Does AI know the Code of Ethics and MLS policy better than you?
Google's AI tools can produce an audio podcast and study guide faster than it would take you to drive to a training class. And, it's surprisingly really good considering I only uploaded the files.
In this post, you will see a section on MLS Policy and another on the Code of Ethics. Each was created by uploading a publicly available PDF on the National Association of Realtors website to Google’s AI tool. Listen to each of the podcasts and review the cliff notes to verify the accuracy and discuss the accuracy in the comments.
MLS Policy
Key Concepts and Definitions
Multiple Listing Service (MLS): A facility, managed under the rules of a Realtor® association, through which brokers establish contractual offers of cooperation and compensation to other brokers. It allows for the widespread dissemination of listing information to facilitate cooperative sales efforts and the compilation of data for appraisals.
MLS Participant: A broker who is authorized to submit listings to and receive information from the MLS, and who agrees to abide by the MLS rules and regulations. This may or may not require association membership, depending on local MLS policy.
Listing Agreement: A contract between a seller and a broker authorizing the broker to market and sell the property. The handbook defines various types, implying different levels of service and exclusivity.
Listing Content: The information provided about a property listed on the MLS, as defined by the MLS rules. Participants are responsible for the accuracy of this data.
IDX (Internet Data Exchange): A policy that allows MLS Participants to display other Participants' listings on their own websites for advertising purposes, subject to certain rules and regulations.
VOW (Virtual Office Website): An internet brokerage service offered by MLS Participants to their own clients, through which clients can access MLS information. The policy governing VOWs outlines specific requirements and restrictions.
Clear Cooperation: A policy requiring that within one business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other participants.
Lock Box: A secure device used to store property keys, allowing authorized individuals access to listed properties for showings. The handbook outlines security requirements and eligibility for keyholders.
Participant vs. Subscriber/User: While Participants are typically principal brokers, MLSs may categorize non-principal brokers, sales licensees, and appraisers affiliated with Participants as Subscribers or Users, who are also subject to MLS rules.
Core Policy Areas
Antitrust Compliance: MLS operations must adhere to antitrust laws, ensuring fair competition among brokers.
Structure and Governance: The handbook provides model governance provisions for MLSs, whether operated as a committee of an association or as a separate subsidiary.
Administration and Operational Issues: This section covers procedures for access, indoctrination, effective dates of policy changes, data submission by appraisers, naming conventions, categorization of services, and rule changes.
Data Management: Policies regarding current listings (submission, termination, exclusive listings), sold/comparable/off-market information, and statistical reports are detailed.
Advertising: Rules govern print and electronic advertising, including IDX and VOW policies, use of MLS information, and transmittal to aggregators.
Participants' Rights: This section outlines the rights of MLS Participants, including optional participation, access, presentation of offers, showings, Code of Ethics adherence, arbitration, ownership of listing content, and data feeds.
Enforcement of Rules: The handbook specifies appropriate procedures for rules enforcement, including the use of fines and disciplinary guidelines.
Compensation: The policy states that there should be no offers of compensation to other brokers included directly within the MLS.
Lock Box/Key Repositories: Detailed policies cover security requirements, key deposits, and centralized key repositories.
Fair Housing: MLS policies must comply with fair housing laws, prohibiting discrimination.
Data Standards: Reference is made to Real Estate Transaction Standards (RETS) and RESO Standards for data management.
Areas for Further Consideration
The handbook emphasizes local control and options for MLSs in certain areas, such as limited service listings and fees for data downloading.
The relationship between the National Association of Realtors®, local associations, and independent MLSs is addressed.
The importance of accurate listing data and timely reporting of status changes is highlighted.
The proper use and reproduction of MLS information are subject to specific guidelines.
The ethical obligations of MLS Participants, particularly regarding the solicitation of clients under exclusive agreements, are referenced through the Code of Ethics.
Quiz: Multiple Listing Service (MLS) Policies
Answer the following questions in 2-3 sentences each based on the provided source material.
What is the fundamental purpose of a Multiple Listing Service (MLS) as described in the handbook's "Purpose" section?
According to the handbook, what distinguishes an "MLS Participant" and what are their basic obligations regarding MLS rules?
What is the significance of the "Clear Cooperation" policy, and when does a listing need to be submitted to the MLS under this rule?
Explain the primary function of the "Internet Data Exchange (IDX)" policy as outlined in the handbook.
What are some of the key restrictions placed on the use of MLS information by individuals who access it through an IDX feed?
According to the handbook, can an MLS Participant be required to transfer ownership rights of their listings to the MLS to maintain participation? Explain briefly.
What are the requirements for holding a lock box key if the lock box system is operated by an association-owned MLS?
How should funds collected as deposits for lock box keys be handled by a member association or its MLS?
What are the implications of the handbook's policy regarding "No Compensation Offers in MLS"?
What is the handbook's stance on representing or implying that a real estate firm directly operates an MLS or that consumers have direct access to MLS databases?
Answer Key for MLS Policies Quiz
The primary purpose of an MLS is to create a facility where Realtors® can effectively invite other brokers into cooperative agreements for the sale of their listings and share necessary information for such cooperation. It also serves to accumulate and disseminate information for appraisals and allows appraisers to contribute to common databases.
An MLS Participant is a broker authorized to submit listings and receive information from the MLS, agreeing to abide by its rules and regulations. Their obligations include providing accurate listing data and adhering to the policies outlined in the handbook.
The Clear Cooperation policy mandates that within one business day of publicly marketing a property, the listing broker must submit it to the MLS for cooperation. This aims to ensure broad exposure and cooperative opportunities for all MLS participants.
The IDX policy allows MLS Participants to display other Participants' listings on their public-facing websites for advertising. This is intended to increase property exposure, subject to rules about display, source attribution, and limitations on the information shared.
Individuals accessing MLS information through an IDX feed are typically restricted from copying, redistributing, or retransmitting the data except in connection with their consideration of purchasing or selling an individual property. They also acknowledge the MLS's ownership and copyright of the database.
No, an MLS Participant generally cannot be required to transfer ownership rights of their listings to the MLS to maintain participation. However, they may be required to grant licenses for the necessary storage, reproduction, compiling, and distribution of listings for MLS purposes.
If the lock box system is operated by an association-owned MLS, every MLS Participant and every affiliated non-principal broker, sales licensee, and licensed or certified appraiser who is legally eligible for MLS access can hold a key. This is contingent upon the execution of a lease agreement with the MLS.
Funds accepted as lock box key deposits must be retained in a separate account by the association or its MLS. These funds are solely for refunding depositors upon the return of the key and cannot be used for any other purpose.
The policy of "No Compensation Offers in MLS" means that offers of compensation to cooperating brokers should not be stated within the MLS listing itself. Compensation arrangements should be handled outside the MLS, often through separate agreements or disclosures.
The handbook explicitly prohibits MLS Participants, Subscribers, and affiliated licensees from representing or implying that their firm operates an MLS or that consumers have direct access to MLS databases reserved for Participants and Subscribers. They can, however, represent that information they are authorized to provide is available on their websites.
Essay Format Questions
Discuss the balance between mandatory national MLS policies and the flexibility afforded to local Realtor® associations and MLSs in the "PDF-HMLP-2025-Handbook-on-Multiple-Listing-Policy-2025-01-23 (2).pdf". Provide specific examples of areas where local discretion is permitted and analyze the potential benefits and challenges of this approach.
Analyze the evolution of information sharing and advertising regulations within the MLS framework as evidenced by the policies outlined in the handbook. Consider the impact of the Internet and data aggregators on these policies and discuss the ongoing efforts to balance transparency, intellectual property rights, and fair competition.
Evaluate the significance of the "Clear Cooperation" policy in the context of modern real estate practices. Discuss its intended benefits for consumers and brokers, potential challenges in its implementation, and its role in fostering cooperation and broader market exposure for listed properties.
Examine the handbook's provisions regarding access to MLS services for non-members of Realtor® associations. Analyze the rationale behind these policies, the eligibility requirements for non-member participation, and the implications for the structure and inclusivity of the MLS.
Critically assess the policies related to data usage for valuation purposes, including automated valuations, as described in the handbook. Discuss the permissible and prohibited uses of MLS data in appraisals and the safeguards in place to protect confidential information and intellectual property rights.
Glossary of Key Terms
Aggregator: A third-party entity that collects and displays real estate listings from various sources, including MLSs.
Arbitration: A method of dispute resolution where a neutral third party hears both sides of a disagreement and makes a binding decision.
Association of Realtors®: A local or state organization affiliated with the National Association of Realtors® (NAR), whose members agree to abide by the NAR's Code of Ethics.
Automated Valuation Model (AVM): A computer-generated estimate of a property's value using mathematical modeling and data analysis.
Brokerage Back Office Data Feed: A stream of MLS data specifically intended for a Participant's internal business operations and management.
Cooperating Broker: A broker who works with the listing broker to find a buyer for a property.
Data Feed: A stream of data provided in a standardized format, allowing for the electronic transfer of information.
Exclusive Agency Listing: A listing agreement where the seller grants one broker the exclusive right to market the property, but the seller retains the right to sell the property themselves without paying a commission.
Exclusive Right-to-Sell Listing: A listing agreement where one broker is given the exclusive right to market and sell the property, and is entitled to a commission regardless of who finds the buyer.
Fair Housing: Laws and regulations that prohibit discrimination in housing based on protected characteristics such as race, color, religion, sex, handicap, familial status, or national origin.
Limited Service Listing: A listing agreement where the listing broker offers fewer services than a traditional full-service listing, often impacting cooperation with other brokers.
MLS Entry-Only Listing: A type of listing where the broker primarily enters the listing into the MLS but may offer limited additional services.
Net Listing: A listing agreement where the broker's commission is any amount exceeding a net price specified by the seller; these are often discouraged or prohibited due to potential conflicts of interest.
Non-Principal Broker/Sales Licensee: Real estate agents and associate brokers who work under the supervision of a principal broker.
Office Exclusive Listing: A listing that is marketed only within the listing broker's own firm and is not submitted to the MLS (subject to Clear Cooperation policy).
Open Listing: A non-exclusive listing agreement where the seller can employ multiple brokers; only the broker who finds a ready, willing, and able buyer earns a commission.
Protection Clause: A clause in a listing agreement that protects the broker's commission for a certain period after the agreement expires if the property is sold to a buyer introduced by the broker during the listing term.
Real Estate Owned (REO): Property owned by a lender (typically a bank) after an unsuccessful foreclosure sale.
RESO Standards: Real Estate Standards Organization standards aimed at creating uniform data standards for the real estate industry.
RETS (Real Estate Transaction Standards): An earlier set of data standards for real estate transactions, now largely superseded by RESO Standards.
Subscriber: In the context of MLS, typically a licensed real estate professional affiliated with a Participant who has access to the MLS under the Participant's account.
User: Similar to a Subscriber, often referring to individuals authorized to access and use the MLS under a Participant's account.
Code of Ethics
Executive Summary:
This briefing document outlines the main themes and important ideas within the provided excerpts of the National Association of REALTORS® (NAR) Code of Ethics and Standards of Practice, effective January 1, 2025. The document emphasizes the high ethical obligations of REALTORS® to clients, customers, the public, and fellow professionals. Key themes include the primacy of client interests (while maintaining honesty with all parties), the importance of cooperation among brokers, the requirement for transparency and disclosure in all dealings, the commitment to fair housing and equal service, the need for professional competence, and the emphasis on resolving disputes through mediation and arbitration. The Code establishes duties that may exceed legal requirements, with the law taking precedence in cases of conflict.
Main Themes and Important Ideas:
1. Foundational Principles and Responsibilities:
Higher Ethical Standard: The Code establishes obligations for REALTORS® that may be higher than those mandated by law. However, legal obligations always take precedence in case of conflict.
Preamble's Emphasis on Land and Society: The Preamble underscores the significant social responsibility of REALTORS®, stating, "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." It highlights the duty to promote the highest and best use of land, adequate housing, functioning cities, productive industries, and a healthy environment.
Dedication to Professional Standards: REALTORS® are expected to be "zealous to maintain and improve the standards of their calling" and share responsibility for the profession's integrity and honor.
Continuous Learning and Sharing: The Code emphasizes the importance of staying informed on real estate issues and willingly sharing knowledge and experience.
Addressing Unethical Conduct: REALTORS® have a responsibility to identify and eliminate practices that may harm the public or discredit the profession. They are specifically obligated to report direct personal knowledge of misconduct involving misappropriation, willful discrimination, or fraud resulting in substantial economic harm.
Importance of Cooperation: Recognizing that cooperation benefits clients, REALTORS® are urged to promote exclusive representation, avoid unfair competitive advantages, and offer objective and professional opinions when sought.
Integrity and the Golden Rule: The term REALTOR® is associated with "competency, fairness, and high integrity." The Golden Rule ("Whatsoever ye would that others should do to you, do ye even so to them") is presented as a guiding principle.
2. Duties to Clients and Customers:
Primacy of Client Interests: Article 1 clearly states, "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 duty is primary but does not negate the obligation to treat all parties honestly.
Honesty in Non-Agency Capacities: Even when not acting as agents, REALTORS® are obligated to treat all parties honestly.
Obligations as Principals: Standard of Practice 1-1 clarifies that REALTORS® acting as principals in a transaction remain bound by the Code of Ethics.
Scope of Ethical Duties: Standard of Practice 1-2 emphasizes that the Code applies to all real estate-related activities, regardless of the medium (in-person, electronic, etc.), but duties exclusive to agents by law are not imposed on those in non-agency roles.
Truthfulness in Securing Listings and Buyer/Tenant Representation: REALTORS® must not mislead owners about market value (1-3) or buyers/tenants about potential savings (1-4).
Disclosed Dual Agency: Representing both sides of a transaction is permissible only with full disclosure and informed consent from all parties (1-5).
Objective and Timely Submission of Offers: Offers and counter-offers must be submitted objectively and as quickly as possible (1-6, 1-8). Listing brokers must continue to submit all offers until closing unless waived in writing (1-7).
Confidentiality: The obligation to preserve confidential information continues after the termination of the professional relationship, with specific exceptions (client consent, court order, preventing a crime, defending against accusations) (1-9). Information about latent material defects is not considered confidential.
Competent Property Management: REALTORS® managing property must do so competently with due regard for the rights, safety, and health of tenants (1-10, 1-11).
Disclosure of Cooperation Policies and Potential for Dual Agency: When entering into listing (1-12) and buyer/tenant (1-13) agreements, REALTORS® must inform clients about company policies on cooperation, compensation arrangements, and the potential for dual agency. They must also inform buyers/tenants that sellers may not keep offer terms confidential unless legally required.
Fees for Valuations: Appraisal fees cannot be contingent on the valuation amount (1-14).
Disclosure of Offers: With seller approval, REALTORS® must disclose the existence of offers to inquiring buyers or cooperating brokers, including who obtained the offer (1-15).
Authorized Access: REALTORS® cannot access or use listed property without the owner's authorization (1-16).
Truthfulness in Representations: Article 2 prohibits exaggeration, misrepresentation, or concealment of pertinent facts. However, REALTORS® are not obligated to discover latent defects or advise on matters outside their license scope or confidential information under state law.
Disclosure of Adverse Factors: REALTORS® are only obligated to disclose adverse factors reasonably apparent to someone with their licensing expertise (2-1).
False Consideration: REALTORS® shall not be party to naming a false consideration in documents (2-4).
Non-Material Facts: Facts legally defined as "non-material" or expressly excluded from disclosure are not considered "pertinent" under Article 2 (2-5).
3. Cooperation with Other Brokers:
General Obligation to Cooperate: Article 3 mandates cooperation with other brokers unless it is not in the client's best interest. This does not include an automatic obligation to share commissions.
Terms of Cooperation and Compensation: Listing brokers establish the terms of cooperation, and cooperating brokers should ascertain compensation terms before beginning work (3-1). Changes in compensation must be communicated before an offer is submitted (3-2). Agreements to change compensation are permissible (3-3).
Disclosure of Dual or Variable Rate Commissions: Listing brokers must disclose the existence of such arrangements to potential cooperating brokers (3-4).
Prompt Disclosure by Subagents: Subagents must promptly disclose all pertinent facts to the principal's agent (3-5).
Disclosure of Accepted Offers: REALTORS® must disclose the existence of accepted offers to cooperating brokers (3-6).
Transparency When Seeking Information: When seeking information from another REALTOR® about a managed or listed property, REALTORS® must disclose their status and interest (personal or on behalf of a client) (3-7).
Accurate Representation of Access: REALTORS® shall not misrepresent the availability of access (3-8) or provide access on unauthorized terms (3-9).
Scope of Cooperation Duty: The duty to cooperate involves sharing information and making property available for showing when in the seller's/landlord's best interest (3-10).
Non-Discrimination in Cooperation: REALTORS® cannot refuse to cooperate based on protected characteristics (race, color, etc.) (3-11).
4. Disclosure of Interests and Compensation:
Disclosure of Ownership or Contemplated Interest: REALTORS® with a present or contemplated interest in a property must disclose this in writing to all parties before any agreement is signed (Article 4, 4-1). This includes representing themselves, immediate family, their firm, or entities in which they have a legal interest. The specific nature of the interest or the client's identity does not need to be disclosed, only that an interest exists (4-2).
Disclosure of Interest in Providing Professional Services: REALTORS® shall disclose any present or contemplated interest when providing professional services concerning a property (Article 5).
Disclosure of Compensation from Third Parties: REALTORS® cannot accept commissions, rebates, or profits on client expenditures without the client's knowledge and consent (Article 6). They must also disclose any financial benefits or fees received for recommending other real estate products or services (e.g., insurance, financing).
Disclosure of Interest in Recommended Services: REALTORS® must disclose any direct interest they have in an organization or business entity they recommend to a client (6-1).
Disclosure of Multiple Compensation: Accepting compensation from more than one party in a transaction requires disclosure to all parties and the informed consent of the REALTOR®'s client(s) (Article 7).
5. Handling Funds and Agreements:
Separate Trust Accounts: Client funds (escrows, trust funds, etc.) must be kept in a separate account (Article 8).
Written and Understandable Agreements: REALTORS® must ensure, whenever possible, that all real estate agreements are in writing, in clear language, expressing specific terms and obligations. Copies must be provided to all parties (Article 9).
Keeping Documents Current: Reasonable care should be taken to ensure documents are kept current through written extensions or amendments (9-1).
Electronic Agreements: When assisting with electronic contractual relationships, REALTORS® must make reasonable efforts to explain the nature and terms before agreement (9-2).
6. Duties to the Public and Fair Housing:
Non-Discrimination in Services and Employment: Article 10 prohibits denying equal professional services or discriminating in employment practices based on protected characteristics (race, color, etc.). REALTORS® cannot be party to any discriminatory plan.
Restrictions on Volunteering Neighborhood Composition Information: When selling or leasing a residence, REALTORS® shall not volunteer information about the racial, religious, or ethnic composition of a neighborhood or engage in panic selling. Other demographic information may be provided (10-1).
Permitted Use of Demographic Data (Non-Residential): In non-residential contexts, demographic data can be provided if deemed necessary for the assignment and obtained from a reliable source, with disclosure of the source and any modifications (10-2).
Non-Discriminatory Advertising: Advertising cannot indicate any preference, limitation, or discrimination based on protected characteristics (10-3).
Definition of "Real Estate Employment Practices": This term includes employees and independent contractors providing real estate services, as well as supporting administrative staff (10-4).
Prohibition of Harassing/Hate Speech: REALTORS® must not use harassing speech, hate speech, epithets, or slurs based on protected characteristics (10-5).
7. Professional Competence and Integrity:
Standards of Practice and Competence: Services provided must conform to the standards reasonably expected in the specific real estate disciplines engaged in (Article 11). REALTORS® should not undertake specialized services outside their competence without assistance from a competent professional or full disclosure to the client.
Opinions of Real Property Value: Standard of Practice 11-1 outlines specific requirements for preparing opinions of value or price, including knowledge of the property type and area, access to necessary information, disclosure of interests, basis for the opinion, and whether inspections were conducted.
Interpretation of Competence Standards: Obligations in non-appraisal disciplines should be interpreted based on the competence and practice reasonably required by clients and the public (11-2).
Consultive Services: Advice given for a fee (not commission) should be objective, and the fee should not be contingent on the advice given (11-3).
Scope of Required Competency: Competency relates to contracted services, Code of Ethics duties, and legal/regulatory duties (11-4).
Honest and Truthful Communications: REALTORS® must be honest and truthful in all real estate communications and present a true picture in advertising (Article 12). Their professional status must be readily apparent.
"Free" Services: REALTORS® cannot represent services as free unless they receive no financial compensation (12-1).
Inducements: Offering inducements is not inherently unethical but requires care and candor, with clear disclosure of all terms (12-3).
Authority to Offer/Advertise: Property cannot be offered or advertised without authority, and listed prices must be accurate (12-4).
Disclosure of Firm Name in Advertising: All advertising must clearly disclose the REALTOR®'s firm name (12-5).
Advertising Owned Property: REALTORS® advertising their own unlisted property must disclose their ownership and REALTOR®/licensee status (12-6).
"Sold" Claims: Only the listing or cooperating broker who participated in the transaction can claim to have "sold" the property, with restrictions on "sold" signs before closing (12-7).
Website Accuracy: REALTORS® must ensure information on their websites is current and take corrective action when it is not (12-8). Firm and individual websites must disclose licensure information clearly (12-9).
Online Representations: The obligation for a true picture includes online content, prohibiting deceptive framing, manipulation of content, misleading use of metatags, and unauthorized use of others' content (12-10).
Disclosure of Consumer Information Sharing: Intentions to share or sell consumer data gathered online must be clearly disclosed (12-11).
Misleading URLs/Domain Names: REALTORS® cannot use or register URLs/domain names that present a false picture (12-12).
Use of Professional Credentials: Only legitimately earned credentials can be used and displayed (12-13).
Unauthorized Practice of Law: REALTORS® shall not engage in the unauthorized practice of law and should recommend legal counsel when needed (Article 13).
8. Professional Standards and Dispute Resolution:
Cooperation in Professional Standards Proceedings: REALTORS® must present all pertinent facts when charged with unethical practice or asked to cooperate in investigations (Article 14). They cannot disrupt or obstruct such processes.
Single Disciplinary Proceeding: REALTORS® cannot be subject to disciplinary proceedings in more than one Board for the same transaction/event (14-1).
Confidentiality of Proceedings: Unauthorized disclosure of allegations, findings, or decisions from ethics or arbitration hearings is prohibited (14-2).
Protection Against Retaliation: REALTORS® shall not obstruct proceedings by threatening legal action for libel, slander, or defamation based on filed complaints or testimony (14-3).
Prohibition of Multiple Complaints: Intentionally filing multiple ethics complaints based on the same event is prohibited (14-4).
Avoiding False or Misleading Statements About Other Professionals: REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals or their businesses (Article 15). This includes not publishing or repeating such statements online (15-2, 15-3).
Avoiding False Ethics Complaints: Filing false or unfounded ethics complaints is prohibited (15-1).
9. Relations with Other REALTORS®:
Respecting Exclusive Agreements: REALTORS® shall not engage in practices inconsistent with exclusive representation or brokerage agreements that other REALTORS® have with clients (Article 16).
Permitted Business Practices: Article 16 does not prohibit aggressive but ethical business practices or disagreements about compensation (16-1).
General Announcements: General announcements describing services are permitted even if some recipients have exclusive agreements with others (16-2). However, targeting clients exclusively listed with others through specific solicitations (based on signs, MLS data, etc.) is unethical.
Offering Different or Future Services: Contacting another broker's client to offer a different type of real estate service or the same service after the existing agreement expires is generally allowed (16-3). MLS information cannot be used to target other REALTORS®' clients for similar services.
Soliciting Listings Currently Listed: Soliciting a currently exclusively listed property is prohibited unless the listing broker refuses to disclose the listing's expiration date and type, in which case the REALTOR® may contact the owner to secure this information and discuss future listing terms (16-4).
Soliciting Buyer/Tenant Agreements: Similar rules apply to soliciting buyers/tenants subject to exclusive agreements (16-5).
Client-Initiated Contact: REALTORS® contacted by another REALTOR®'s client about creating an exclusive relationship for the same service can discuss future terms or enter into an agreement effective upon the existing agreement's expiration (16-6).
Past Relationships: Previous exclusive relationships do not prevent other REALTORS® from seeking future business (16-7).
Entering Similar Agreements After Expiration: Entering into a similar agreement after a prior one has expired is permissible (16-8).
Duty to Inquire About Existing Agreements: REALTORS® have an affirmative obligation to reasonably determine if a prospect is subject to a current exclusive agreement before entering into a representation agreement (16-9).
Disclosure of Buyer/Tenant Representation: REALTORS® acting as buyer/tenant representatives must disclose this to the seller/landlord's representative at first contact and provide written confirmation by the execution of the agreement (16-10). Similar disclosure is required on unlisted property directly to the seller/landlord, along with any request for compensation (16-11).
Disclosure of Seller/Landlord Representation: REALTORS® representing sellers/landlords must disclose this to buyers/tenants as soon as practicable, with written confirmation by the execution of the agreement (16-12).
Dealing with Clients Under Exclusive Agreements: All dealings concerning exclusively listed property or clients with exclusive agreements should be conducted with the client's representative, not the client directly, unless with consent or client initiation. REALTORS® should inquire about exclusive agreements before providing substantive services (16-13).
Avoiding Multiple Commissions: REALTORS® should not knowingly obligate non-exclusive clients to pay more than one commission without informed consent (16-14).
Compensation in Cooperative Transactions: Cooperating REALTORS® should be compensated (principal brokers), not their affiliated sales licensees directly without the cooperating broker's express consent (16-15).
Modifying Offers of Compensation: Buyer/tenant representatives cannot use the terms of a purchase/lease offer to modify the listing broker's offer of compensation (16-16).
Extending Offers of Cooperation: REALTORS® cannot extend a listing broker's cooperation/compensation offer to other brokers without consent (16-17).
Using MLS Information: Information from MLS or other cooperation offers cannot be used to refer listing brokers' clients or create buyer/tenant relationships with them unless authorized (16-18).
Placement of Signs: "For sale," "for rent," etc., signs require the seller's/landlord's consent (16-19).
Inducing Cancellation of Agreements: REALTORS® cannot induce clients of their current firm to cancel exclusive agreements before their relationship ends. This doesn't prevent principals from establishing agreements with associated licensees regarding the assignability of exclusive agreements (16-20).
10. Mediation and Arbitration:
Dispute Resolution Between REALTORS®: Contractual and specific non-contractual disputes between REALTORS® from different firms arising from their REALTOR® relationship should be mediated if required by the Board. If not resolved through mediation or if not required, disputes should be submitted to arbitration rather than litigation (Article 17).
Disputes with Clients: REALTORS® should mediate or arbitrate contractual disputes with their clients if the clients agree to be bound by the outcome.
Obligation of Principals: The obligation to participate in mediation and arbitration extends to the REALTOR®'s firm.
Refusal to Arbitrate: Filing litigation in an arbitrable matter constitutes a refusal to arbitrate (17-1).
Waiver of Mediation/Arbitration: REALTORS® are not required to mediate or arbitrate if all parties advise the Board in writing that they choose not to (17-2). However, declining mediation does not remove the duty to arbitrate if the Board requires it.
REALTORS® as Principals: REALTORS® acting solely as principals are not obligated to arbitrate with other REALTORS® absent a specific written agreement (17-3).
Specific Non-Contractual Disputes Subject to Arbitration (procuring cause in cooperative sales): Standard of Practice 17-4 outlines specific compensation disputes in cooperative transactions that are subject to arbitration, even without the listing broker as a direct party in some cases.
Inter-Association Arbitration: The obligation to arbitrate can extend to disputes between REALTORS® in different states under certain conditions (17-5).
Explanatory Notes:
Charges of Code violations must cite specific Articles. Standards of Practice can be used to support the charge.
Standards of Practice clarify the ethical obligations of the Articles and are supplemented by Case Interpretations.
The Code and Standards are subject to periodic modifications, and users should ensure they are using the most recent versions.
This briefing provides a comprehensive overview of the key elements within the provided excerpts of the 2025 NAR Code of Ethics and Standards of Practice. REALTORS® are expected to adhere to these principles in all their professional activities.