NAR just hired Fiona to film some TV ads to highlight the association. Based on the NAR’s goals, on what should Fiona’s advertising focus?
The large number of NAR members
The low number of complaints placed against NAR members
The NAR’s government lobbying efforts
The NAR’s high ethical standards for its members
Considering that 55% of consumers don’t understand the differences between agency relationships, licensees should ______.
Apply the Code of Ethics to their real estate practice
Not accept an agency agreement with a consumer until the consumer is able to recite the agency relationships available
Only work with first-time buyers if they have at least five years’ experience
Use this to their advantage and convince consumers to enter into the relationship that will most benefit the licensee
Lorenzo had criminal charges filed against him in connection to his real estate practice. NAR policy dictates that his local REALTOR® association may ______.
Investigate and hold a hearing even while his criminal trial is pending
Only investigate Lorenzo after his criminal trial is complete
Revoke Lorenzo’s membership immediately, without a hearing
Send a board member to observe the criminal proceedings in order to better inform the board of his actions
What does the NAR Code of Ethics outline?
Agency laws by state
Behaviors expected of REALTORS®
Fixed commission rates all REALTORS® should follow
Legal ramifications for violating state and federal laws
What does the National Association of REALTORS® reference, and base its Code of Ethics on?
Declaration of Independence
Fair Housing Act
First Amendment to the U.S. Constitution
Golden Rule
What’s the purpose of the NAR Code of Ethics preamble?
To form a national ethics panel that monitors the activity of all licensees
To inspire license laws throughout the country
To let all who read it know what they can expect of REALTORS®
To set parameters regarding commission rates, listing periods, and other real estate-related matters
The NAR Code of Ethics preamble states, “REALTORS® should recognize that the interests of the nation and its citizens require the ______.”
Consistent buying and selling of real property
Equal treatment under the eyes of the law
Highest and best use of the land and the widest distribution of land ownership
Utmost ethical standards
How often is the NAR Code of Ethics updated?
As needed
Every five years
Every three years
Twice a year
Which of the following statements about real estate ethics is true?
About half of all REALTORS® have less than two years’ experience.
Only the most seasoned real estate agents are equipped to handle ethical dilemmas.
Real estate agents are among the least-trusted professionals.
Real estate agents are among the most-trusted professionals.
Jasmine is not a REALTOR®, but she is a real estate licensee. Has Jasmine agreed to abide by the conduct outlined in NAR’s Code of Ethics?
No; abiding by the Code of Ethics is voluntary for all licensees.
No; she isn’t a REALTOR®, so she isn’t bound by NAR’s Code of Ethics.
Yes; all licensees are required to abide by the code.
Yes, but only if she also earns more than $100,000 in commissions each year.
According to the NAR Code of Ethics preamble, the real estate industry is so important that REALTORS® share with their fellow REALTORS® a common ______.
Responsibility for its economic viability
Responsibility for its integrity and honor
Spirit of capitalism
Spirit of competition
How often is the NAR Code of Ethics revised?
Revised as needed to meet the changing needs of the industry
Revised every three years
Revised only when the state associations need new guidelines to be included
Revised yearly, when requested by the public
Licensee A wants to present herself as an ethical agent. With whom should Licensee A apply the principles of the Code of Ethics?
With buyer clients
With everyone in both her personal and professional lives
With her fellow licensees
With listing clients
Which of the following ethics-related statements is true?
Only REALTORS® are required to be ethical in their real estate practice.
Only the most seasoned real estate agents are equipped to handle ethical dilemmas.
Real estate transactions often present ethical predicaments due to their financial risks and inherent complexity.
The government real estate agency is the only entity with authority to evaluate ethical complaints.
Which of the following is true regarding the NAR Code of Ethics?
All real estate licensee must abide by the Code of Ethics.
As a basis of membership, all REALTORS® must comply with the Code of Ethics.
As a historic document, the Code of Ethics is exactly the same as it was when it was first written.
NAR makes a point to update the Code of Ethics once a quarter.
Marsha holds an ethics refresher training every spring at her brokerage. She knows that ethics are tricky to navigate, especially considering that ______.
22% of REALTORS® have had their license for less than three years
Consumers have a reputation for taking advantage of agents by claiming ethical violations
Few licensees take ethics training
The NAR changes the Code of Ethics each year
The Code of Ethics isn’t legislated at the state or federal levels, but it’s designed to ______ the law.
Align with
Be stricter than
Be used in place of
Contradict
As a member of the NAR, REALTORS® should know about laws, proposed legislation, government relations, public policies, and ______.
Any emerging or current technologies that apply to real estate
Their competitors’ practices
The real estate market’s current conditions
The sales records of their closest competition
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Erica had an exhausting day and couldn’t wait to go home. As she was leaving the office, she got a call from a buyer’s agent who wanted to show her listing that evening. The home was vacant, and the seller had asked Erica to be present for all showings. Erica should ______.
Ask the seller to attend the showing since Erica isn’t available
Say that the buyer’s agent can go ahead and show it without her, just this once
Say that the home isn’t available for showing today
Tell the buyer’s agent that the showing is on, and she’ll meet him there at a mutually agreeable time
According to Article 1 of the NAR Code of Ethics, the obligation to protect and promote the interests of your client is primary, but this doesn’t relieve you of your obligation to ______.
Protect yourself financially
Treat all parties honestly
Your affiliated REALTOR® association
Your brokerage
Just a few minutes after Patrice received an offer on her listing, another buyer’s agent emailed saying that he’d be sending her an offer in a few hours. A few minutes later, a third agent called Patrice and promised his client’s offer would be to her the following morning. What should Patrice do?
Present all three offers at the same time.
Present the offer she has in hand.
Tell the third agent that he must have the offer in within the hour.
Wait until she gets the second offer, then present them before the end of the day.
Jackie’s seller client told her that the water heater was three years old, but it was an excellent model so she disclosed it as “new” on the property disclosure form. What is Jackie’s ethical obligation in this situation?
Advise her on the legal implications of falsifying records and suggest what paperwork she may need to defend herself in court.
Obey her client whether she agrees with her actions or not.
Treat the other parties honestly, which means disclosing the actual age of the water heater.
Use her best efforts to help the seller, which means keeping quiet about the discrepancy.
The seller client Veronica represents scheduled the buyer-requested repairs, but due to inclement weather, the repairs won’t be completed until the day after closing. What should Veronica do?
Call the title company and push closing to the following month.
Cancel closing until a new home inspection can be scheduled after all repairs are completed.
Tell the buyer’s agent that the repair will not be finished until after the scheduled closing.
Warn the seller that the buyer is likely withdraw the offer because of the unfinished repair.
Jill’s seller client told her that his house flooded last year, but that he doesn’t want to include this on the property disclosure form because it might lower his property value. What ethical obligation does Jill have?
Arrange a meeting with an attorney who can advise the seller on the legal implications of falsifying records.
Assist the seller in covering up any history of flooding.
Be honest with all parties and disclose the history of flooding.
Uphold her fiduciary duty of obedience and obey her client whether she agrees with his actions or not.
Simone knows that a full-price cash offer is coming in for her listing. Another agent calls and asks if he can show the property tomorrow, but Simone says it’s unavailable until the weekend in order to give herself a couple days to present the cash offer to the seller. Has Simone done anything wrong?
No; she doesn’t want to waste her client’s time when the incoming offer is sure to be accepted.
No; Simone knows the other agent doesn’t have a chance, so she’s respecting his time.
Yes; she misrepresented the property’s availability.
Yes; she should have told the agent about the incoming offer in order to explain why the property wasn’t available.
Read through the following scenarios and determine which licensee is abiding by the Code of Ethics.
Damon worked with licensee Regina in the past, and Regina blatantly lied to him. Damon cautions his seller client to not take her buyer client’s offer.
Even though Joe and Amelia haven’t seen eye to eye in the past, he presents her client’s offer to his seller client and says nothing about his relationship with Amelia.
Marisa refuses to cooperate with Barry because a deal she had with him fell through last year.
Mike only presents the seller with offers that come from agents within Mike’s firm.
Since loyalty is inherently divided in dual agency transactions, licensees can maintain ethical behavior by ______ information whenever possible.
Destroying
Disclosing
Withholding
Writing down
If you agree to cooperate with another broker because it’s best for your client, it’s assumed that ______.
Any commission sharing will be discussed and isn’t a requirement of cooperation
The other broker will be sharing a commission with you
You’ll also be sharing your commission with the other broker
Your client will pay your commission as well as pay a fee to the other broker
A licensee is working with four rather difficult clients but doesn’t want to end any client relationships unless it’s absolutely necessary. Which of these clients should the licensee consider releasing?
A buyer whose deal has had to be extended twice because the buyer forgot about contract deadlines.
An investor that only wants to submit lowball offers.
An investor that used profanity and insulted the licensee’s competence when their offer wasn’t accepted.
A seller who has changed their mind about the sales price 10 times.
Article 1 of the NAR Code of Ethics requires REALTORS® to ______ the interests of their client.
Dictate
Influence
Protect and promote
Write down
Roz represents a seller who has tentatively accepted a verbal offer for his home. Per Article 9 of the NAR Code of Ethics, Roz should make sure the agreement ______.
Contains a clause that allows the seller to back out at any time
Details that her commission will be paid even if the deal falls through
Includes an earnest money deposit of at least 10%
Is in writing
You’ve listed a condo and just received an offer from a notoriously unethical broker. According to the NAR Code of Ethics, which of the following is an acceptable reason not to cooperate with that broker?
Cooperation isn’t practiced at your firm.
If the broker has actually done the things you’ve heard, it’ll mean even more work for you to get the deal through to closing.
Working with the broker isn’t in the seller’s best interests.
You don’t want to work with that broker.
Article 3 of the NAR Code of Ethics requires REALTORS® to cooperate with other brokers, except when ______.
Doing so would not be in the client’s best interest
Their brokerage firm prohibits it
The REALTOR® could make more money by not cooperating with another broker
The seller doesn’t consent to the listing being advertised on the MLS
REALTOR® Shawna is cooperating with a listing broker. What does Shawna need to know concerning her commission?
The buyer will pay it.
There’s no commission involved.
There’s no obligation to share commissions.
The seller will pay it.
The NAR Professional Standards Committee releases ______ to help REALTORS® understand the ethical obligations they agree to when they join NAR.
Case interpretations
Complaint statistics
Monthly memoranda
Violation analyses
Cameron would like to mitigate some of the risk involved in dual agency. A required step is ______.
Offering to negotiate for both parties
Providing disclosure and obtaining advance consent
Reducing his commission
Requiring the buyer to pay half of his commission
A seller client is having trouble deciding between two offers. Which offer should the licensee encourage the seller to take?
Neither; listing agents should never advise their clients about which offer to take.
The offer that best protects the seller’s interests and is most prudent.
The offer that will net the licensee the largest commission.
The offer that will net the seller the most money.
Noel’s landlord client wants to amend the lease that the tenant just finished signing. What should Noel do?
Ask the tenant’s agent to run the changes by the tenant before Noel draws up the amendment.
Tell the landlord that it’s too late to change the lease.
Tell the landlord that she can draw up an amendment, but caution that the tenant may not agree to it.
Tell the tenant’s agent that the lease is void.
One of Ronnie’s frequent investor clients would like to see a property that’s listed with Ronnie’s firm. Ronnie has a scheduling conflict and can’t show the property on the day the investor is available. What’s the acceptable method Ronnie should use to show the property?
Give the investor the lockbox code; Ronnie knows he’s trustworthy.
Leave the door unlocked and ask the investor to lock up when leaving
Show the property per the guidelines the seller agrees upon.
State that the property isn’t available for showing at that time.
Article 9 of the NAR Code of Ethics requires REALTORS® to assure that, whenever possible, all contracts are ______.
In writing
Submitted to the local REALTOR® association
Witnessed
Written using REALTOR®-approved forms
Listing broker Raul has agreed to reduce the seller’s commission by 1% if an agent in his firm procures the buyer. Raul ______.
Can keep the arrangement a secret unless he’s asked directly about it
Can keep the arrangement between him and the seller
Must disclose the agreement
Only has to honor the agreement with other REALTORS®
Frasier received two offers for his seller client’s listing at the same sales price. He should advise the seller to ______.
Consider all aspects of the offer, not simply the price
Request personal letters from each offeror
Take the offer with the earliest closing date
Take whichever offer came in first
Charlie’s seller client asked him to pass along any offers to her, even after her property went under contract. Four days before closing, an offer arrived in Charlie’s inbox. What should Charlie do?
Call the buyer’s agent and tell her that closing is a few days away, but if it’s delayed for some reason, he’ll present the offer.
Ignore it, because it’s too late to back out of the contract now.
Present the offer to the seller.
Refer to his brokerage manual to see what to do.
According to the NAR Code of Ethics, listing agents must ______.
Present all offers to the client as soon as possible
Present a second offer only after the first offer has received a response
Present cash offers first
Present only offers that appear to be in the client’s best interest
New licensee Max is writing up his first offer. Neither his state nor his broker have mandated a specific form to use. Ethically speaking, which form would be the best for Max to use?
The form that his favorite coworker uses
The form that sets forth the parties’ terms, conditions, and commitments most clearly
The form with the most legal language
The shortest form, so the buyer isn’t overwhelmed by details
Licensee Monica is practicing dual agency with two of her clients. What does she need to do in order to keep this transaction ethical?
Assure the parties that she will keep all information above board, and tell them everything about the transaction.
Demonstrate obedience and undivided loyalty to both clients.
Make the parties aware that while some things must remain confidential, she will disclose whatever she’s legally required to disclose.
Request that both parties attend all negotiations so everyone’s on the same page.
Ethically speaking, all agreements regarding a real estate transaction should be ______.
Advantageous to the buyer
Advantageous to the seller
In writing
One-sided
Beverly lists a property for her seller client, Angela, and tells her that if someone in Beverly’s firm finds the buyer, she’ll reduce the commission by 1%, but they won’t tell outside agents that. Has Beverly behaved ethically?
No; commission shouldn’t be discussed until there’s a contract.
No; variable-rate commissions must be disclosed to potential cooperating brokers.
Yes; commission structures are kept between the seller and the listing agent.
Yes; it wouldn’t be in Angela’s best interests to disclose the alternate compensation structure.