discriminatory
in an attempt to exclude families with children from
responding to the advertisement.
Optional Discussion Question and Suggested Answer
Q. Pretend that a prospective buyer has just walked into
your office. What information do you record about this
new prospect?
80
The selling agent suggested that the sellers were in no
hurry because they were having a house built. After
meeting with the selling agent and Mr. Whitecloud, the
seller’s agent quickly suggested some other homes might
be better for Mr. Whitecloud. These homes were
“coincidentally” in a community comprised mostly of
Native Americans. The selling agent also suggested that
the sellers would probably not accept any contingency
offer from Mr. Whitecloud, nor will the sellers come down
in price. “However, there are plenty of homes in the other
neighborhood that would be more suitable for
Mr. Whitecloud.”
BUYER’S AGENCY
Does functioning as a buyer’s agent affect a real estate
professional’s responsibility under the fair housing
laws? For example, how does a buyer’s agent respond
when a buyer asks for help identifying a community
based on demographic characteristics such as race?
Although a buyer’s agent has a fiduciary responsibility to
the buyer and works to protect the best interest of
the buyer, refusing to discriminate is always the best
policy.
It is recommended that a buyer’s agent include language
in their buyer’s representation agreement indicating a
commitment to equal housing opportunity and a
statement that the agent has no duty to disclose
information regarding race or other protected classes.
Because of the circumstances that occurred to Mr.
Whitecloud you suspect that the buyer is being
discriminated against.
Q.
Do you have a duty to report this act of
discrimination? If so, why?
Q.
What specific acts of discriminating took place?
Q.
What would you advise the client as far as his
course of action?
The following is suggested language for such an
agreement:
It is the policy of (firm name) to abide by all local, state,
and federal fair housing laws and not discriminate
against any individual or group of individuals. The agent
has no duty to disclose the racial, ethnic, or religious
composition of any neighborhood, community, or
building, nor whether persons with disabilities are
housed in any home or facility, except that the agent may
identify housing facilities meeting the needs of a disabled
buyer.
Discussion
You have a duty to report this act of discrimination. You
have a fiduciary responsibility to the buyer and a
commitment to uphold fair housing laws. In general, good
business practices are similar, regardless of agency. The
key is understanding the legal and ethical obligations to
provide equal professional service to all. In this scenario,
steering and refusing to make the transaction available
demonstrate discrimination and the terms and conditions
may also demonstrate discrimination. In this scenario, you
should discuss with your client your belief that
discrimination has occurred, how to file a complaint, how
to document what occurred, and your client's rights as a
consumer.
SCENARIO # 1
After receiving his MBA degree, John Whitecloud landed
a good job with an accounting firm that paid him a
good salary. He wanted to buy a home that was large
enough for his parents and sister and their two large
dogs to move in with him. John found a home that
seemed perfect. The house had a finished basement
with a separate bedroom, bathroom, and kitchen, which
was perfect for his parents. The upstairs had three
bedrooms with ample space for John and his sister. The
house even had a large fenced in backyard for the dogs.
John decided to take the plunge and talk to a buyers
agent.
COLLECTING & DOCUMENTING INFORMATION
Why is it good practice to collect and document
information about prospects?
John Whitecloud who is a native American, walked into
your office looking for a buyer's representative to help
him go buy this home which is located just outside of the
Indian reservation in a community that is predominately
Caucasian. Being a buyer's representative, you can
sympathize with John on how intimidating it can be to
buy your first home.
Excited at the opportunity to help this hard-working and
loyal young man, you call the listing agent to set up an
appointment. You mentioned to the selling agent that
your client – John, is interested in the home, but needs
to sell his home first.
81
Suggested Answers/ Notes:
Possible answers include, but are not limited to:
 a prospect database is created
 follow-up information is recorded
 information is readily available
 more organization
 documentation provides a defense against claims
that fair housing laws have been violated
 activities are recorded for future reference
 fair housing compliance is monitored to make
corrections (as necessary)
EQUAL PROFESSIONAL SERVICE MODEL
OBTAINING OBJECTIVE INFORMATION
This Equal Professional Service (EPS) model can and
should be applied to all areas of marketing housing. The
chances of facing charges of fair housing violations with
no defense are drastically reduced when a sales
associate develops a consistent approach to greeting
people, showing homes, qualifying prospects, obtaining
listings, conducting open houses, keeping records, and
following up with clients and customers.
Notes:
When a sales associate truly listens to the opinions of a
prospect in an objective manner, it is more likely that the
prospect can determine personal limits and priorities. It is
never a sales associate’s job to make choices for
prospects. More appropriately, it is a sale associate’s job
to provide prospects with choices.
Remember, no conversations are one-sided. While a sales
associate asks questions to gather objective information
from a potential homebuyer, it is likely that the buyer is
asking questions, too. A homebuyer might ask how to
locate neighborhoods of a particular racial composition.
During discussions about particular neighborhoods, a
buyer might also ask whether schools are integrated. Or, a
homebuyer might be more vague and inquire about
“problems” in a particular area.
When sales associates follow EPS models, their level of
professionalism tends to increase, their client base
expands, they receive more referrals, and they avoid fair
housing claims. It is a win-win option. However,
everyone has their own particular style. The EPS model is
not intended to replace that. It is a structure that can
be used to incorporate your own procedures and style.
The major points of the model follow:



Such questions and comments should be noted in the
Equal Service Report, along with a record of the sales
associate’s response. A sales associate should make every
effort to answer questions consistently from one
buyer to the next.
Develop and enforce documentation system
Use it consistently
Perfect it
Obtaining Objective Information
SENSITIVE INFORMATION
Question
What are the benefits of obtaining objective
information?
Megan’s Law
Another area of concern relates to the location of sex
offenders in a community. A federal statute known as
Megan’s Law, was signed into law in l996. It requires that
sex offenders register with local police authorities so that
the public can review the list.
Answer
Possible answers include, but are not limited to:







Documentation provides a defense against
claims that fair housing laws have been violated.
It is good business practice -- ethically and
professionally.
Fair housing compliance is monitored, thus
providing opportunities to make corrections (as
necessary).
It makes a sales associate a problem-solver, not
a decision maker.
It saves a sales associate showing time, because
that person is more likely to identify homes that
meet that a prospect’s needs.
Activities are recorded for reference.
Information is readily available.
Notes
Responses to specific questions, such as inquiries about the
racial makeup of neighborhoods or schools, should be
handled in an objective manner by referring the prospect to
the appropriate sources for the requested information (e.g.,
local library, school district, municipal government).
If a prospective homebuyer asks whether any sex
offenders live in a particular community, the homebuyer
can be referred to the local police department for
information. Approximately 30 states have community
notification statutes, so it's important to understand the
requirements under each state’s law.
Notes:
82
IDENTIFYING A CUSTOMER’S NEEDS
Use of Standard Forms
There are certain questions a sales associate can ask to
ensure that the customer/client, not the sales
associate, sets the personal limits of a home search.
Many sales associates make sure they pass the so-called
“decision maker test” with each prospective buyer. The
decision maker test involves asking the following
questions:
No sales associate should encourage or discourage a
homebuyer to buy a property because of the racial,
ethnic, or religious composition of the neighborhood. A
pragmatic sales associate identifies many homes to
allow the customer to make personal choices.
Using forms and/or checklists, as well as asking standard
questions of all prospects, is an advisable approach
to gathering data. When a sales associate fills out the
same form(s) for each and every prospect, the goal of
equal treatment for all is more likely to be realized.


EPS forms have many names, most notably a “Prospect
Information Checklist” or a “Prospect Equal Service
Report,” Appendix F. A sales associate begins to fill out
such a report form the day contact is made with a
new prospect.
That form is updated by the sales associate every time
there is any kind of communication (email,
fax, phone, face-to-face) with the prospect.




Notes:
Did the customer identify the must-have
features and the hope-to-have features of a
house?
Did the customer say what they intend to
spend?
Does the customer know whether he/she has
met the financial qualifications to purchase?
Did the customer express a preference for one
or more communities?
Did the customer express a lack of preference
for one or more communities? If so, offer all
possible housing alternatives?
Has all of the above information been recorded
in writing?
The sales associate who passed the decision-maker test
is ready to advance to the next of the EPS model.
Offer A Variety of Choices
The next step is the selection process for viewing homes.
Sales associates should carefully consider the
resources used to select the homes shown to
prospective homebuyers. A sales associate should
document the resources used, and consistently use the
same resources from customer to customer.
Many firms require that an Equal Service Report form be
completed for every prospect. Such firms have
established a procedure that will increase the likelihood
that all prospects will receive equal treatment. Use
of Equal Service Report forms also provides solid
documentation of office activities and a means to
monitor ongoing compliance with fair housing laws. A
sales associate can move to the next step of the EPS
Model when he or she is sure that objective information
has been collected from the prospective buyer.
Notes:
83
SELECTING HOMES FOR VIEWING
STEERING
Question
What are the important steps to take when selecting
homes to view?
Steering
When a sales associate makes choices for homebuyers,
there is a risk of facing steering charges. It is necessary
for all sales associates to understand steering and how
to avoid this illegal activity.
Suggested Answers/ Notes:
The primary steps follow:





Question
What is steering?
Select homes at the upper and lower ends of
the homebuyer’s price range.
Take the homebuyer’s wants and needs into
careful account -- not your own.
Develop a list of properties available in the
areas requested.
Review that list with the homebuyer, and allow
the homebuyer to determine which properties
are to be viewed.
Consider homes that meet the homebuyer’s
needs, in all areas when a specific area has not
been requested.
Suggested Answers:
There are many acceptable definitions of the term
“steering.” As the word itself suggests, steering occurs
when a real estate sales associate makes choices or
assumptions about a prospective buyer and attempts to
guide or “steer” the prospect in certain directions. A
sales associate who shows a prospect homes in some
areas/neighborhoods and avoids showing that same
prospect homes in other areas/neighborhoods (and is
not receiving guidance from the prospect to do so) may
be steering.
SELECTING HOMES FOR VIEWING
Example 1 illustrates matters of priority and choice.
Assume that a homebuyer has expressed a preference
for housing in a certain neighborhood and within a
specific price range (for which she has been prequalified).
The homebuyer has a wish list of five features:
 three bedrooms
 two baths
 backyard
 attached garage
 fireplace
Steering takes place when locational choices are made
for a buyer based on:
 The race, color, national origin, religion, familial
status, sex, or handicap of the buyer
 Changes in the composition of the community
At present, there are only three properties for sale in the
neighborhood identified by the homebuyer that are
within her price range.
Notes:
The first property has three bedrooms and one bath.
The garage is detached. The home is located on an
over-sized lot and has a generous backyard. A beautiful
fireplace with a carved mantle is the focal point of the
living room.
The second property has three bedrooms, two baths, an
attached garage, and a modest fireplace in the living
room. The home is located on a corner lot and has a
small, side yard.
The third property has two bedrooms upstairs and a
small downstairs study that could be used as a third
bedroom. It has two baths, an attached garage, and a
nicely-landscaped backyard with a perennial garden. It
does not have a fireplace.
A fourth property identified by the sales associate meets
all of the homebuyer’s wish list criteria and is within her
budget. Although the home is not located in the
requested neighborhood, it is an easy commute to
the prospect’s place of employment.
Which property would you recommend?
84
CASE STUDY # 4 : CHICAGO V. MATCHMAKER
Consider the following case law example that could work
well with the EPS model. While reading this case,
consider how the EPS model might have helped the
salesperson.
Discussion Question and Suggested Answer
City of Chicago v. Matchmaker Real Estate Sales Center Inc.
982 F.2d 1086,1095 (7th Cir. 1992)
Q.
In the previous case law example, how could
discrimination have been avoided? (Provide
examples.)
A.
The following elements would have helped the
firm to avoid discrimination.
In the City of Chicago v. Matchmaker Real Estate Sales
Center, the court held that a brokerage firm and its
agents violated the fair housing law because of unequal
treatment provided to minorities.

In this case, two neighboring communities, Chicago Lawn
and West Lawn, are separated by railroad tracks. Both
communities contain small, single-family homes, many
of which are bungalows. The price average price of a
three-bedroom home in Chicago Lawn is $50,000. The
price of the same size home in West Lawn generally
exceeds $70,000. West Lawn was over 95 percent
Caucasian at the time. Chicago Lawn was changing
racially, with Hispanics and African Americans moving
into the neighborhood, and Caucasian residents leaving.
Established systematic procedures that assure
the customer sets limits and a variety of choices
are offered. (For example, all testers could have
been told, “I do not have any homes in the
$70,000 range in that neighborhood, you could
see $50,000 in the same neighborhood or
$70,000 homes in other communities.”)

Established record maintenance and
documentation systems and regularly scheduled
examination of records. This gives the broker an
opportunity to correct problems before they
recur.
While the sales associates did collect some objective
information (price, down payment, general location),
they did not allow the customers to set their own limits.
Furthermore, the sales associates did not offer a variety
of choices. Of particular interest is the test that involved
the Caucasian testers who requested a bungalow-style
residence. The sales associates did not give the
Caucasian testers an option to view bungalows, even
though such residences below the testers’ stated price
range (in African-American and racially-mixed areas)
were available.
Homebuyers working with sales associates at
Matchmaker asked for three-bedroom homes. Caucasian
and African-American testers asked for homes in Chicago
Lawn that cost about $70,000. In each test, the
Caucasian and African-American homebuyers had similar
incomes and were similarly qualified to purchase
the homes they requested. Five matched tests were
conducted.
In test 1, the Caucasian and African-American testers
both asked for three-bedroom homes in Chicago
Lawn that were selling for about $65,000. The same
sales associate saw both sets of testers. The
Caucasian testers were told about and saw homes in
West Lawn, while the African-American testers were
shown homes in Chicago Lawn. This pattern continued in
subsequent tests over an 11-month period. In
one instance, a sales associate made comments about
the changing racial makeup of the Chicago Lawn
community.
The court found that the sales associates and the firm
discriminated on the basis of race. The sales associates
and the firm were ordered to pay monetary damages. In
addition, they were assessed punitive damages. The
broker and sales associates also had to pay attorneys
fees to the complaining parties, and the broker was held
liable for the sales associates’ discriminatory behavior.
The broker, however, did not have to pay punitive
damages, in part because the broker made attempts to
implement fair housing policies in the firm and the
community.
Conversely, the African-American testers were routinely
steered toward residences below their price range
in African-American and racially-mixed neighborhoods.
Those same African-American testers were never
shown homes in Caucasian neighborhoods -- even when
the properties were well within their price range.
If the broker had required agents to maintain equal
service reports and had regularly reviewed them, the
broker probably would have noticed different treatment
that occurred after the first test. Then, the broker could
have prevented similar differences from recurring. Most
fair housing cases that are based on tests alone use a
series of tests. Had the firm treated the Caucasian and
African-American testers the same in subsequent tests,
it is likely that no lawsuit would have been filed.
85
OFFICE PROCEDURES
Convey a Message of Fair Housing Support
Optional Exercise
Certain business practices communicate a firm’s
commitment to providing everyone with equal housing
opportunities. Such practices send a positive message to
the community and lend credence to any claims
made regarding a firm’s support of fair housing. In other
words, sound fair housing policies give credibility
to a firm that is forced to defend itself against charges of
fair housing law violations.
Evaluating Office Procedures
How do the procedures promote fair housing?
How would you implement the procedures?
What objections do you have to these procedures?
What other procedures could be developed to achieve
the same fair housing goals?
There are many ways to establish a commitment to fair
housing -- from committing to the REALTOR® Fair
Housing Declaration to running regular fair housing
training programs and monitoring sales associates’
performance. All such practices help to build a
knowledgeable staff and firmly establish a firm’s role in
promoting fair housing.
Review the Fair Housing Checklist for Maintaining Office
Procedures. Be prepared to discuss the pros and cons of
the procedures listed, possible objections to the
procedures, and ways to address such objections.
Notes
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FAIR HOUSING SUPPORT
LESSON 5 : COMPLAINT PROCEDURES &
PENALTIES
Question
Is it necessary to use the Equal Housing Opportunity logo
and slogan in your advertisements? If so, why?
Answer
In truth, it is wise to use the Equal Housing Opportunity
logo and slogan whenever and wherever you
advertise.
The logo and slogan express a commitment to equal
housing opportunities. Making such intentions clear can
help a firm generate more business. What is more,
consistent use of the logo and slogan may help build
credibility as a supporter of equal housing opportunities.
Assume that a sales associate in your firm has been
accused of violating fair housing laws. There is no
preponderance of evidence to indicate that the sales
associate provided discriminatory treatment or acted in
such a manner as to create a disparate impact. A solid
defense is built on good record keeping and consistent
office procedures such as those that are covered in the
next section. Consistent use of the Equal Housing
Opportunity logo and slogan also provides evidence that
the firm and salesperson are sensitive to fair housing law
issues. A good faith effort in support of fair housing may
assist in the defense of a fair housing claim.
Objectives
 State who can file a fair housing complaint
 Define different types of injunctions and the
penalties associated with them
 Describe potential fair housing penalties and
damages
Question
Who can file a fair housing complaint?
Suggested Answers/Notes:
Aggrieved persons, including real estate professionals
and testers, who perceive that they have been injured by
a discriminatory housing practice.
Notes
Today, due to our litigious society, there is an even
greater need than in prior years for every real estate
professional to provide fair and equal service to all and
to identify and remedy potentially discriminatory
practices.
The penalties imposed for violations of fair housing laws
can be significant. What follows is an overview of
the types of awards given to complainants (plaintiffs)
and the types of penalties assessed against defendants
(respondents) in cases involving fair housing law
violations.
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ACTUAL DAMAGES AND INJUNCTIVE RELIEF
CIVIL PENALTIES
Actual damages and injunctive relief include any out-ofpocket costs (e.g., what the plaintiff spent obtaining
alternate housing and additional rent or costs associated
with it)
If the charge is heard by an administrative court, the
Administrative Law Judge (ALJ) can impose civil
penalties of $11,000, $27,500, or $55,000, depending on
the number of prior offenses committed. The
Department of Justice has the authority in “pattern or
practice” cases to seek civil penalties of $50,000 for a
first offense and $100,000 for any subsequent offense. If
assessed, civil penalties are paid to the United States
Treasury, not to the aggrieved person.




Actual damages are also injuries such as:
Emotional distress
Humiliation
Mental anguish
Other psychological conditions
If a charge is heard in federal court, a judge or jury can
impose punitive, as well as actual damages. This is a
monetary award paid to the aggrieved person and is
designed to punish the wrongdoer and prevent future
misconduct. There is no limit to the amount of punitive
damage awards.
Actual damages and injunctive relief can be secured in
both administrative and federal courts.
They include any out-of-pocket costs (e.g., what the
plaintiff spent obtaining alternate housing or additional
rent or costs associated with it). Actual damages are also
injuries such as emotional distress, humiliation, mental
anguish, or other psychological conditions. These are
often assessed relative to the severity of the
discriminatory behavior.
Courts and HUD are also required to report any
violations of fair housing laws against a licensee to the
state licensing authority for appropriate discipline under
the applicable state licensing law. In addition, attorney’s
fees may be awarded to a prevailing party under the fair
housing laws.
Injunctions
Injunctions are issued by courts to prevent additional
discrimination from taking place. For example, a
temporary injunction typically prohibits a property
owner from renting the unit in question until the
case is settled.
Note: The civil penalties are indexed to inflation and go
up regularly. These penalty amounts are current as of
November, 1998.
A permanent injunction can be set for a specified or
permanent amount of time. It prohibits the
wrongdoer from engaging in a discriminatory housing
practice.
A mandatory injunction may require the wrongdoer to
take positive steps toward correcting the effects of prior
illegal discrimination such as requiring a firm to establish
office procedures, maintain records, institute training,
and promote equal housing opportunities through
outreach programs or advertisements.
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APPENDIX: A - SELF-TESTING
The Fair Housing Partnership Agreement between HUD and the NATIONAL ASSOCIATION OF REALTORS®
calls for promotion of self-testing as an effective tool for educating real estate professionals and internal
monitoring of compliance with the Fair Housing Act. Self-testing is a valuable method for measuring voluntary
compliance and commitment to fair housing. Methods for self-testing are similar to enforcement testing, however
they do not need to meet the exacting standards for proof for court cases. In self-testing, the emphasis is on
evaluating compliance and uncovering potential problem areas. Through self-testing, firms can discover problem
areas, before enforcement agencies and groups do, and take corrective action.
Testing can be initiated by a firm, or by the local association of REALTORS® . If a local association stages the testing,
the results are usually referred to a grievance or professional standards committee for review and determination of
sanctions resulting from actions that violate Article 10 of the Code of Ethics. The results of firm initiated
self-testing provide a basis for correction action, and a policy to act on results demonstrates good faith in improving
the firm’s fair housing compliance.
Before initiating a program of self-testing, the firm or local association of REALTORS® should assure that agents
have been trained or have ready access to fair housing training. Fair housing procedures, such as the “Prospect
Equal Services Report,” should be in place, and actions that will be taken as a result of the test outcome should be
determined, e.g., corrective action, referral to a grievance committee. The attorney for the firm or association
should be involved in initiating the testing process and analyzing the results. The testing can be organized and
planned by the firm, an attorney (self-testing could be part of the services of the firm’s attorney), the local
association of REALTORS®, a fair housing group, or consultant.
Private fair housing organizations are usually the most experienced in the conduct of testing. Their testers are
usually trained and have a good understanding of when and where fair housing violations are occurring. There is
usually a fee for this service. Consultants, such a shopper services, can stage the testing, and may be a good
alternative in areas where a past adversarial relationship with local fair housing groups could influence the process.
However, shopper services may lack fair housing or real estate experience, and may not be attuned to the
community’s fair housing concerns. A low-cost source of testers may be a nonprofit organization, such as a
university; however their testers may have little fair housing experience.
In order to institute a program of self-testing, the firm or local association of REALTORS® should execute a
written agreement with the organization providing the testing services. The agreement should cover how the
testing will be conducted and what will be done with the results. Specific points the agreement should cover are:
who the testers will be.
how the testers will be compensated.
safeguards on comparisons among and between testers.
safeguards to keep the results “in-house”.
ownership of the data gathered.
future use of the data.
how long records will be kept, or will they be destroyed.
record of corrective action taken and the role of the testing service in use of tests.
time frame for the testing - - when will it start and end -- and ongoing obligations.
As stated above, self-testing is an evaluative, not an enforcement process, with the potential to expose
discriminatory behavior. Therefore, safeguards must be put in place to prevent testers, and testing services, from
sharing data and assure that test results will not be used for subsequent enforcement purposes.
89
APPENDIX: B
MODEL AFFIRMATIVE FAIR
HOUSING MARKETING PLAN
90
PART II: AFFIRMATIVE FAIR HOUSING MARKETING STRATEGIES
Each signatory is responsible for the development and implementation of the Affirmative Fair Housing
Marketing Plan or affirmative marketing procedures. Each signatory has the ultimate responsibility for
marketing and sales/rental transactions. The employment of a sales or management agent does not relieve the
signatory of his/her responsibilities. Each signatory must assure that such agents will carry out affirmative
marketing and nondiscrimination practices. Each signatory agrees to utilize the following strategies to
implement the Fair Housing Declaration.
A. Fair Housing Education and Training
1. Each signatory shall explain and publicize the purposes and provisions of this agreement to all associates.
2. Each signatory shall provide, either directly or through Board or Association sponsored programs, ongoing
training and education to inform all associates of their responsibilities under this Agreement and under the fair
housing laws, and urge associates to attend and participate in Board or Association training programs.
3. Each signatory shall obtain and make available to all associates the NAR Fair Housing Handbook.
B. Public Commitment to Fair Housing
1. Each signatory shall display, in a prominent place in the signatory's office, a fair housing poster as outlined in 24
CFR Part 1 10.
2. Each signatory shall use advertising policies for the sale or rental of housing that indicate to the general public
that the advertised housing is open to all persons and is designed to attract buyers and renters without regard to
race, color, religion, sex, familial status, handicap, or national origin.
3. Such advertising shall include an official Equal Housing Opportunity slogan or logotype as follows:
a) In all display advertising, the Equal Housing Opportunity logotype, when used, shall be at least
1/2" by 1/2" in size.
b) In each "classified" advertisement of six (6) column inches or larger in size, except where the
HUD "Publisher's Notice" appears on the lead page of the classified advertising section of the
newspaper or magazine.
c) In a prominent place on all brochures, circulars, billboards, and direct mail advertising.
d) In a prominent place on signs and all other forms of advertising not specifically referred to in
subparagraphs 3(a), (b) and (c) above, where its inclusion does not significantly increase the cost
of advertising.
4.
In order to promote awareness of the fair housing laws and the equal opportunity policy of the
signatory, each signatory shall encourage all associates to distribute copies of the NAR flyer entitled
"What Everyone Should Know About Equal Opportunity in Housing", or its equivalent, provided a
copy of the equivalent flyer is attached to this plan or otherwise provided to HUD prior to its use.
91
C. Fair Housing Procedures and Advertising Policies
1.
Each signatory shall adopt fair housing procedures, including procedures relating to office operations, and
advertising policies to implement the goals and purposes of providing fair housing for all. The signatory either
shall adopt the fair housing "best practices" recommended by NAR and HUD, or shall develop written fair
housing procedures and advertising policies which, at a minimum, are consistent with the recommended "best
practices".
2.
Each signatory shall require all associates to follow the procedures and policies adopted by the signatory's firm.
3.
The fair housing procedures, including those relating to office operations, shall address the provision of equal
professional service without discrimination based on race, color, religion, sex, familial status, handicap, or
national origin.
4.
The advertising policies shall incorporate the provisions of paragraph II B of this plan.
D. Equal Opportunity in the Real Estate Industry
1.
Each signatory shall affirmatively recruit persons of all racial and ethnic groups, of both sexes, with and
without disabilities, and individuals otherwise protected from discrimination by the Fair Housing Act, as salaried
employees and independent contractors.
E. Association and Community Efforts
1.
2.
Each signatory shall encourage all associates to participate equal opportunity activities in community fair
housing
Each signatory shall endeavor to participate in Association Fair Housing Partnership activities designed to identify
and remove barriers to equal opportunity in housing in the community.
F. Specific Project Considerations
1.
Each signatory shall attach this REALTOR® Model Plan to its Affirmative Fair Housing Marketing Plan Application
form for each project subject to the Affirmative Fair Housing Marketing Plan Regulations.
2.
Each signatory shall consider, for each project submitted for HUD approval, the following:
a. the type of project
b. the area in which the project is to be located
c. the groups that are least likely to apply for or be aware of the project
d. the most effective methods to be used in marketing to group(s) that are least likely to apply
for or be aware of housing in the project area and respective project.
Groups are defined as white (non-hispanic), black (non-hispanic), Hispanic, American Indian or
Alaskan Native, Asian or Pacific Islander.
3.
Each applicant shall review its marketing efforts for each project to assess whether its marketing efforts
have attracted a significant cross-section of the eligible population, especially significant numbers from
those eligible among those population groups least likely to apply for or be aware of housing in the
project area and project.
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PART III. EVALUATING A SIGNATORY'S PERFORMANCE UNDER THIS PLAN
A signatory's performance under this plan shall be evaluated by reviewing the actions taken or not taken to
carry out the provisions of this plan and related provisions of fair housing laws, executive orders and
regulations. The purpose of the evaluation is to assess the following:
1.
2.
3.
Whether the signatory carried out the elements of this Affirmative Fair Housing Marketing Plan.
Whether the good faith efforts of the signatory have attracted a diversified cross-section of the eligible
population, especially from those identified pursuant to Part II F of this plan as least likely to apply for
the housing without special outreach activities.
To assist in this evaluation, the signatory is encouraged to seek the input of a broad spectrum of
organizations throughout the community that have a substantial interest in fair housing.
PART IV. ACCEPTANCE OF SIGNATORY STATUS OF MEMBER IN LIEU OF
INDIVIDUAL AFFIRMATIVE FAIR HOUSING MARKETING PLAN
1.
During the effectiveness of this Agreement, any signatory who hereafter applies for participation in
any HUD/FHA program and would otherwise be subject to the requirement of the HUD Affirmative
Fair Housing Marketing Regulations may submit this REALTOR® Model Plan in lieu of using the
HUD 935.2 form.
2.
Each signatory shall attach this REALTOR® Model Plan to its REALTOR® Affirmative Fair Housing Marketing Plan
Application form for each project subject to the Affirmative Fair Housing Marketing Plan Regulations.
PART V. EFFECTIVE DATE OF PLAN
A. This Agreement shall be in effect for any signatory until:
1.
A signatory advises HUD in writing that he no longer wishes to be signatory;
2.
The signatory in no longer a member of the National Association of REALTORS®.
3.
The expiration of the Fair Housing Partnership unless renewed by HUD and NAR.
4.
The signatory is suspended as a party to this REALTOR® Model Plan, under paragraph
B. During the time that a signatory is suspended as a party to this Plan, the signatory shall continue to be
subject to the requirements of the HUD Affirmative Fair Housing Marketing Regulations, and shall be
required to submit individual Affirmative Fair Housing Marketing Plans in connection with any new
application for participation in any HUD/FHA assistance or insurance program. In addition, the suspended
signatory shall have 30 days from the date of suspension to submit to HUD an individual Affirmative Fair
Housing Marketing plan for each of its current projects for which an individual plan had not previously
been submitted.
PART VI. SUSPENSION FROM THE REALTOR® MODEL PLAN
Whenever HUD has reasonable cause to believe that a signatory has failed to make good faith efforts to
comply with his or her responsibilities under this REALTOR ® Model Affirmative Fair Housing Marketing
Plan, HUD shall contact the signatory and arrange for a meeting between HUD representatives and the
signatory and any other principals of the firm to identify and discuss the area(s) of non-compliance. Either
HUD or the signatory may invite representatives of the signatory's local or state REALTOR ® Association
(where the signatory holds primary membership) or the National Association of REALTORS ® to participate
in the meeting.
93
If the HUD representatives determine that corrective action by the signatory is needed to achieve compliance,
the HUD representative shall determine the appropriate correction action needed, including a timetable for
implementation. If the signatory does not agree to take the needed corrective action, or fails to take such
action within the time specified, the HUD representative(s) shall make a recommendation to the Assistant
Secretary for Fair Housing and Equal Opportunity on whether or not the signatory should be suspended as a
party to this REALTOR® Model Plan. Written notice of this recommendation shall be given to the signatory
and to NAR. The signatory may, within 30 days of receipt of the notice of recommendation, submit written
arguments and/or other materials in support of his/her position to the Assistant Secretary. The Assistant
Secretary shall make the final decision on the suspension of the signatory and shall notify the signatory and
NAR of the decision.
The suspension of a signatory as a party to this REALTOR® Model Plan shall remain in effect until the
Assistant Secretary has determined that the signatory may be reinstated.
ADOPTION
THE NATIONAL ASSOCIATION OF REALTORS® and the U.S. Department of Housing and Urban
Development hereby approve this Model Affirmative Fair Housing Marketing Plan for use by REALTOR® to
meet the requirements of submitting an affirmative fair housing marketing plan as outlined in 24 CFR Part
200.625.
For the NATIONAL ASSOCIATION OF REALTORS®
Signed: Russell K. Booth President
Date: August 11, 1997
For the Department of Housing and Urban Development:
Signed: Susan M. Forward, Deputy Assistant Secretary for Enforcement and Investigations
Date: July 31, 1997
REALTOR® SUBSCRIPTION
The undersigned REALTOR® affirms that he/she holds primary membership in the above named Association
of REALTORS ® and subscribes to the terms of this Model Affirmative Fair Housing Marketing Plan on
behalf of the named firm.
Signature: __________________________________________________ Date: ____________
Name printed: _________________________________________________________________
Position: _____________________________________________________________________
Firm name: ___________________________________________________________________
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REALTOR® Affirmative Fair Housing
Marketing Plan Application
Applicants for participation in FHA subsidized and unsubsidized housing programs for the development or
rehabilitation of subdivisions, multifamily projects and manufactured home parks of five or more lots, units, or
spaces, or dwelling units when the applicant's participation in FHA housing programs had exceeded or would
exceed development of five or more such units during the previous year, are required to carry out an
affirmative program to attract buyers or tenants, regardless of sex, of all minority and majority groups to the
housing for initial sale or rental. (24 CFR Part 200.600 et seq). 24 CFR Part 200.625 provides that each
applicant shall provide to HUD an affirmative fair housing marketing plan for that project.
The Fair Housing Partnership Resolution between the U.S. Department of Housing and Urban Development
and the National Association of REALTOR® provides that REALTOR® (members of the National
Association of REALTOR® may use a model plan developed by HUD and NAR to satisfy the requirement to
submit an affirmative fair housing marketing plan as outlined in 24 CFR Part 200.625. REALTOR® who
adopt the Model Affirmative Fair Housing Marketing Plan containing the REALTOR® Fair Housing
Declaration (Model Plan) may signify use of that plan for any covered project by attaching a copy of that plan
to this form.
95
Each applicant using the REALTOR® Model Plan agrees, for the above identified project, to consider and
use the most effective methods to market to groups that are least likely to apply for or be aware of housing in
the project area and in the project. The applicant need not submit these marketing methods to HUD for
approval, but should retain records of its consideration and use of marketing activities.
The applicant is subject to all remaining provisions of the Affirmative Fair Housing Marketing Regulations,
and must make this form and the model plan available for public inspection at the sales and rental offices of
the applicant.
96
MAINTAINING OFFICE PROCEDURES
Fair Housing Checklist for Maintaining Office
Procedures
The following checklist will help a broker or office
manager to evaluate his or her office procedures in the
context of fair housing law. These checklist entries are
offered as samples only and are not intended to be
perceived as a comprehensive list of office procedures.
An office with such elements in place and a commitment
to maintain them is less likely to face charges of fair
housing violations. When and if such charges are
imputed, the firm will be in a better position to defend
itself.
Check the following elements that are already in
place:
The firm has a written fair housing policy.
Either the broker or a broker's designee serves as a
fair housing officer for the firm. Such a person should
provide training or identify appropriate sources for
training; maintain awareness of, and perform research
about, recent fair housing developments; answer
questions as they arise within the firm; provide guidance
when problems arise; monitor compliance with fair
housing and equal professional service policies; and take
corrective actions when necessary.
Cooperation with the fair housing officer is required
during the investigation of alleged discrimination or in
review of equal service records.
The fair housing policy clearly states the firm's
unwillingness to be associated with someone who does
not comply with fair housing laws.
Sales associates and employees of the firm are
familiar with the fair housing policy.
Sales associates and employees of the firm have
agreed in writing to comply with the fair housing
policy.
The firm publicizes its commitment to fair housing
(internally and externally).
The fair housing poster is prominently displayed in the
office.
The Equal Housing Opportunity logo and/or slogan are
used in advertising and brochures.
Sellers, prospective buyers, landlords, and tenants are
informed of the firm's commitment to fair
housing.
Any sellers, prospective buyers, or landlords with
whom the firm has contractual agreements have
agreed in writing to comply with fair housing law.
97
Fair housing training is provided to sales associates
and employees (either through internal offerings, the
local REALTOR® Association, or other qualified
providers).
Fair housing is a regular item on office meeting
agendas. Current concerns are discussed, and questions
are answered.
Fair housing is a regular topic addressed by
memorandums, e-mail messages, newsletter articles,
and other means of internal communications.
The firm has established procedures for providing
equal professional service. (Procedures are outlined
for activities such as listing, executing a seller's
agreement, working with prospective buyers, working
with cooperating brokers, advertising/marketing.)
 Consistent interviewing and qualifying techniques are
used with all buyers and adequate records are
maintained to demonstrate that all prospective buyers
are given equal treatment. Using consistent and
systematic procedures, the salesperson or associate
obtains objective information regarding a prospect's
needs and wants, lets the customer set his or her own
limits, and provides a variety of choices.
All prospects are informed of any available property in
the market area within their price range and provided
with objective criteria for showing. Associates offer to
show any such properties.
Additionally, associates offer to show properties in other
geographic areas when those properties are
otherwise within the buyer's price range and objective
criteria.
All firm salespersons, associates, and employees have
agreed to follow these procedures.
The procedures provide for good record keeping and
documentation of all prospect visits.
Someone examines the salespersons' records on a
regular basis to monitor activities and confirm
compliance with office procedures and fair housing laws.
The firm has a corrective action policy in place, that
provides procedures for righting problems and potential
problems as they are identified. Such a policy includes
provisions for additional training and/ or mentoring as
well as regular monitoring and follow-up activities.
All corrective actions and results are documented.
Office procedures are reviewed regularly to assess
their ongoing effectiveness. Procedures are modified to
respond to changes in the law and fair housing issues.
Procedures are also modified to correct deficiencies in
the office.
All prospects and clients are encouraged, through
distribution of the company brochure, to contact the fair
housing officer with comments or concerns about equal
professional service. Additionally, all prospective buyers,
sellers, owners, or renters who do not wish to list,
purchase, or rent with the firm are asked to complete a
customer service survey.
Associates are strictly forbidden to refuse to list or
show a property in a market area served by the firm
because of the presence or absence of persons of any
particular race, color, religion, sex, handicap, familial
status, or national origin.
All licensees and brokers are equally cooperative with
brokers or salespersons who serve predominantly
minority buyers or with salespersons who work with (or
are suspected to work with) minority buyers. Behavior
with all brokers and salespersons is consistent with
regard to actions such as setting up showings, making
keys available, setting appointments to present offers,
conducting negotiations.
Alleged acts of discrimination, whether by associates
of this or another firm or by members of the public, are
immediately brought to the attention of the fair housing
officer. It is the policy of the firm to cooperate in the
investigation of fair housing complaints and, when
appropriate, file complaints on behalf of associates of
this firm.
When working with prospects or clients who may be
victims of discrimination, the fair housing officer will
determine the best way to assist them in the protection
of their fair housing rights.
When a client refuses to comply with fair housing
laws, the firm will disassociate itself from the listing.
Meeting the prospect for the first time

How is the prospect greeted?

What information is distributed to the prospect?

Do you explain the firm's commitment to fair
housing laws?

What information about the prospect is
recorded? How is the information recorded?

Do you request the same information from
everyone?

What questions do you ask the prospect?

Do you make suggestions?

Do you record information regarding the
suggestions you make? How is this recorded?
Qualifying the Prospect

Do you always seek the same qualifying
information from all prospects or does it depend
on your personal assessment of each prospect?

Do you let prospects determine their price
range?

Do you calculate the price range for the
prospect?

Does your method vary by the price range or
location requested?

When does the qualifying usually take place?
Does this vary by prospect and circumstances?

Do you suggest that the prospect be
prequalified by a lender prior to showing
properties?

Do you require a credit check prior to inspecting
properties or submitting a bid?

How do you record this information?

Do you use a standard form?

Are prospects told they will need to locate their
own financing?

Do you refer prospects to lenders?

Do you explain financing and quote interest
rates?

Is this information recorded? How?
Choosing Properties

Do you ask about preferences concerning home
features and location?

Who sets the priorities? Do you record this
information? How?

Does the prospect set limits, not merely in
terms of price and features, but also location.

Who decides where to look for housing?

Do you rely on the prospect to make the
choices?

Do you develop a list of properties to show?

What resources do you use to locate
properties?

Does this process vary with different prospects?
Self-Assessment Questionnaire
A sales associate who continually evaluates his or her
own performance is likely to perform well. One
approach to self-assessment involves answering a list of
questions on a regular basis. When a sales associate
asks himself or herself questions such as the ones that
follow, he or she will have developed a heightened
awareness of the importance of providing consistent
service to all customers/clients. These exercises also
help sales associates to better identify the needs of
prospects.
98

Self-Assessment Questionnaire (continued)
Showing Properties






Do you schedule appointments and accompany
the prospect?
Do you offer a variety of choices?
Do you offer a list and suggest that the prospect
drive around to narrow the list?
Do you point out positive and negative aspects
of each property? Some properties? Do you wait
for a prospect's comments?
Do you always record the prospect's likes and
dislikes? How?
What materials does the prospect receive
concerning each listing?














Performing Follow-up Activities



Are your follow-up techniques more aggressive
with some prospects than with others?
What information is kept on completed sales?
What information is kept on prospects who do
not purchase?
Advertising Guidelines Checklist
According to federal fair housing law, advertising for the
sale or rental of property may not state a preference for
any person or an intention to exclude any person
because of the person's race, color, religion, sex,
The prohibition of discriminatory intent applies to the
use of media, such as newspapers, radio, television, or
billboards, and any written material produced in
connection with the sale or rental of a dwelling, such as
application forms, brochures, flyers, signs, posters, or
banners.
Using symbols or logos that imply or suggest
discrimination because of race, color, religion,
sex, handicap, familial status (children under
18), or national origin.
Writing out directions to the property that refer
to well-known racial, ethnic, or religious
landmarks or to any other major landmark that
could signal a preference for a specific type of
person.
Targeting advertisements to one particular
segment of the community.
Using only adult or white models over a
significant period of time.
Using prohibited words or phrases with respect
to handicapped persons or families with
children, including:

crippled

deaf

retarded

adult building

restricted community

blind

mentally ill

singles

mature persons

exclusive
Advertising in:

a strategically limited geographic area

particular editions of newspapers to reach a
particular segment of the community

only small papers that cater to particular
ethnic or religious groups rather than general
circulation papers

only selected sales offices
The Fair Housing Act permits:

Indicating that rental property is:
 accessible to handicapped individuals
 intended for and operated as housing
for older persons

Indicating age restriction for occupancy as long
as children are not excluded. Local law may
prohibit discrimination on the basis of age.
Check your local statutes.

Using the equal housing opportunity logotype,
statement, or slogan in all advertising.
Using human models who:

Represent all races and age segments of the
population in the area, including families with
children and people with disabilities.

Vary periodically so that diverse groups in
your community are featured -- majority and
minority in the metropolitan area, both sexes,
families with children (when appropriate).
To comply with the law, avoid:

Using words or phrases describing the dwelling,
landlord, or tenants. Examples are: white
private home, colored home, Jewish home,
Hispanic residence, adult building, or other
words indicative of race, color, religion, sex,

Conveying preference to one group over
another or exclusion due to race, color, religion,
sex, handicap, familial status (children under 18)
or national origin.

Using catchwords, such as restricted, exclusive,
private, integrated, traditional, board approval,
membership approval.
99






Portray persons in an equal social setting.
Indicate to the general public that
housing is available to all persons,
regardless of status.
Localize your efforts to abide by the law by
doing the following:
Know the guidelines in the area where
promotional materials are seen. Laws vary
according to the location.
Learn about each publication's guidelines or
criteria before placing an advertisement.
Questions to Evaluate Your Advertisements and
Promotional material

What is your message really saying?

Does the ad exclude any potential prospects or
groups?

Does the ad describe the services of the firm
and not the target market?

What steps can the firm take to assure that it
can truly provide the services promoted in the ad?
HUD Memorandum from Roberta Achtenberg
The following is an excerpt from a January 9, 1995
memorandum from the Assistant Secretary for Fair
Housing and Equal Opportunity, Roberta Achtenberg. It
provides some guidance regarding advertisements under
Section 804(c) of the Fair Housing Act. It does not address
fair housing issues associated with the publication of
advertisements containing human models, nor does the
memo address 804(c) liability for making discriminatory
statements.
2. Religion. Advertisements should not contain an
explicit preference, limitation, or discrimination on
account of religion (e.g., no Jews, Christian home).
Advertisements which use the legal name of an entity
which contains a religious reference (for example,
Roselawn Catholic Home), or those which contain a
religious symbol (such as a cross), standing alone, may
indicate a religious preference. However, if such an
advertisement includes a disclaimer (such as the
statement, "This Home does not discriminate on the
basis of race, color, religion, national origin, sex,
handicap, or familial status"), it will not violate the
Act.
Advertisements containing descriptions of properties
(apartment complex with chapel), or services (kosher
meals available) do not on their face state a
preference for persons likely to make use of those
facilities, and are not violations of the Act.
The use of secularized terms or symbols relating to
religious holidays such as Santa Claus, Easter Bunny,
or St. Valentine's Day images, or phrases such as
"Merry Christmas" or "Happy Easter," or the like does
not constitute a violation of the Act.
The following is policy guidance on certain advertising
issues which have arisen recently. We are currently
reviewing past guidance from this office and from the Office
of General Counsel and will update our guidance as
appropriate.
1. Race, color, national origin. Real estate advertisements
should state no discriminatory preference or
limitation on account of race, color, or national origin. Use
of words describing the housing, the current or
potential residents, or the neighbors or neighborhood in
racial or ethnic terms (e.g., white family home, no
Irish) will create liability under this section.
However, advertisements which are facially neutral will not
create liability. Thus, complaints over the use
of phrases such as master bedroom, rare find, and desirable
neighborhood should not be filed.
100
3. Sex. Advertisements for single-family dwellings or
separate units in a multi-family dwelling should
contain no explicit preference, limitation, or
discrimination based on sex. Use of the term master
bedroom does not constitute a violation of either the
sex discrimination provisions or the race
discrimination provisions.
Terms such as "mother-in-law suite" and "bachelor
apartment" are commonly used as physical
descriptions of housing units and do not violate the
Act.
4. Handicap. Real estate advertisements should not
contain explicit exclusions, limitations, or other
indications of discrimination based on handicap (e.g.,
no wheelchairs). Advertisements containing
descriptions of properties (great view, fourth floor
walk-up, walk-in closet), services or facilities (jogging
trails), or neighborhoods (walk to bus stop) do not
violate the Act. Advertisements describing the
conduct required of residents ("non-smoking"
"sober") do not violate the Act. Advertisements
containing descriptions of accessibility features are
lawful (wheelchair ramp).
Code
Objectives
Upon completion of “The Code of Ethics: Our
Promise of Professionalism” course, participants
will be able to:
Of
Ethics
101

identify key aspirational concepts found in the
Preamble to the NATIONAL ASSOCIATION
OF REALTORS® Code of Ethics

describe “general business” ethics, and
compare and contrast the REALTORS®’ Code
of Ethics with business ethics, generally

describe the concepts established in Articles 1,
2, 12, and 17 of the Code of Ethics

identify possible violations of the Code of
Ethics specifically related to the Articles cited
above, after participating in interactive learning
methods (case studies, quizzes, role plays,
demonstrations, and group discussions about
fact scenarios)

describe the professional standards process
for enforcing the Code of Ethics, including the
duty to arbitrate

identify critical elements of due process as they
relate to Code enforcement

identify factors considered by hearing panels in
procuring cause disputes
Exercise: Ice-breaker
Part 1: History of the Code of Ethics
Instructions: Read each statement and select the
Article of the Code of Ethics from the list below that
the statement most closely describes. Write the
correct Article number in the space next to each
statement. No Articles are to be selected twice.
1. Pre-1900
NOTE: The statements in this exercise do not fully
represent the comprehensive ethical principles of
each Article of the Code of Ethics. To gain a full
understanding of the principles of the
REALTORS® Code of Ethics, each Article must be
read and understood in its entirety.

There was no licensing of real estate
practitioners.

Speculation, exploitation, and disorder was
the rule.

Caveat emptor (buyer beware) governed
transactions.

2. NATIONAL ASSOCIATION OF REALTORS
Formed in 1908

The Code of Ethics was adopted in 1913 to
establish professional standards of
conduct.

The Code of Ethics was the first business
ethical code, after those of medicine,
engineering, and law.

-
Service to the public
-
Commitment to professionalism
The original Code included “Duties to
Clients” and “Duties to Other Brokers.”
3. Code of Ethics as Basis for Later-adopted
License Laws
4. Code Requirements
Since its inception, the Code has required:

Arbitration of contractual disputes
between/among REALTORS®

Respect for other brokers’ exclusive
relationships with clients
Cooperation between members
NATIONAL ASSOCIATION OF REALTORS® ©Copyright 2009
102
In recognition and appreciation of their obligations to
clients, customers, the public, and each other,
REALTORS® continuously strive to become and
remain informed on issues affecting real estate and,
as knowledgeable professionals, they willingly share
the fruit of their experience and study with others.
They identify and take steps, through enforcement of
this Code of Ethics and by assisting appropriate
regulatory bodies, to eliminate practices which may
damage the public or which might discredit or bring
dishonor to the real estate profession. REALTORS®
having direct personal knowledge of conduct that
may violate the Code of Ethics involving
misappropriation of client or customer funds or
property, willful discrimination, or fraud resulting in
substantial economic harm, bring such matters to the
attention of the appropriate Board or Association of
REALTORS®. (Amended 1/00)
Part 2: Business Ethics, NAR Code of Ethics,
and Pathways to Professionalism
1. Business Ethics

What are "business ethics?"
- Industry codes and standards
-
Company policies and practices
-
Individual values

Business ethics and legal standards

Business ethics and the REALTORS
Code of Ethics
Note: REALTORS® engage in many specialty areas and
may be subject to the various codes and canons of those
fields (such as legal ethics, the Uniform Standards of
Professional Appraisal Practice [USPAP], the National
Auctioneers Association [NAA] Code of Ethics, and the
codes of the NATIONAL ASSOCIATION OF
REALTORS®’ Institutes, Societies, and Councils, etc.).
Regardless of their real estate specialties or fields of
practice, all REALTORS® are bound by the Code of Ethics
of the NATIONAL ASSOCIATION OF REALTORS®.
Realizing that cooperation with other real estate
professionals promotes the best interests of those
who utilize their services, REALTORS® urge
exclusive representation of clients; do not attempt to
gain any unfair advantage over their competitors;
and they refrain from making unsolicited comments
about other practitioners. In instances where their
opinion is sought, or where REALTORS® believe that
comment is necessary, their opinion is offered in an
objective, professional manner, uninfluenced by any
personal motivation or potential advantage or gain.
2. Aspirational Concepts of the Preamble to
the Code
Preamble
Under all is the land. Upon its wise utilization and
widely allocated ownership depend the survival
and growth of free institutions and of our
civilization. REALTORS® should recognize that
the interests of the nation and its citizens require
the highest and best use of the land and the
widest distribution of land ownership. They
require the creation of adequate housing, the
building of functioning cities, the development of
productive industries and farms, and the
preservation of a healthful environment.
The term REALTOR® has come to connote
competency, fairness, and high integrity resulting
from adherence to a lofty ideal of moral conduct in
business relations. No inducement of profit and no
instruction from clients ever can justify departure from
this ideal.
Such interests impose obligations beyond those
of ordinary commerce. They impose grave social
responsibility and a patriotic duty to which
REALTORS® should dedicate themselves, and
for which they should be diligent in preparing
themselves. REALTORS®, therefore, are zealous
to maintain and improve the standards of their
calling and share with their fellow Realtors® a
common responsibility for its integrity and honor.
Accepting this standard as their own, REALTORS®
pledge to observe its spirit in all of their activities
whether conducted personally, through associates or
others, or via technological means, and to conduct
their business in accordance with the tenets set forth
below. (Amended 1/07)
In the interpretation of this obligation, REALTORS®
can take no safer guide than that which has been
handed down through the centuries, embodied in the
Golden Rule, “Whatsoever ye would that others
should do to you, do ye even so to them.”
103
2. Aspirational Concepts of the Preamble to the
Code (continued)
3. The Structure of the Code and How It Is
Amended

Under all is the land . . .


The Golden Rule
-
Duties to Clients and Customers

“Widely allocated ownership” and “widest
distribution of land ownership”
-
Duties to the Public
-
Duties to REALTORS®

Maintain and improve the standards of our
calling.

Share our common responsibility for the
integrity and honor of the real estate
profession.

Become and remain informed about issues
affecting real estate.

Share your experience and expertise with
others.

Three major sections
The Code’s 17 Articles are broad statements
of ethical principles
Important Note: Only violations of the
Articles can result in disciplinary action.

The Standards of Practice support, interpret,
and amplify the Articles under which they are
stated
-
REALTORS® may not be found in
violation of a Standard of Practice,
only its foundational Article.
-
Standards of Practice may be cited in
support of an alleged violation of an
Article (such as a violation of Article 1,
as interpreted by Standard of Practice
1-3).

Identify and eliminate practices that damage
the public or might discredit or bring
dishonor to the real estate profession.

Urge exclusive representation of clients.

Refrain from taking unfair advantage of your
competitors.

Don’t make unsolicited comments about other
practitioners.


If your opinion is sought about a competitor (or
if you believe a comment is necessary),
offer it in an objective, professional
manner.
The “Official Case Interpretations” are specific
fact situations that explain Articles and/or
Standards of Practice

How the Code evolves
When needed, amendments to the Code,
the Standards of Practice, and the Official
Interpretations are made at the NAR
Midyear Meetings and the REALTORS®
Conference and Expo.
-

Remember, the term “REALTOR®” stands for
competency, fairness, high integrity, moral
conduct in business relations.

Keep in mind that no inducement of profit or
instruction from clients can justify
departure from the Code’s duties.
- The NAR Interpretations and Procedures
Subcommittee frequently makes
recommendations to the Professional
Standards Committee about enhancements
to professional standards procedures and to
the Code of Ethics.
Important Note: The Preamble may not be the
basis for disciplining a REALTOR®.
- All proposed changes to the Code and to
the policies and procedures by which the
Code is enforced must be approved by the
Board of Directors. Amendments to the 17
Articles must also be approved by the
Delegate Body.
104
4. The Code and the Law
Exercise: Pathways to Professionalism

The Code must be reasonably and
consistently construed with the law

The Code imposes duties above and in
addition to the duties imposed by law or
regulation

Instructions: Break into groups and identify three
areas in the “Pathways to Professionalism” document
that relate to your market. Select a group
spokesperson to summarize the group’s discussion.
Pathways to Professionalism
The Code restates certain fundamental
legal principles (contract, agency, fair
housing)
These professional courtesies are intended to be
used by REALTORS® on a voluntary basis, and
cannot form the basis for a professional
standards complaint.
Respect for the Public
1. Follow the “Golden Rule” -- Do unto others
as you would have them do unto you.
2. Respond promptly to inquiries and
requests for information.
3. Schedule appointments and showings as
far in advance as possible.
4. Call if you are delayed or must cancel an
appointment or showing.
5. Pathways to Professionalism
5. If a prospective buyer decides not to view
an occupied home, promptly explain the
situation to the listing broker or the
occupant.


Is a comprehensive list of service criteria
for the industry and professional
courtesies for REALTORS® to enhance
their professional conduct.
6. Communicate with all parties in a timely
fashion.
Three major sections
-
Respect for the public
-
Respect for property
-
Respect for peers
7. When entering a property, ensure that
unexpected situations, such as pets, are
handled appropriately.
8. Leave your business card if not prohibited
by local rules.
9. Never criticize property in the presence of
the occupant.
10. Inform occupants that you are leaving
after showings.
105
11. When showing an occupied home, always
ring the doorbell or knock -- and announce
yourself loudly -- before entering. Knock
and announce yourself loudly before
entering any closed room.
1. Be considerate of the seller’s property.
Do not allow anyone to eat, drink, smoke,
dispose of trash, use bathing or sleeping
facilities, or bring pets. Leave the house
as you found it unless instructed
otherwise.
12. Present a professional appearance at all
times; dress appropriately and drive a
clean car.
2. Use sidewalks; if weather is bad, take off
shoes and boots inside property.
13. If occupants are home during showings,
ask their permission before using the
telephone or bathroom.
Respect for Peers
14. Encourage the clients of other brokers to
direct questions to their agent or
representative.
1. Identify your REALTOR® and professional
status in all contacts with other
REALTORS®.
15. Communicate clearly; don’t use jargon or
slang that may not be readily understood.
2. Respond to other agents’ calls, faxes, and
e-mails promptly and courteously.
16. Be aware of and respect cultural
differences.
3. Be aware that large electronic files with
attachments or lengthy faxes may be a
burden on recipients.
17. Show courtesy and respect to everyone.
4. Notify the listing broker if there appears to
be inaccurate information on the listing.
18. Be aware of -- and meet -- all deadlines.
5. Share important information about a
property, including the presence of pets,
security systems, and whether sellers will
be present during the showing.
19. Promise only what you can deliver -- and
keep your promises.
20. Identify your REALTOR® and your
professional status in contacts with the
public.
6. Show courtesy, trust, and respect to other
real estate professionals.
21. Do not tell people what you think -- tell
them what you know.
7. Avoid the inappropriate use of
endearments or other denigrating
language.
Respect for Property
3. Be responsible for everyone you allow to
enter listed property.
8. Do not prospect at other REALTORS®’
open houses or similar events.
4. Never allow buyers to enter listed property
unaccompanied.
9. Return keys promptly.
10. Carefully replace keys in the lockbox after
showings.
5. When showing property, keep all
members of the group together.
11. To be successful in the business, mutual
respect is essential.
6. Never allow unaccompanied access to
property without permission.
12. Real estate is a reputation business.
What you do today may affect your
reputation -- and business -- for years to
come.
7. Enter property only with permission even if
you have a lockbox key or combination.
8. When the occupant is absent, leave the
property as you found it (lights, heating,
cooling, drapes, etc). If you think
something is amiss (e.g. vandalism)
contact the listing broker immediately.
106
-
Part 3: Enforcement of the Code of Ethics
1. Background





Associations of REALTORS® are responsible
for enforcing the Code of Ethics. That
obligation includes providing mediation
services and conducting arbitration hearings.
Option #2: Ethics Complaints and Arbitration
Requests
Only REALTOR® and REALTORASSOCIATE® members are subject to the
Code of Ethics. Associations in which
REALTORS® hold membership and/or
participate or access MLS have jurisdiction
over those individuals to receive and resolve
ethics complaints and arbitration requests.
-
Ethics: Ask, “Is there a possible violation of
the Code of Ethics?”
-
Arbitration: Ask, “Is there an arbitrable issue
– a monetary dispute?” (Typically a dispute
over entitlement to cooperative commission in
a transaction.)
Associations do not determine whether law or
real estate regulations have been violated.
Those decisions can only be made by the
regulatory authorities or courts.
3. Informal Dispute Resolution – Ombudsman
Program
Often, difficulties between real estate
professionals (whether REALTORS® or not)
result from misunderstanding,
miscommunication, or lack of adequate,
ongoing communication.

Only available if offered as a service of the
local association of REALTORS®.

Voluntary on the part of REALTORS® and
consumers.

Associations have considerable latitude in
developing criteria for serving as an
ombudsman. Ombudsmen should be familiar
with the Code of Ethics, state real estate
regulations, and current real estate practices.

REALTORS®, staff, and others may act as
ombudsmen.

Ombudsmen can:
Open, constructive discussion often resolves
questions or differences, diminishing the need
for further action.
2. REALTOR® Dispute Resolution
 field and respond to inquiries and
complaints about real estate transactions,
ethical practice, and Code enforcement
issues
If REALTORS® cannot settle disagreements
between/among themselves, two options are
available to them – (1) informal dispute resolution
and (2) filing an ethics complaint and/or an
arbitration request.
 receive and respond to questions and
complaints about members, solicit
responses, and meet with the disputing
parties
Option #1: Informal Dispute Resolution
-
Mediation: A voluntary process through
which the parties meet with a mediator who
helps facilitate a mutually acceptable
resolution.
Ombudsman: A voluntary process in ethics
where the parties communicate with an
ombudsman whose primary role is
communication and conciliation, not
adjudication. Ombudsmen do not determine
whether ethics violations have occurred;
rather they anticipate, identify, and help
resolve misunderstandings and
disagreements before they ripen into disputes
and possible charges of unethical conduct.
107

Parties may decline to use ombudsmen
services

Ethics complaints resolved through an
ombudsman are considered dismissed.

Failure or refusal of a member to comply with
the terms of a mutually agreed upon
resolution permits the complaining party to file
or re-file an ethics complaint. The filing
deadline is the date when the matter was
originally brought to the attention of the
association.
4. Informal Dispute Resolution – Mediation
Program
5. Formal Dispute Resolution – Filing an
Ethics Complaint

Mediation is the preferred dispute resolution
tool of the REALTOR® organization

Who can file a complaint?

Voluntary

Grievance committee in ethics

Vehicle for creating a mutually acceptable
resolution of disputes (instead of having a
decision imposed by a hearing panel)


Must be available to all REALTORS®
 Local association option: Mediation may
be offered to disputants before or after a
grievance committee’s review of
arbitration requests. If offered before,
then mediation must be offered again after
the grievance committee determines an
arbitrable matter exists.
Process

 Parties explain their issues and positions
and have an opportunity to ask each other
questions.
 If an agreement is reached, then the
parties put the agreement into a signed
document expressing the terms, and no
arbitration hearing is held.
Mediation compared with arbitration
Additional mediation resources: “Mediation –
The Alternative for Win-Win” article by Bruce
H. Aydt, ABR, ABRM, CRB, © Copyright 2001
and the "No Losers in Mediation" article, first
published in the September/October 2001
issue of Real Estate Business.
o
Answers key question: “If the
allegations in the complaint are
taken as true on their face, is it
possible a violation of the Code of
Ethics occurred?”
Ethics hearing panel
-
Conducts full “due process” hearings,
including sworn testimony, counsel,
witnesses, and evidence.
-
Is comprised of members of an
association’s professional standards
committee.
-
After a hearing, decides in executive
session whether there has been a
violation of the Code of Ethics.
Violations of the Code must be
supported by clear, strong, and
convincing proof.
-
Must also determine the discipline (if
any) to be imposed on the violator
when a violation of the Code of Ethics
has been found
 Mediators use a wide variety of
techniques to move the parties toward a
mutually acceptable resolution.

A screening body comprised of
members of the association.
Important Note: A grievance committee’s review
of an ethics complaint is not a hearing on the
merits, but rather a preliminary review to
determine if the complaint requires a hearing.
 Disputing parties meet with a mediator
appointed by the association.

o
108



Authorized discipline and administrative
processing fees;
Letter of Warning
Letter of Reprimand
Education
Fine not to exceed $5,000
Probation for one year or less
Suspension for not less than 30 days
or more than one year
Expulsion from membership for one to
three years
Suspension or termination of MLS
privileges.
Administrative processing fee (if found
in violation) not to exceed $500
Grievance committee in arbitration
-
Performs an initial screening function
similar to its role in reviewing ethics
complaints.
-
Asks key question: “If the claims in
the request for arbitration are taken as
true on their face, is the matter at
issue related to a real estate
transaction and properly arbitrable?”
(Is there some basis on which an
arbitration award could be based?)
Note: A grievance committee’s review of an
arbitration request is not a hearing on the merits,
but rather a preliminary review to determine if a
hearing is warranted.
The primary emphasis of discipline for an
ethics violation is educational, to create a
heightened awareness of and appreciation for
the Code. More serious or repeated violations
might lead to more severe forms of discipline.

Arbitration hearing panel

Note: Administrative processing fees are not
discipline. Fees should not to be assessed on a
case-by-case basis, but consistently, subject to
association policy.
-
Conducts full “due process” hearing,
including sworn testimony, counsel,
witnesses, and evidence.
-
Comprised of members of an
association’s professional standards
committee.
-
After a hearing, decides in executive
session who is entitled to an award, as
demonstrated by a preponderance of
the evidence.
6. Formal Dispute Resolution – Filing an
Arbitration Request


Authority to conduct arbitration is established
in Article 17 of the Code of Ethics and in the
state arbitration statute

Payment of awards
-
Awards may be judicially enforced
when not paid by the nonprevailing
party.
-
Many associations require that when
awards are not paid, an equivalent
amount must be deposited with the
association, pending review of the
hearing process or during the
pendency of any legal challenge.
Article 17 establishes arbitration can occur
when there are:
-
contractual disputes or specific noncontractual disputes (see Standard of
Practice 17-4)
-
between REALTORS® (principals)
associated with different firms
-
arising out of their relationship as
REALTORS®
Note: Although less common, clients also may
invoke mandatory arbitration against their
REALTOR® (principal).
109
Part 4: Concepts of Procuring Cause in
Arbitration
1. NAR’s Arbitration Guidelines

Published in the Code of Ethics and
Arbitration Manual.

Guide hearing panels in resolving
arbitrable issues.

Focus primarily on “procuring cause,”
because that is the determiner of most
disputes between brokers.
2. Key Factors in Procuring Cause Disputes

There are no predetermined rules of
entitlement.

Hearing panels must consider the entire
course of events.

Events such as the first property showing,
writing a successful offer, or an existing
agency relationship with the buyer are not,
in and of themselves, exclusive
determiners of procuring
cause/entitlement.

Black’s Law Dictionary, Fifth Edition,
defines “procuring cause” as, “The
proximate cause; the cause originating a
series of events which, without break in
their continuity, result in the
accomplishment of the prime object.”

Or, as the Arkansas Supreme Court said:
“It’s not the squirrel that gathers the nuts,
but the one who shakes the tree [who is
entitled to be paid].”
Part 5: Summaries and Case Studies of
Selected Articles of the Code of Ethics
1. Article 1

Protect and promote your clients’
interests.

This obligation to your clients is primary.

With that duty in mind, REALTORS must
also treat all parties honestly.

Standard of Practice 1-2 defines key
terms, including “client,” “customer,”
“agent,” and “broker”.
110
Part 5: Summaries and Case Studies of Selected Articles of the Code of
Ethics
Exercise: Article 1 Case Study (Based on Case Interpretation #1-26)
REALTOR® Leo is a sales associate with Done Right, REALTORS®. To promote Done Right’s in-house
listings, the firm’s principals offer $1,000 bonuses to the company’s sales associates for each listing sold.
Dr. Newcomer, a recent transferee to the town, enters into a buyer’s representation agreement with Done
Right, REALTORS® through REALTOR® Leo.
Dr. Newcomer explains he has specific needs, foremost of which is that any home he purchases must be
convenient for and readily accessible to Dr. Newcomer’s spouse, who is physically challenged. “Part of
my wife’s physical conditioning program is swimming,” says Dr. Newcomer. “So,” he explains, “in addition
to everything else, I am looking for a home with a pool or room to build a pool.”
During the next few days, REALTOR® Leo shows Dr. Newcomer several properties in the Blackacre
Subdivision, all of which are listed with Done Right, including one with an outdoor swimming pool. Not
included among the properties shown to Dr. Newcomer are several similar homes in Blackacre that are
listed with other firms, including one with an indoor pool.
After considering the properties he sees with REALTOR® Leo, Dr. Newcomer makes an offer on the home
with the outdoor pool. His offer is accepted, and the transaction closes.
Several months later, REALTOR® Leo receives notice that an ethics complaint has been filed against him
by Dr. Newcomer. From a colleague at the hospital who lives on the same block, Dr. Newcomer learned
about the home with the indoor pool that REALTOR® Leo failed to show him when Dr. Newcomer was
looking for just the right property. The complaint alleges that REALTOR® Leo put his own interests and
those of Done Right ahead of Dr. Newcomer’s interests by exclusively promoting Done Right’s listings and
by not telling Dr. Newcomer about the similarly priced property with the indoor pool. Dr. Newcomer also
says in the complaint that he believes the unshown property suited his family’s needs much better than the
property he did purchase, because his wife would have been able to use the pool all year long. The
complaint spells out that REALTOR® Leo received a bonus for selling one of Done Right’s listings to Dr.
Newcomer, and that Dr. Newcomer believes that REALTOR® Leo’s failure to tell him about the house with
the indoor pool was motivated by REALTOR® Leo’s desire for the bonus.
During the hearing, REALTOR® Leo defends his actions, explaining that properties rarely meet all of a
potential purchaser’s desires, and that he made Dr. Newcomer aware of several properties that met most
of his requirements, including one property with an outdoor pool. REALTOR® Leo goes on to say that Dr.
Newcomer must have been satisfied, because he ultimately purchased that home.
When questioned by the hearing panel, REALTOR® Leo acknowledges he knew about but did not show
the house with the indoor pool to Dr. Newcomer. He concedes that a year-round, indoor pool was better
suited to the family’s needs than a seasonal, outdoor pool. He also admits that failing to tell Dr. Newcomer
about the house with the indoor pool was, at least in part, motivated by the prospect of the bonus offered
by his firm. “But,” he also argues, “aside from the indoor pool, that house is no different than the one that
Dr. Newcomer bought.”
111
1
Questions
1. REALTOR® Leo’s obligations under Article 1
call for him to (check all that apply):
2. Article 2
A. find Dr. Newcomer a house that he is
willing to buy

B. show Dr Newcomer all properties that
meet his specific needs and requirements,
regardless of whether those properties are
listed with Done Right, REALTORS® or
another firm
Avoid exaggeration, misrepresentation
and concealment of pertinent facts about
the property or the transaction
But there is no obligation to discover latent
defects, matters outside scope of license, or
matters confidential under agency or non-agency
relationships
C. subordinate his own interests to those of
Dr Newcomer
D. explain that he honestly believes other
physical conditioning programs might be
better than swimming for Dr. Newcomer’s
wife
Exercise: Article 2 Case Study (Based on
Case Interpretation #2-7)
Homebuilder REALTOR® Dean shows one of his
newly constructed houses to Buyer Bert. Bert
sees some kind of construction beginning nearby,
and asks REALTOR® Dean about it. “I really
don’t know,” says REALTOR® Dean, “but I
believe it’s the attractive new shopping center
planned for this area.”
2. Article 1 requires REALTOR® Leo to disclose
the $1,000 bonus at the time of entering into
the exclusive buyer’s representation
agreement with Dr. Newcomer.
A. True
Following Buyer Bert’s purchase of one of the
houses, Buyer Bert learns that the “construction”
actually is a bottling plant, and the area adjacent
to it is zoned as “industrial”. Buyer Bert files a
complaint with the board of REALTORS, charging
REALTOR Dean with unethical conduct for failing
to disclose a pertinent fact. He says in his
complaint that, had he known about the proximity
of the new bottling plant when he first saw the
house, he would not have purchased it.
B. False
3. If a second offer was submitted for the
property by another real estate office at the
same time as Dr. Newcomer’s offer was
submitted, what disclosures to that
cooperating broker, if any, would Done Right
REALTORS® be required to make?
A. The existence of Dr. Newcomer’s offer
B. That Dr Newcomer’s offer was obtained by
another licensee within Done Right
REALTORS®
During the ethics hearing, REALTOR® Dean’s
defense is that he honestly answered Bert’s
question, because at the time, he had no
knowledge about what was being built. All he
knew was that other developers were planning an
extensive shopping center somewhere in the
general area, so he simply ventured a guess.
REALTOR® Dean goes on to say that, as
indicated in Buyer Bert’s testimony, he prefaced
his response to Bert by saying he didn’t know the
answer to Bert’s question.
C. The existence of Dr. Newcomer’s offer and
that it was obtained by another licensee within
Done Right REALTORS®, but only if asked
by the other cooperating broker and given
approval to do so by the seller
D. There are no disclosure requirements for
multiple offer situations
112
Questions
1. Is REALTOR® Dean in violation of Article 2?
Exercise: Article 12 Case Studies
A. No, because he prefaced his response by
clearly saying that he didn’t know.
Case #1 (Based on Case Interpretation #12-17)
A principal broker of Tech-friendly Realty,
REALTOR® Bob is technologically savvy and
constantly looking for ways to use the Internet to
promote his firm and drive additional traffic to his
website. Being an early adapter to the Internet he
registered, but did not use, several domain
names that incorporated or played on the names
of many of his competitors and their firms,
including Top Notch, REALTORS®.
B. No, because Buyer Bert could have
researched the new construction and
zoning himself.
C. Yes, because REALTOR® Dean is
obligated to discover and disclose adverse
factors that are reasonably apparent to a
licensed real estate professional.
D. Maybe, if the new construction was
identified as a “non-material” fact in law or
regulation.
REALTOR® Bob and his information technology
vendor recently came to the conclusion that one
way to drive traffic to Tech-friendly Realty’s
website is to take better advantage of the search
engines commonly used by potential buyers and
sellers. They determine that when potential
buyers or sellers search on “real estate,”
“REALTORS®,” or similar words, lists of related,
registered domain names appear. So,
REALTOR® Bob decides to activate some of the
dormant domain names of his competitors,
including the “topnotchREALTORS.com,” and use
them to point consumers to his own website.
2. How should REALTOR® Dean have
responded when asked about the new
construction?
A. Refer Bert to the developer.
B. Explain that although he didn’t know the
answer, he would research it and get back
to Bert.
C. Say he didn’t know the answer and leave
it at that.
In a matter of days, REALTOR® Bob learns that
he had been charged with a violation of Article 12
of the Code of Ethics by the owner of Top Notch,
REALTORS®, REALTOR® Sally, who alleges
that REALTOR® Bob’s use of the domain name
“topnotchREALTORS.com” presents a false
picture on the Internet to potential buyers and
sellers.
D. Advise Bert to wait and see if the
construction is a shopping center or
something else before submitting an offer.
3. Article 12

Be honest and truthful in real estate
communications.

Present a “true picture” in your
advertising, marketing, and other
representations.

Ensure that your status as a real estate
professional is readily apparent in your
advertising, marketing, and other
representations.
113
During the hearing, REALTOR® Bob defends
himself, by saying that in his opinion, using a
domain name is not advertising or a
representation to the public, but simply a
convenient way for Internet users to find relevant
Web sites. He goes on to say that, “When Web
surfers reach my home page, there is no
question, but that it’s my site, because it clearly
displays Tech-friendly Realty’s name and status
as a real estate firm.” He goes on to say that,
“These complaints are just a lot of sour grapes
from dinosaurs who don’t keep up with the times,
and who don’t realize that on the Internet, it’s
every man for himself.”
Case #1 Questions
The day after receiving the e-mail from
REALTOR® Sloan, REALTOR® Owen contacts
another area broker, REALTOR® Caren, to see if
the wooded lot is still available. REALTOR®
Caren confirms her firm has had an exclusive
listing on the property for the past six months.
“That’s funny,” responds REALTOR® Owen,
“REALTOR® Sloan has a ‘For Sale’ sign on the
property and information about it on his website. I
was under the impression he still has that listing.”
1. Which Standard of Practice applies to this
situation?
A. Standard of Practice 12-9
B. Standard of Practice 12-10
C. Standard of Practice 12-11
Although the lot was out of REALTOR® Owen’s
price range, the “For Sale” sign and information
on REALTOR® Sloan’s website stayed on his
mind. Finally, he contacted the local association
of REALTORS® and filed an ethics complaint
alleging that REALTOR® Sloan’s “For Sale” sign
and website information indicates that the
property is listed with his firm, but this has not
been the case for over six months. REALTOR®
Owen writes that in his opinion, REALTOR®
Sloan’s conduct violates Article 12, because it
does not present a “true picture” in a public
representation and is advertising a property
without authority, practices both prohibited by
Article 12, as interpreted by Standard of Practice
12-4.
D. Standard of Practice 12-12
2. Has REALTOR® Bob violated Article 12?
A. Yes.
B. No.
C. Only if using a domain name based on
another firm’s name is precluded by law or
regulation.
D. It depends on the disclosures and any
other information displayed on
REALTOR® Bob’s Web site.
Exercise: Article 12 Case Studies
Case #2 (Based on Case Interpretation #12-19)
REALTOR® Owen spots a dilapidated “For Sale”
sign on an otherwise attractive wooded lot. He
gets out of his car to look closer at the sign, and
is barely able to discern REALTOR® Sloan’s
name, which he later uses to locate REALTOR®
Sloan’s company website on the Internet.
Later, when he has a chance to view REALTOR®
Sloan’s website, he sees detailed information
about the lot. He sends an e-mail to REALTOR®
Sloan, requesting lot dimensions and the
property’s asking price. Several days later, he
receives a response that simply says, “That listing
expired.”
114
During the professional standards hearing,
REALTOR® Sloan claims that failing to remove
the “For Sale” sign simply was an oversight, and if
anyone is to blame, it is his personal assistant,
Brenda, who is responsible for removing signs
and lockboxes from expired and sold listings. He
says, “If you want to blame anyone, blame her,
since she’s supposed to bring back all of our ‘For
Sale’ and ‘Sold’ signs.” REALTOR® Sloan
acknowledges that the stale listing information on
his Web site continued to appear for more than
six months after the listing expired, and compares
this to finding outdated property information in an
old newspaper advertisement. “It’s possible,” he
points out, “that someone might come across a
six- month-old newspaper with my listings in it,
and those ads were true when I ran them. How
can I control when and where someone will come
across old newspaper ads, months or even years
later?”, he asks. “Besides,” he adds,
“REALTORS® have better things to do than
constantly monitor their websites to make sure
that everything is absolutely, positively up-to-theminute. If we did that, none of us would have
time to list or sell,” he concludes.
Case #2 Questions
1. Is REALTOR® Sloan obligated to keep his
company’s listing information up to date on his
firm’s website?
4. Article 17
A. Yes.

REALTORS® (principals) are required to
arbitrate contractual and specific noncontractual disputes identified in Standard
of Practice 17-4 that they have with
REALTORS® (principals) in other firms.

REALTORS®’ clients may invoke
mandatory arbitration with their
REALTOR® (principal).

REALTORS® are obligated to cause their
firms to arbitrate.
B. No.
C. Only if the same listing information does
not also appear in a newspaper.
2. If he is obligated to keep his website current,
then how long does REALTOR® Sloan have
to remove outdated or expired property
information from the website?
A. REALTORS®’ websites must be
immediately and continuously updated to
avoid the inclusion of outdated and
misleading information.
Exercise: Article 17 Case Study (Based on
Case Interpretation #17-1)
B. REALTORS® should use reasonable
efforts to ensure information on their
websites is current and accurate.
REALTORS® Linda and Amy participate in a
cooperative transaction that results in a dispute
over entitlement to compensation. Rather than
request arbitration at the local association of
REALTORS®, REALTOR® Linda instead files a
lawsuit against REALTOR® Amy for the
compensation she feels is owed to her. When
REALTOR® Amy receives notification a lawsuit
has been filed, she turns around and requests
arbitration at the local association.
C. It depends on the multiple listing service’s
IDX and VOW Rules.
D. Both B and C.
E. REALTORS® are not obligated to update
the information shown on their websites.
Because Linda and Amy are REALTOR®
principals in different firms, the association’s
Grievance Committee classifies the arbitration as
“mandatory” and schedules it for a hearing.
REALTOR® Linda receives notice of the
grievance committee’s decision, but refuses to
withdraw her lawsuit, so REALTOR® Amy then
files an ethics complaint alleging that REALTOR®
Amy has violated Article 17, as interpreted by
Standard of Practice 17-1.
3. When he took the listing, REALTOR® Sloan
received permission from the seller to post a
sign on the property and to advertise it on his
website. Such authority remains in effect
even after the listing expires.
A. True
B. False
115
(continued)
After receiving the complaint, the association
schedules a hearing before the Board of
Directors. During that hearing, REALTOR® Amy
presents evidence that she sought REALTOR®
Linda’s agreement to submit the dispute to
arbitration. REALTOR® Linda defends her
actions by asserting that under state law,
REALTOR® associations have no authority to bar
her access to the courts, or to require her to
arbitrate disputes with other REALTORS®.
The Board of Directors acknowledges that
REALTOR® Linda is correct about her legal rights
and about the association’s inability to prevent
her from filing a lawsuit. That said, the Board of
Directors points out the association is a voluntary
organization whose members agree to assume
certain obligations with respect to their relations
with other REALTORS®. The board advises
Linda that if she wishes to continue as a
REALTOR® member, she is obligated to adhere
to the Code’s duty to arbitrate, as established in
Article 17.
2. REALTORS® may be relieved of their
obligation to arbitrate through the local
association of REALTORS® when:
A. a grievance committee or a hearing panel
find the matter to be too legally complex or
the amount involved to be too large or too
small
B. both parties voluntarily choose to litigate,
rather than arbitrate
C. the arbitration is classified as “voluntary”
by a grievance committee
D. the request for arbitration is filed after the
filing deadline
E. All of the above.
3. Is failing to pay an arbitration award always a
violation of Article 17?
A. Yes.
B. Only if a pattern of arbitrarily refusing to
pay arbitration awards is established.
Questions
1. Does filing litigation against another
REALTOR® over a contractual dispute
always lead to a violation of Article 17?
C. Yes, depending on whether the arbitration
is mandatory or voluntary.
D. No, arbitration awards must be enforced
through the courts.
A. Yes.
B. No, because everyone is entitled to file
litigation.
C. It depends on whether: (1) a request for
arbitration has been filed, (2) the
grievance committee determines the
matter to be arbitrable and of a mandatory
nature, and (3) a separate ethics
complaint alleging a charge of Article 17
has been filed.
Part 6: Conclusion
The REALTOR® Code of Ethics:

protects the buying and selling public and the
general public

promotes a competitive real estate market
place

enhances the integrity of our profession

is our promise of performance

is our promise of professionalism
D. Arbitration always is voluntary.
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Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS®
Effective January 1, 2011
Where the word REALTORS® is used in this Code and Preamble, it shall
be deemed to include REALTOR-ASSOCIATE®s.
While the Code of Ethics establishes obligations that may be higher
than those mandated by law, in any instance where the Code of Ethics
and the law conflict, the obligations of the law must take precedence.
Preamble
Under all is the land. Upon its wise utilization and widely allocated
ownership depend the survival and growth of free institutions and of
our civilization. REALTORS® should recognize that the interests of the
nation and its citizens require the highest and best use of the land and
the widest distribution of land ownership. They require the creation of
adequate housing, the building of functioning cities, the development
of productive industries and farms, and the preservation of a healthful
environment.
Such interests impose obligations beyond those of ordinary commerce.
They impose grave social responsibility and a patriotic duty to which
REALTORS® should dedicate themselves, and for which they should be
diligent in preparing themselves. REALTORS®, therefore, are zealous to
maintain and improve the standards of their calling and share with
their fellow REALTORS® a common responsibility for its integrity and
honor.
In recognition and appreciation of their obligations to clients,
customers, the public, and each other, REALTORS® continuously strive
to become and remain informed on issues affecting real estate and, as
knowledgeable professionals, they willingly share the fruit of their
experience and study with others. They identify and take steps, through
enforcement of this Code of Ethics and by assisting appropriate
regulatory bodies, to eliminate practices which may damage the public
or which might discredit or bring dishonor to the real estate profession.
REALTORS® having direct personal knowledge of conduct that may
violate the Code of Ethics involving misappropriation of client or
customer funds or property, willful discrimination, or fraud resulting in
substantial economic harm, bring such matters to the attention of the
appropriate Board or Association of REALTORS®. (Amended 1/00)
Realizing that cooperation with other real estate professionals
promotes the best interests of those who utilize their services,
REALTORS® urge exclusive representation of clients; do not attempt to
gain any unfair advantage over their competitors; and they refrain from
making unsolicited comments about other practitioners. In instances
where their opinion is sought, or where REALTORS® believe that
comment is necessary, their opinion is offered in an objective,
professional manner, uninfluenced by any personal motivation or
potential advantage or gain.
The term REALTOR® has come to connote competency, fairness, and
high integrity resulting from adherence to a lofty ideal of moral
conduct in business relations. No inducement of profit and no
instruction from clients ever can justify departure from this ideal.
In the interpretation of this obligation, REALTORS® can take no safer
guide than that which has been handed down through the centuries,
embodied in the Golden Rule, “Whatsoever ye would that others
should do to you, do ye even so to them.”
117
Accepting this standard as their own, REALTORS® pledge to observe its
spirit in all of their activities whether conducted personally, through
associates or others, or via technological means, and to conduct their
business in accordance with the tenets set forth below. (Amended 1/07)
Duties to Clients and Customers
Article1
When representing a buyer, seller, landlord, tenant, or other client as
an agent, REALTORS® pledge themselves to protect and promote the
interests of their client. This obligation to the client is primary, but it
does not relieve REALTORS® of their obligation to treat all parties
honestly. When serving a buyer, seller, landlord, tenant or other party
in a non-agency capacity, REALTORS® remain obligated to treat all
parties honestly. (Amended 1/01)
• Standard of Practice 1-1
REALTORS®, when acting as principals in a real estate transaction,
remain obligated by the duties imposed by the Code of Ethics.
(Amended 1/93)
The duties imposed by the Code of Ethics encompass all real estaterelated activities and transactions whether conducted in person,
electronically, or through any other means.
The duties the Code of Ethics imposes are applicable whether
REALTORS® are acting as agents or in legally recognized non-agency
capacities except that any duty imposed exclusively on agents by law
or regulation shall not be imposed by this Code of Ethics on
REALTORS® acting in non-agency capacities.
As used in this Code of Ethics, “client” means the person(s) or
entity(ies) with whom a REALTOR® or a REALTOR®’s firm has an
agency or legally recognized non-agency relationship; “customer”
means a party to a real estate transaction who receives information,
services, or benefits but has no contractual relationship with the
REALTOR® or the REALTOR®’s firm; “prospect” means a purchaser,
seller, tenant, or landlord who is not subject to a representation
relationship with the REALTOR® or REALTOR®’s firm; “agent” means
a real estate licensee (including brokers and sales associates) acting in
an agency relationship as defined by state law or regulation; and
“broker” means a real estate licensee (including brokers and sales
associates) acting as an agent or in a legally recognized non-agency
capacity. (Adopted 1/95, Amended 1/07)
REALTORS®, in attempting to secure a listing, shall not deliberately
mislead the owner as to market value.
REALTORS®, when seeking to become a buyer/tenant representative,
shall not mislead buyers or tenants as to savings or other benefits that
might be realized through use of the REALTOR®’s services.
(Amended 1/93)
1) the REALTOR®’s company policies regarding cooperation and the
amount(s) of any compensation that will be offered to subagents,
buyer/tenant agents, and/or brokers acting in legally recognized
non-agency capacities;
2) the fact that buyer/tenant agents or brokers, even if compensated
by listing brokers, or by sellers/landlords may represent the
interests of buyers/tenants; and
3) any potential for listing brokers to act as disclosed dual agents,
e.g., buyer/tenant agents. (Adopted 1/93, Renumbered 1/98,
Amended 1/03)
REALTORS® may represent the seller/landlord and buyer/tenant in the
same transaction only after full disclosure to and with informed
consent of both parties. (Adopted 1/93)
REALTORS® shall submit offers and counter-offers objectively and as
quickly as possible. (Adopted 1/93, Amended 1/95)
When acting as listing brokers, REALTORS® shall continue to submit
to the seller/landlord all offers and counter-offers until closing or
execution of a lease unless the seller/landlord has waived this
obligation in writing. REALTORS® shall not be obligated to continue to
market the property after an offer has been accepted by the
seller/landlord. REALTORS® shall recommend that sellers/landlords
obtain the advice of legal counsel prior to acceptance of a subsequent
offer except where the acceptance is contingent on the termination of
the pre-existing purchase contract or lease. (Amended 1/93)
When entering into buyer/tenant agreements, REALTORS® must advise
potential clients of:
1) the REALTOR®’s company policies regarding cooperation;
2) the amount of compensation to be paid by the client;
3) the potential for additional or offsetting compensation from other
brokers, from the seller or landlord, or from other parties;
4) any potential for the buyer/tenant representative to act as a
disclosed dual agent, e.g., listing broker, subagent, landlord’s
agent, etc., and
5) the possibility that sellers or sellers’ representatives may not treat
the existence, terms, or conditions of offers as confidential unless
confidentiality is required by law, regulation, or by any
confidentiality agreement between the parties. (Adopted 1/93,
Renumbered 1/98, Amended 1/06)
REALTORS®, acting as agents or brokers of buyers/tenants, shall
submit to buyers/tenants all offers and counter-offers until acceptance
but have no obligation to continue to show properties to their clients
after an offer has been accepted unless otherwise agreed in writing.
REALTORS®, acting as agents or brokers of buyers/tenants, shall
recommend that buyers/tenants obtain the advice of legal counsel if
there is a question as to whether a pre-existing contract has been
terminated. (Adopted 1/93, Amended 1/99)
The obligation of REALTORS® to preserve confidential information (as
defined by state law) provided by their clients in the course of any
agency relationship or non-agency relationship recognized by law
continues after termination of agency relationships or any non-agency
relationships recognized by law. REALTORS® shall not knowingly,
during or following the termination of professional relationships with
their clients:
1) reveal confidential information of clients; or
2) use confidential information of clients to the disadvantage of
clients; or3) use confidential information of clients for the
REALTOR®’s advantage or the advantage of third parties unless:
a) clients consent after full disclosure; or
b) REALTORS® are required by court order; or
c) it is the intention of a client to commit a crime and the
information is necessary to prevent the crime; or
d) it is necessary to defend a REALTOR® or the REALTOR®’s
employees or associates against an accusation of wrongful
conduct.
Information concerning latent material defects is not considered
confidential information under this Code of Ethics. (Adopted 1/93,
Amended 1/01)
REALTORS® shall, consistent with the terms and conditions of their
real estate licensure and their property management agreement,
competently manage the property of clients with due regard for the
rights, safety and health of tenants and others lawfully on the
premises. (Adopted 1/95, Amended 1/00)
REALTORS® who are employed to maintain or manage a client’s
property shall exercise due diligence and make reasonable efforts to
protect it against reasonably foreseeable contingencies and losses.
(Adopted 1/95)
When entering into listing contracts, REALTORS® must advise sellers/
landlords of:
Fees for preparing appraisals or other valuations shall not be
contingent upon the amount of the appraisal or valuation.
(Adopted 1/02)
REALTORS®, in response to inquiries from buyers or cooperating
brokers shall, with the sellers’ approval, disclose the existence of
offers on the property. Where disclosure is authorized,
REALTORS® shall also disclose, if asked, whether offers were
obtained by the listing licensee, another licensee in the listing firm, or
by a cooperating broker. (Adopted 1/03, Amended 1/09)
Article 2
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. (Amended 1/00)
REALTORS® shall only be obligated to discover and disclose adverse
factors reasonably apparent to someone with expertise in those areas
required by their real estate licensing authority. Article 2 does not
impose upon the REALTOR® the obligation of expertise in other
professional or technical disciplines. (Amended 1/96)
(Renumbered as Standard of Practice 1-12 1/98)
(Renumbered as Standard of Practice 1-13 1/98)
REALTORS® shall not be parties to the naming of a false consideration
in any document, unless it be the naming of an obviously nominal
consideration.
118
Factors defined as “non-material” by law or regulation or which are
expressly referenced in law or regulation as not being subject to
disclosure are considered not “pertinent” for purposes of Article 2.
(Adopted 1/93)
Article 3
REALTORS® shall cooperate with other brokers except when
cooperation is not in the client’s best interest. The obligation to
cooperate does not include the obligation to share commissions, fees,
or to otherwise compensate another broker. (Amended 1/95)
REALTORS®, acting as exclusive agents or brokers of sellers/landlords,
establish the terms and conditions of offers to cooperate. Unless
expressly indicated in offers to cooperate, cooperating brokers may
not assume that the offer of cooperation includes an offer of
compensation. Terms of compensation, if any, shall be ascertained by
cooperating brokers before beginning efforts to accept the offer of
cooperation. (Amended 1/99)
To be effective, any change in compensation offered for cooperative
services must be communicated to the other REALTOR® prior to the
time that REALTOR® submits an offer to purchase/lease the property.
(Amended 1/10)
Standard of Practice 3-2 does not preclude the listing broker and
cooperating broker from entering into an agreement to change
cooperative compensation. (Adopted 1/94)
REALTORS®, acting as listing brokers, have an affirmative obligation
to disclose the existence of dual or variable rate commission
arrangements (i.e., listings where one amount of commission is
payable if the listing broker’s firm is the procuring cause of sale/lease
and a different amount of commission is payable if the sale/lease
results through the efforts of the seller/landlord or a cooperating
broker). The listing broker shall, as soon as practical, disclose the
existence of such arrangements to potential cooperating brokers and
shall, in response to inquiries from cooperating brokers, disclose the
differential that would result in a cooperative transaction or in a
sale/lease that results through the efforts of the seller/landlord. If the
cooperating broker is a buyer/tenant representative, the buyer/ tenant
representative must disclose such information to their client before
the client makes an offer to purchase or lease. (Amended 1/02)
It is the obligation of subagents to promptly disclose all pertinent
facts to the principal’s agent prior to as well as after a purchase or
lease agreement is executed. (Amended 1/93)
REALTORS® shall disclose the existence of accepted offers, including
offers with unresolved contingencies, to any broker seeking
cooperation. (Adopted 5/86, Amended 1/04)
When seeking information from another REALTOR® concerning
property under a management or listing agreement, REALTORS® shall
disclose their REALTOR® status and whether their interest is personal
or on behalf of a client and, if on behalf of a client, their relationship
with the client. (Amended 1/11)
REALTORS® shall not misrepresent the availability of access to show
or inspect a listed property. (Amended 11/87)
REALTORS® shall not provide access to listed property on terms other
than those established by the owner or the listing broker. (Adopted
1/10)
The duty to cooperate established in Article 3 relates to the obligation
to share information on listed property, and to make property
available to other brokers for showing to prospective
purchasers/tenants when it is in the best interests of sellers/landlords.
(Adopted 1/11)
Article 4
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. (Amended 1/00)
For the protection of all parties, the disclosures required by Article 4
shall be in writing and provided by REALTORS® prior to the signing of
any contract. (Adopted 2/86)
Article 5
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.
Article 6
REALTORS® shall not accept any commission, rebate, or profit on
expenditures made for their client, without the client’s knowledge and
consent.
When recommending real estate products or services (e.g.,
homeowner’s insurance, warranty programs, mortgage financing, title
insurance, etc.), REALTORS® shall disclose to the client or customer to
whom the recommendation is made any financial benefits or fees,
other than real estate referral fees, the REALTOR® or REALTOR®’s firm
may receive as a direct result of such recommendation. (Amended
1/99)
REALTORS® shall not recommend or suggest to a client or a customer
the use of services of another organization or business entity in which
they have a direct interest without disclosing such interest at the time
of the recommendation or suggestion. (Amended 5/88)
Article 7
In a transaction, REALTORS® shall not accept compensation from more
than one party, even if permitted by law, without disclosure to all
parties and the informed consent of the REALTOR®’s client or clients.
(Amended 1/93)
Article 8
REALTORS® shall keep in a special account in an appropriate financial
institution, separated from their own funds, monies coming into their
possession in trust for other persons, such as escrows, trust funds,
clients’ monies, and other like items.
119
Article 9
Article 11
For the protection of all parties, REALTORS® shall use reasonable care
to ensure that documents pertaining to the purchase, sale, or lease of
real estate are kept current through the use of written extensions or
amendments. (Amended 1/93)
REALTORS® shall not undertake to provide specialized professional
services concerning a type of property or service that is outside their
field of competence unless they engage the assistance of one who is
competent on such types of property or service, or unless the facts are
fully disclosed to the client. Any persons engaged to provide such
assistance shall be so identified to the client and their contribution to
the assignment should be set forth. (Amended 1/10)
REALTORS®, for the protection of all parties, shall assure whenever
possible that all agreements related to real estate transactions
including, but not limited to, listing and representation agreements,
purchase contracts, and leases are in writing in clear and
understandable language expressing the specific terms, conditions,
obligations and commitments of the parties. A copy of each agreement
shall be furnished to each party to such agreements upon their signing
or initialing. (Amended 1/04)
When assisting or enabling a client or customer in establishing a
contractual relationship (e.g., listing and representation agreements,
purchase agreements, leases, etc.) electronically, REALTORS® shall
make reasonable efforts to explain the nature and disclose the specific
terms of the contractual relationship being established prior to it
being agreed to by a contracting party. (Adopted 1/07)
The services which REALTORS® provide to their clients and customers
shall conform to the standards of practice and competence which are
reasonably expected in the specific real estate disciplines in which they
engage; specifically, residential real estate brokerage, real property
management, commercial and industrial real estate brokerage, land
brokerage, real estate appraisal, real estate counseling, real estate
syndication, real estate auction, and international real estate.
When REALTORS® prepare opinions of real property value or price,
other than in pursuit of a listing or to assist a potential purchaser in
formulating a purchase offer, such opinions shall include the
following unless the party requesting the opinion requires a specific
type of report or different data set:
1) identification of the subject property
2) date prepared
3) defined value or price
4) limiting conditions, including statements of purpose(s) and
intended user(s)
5) any present or contemplated interest, including the possibility of
representing the seller/landlord or buyers/tenants
6) basis for the opinion, including applicable market data
7) if the opinion is not an appraisal, a statement to that effect
(Amended 1/10)
Duties to the Public
Article 10
REALTORS® shall not deny equal professional services to any person
for reasons of race, color, religion, sex, handicap, familial status, or
national origin, or sexual orientation. REALTORS® shall not be parties
to any plan or agreement to discriminate against a person or persons on
the basis of race, color, religion, sex, handicap, familial status, national
origin, or sexual orientation. (Amended 1/11)
REALTORS®, in their real estate employment practices, shall not
discriminate against any person or persons on the basis of race, color,
religion, sex, handicap, familial status, national origin, or sexual
orientation. (Amended 1/11)
When involved in the sale or lease of a residence, REALTORS® shall
not volunteer information regarding the racial, religious or ethnic
composition of any neighborhood nor shall they engage in any
activity which may result in panic selling, however, REALTORS® may
provide other demographic information. (Adopted 1/94, Amended
1/06)
When not involved in the sale or lease of a residence, REALTORS®
may provide demographic information related to a property,
transaction or professional assignment to a party if such demographic
information is (a) deemed by the REALTOR® to be needed to assist
with or complete, in a manner consistent with Article 10, a real estate
transaction or professional assignment and (b) is obtained or derived
from a recognized, reliable, independent, and impartial source. The
source of such information and any additions, deletions,
modifications, interpretations, or other changes shall be disclosed in
reasonable detail. (Adopted 1/05, Renumbered 1/06)
REALTORS® shall not print, display or circulate any statement or
advertisement with respect to selling or renting of a property that
indicates any preference, limitations or discrimination based on race,
color, religion, sex, handicap, familial status, national origin, or
sexual orientation. (Adopted 1/94, Renumbered 1/05 and 1/06,
Amended 1/11)
As used in Article 10 “real estate employment practices” relates to
employees and independent contractors providing real estate-related
services and the administrative and clerical staff directly supporting
those individuals. (Adopted 1/00, Renumbered 1/05 and 1/06)
The obligations of the Code of Ethics in respect of real estate
disciplines other than appraisal shall be interpreted and applied in
accordance with the standards of competence and practice which
clients and the public reasonably require to protect their rights and
interests considering the complexity of the transaction, the
availability of expert assistance, and, where the REALTOR® is an agent
or subagent, the obligations of a fiduciary. (Adopted 1/95)
When REALTORS® provide consultive services to clients which
involve advice or counsel for a fee (not a commission), such advice
shall be rendered in an objective manner and the fee shall not be
contingent on the substance of the advice or counsel given. If
brokerage or transaction services are to be provided in addition to
consultive services, a separate compensation may be paid with prior
agreement between the client and REALTOR®. (Adopted 1/96)
The competency required by Article 11 relates to services contracted
for between REALTORS® and their clients or customers; the duties
expressly imposed by the Code of Ethics; and the duties imposed by
law or regulation. (Adopted 1/02)
Article 12
REALTORS® shall be honest and truthful in their real estate
communications and shall present a true picture in their advertising,
marketing, and other representations. REALTORS® shall ensure that
their status as real estate professionals is readily apparent in their
advertising, marketing, and other representations, and that the
recipients of all real estate communications are, or have been, notified
that those communications are from a real estate professional.
(Amended 1/08)
120
REALTORS® may use the term “free” and similar terms in their
advertising and in other representations provided that all terms
governing availability of the offered product or service are clearly
disclosed at the same time. (Amended 1/97)
REALTORS® may represent their services as “free” or without cost
even if they expect to receive compensation from a source other than
their client provided that the potential for the REALTOR® to obtain a
benefit from a third party is clearly disclosed at the same time.
(Amended 1/97)
The offering of premiums, prizes, merchandise discounts or other
inducements to list, sell, purchase, or lease is not, in itself, unethical
even if receipt of the benefit is contingent on listing, selling,
purchasing, or leasing through the REALTOR® making the offer.
However, REALTORS® must exercise care and candor in any such
advertising or other public or private representations so that any party
interested in receiving or otherwise benefiting from the REALTOR®’s
offer will have clear, thorough, advance understanding of all the
terms and conditions of the offer. The offering of any inducements to
do business is subject to the limitations and restrictions of state law
and the ethical obligations established by any applicable Standard of
Practice. (Amended 1/95)
REALTORS® shall not offer for sale/lease or advertise property without
authority. When acting as listing brokers or as subagents, REALTORS®
shall not quote a price different from that agreed upon with the
seller/landlord. (Amended 1/93)
REALTORS® shall not advertise nor permit any person employed by or
affiliated with them to advertise real estate services or listed property
in any medium (e.g., electronically, print, radio, television, etc.)
without disclosing the name of that REALTOR®’s firm in a reasonable
and readily apparent manner. This Standard of Practice acknowledges
that disclosing the name of the firm may not be practical in electronic
displays of limited information (e.g., thumbnails”, text messages,
“tweets”, etc.). Such displays are exempt from the disclosure
requirement established in the Standard of Practice, but only when
linked to a display that includes all required disclosures. (Adopted
11/86, Amended 1/11)
REALTOR® firm websites shall disclose the firm’s name and state(s) of
licensure in a reasonable and readily apparent manner.
Websites of REALTORS® and non-member licensees affiliated with a
REALTOR® firm shall disclose the firm’s name and that REALTOR®’s
or non-member licensee’s state(s) of licensure in a reasonable and
readily apparent manner. (Adopted 1/07)
REALTORS®’ obligation to present a true picture in their advertising
and representations to the public includes the URLs and domain
names they use, and prohibits REALTORS® from:
1) engaging in deceptive or unauthorized framing of real estate
brokerage websites;
2) manipulating (e.g., presenting content developed by others) listing
content in any way that produces a deceptive or misleading result;
or
3) deceptively using metatags, keywords or other devices/ methods to
direct, drive, or divert Internet traffic, or to otherwise mislead
consumers. (Adopted 1/07)
REALTORS® intending to share or sell consumer information gathered
via the Internet shall disclose that possibility in a reasonable and
readily apparent manner. (Adopted 1/07)
REALTORS® shall not:
1) use URLs or domain names that present less than a true picture,
or
2) register URLs or domain names which, if used, would present less
than a true picture. (Adopted 1/08)
The obligation to present a true picture in advertising, marketing, and
representations allows REALTORS® to use and display only
professional designations, certifications, and other credentials to
which they are legitimately entitled. (Adopted 1/08)
Article 13
REALTORS® shall not engage in activities that constitute the
unauthorized practice of law and shall recommend that legal counsel
be obtained when the interest of any party to the transaction requires it.
Article 14
REALTORS®, when advertising unlisted real property for sale/lease in
which they have an ownership interest, shall disclose their status as
both owners/landlords and as REALTORS® or real estate licensees.
(Amended 1/93)
If charged with unethical practice or asked to present evidence or to
cooperate in any other way, in any professional standards proceeding
or investigation, REALTORS® shall place all pertinent facts before the
proper tribunals of the Member Board or affiliated institute, society, or
council in which membership is held and shall take no action to disrupt
or obstruct such processes. (Amended 1/99)
Only REALTORS® who participated in the transaction as the listing
broker or cooperating broker (selling broker) may claim to have
“sold” the property. Prior to closing, a cooperating broker may
post a “sold” sign only with the consent of the listing broker.
(Amended 1/96)
REALTORS® shall not be subject to disciplinary proceedings in more
than one Board of REALTORS® or affiliated institute, society, or
council in which they hold membership with respect to alleged
violations of the Code of Ethics relating to the same transaction or
event. (Amended 1/95)
The obligation to present a true picture in representations to the
public includes information presented, provided, or displayed on
REALTORS®’ websites. REALTORS® shall use reasonable efforts to
ensure that information on their websites is current. When it becomes
apparent that information on a REALTOR®’s website is no longer
current or accurate, REALTORS® shall promptly take corrective action.
(Adopted 1/07)
REALTORS® shall not make any unauthorized disclosure or
dissemination of the allegations, findings, or decision developed in
connection with an ethics hearing or appeal or in connection with an
arbitration hearing or procedural review. (Amended 1/92)
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REALTORS® shall not obstruct the Board’s investigative or
professional standards proceedings by instituting or threatening to
institute actions for libel, slander, or defamation against any party to a
professional standards proceeding or their witnesses based on the
filing of an arbitration request, an ethics complaint, or testimony
given before any tribunal. (Adopted 11/87, Amended 1/99)
REALTORS® shall not intentionally impede the Board’s investigative
or disciplinary proceedings by filing multiple ethics complaints based
on the same event or transaction. (Adopted 11/88)
Duties to REALTORS®
Article 15
REALTORS® shall not knowingly or recklessly make false or misleading
statements about competitors, their businesses, or their business
practices. (Amended 1/92)
REALTORS® shall not knowingly or recklessly file false or unfounded
ethics complaints. (Adopted 1/00)
The obligation to refrain from making false or misleading statements
about competitors, competitors’ businesses, and competitors’
business practices includes the duty to not knowingly or recklessly
publish, repeat, retransmit, or republish false or misleading statements
made by others. This duty applies whether false or misleading
statements are repeated in person, in writing, by technological means
(e.g., the Internet), or by any other means. (Adopted 1/07, Amended
1/10)
The obligation to refrain from making false or misleading statements
about competitors, competitors’ businesses, and competitors’
business practices includes the duty to publish a clarification about or
to remove statements made by others on electronic media the
REALTOR® controls once the REALTOR® knows the statement is false
or misleading. (Adopted 1/10)
Article 16
REALTORS® shall not engage in any practice or take any action
inconsistent with exclusive representation or exclusive brokerage
relationship agreements that other REALTORS® have with clients.
(Amended 1/04)
Article 16 is not intended to prohibit aggressive or innovative
business practices which are otherwise ethical and does not prohibit
disagreements with other REALTORS® involving commission, fees,
compensation or other forms of payment or expenses. (Adopted 1/93,
Amended 1/95)
Article 16 does not preclude REALTORS® from making general
announcements to prospects describing their services and the terms of
their availability even though some recipients may have entered into
agency agreements or other exclusive relationships with another
REALTOR®. A general telephone canvass, general mailing or
distribution addressed to all prospects in a given geographical area or
in a given profession, business, club, or organization, or other
classification or group is deemed “general” for purposes of this
standard. (Amended 1/04)
Article 16 is intended to recognize as unethical two basic types of
solicitations:
122
First, telephone or personal solicitations of property owners who
have been identified by a real estate sign, multiple listing
compilation, or other information service as having exclusively listed
their property with another REALTOR®, and
Second, mail or other forms of written solicitations of prospects
whose properties are exclusively listed with another REALTOR® when
such solicitations are not part of a general mailing but are directed
specifically to property owners identified through compilations of
current listings, “for sale” or “for rent” signs, or other sources of
information required by Article 3 and Multiple Listing Service rules
to be made available to other REALTORS® under offers of subagency
or cooperation. (Amended 1/04)
Article 16 does not preclude REALTORS® from contacting the client of
another broker for the purpose of offering to provide, or entering into
a contract to provide, a different type of real estate service unrelated
to the type of service currently being provided (e.g., property
management as opposed to brokerage) or from offering the same type
of service for property not subject to other brokers’ exclusive
agreements. However, information received through a Multiple
Listing Service or any other offer of cooperation may not be used to
target clients of other REALTORS® to whom such offers to provide
services may be made. (Amended 1/04)
REALTORS® shall not solicit a listing which is currently listed
exclusively with another broker. However, if the listing broker, when
asked by the REALTOR®, refuses to disclose the expiration date and
nature of such listing; i.e., an exclusive right to sell, an exclusive
agency, open listing, or other form of contractual agreement between
the listing broker and the client, the REALTOR® may contact the owner
to secure such information and may discuss the terms upon which the
REALTOR® might take a future listing or, alternatively, may take a
listing to become effective upon expiration of any existing exclusive
listing. (Amended 1/94)
REALTORS® shall not solicit buyer/tenant agreements from buyers/
tenants who are subject to exclusive buyer/tenant agreements.
However, if asked by a REALTOR®, the broker refuses to disclose the
expiration date of the exclusive buyer/tenant agreement, the
REALTOR® may contact the buyer/tenant to secure such information
and may discuss the terms upon which the REALTOR® might enter into
a future buyer/tenant agreement or, alternatively, may enter into a
buyer/tenant agreement to become effective upon the expiration of
any existing exclusive buyer/tenant agreement. (Adopted 1/94,
Amended 1/98)
When REALTORS® are contacted by the client of another REALTOR®
regarding the creation of an exclusive relationship to provide the
same type of service, and REALTORS® have not directly or indirectly
initiated such discussions, they may discuss the terms upon which
they might enter into a future agreement or, alternatively, may enter
into an agreement which becomes effective upon expiration of any
existing exclusive agreement. (Amended 1/98)
The fact that a prospect has retained a REALTOR® as an exclusive
representative or exclusive broker in one or more past transactions
does not preclude other REALTORS® from seeking such prospect’s
future business. (Amended 1/04)
The fact that an exclusive agreement has been entered into with a
REALTOR® shall not preclude or inhibit any other REALTOR® from
entering into a similar agreement after the expiration of the prior
agreement. (Amended 1/98)
REALTORS®, prior to entering into a representation agreement, have
an affirmative obligation to make reasonable efforts to determine
whether the prospect is subject to a current, valid exclusive agreement
to provide the same type of real estate service. (Amended 1/04)
REALTORS®, acting as subagents or as buyer/tenant representatives or
brokers, shall not attempt to extend a listing broker’s offer of
cooperation and/or compensation to other brokers without the consent
of the listing broker. (Amended 1/04)
REALTORS®, acting as buyer or tenant representatives or brokers, shall
disclose that relationship to the seller/landlord’s representative or
broker at first contact and shall provide written confirmation of that
disclosure to the seller/landlord’s representative or broker not later
than execution of a purchase agreement or lease. (Amended 1/04)
REALTORS® shall not use information obtained from listing brokers
through offers to cooperate made through multiple listing services or
through other offers of cooperation to refer listing brokers’ clients to
other brokers or to create buyer/tenant relationships with listing
brokers’ clients, unless such use is authorized by listing brokers.
(Amended 1/02)
On unlisted property, REALTORS® acting as buyer/tenant
representatives or brokers shall disclose that relationship to the
seller/landlord at first contact for that buyer/tenant and shall provide
written confirmation of such disclosure to the seller/landlord not later
than execution of any purchase or lease agreement. (Amended 1/04)
REALTORS® shall make any request for anticipated compensation
from the seller/landlord at first contact. (Amended 1/98)
REALTORS®, acting as representatives or brokers of sellers/ landlords
or as subagents of listing brokers, shall disclose that relationship to
buyers/tenants as soon as practicable and shall provide written
confirmation of such disclosure to buyers/tenants not later than
execution of any purchase or lease agreement. (Amended 1/04)
All dealings concerning property exclusively listed, or with
buyer/tenants who are subject to an exclusive agreement shall be
carried on with the client’s representative or broker, and not with the
client, except with the consent of the client’s representative or broker
or except where such dealings are initiated by the client.
Before providing substantive services (such as writing a purchase
offer or presenting a CMA) to prospects, REALTORS® shall ask
prospects whether they are a party to any exclusive representation
agreement. REALTORS® shall not knowingly provide substantive
services concerning a prospective transaction to prospects who are
parties to exclusive representation agreements, except with the
consent of the prospects’ exclusive representatives or at the direction
of prospects. (Adopted 1/93, Amended 1/04)
REALTORS® are free to enter into contractual relationships or to
negotiate with sellers/landlords, buyers/tenants or others who are not
subject to an exclusive agreement but shall not knowingly obligate
them to pay more than one commission except with their informed
consent. (Amended 1/98)
In cooperative transactions REALTORS® shall compensate cooperating
REALTORS® (principal brokers) and shall not compensate nor offer to
compensate, directly or indirectly, any of the sales licensees
employed by or affiliated with other REALTORS® without the prior
express knowledge and consent of the cooperating broker.
REALTORS®, acting as subagents or buyer/tenant representatives or
brokers, shall not use the terms of an offer to purchase/lease to
attempt to modify the listing broker’s offer of compensation to
subagents or buyer/tenant representatives or brokers nor make the
submission of an executed offer to purchase/lease contingent on the
listing broker’s agreement to modify the offer of compensation.
(Amended 1/04)
Signs giving notice of property for sale, rent, lease, or exchange shall
not be placed on property without consent of the seller/landlord.
(Amended 1/93)
REALTORS®, prior to or after their relationship with their current firm
is terminated, shall not induce clients of their current firm to cancel
exclusive contractual agreements between the client and that firm.
This does not preclude REALTORS® (principals) from establishing
agreements with their associated licensees governing assignability of
exclusive agreements. (Adopted 1/98, Amended 1/10)
Article 17
In the event of contractual disputes or specific non-contractual disputes
as defined in Standard of Practice 17-4 between REALTORS®
(principals) associated with different firms, arising out of their
relationship as REALTORS®, the REALTORS® shall submit the dispute to
arbitration in accordance with the regulations of their Board or Boards
rather than litigate the matter.
In the event clients of REALTORS® wish to arbitrate contractual
disputes arising out of real estate transactions, REALTORS® shall
arbitrate those disputes in accordance with the regulations of their
Board, provided the clients agree to be bound by the decision.
The obligation to participate in arbitration contemplated by this Article
includes the obligation of REALTORS® (principals) to cause their firms
to arbitrate and be bound by any award. (Amended 1/01)
The filing of litigation and refusal to withdraw from it by REALTORS®
in an arbitrable matter constitutes a refusal to arbitrate. (Adopted
2/86)
Article 17 does not require REALTORS® to arbitrate in those
circumstances when all parties to the dispute advise the Board
in writing that they choose not to arbitrate before the Board.
(Amended 1/93)
REALTORS®, when acting solely as principals in a real estate
transaction, are not obligated to arbitrate disputes with other
REALTORS® absent a specific written agreement to the contrary.
(Adopted 1/96)
Specific non-contractual disputes that are subject to arbitration
pursuant to Article 17 are:
1) Where a listing broker has compensated a cooperating broker and
another cooperating broker subsequently claims to be the procuring
cause of the sale or lease. In such cases the complainant may name the
first cooperating broker as respondent and arbitration may proceed
without the listing broker being named as a respondent. When
arbitration occurs between two (or more) cooperating brokers and
where the listing broker is not a party, the amount in
123
dispute and the amount of any potential resulting award is limited
to the amount paid to the respondent by the listing broker and any
amount credited or paid to a party to the transaction at the direction
of the respondent. Alternatively, if the complaint is brought against
the listing broker, the listing broker may name the first cooperating
broker as a third-party respondent. In either instance the decision of
the hearing panel as to procuring cause shall be conclusive with
respect to all current or subsequent claims of the parties for
compensation arising out of the underlying cooperative transaction.
(Adopted 1/97, Amended 1/07)
2) Where a buyer or tenant representative is compensated by the
seller or landlord, and not by the listing broker, and the listing
broker, as a result, reduces the commission owed by the seller or
landlord and, subsequent to such actions, another cooperating
broker claims to be the procuring cause of sale or lease. In such
cases the complainant may name the first cooperating broker as
respondent and arbitration may proceed without the listing broker
being named as a respondent. When arbitration occurs between
two (or more) cooperating brokers and where the listing broker is
not a party, the amount in dispute and the amount of any potential
resulting award is limited to the amount paid to the respondent by
the seller or landlord and any amount credited or paid to a party to
the transaction at the direction of the respondent. Alternatively, if
the complaint is
brought against the listing broker, the listing
broker may name the first cooperating broker as a third-party
respondent. In either instance the decision of the hearing panel as
to procuring cause shall be conclusive with respect to all current or
subsequent claims of the parties for compensation arising out of
the underlying cooperative transaction. (Adopted 1/97, Amended
1/07)
buyer or tenant and, as a result, the listing broker reduces the
commission owed by the seller or landlord and, subsequent to such
actions, another cooperating broker claims to be the procuring
cause of sale or lease. In such cases the complainant may name the
first cooperating broker as respondent and arbitration may proceed
without the listing broker being named as a respondent.
Alternatively, if the complaint is brought against the listing broker,
the listing broker may name the first cooperating broker as a thirdparty respondent. In either instance the decision of the hearing
panel as to procuring cause shall be conclusive with respect to all
current or subsequent claims of the parties for compensation
arising out of the underlying cooperative transaction. (Adopted
1/97)
4) Where two or more listing brokers claim entitlement to
compensation pursuant to open listings with a seller or landlord
who agrees to participate in arbitration (or who requests arbitration)
and who agrees to be bound by the decision. In cases where one of
the listing brokers has been compensated by the seller or landlord,
the other listing broker, as complainant, may name the first listing
broker as respondent and arbitration may proceed between the
brokers. (Adopted 1/97)
seller or landlord, and not by the listing broker, and the listing
broker, as a result, reduces the commission owed by the seller or
landlord and, subsequent to such actions, claims to be the
procuring cause of sale or lease. In such cases arbitration shall be
between the listing broker and the buyer or tenant representative
and the amount in dispute is limited to the amount of the reduction
of commission to which the listing broker agreed. (Adopted 1/05)
124
The obligation to arbitrate established in Article 17 includes disputes
between REALTORS® (principals) in different states in instances
where, absent an established inter-association arbitration agreement,
the REALTOR® (principal) requesting arbitration agrees to submit to
the jurisdiction of, travel to, participate in, and be bound by any
resulting award rendered in arbitration conducted by the
respondent(s) REALTOR®’s association, in instances where the
respondent(s) REALTOR®’s association determines that an arbitrable
issue exists. (Adopted 1/07)
The Code of Ethics was adopted in 1913. Amended at the Annual
Convention in 1924, 1928, 1950, 1951, 1952, 1955, 1956, 1961, 1962,
1974, 1982, 1986, 1987, 1989, 1990, 1991, 1992, 1993, 1994, 1995,
1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006,
2007, 2008 2009 and 2010.
Explanatory Notes
The reader should be aware of the following policies which have been
approved by the Board of Directors of the National Association:
In filing a charge of an alleged violation of the Code of Ethics by a
REALTOR®, the charge must read as an alleged violation of one or more
Articles of the Code. Standards of Practice may be cited in support of
the charge.
The Standards of Practice serve to clarify the ethical obligations
imposed by the various Articles and supplement, and do not substitute
for, the Case Interpretations in Interpretations of the Code of Ethics.
Modifications to existing Standards of Practice and additional new
Standards of Practice are approved from time to time. Readers are
cautioned to ensure that the most recent publications are utilized.
®
© 2011, NATIONAL ASSOCIATION OF REALTORS , All Rights Reserved
Form No. 166-288 (12/09)

New Member Orientation - Greater Lehigh Valley Realtors

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