What do laws establish between citizens and the government?
What is the relationship between ethics and laws?
“I personally believe that it is wrong to eat meat.” This statement is an example of:
In the rare case that the law and the Code of Ethics conflict with each other, what should Realtors do?
How frequently is the NAR Code of Ethics reviewed?
All of the following are possible consequences of breaching the NAR Code of Ethics EXCEPT:
verbal warning
expulsion
letter of warning
required education
According to the Preamble, the Code of Ethics is based on which ideal?
Leslie is at the dentist. The dentist tells her, “You should get the special deep cleaning.” Leslie asks why she should get the special treatment. The dentist answers, “Oh, it’ll prevent mandibular cancer and general jaw decline.” Leslie doesn’t understand what he means, but it sounds serious, so she gets the expensive treatment. Later, she realizes the dentist was more or less spouting nonsense, and she is furious. Leslie, besides having really clean teeth, is also a real estate agent. When a couple notices some black mold in a house they are interested in buying, Leslie says, “Oh, that’s nothing. All old houses have that. It’s called domicilar fungitis and is very common. You shouldn’t worry about it.” Evaluate this scenario.
Which of the following is the primary responsibility of a Realtor, according to the NAR Code of Ethics?
According to Article 1 of the NAR Code of Ethics, in which situation are Realtors permitted to represent the seller/landlord and buyer/tenant in the same transaction?
Tobias, a Realtor, knows that his buyer-client Fred went to prison many years ago. At a dinner party, someone mentions that they know Fred and tries to gossip about Fred’s “unusual” past. What should Tobias say?
Leo sold a home for his client Lily last year, at which time no issues were disclosed about the roof. Recently, a storm damaged the roof and it was discovered during repair that there was serious leak into the attic that had never been discovered, but had likely developed before the sale. In this situation, did Leo violate Article 2 of the NAR Code of Ethics?
According to Article 3, Realtors shall cooperate with other brokers EXCEPT:
when the other broker is not a member of the local Board of Realtors
when they disagree with the other broker
when another broker doesn’t outline their terms in writing
when cooperation is not in the client’s best interest
Brad is an agent. His contract with Judy, his seller-client, states that he will get a 3% commission. Brad goes above and beyond for Judy, and ends up selling her house for $25,000 over the listing price. After the sale, Brad tells Judy that he thinks it’s only fair that he get a 4% commission, and asks her to consider it. Evaluate this situation.
Sam is a Realtor and recommends a title company to his client. His client decides to use the company and Sam’s brokerage is paid a referral fee. According to the NAR Code of Ethics Article 6, is Sam required to disclose that he received this fee to his client?
Client funds must be deposited into which type of account?
Shelly did some things right in this transaction and some things wrong. Which of these is an ethical obligation that Shelly correctly navigated?
presented all offers to the seller
picked client up at the airport
got the highest possible price for the property
treated other agents with fairness
What ethical lapse did Shelly make in the transaction?
Realtors not involved in the sale or lease of a residence may provide demographic information related to a property, transaction or professional assignment under what circumstance(s)?
Tiera is a Realtor who specializes in property management. One of her tenants is interested in having her list his sushi restaurant for sale. According to Article 11 of the NAR Code of Ethics, is Tiera permitted to handle this listing?
When advertising real estate services or property, what must be published and obvious?
Eric is a broker who was asked by his client to assist with drafting up documents regarding a lawsuit against a contractor that they used for improvements done to a rental property. According to Article 13 of the NAR Code of Ethics, what should Eric do?
Longtime Realtor Leo just started at a new brokerage and is excited to list properties as soon as possible. Unfortunately, there is a delay with getting new signs made for him, and he decides in the meantime to just use his old signs with his former broker’s name. Is this ethical? Why or why not?
Yes, this is ethical as long as Leo’s name is on the signs.
Yes, this is ethical; any “for sale” sign can be placed outside of a listed property.
No, this is unethical because Leo did not get his former broker’s permission.
No, this is unethical because it is not truthful advertising.
Realtor Hazel recommends a home staging company to her new client, Raymond. However, Hazel does not tell Raymond that she would receive a referral fee if he chooses to use that company. Is this ethical? Why or why not?
This is ethical because Raymond did not ask Hazel if she would receive a referral fee.
This is ethical because Realtors are not required to disclose referral fees to clients.
This is not ethical because Realtors are required to disclose fees received for using recommended services.
This is not ethical because Realtors are not permitted to recommend outside companies.
After appraising their property for $510,000, Richard tells his clients that his appraisal fee is an additional $400 for any property appraised over $500,000. Is this ethical? Why or why not?
Yes, property appraisal fees are dependent on the value of the property.
No, fees cannot change due to the value of the appraisal.
No, he should have told them about the fee before appraising the property.
Yes, unless his clients signed an agreement prior to the appraisal.
A Realtor is listing a property that needs exterior paint and other cosmetic work done. To show the potential of the property, she edits the listing photos to show the home with a fresh coat of paint and professional landscaping. Is this ethical? Why or why not?
Yes, she is making sure her client gets top dollar.
No, Realtors are not permitted to use photo editing tools.
No, she is not accurately representing the property.
Yes, buyers will be able to judge the condition of the property once they view it in person.
At what point may a Realtor disclose a client’s confidential information?
when their agency or non-agency relationship has ended
after five years
Confidential information can never be disclosed.
when all agreements and contracts have expired
Alfonso is an agent who is willing to do anything for a client. He prides himself on how far he’ll go to make sure his clients’ deals are successful. He has decided to apply this philosophy to other parts of his job, including getting leads. Which of these lead-generating techniques is unethical and should be avoided?
Agent Rigoberto accidentally posted some false negative information about another agency on his Facebook page. He believed it to be true when he posted it, but has now learned it is false. What actions should Rigoberto take to make it right, according to the Code of Ethics?
Which of these marketing moves would be prohibited by Article 16?
Homeowner Pia was in an exclusive listing contract with an agent, Sarah. The contract expired without a sale. An agent with a different brokerage, Jamal, contacted Pia about listing her house with him. Is this ethical, according to Article 16? Why or why not?
When is it ethical to place a yard sign in front of a client’s home?
What is the difference between mediation and arbitration?
Jordi, a Realtor, goes with a buyer client to an open house. When his client asks the listing agent for the Seller’s Disclosure, the agent tells him he doesn’t have the disclosure on hand and the house is fine. Jordi also overhears the listing agent giving quick, lazy answers to other questions. Later, Jordi calls the seller and tells him about the listing agent’s behavior. Jordi also tells the seller that he would be happy to represent him instead. Evaluate this situation.
Lianna is a listing agent and a Realtor. Her client asks that she turn down offers from a certain buyer’s agent because of some bad real estate transactions in the past. What should Lianna do?
Lianna should remind the client that because she is a Realtor, she must always cooperate with other license holders.
Lianna should remind the client that because she is a Realtor, she (the Realtor) gets to decide acceptance of offers.
Lianna should do as her client tells her, and tell the buyer’s agent, in detail, why she can’t work with them.
Lianna should respect the client’s wishes.
If the Code of Ethics and the law conflict, which takes precedence?
the law
the Code of Ethics
it depends on whether it is a state or federal law
the National Association of Realtors
Audrey is a Realtor. When writing advertisements, she should do all of the following EXCEPT:
disclose the name of her real estate company
send out ads only to houses already listed with other firms
put the word “Realtor” in the ad somewhere
quote sources for any facts that she cites
María is a Realtor. She has a few people on her email list who have signed with other agents. Does this violate NAR’s Code of Ethics, specifically Article 16, which prohibits agents from interfering with exclusive representation agreements?
No. Article 16 is not intended to prevent marketing practices such as María’s.
It depends on whether or not María knows that these people have signed with other agents.
Yes. María’s use of email lists in this way violates Article 16.
It depends on how often María updates her email list.
Broker Bart places some of a client’s funds into his personal account. He then uses some of that money to pay for a new air-conditioning unit in his home. Which action is commingling, and which is conversion?
Both actions are conversion.
Bart commingled when he placed client funds in his personal account. He committed conversion when he used the commingled money to buy an air-conditioning unit.
Bart committed conversion when he placed client funds in his personal account. He commingled when he used the money to buy an air-conditioning unit.
Both actions are commingling.
Which of these is one of the advantages arbitration has over a lawsuit for settling disputes?
Julie and Lee are agents who agree to mediation to settle a dispute. They come to a resolution, and sign an agreement. A week later, Lee decides that he actually would rather settle the issue via arbitration. Is this allowed? Why or why not?
Which of these most accurately describes what happens in mediation after both sides present their points of view?
What role does the Grievance Committee play in the arbitration process?
Leticia is an agent who believes she witnessed another agent breaking the Code of Ethics. What should her next move be?
Which of these must be included with an ethics complaint?
Ethics trials are important because they educate Realtors who have broken the Code of Ethics. What is one other reason that they are important?
Which of these is a potential punishment for Realtors found to be breaking the Code of Ethics?
What is the name for the disciplinary philosophy advocated by NAR?
Jeff is a Realtor representing a buyer. He knows that the listing agent is desperate for the sale, and also that his buyer is going to make an offer. Jeff tells the listing agent, “My client will make an offer if you give me 4% of the commission instead of 3%.” Evaluate this situation.
There is no rule against what Jeff has done, and he’s helped put money into the listing agent’s pocket. Good Jeff!
As long as Jeff gets his client’s agreement beforehand, this behavior is allowed. Acceptable Jeff!
Jeff should not use a buyer he is bringing to the table as leverage to get the listing agent to change their commission split. Bad Jeff!
While not acting completely ethically, Jeff is ultimately helping the listing agent get a commission they would otherwise not get. Mediocre Jeff!
What is the relationship between “procuring cause” and arbitration?
“Procuring cause” is a significant ethical violation, and arbitration will decide penalties, if necessary.
Most arbitrations are focused on whether or not a broker was the “procuring cause” of a transaction.
Cooperating brokers often use “procuring cause” to avoid arbitration.
“Procuring cause” tends to be the result of arbitrations.
Realtor Norma just found her client the perfect apartment. Norma’s client is offering her a finder’s fee and the apartment complex is offering a referral fee. Who must consent to Norma receiving both of these fees?
Norma’s broker-in-charge
the apartment complex property manager
Norma’s client
both parties involved
Shannon, a Realtor, is expelled from her local Realtor association because of an ethics violation. What is a likely consequence?
She will be arrested if she tries to practice real estate.
She will no longer have MLS access.
She will permanently lose her real estate license.
She will temporarily lose her real estate license.
Mel is a Realtor talking to a potential client for the first time. During this conversation, she asks, “Are you currently in an exclusive representation agreement with any other agent?” The client gets annoyed and says, “Of course not. I would never call you if that was the case.” Should Mel have asked that question?
Yes. It’s Mel’s duty as an agent to make a reasonable effort to find out if a person is currently in a valid exclusive agreement before signing on to work with them.
Mel needed to find out this information, but she should not have asked the client directly about it.
No. The question implied that the client might have been acting unethically. Remember, the client always comes first!
Yes. However, Mel should have instead said, “You do know it is illegal, but some people do it anyway, I need to know: Are you currently in an exclusive representation agreement with any other agent?”
Nikolas is a Realtor. He has represented Cassadine Commercial Properties for years in their transactions. He is fond of saying that the Cassadine business is “his.” As a result, other Realtors generally stay away. Evaluate this situation.
The NAR Code of Ethics states that once a client, always a client. The other agents are correct in not contacting Cassadine Commercial Properties, even after the exclusive representation agreement expires.
Nikolas is being pretty annoying. While not 100% ethical, it would be understandable if agents tried to steal Cassadine Commercial Properties away from Nikolas.
Nikolas doesn’t get dibs on people he’s worked with in the past. Once a person’s exclusive agreement runs out, it is perfectly acceptable for other agents to contact them about working together.
As a professional courtesy, it is acceptable for the other agents not to pursue any future business with Cassadine Commercial Properties
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Jim is the listing agent for a home in a desirable neighborhood but isn’t familiar with the school system where the home is located. He assumes they are great since the neighborhood is so popular. A prospective buyer tours the home and asks Jim about the schools, and Jim replies that they are some of the best in the state. Is this ethical?
No, Jim is exaggerating and possibly misrepresenting the property.
No, Realtors should not make broad statements about school districts.
Yes, as long as Jim’s assumption is correct.
Yes, Jim is not responsible for representing the local school district.
Matteo is a Realtor selling his own home. He gets into a dispute with the Realtor acting as the buyer’s agent. Does he have to resolve the dispute through arbitration?
No, under no circumstance does Matteo have to solve the dispute via arbitration.
Matteo only has to solve the dispute via arbitration if this requirement was made verbally beforehand.
Yes, Matteo must solve the dispute via arbitration.
Matteo only has to solve the dispute via arbitration if this requirement was made in writing beforehand.
Jen, a Realtor, sees a negative tweet about Ralph Realty, a brokerage that she’s heard bad things about. She is angry about the brokerage’s bad service, and retweets the tweet. She later finds out that the tweet was two years old, posted before the brokerage came under new management. Jen realizes that Ralph Realty has turned over a new leaf and now provides very good service. What should she do?
Jen should delete the tweet and issue an apology and clarification.
Jen should apologize to Ralph Realty.
Jen should delete the tweet.
Jen does not need to do anything.
Realtor Bob’s client has asked him to appraise their commercial building. Since Bob specializes in residential real estate, he discloses to his client that he is not an expert in appraisals or commercial real estate, and also says that he will need to consult an expert for assistance. Are Bob’s actions ethical? Why or why not?
No, Realtors cannot ask other Realtors to assist them with listings.
No, only Realtors who specialize in commercial real estate can list this kind of property.
Yes, Bob disclosed his lack of expertise upfront and is consulting an expert for assistance.
Yes, Bob went above and beyond as he didn’t need to disclose this information to his client.
Erik’s client Diana fosters kittens and has requested that when showing her house, he does not open the closet where they are kept in the main bedroom. While showing the house, a potential buyer asks to open the closet. What should Erik tell them?
no!
yes, feel free to tour the closet
unfortunately, my client has requested that this closet remains closed
you can definitely see the closet, just do so quickly and quietly
In order to avoid unauthorized practice of law, Realtors should use which type of forms?
standardized forms drafted by a lawyer
standardized forms drafted by their supervising broker
Realtors must write their own forms.
standardized forms drafted by a Realtor
You are a Realtor. You call up an agent at another brokerage and ask if they have an exclusive listing with Seller Sara. The agent refuses to tell you. So, you call up Sara to ask her. Under the NAR Code of Ethics, is this allowed?
No. Furthermore, you should not called the agent to ask them this question in the first place.
Yes. If another agent won’t tell you if they have an exclusive listing with a client, you can contact the client and ask them yourself.
No. If another agent won’t tell you if they have an exclusive listing with a client, you cannot take any further action.
Yes. Furthermore, once you have contacted the seller, you should try to get them to fire their current agent and hire you instead.
Claire and Margo are Realtors. Claire suspects Margo has committed an ethics violation. Claire calls Margo and asks about the incident. Margo refuses to talk about it and hangs up on Claire. What’s a good next step for Claire to take?
Claire should persist in trying to talk to Margo.
Claire should contact the victim of the suspected ethical violation.
Claire should talk about the alleged ethical violation with Margo’s broker.
Claire should file an ethics complaint with the Realtor’s Board.
Anne is a Realtor at Bow Tie Realty. One day, an acquaintance tells her that he might work with Brad, another agent at the firm, to list his home. Anne thinks that Brad is irresponsible and has heard rumors that he isn’t great with clients. Should she tell the acquaintance?
Anne should only tell the acquaintance if she knows he doesn’t yet have an exclusive listing agreement with Brad.
Anne should only tell the acquaintance if she has heard the rumors about Brad from several people whom she considers reliable sources.
No, Anne should keep her opinions to herself.
Yes, Anne is obligated to tell the acquaintance the rumors she’s heard about Brad.
A Realtor contacts a homeowner and tells them that they should consider selling their home now, as their property value is likely to decrease due to a large number of immigrants moving into the neighborhood. What is the unethical practice that this Realtor is engaging in?
redlining
blockbusting
poaching
violating listing agreements
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