The Realtor Code of Ethics: What It Is and How to Apply It

As a real estate professional, you have a responsibility to provide your clients with honest and ethical service. The National Association of Realtors (NAR) Code of Ethics was established for exactly that. It outlines the ethical standards all real estate agents and brokers must follow. It also ensures they provide the best possible service to their clients while also maintaining the integrity of the industry.

But what exactly is the NAR Code of Ethics, and why is it so important? Keep reading to learn everything you need to know.


Created in 1913, the NAR Code of Ethics is a comprehensive guide that outlines the ethical standards that all Realtors are expected to adhere to. It has been updated throughout the years to keep up with industry and societal changes and maintain industry best practices.

The purpose of the NAR Code of Ethics is to protect the interests of the public and to elevate the standards of professionalism in the real estate industry. It covers a wide range of topics, including Realtors’ duties to clients and customers, the public, and even fellow industry professionals.

Key provisions and standards of practice include:

  • Loyalty to clients. Realtors are required to prioritize their clients’ interests above their own, and protect their clients’ confidential information.
  • Disclosure. Realtors are required to disclose any and all known facts about the property, as well as any conflicts of interest they may have.
  • Good faith and fair dealing. Realtors are required to act honestly and fairly throughout all transactions.
  • Non-discrimination. Realtors are required to act without discrimination against any individual based on race, religion, sex, national origin, sexual orientation, gender identity, or handicap.
  • Truth in advertising. Realtors are required to remain truthful in all advertising and marketing materials.
  • Cooperation. Realtors are required to cooperate with each other in furthering their clients’ best interests.

What happens when the NAR Code of Ethics is violated? In order to hold all real estate agents and brokers accountable, the code of ethics is strongly enforced, with a number of possible sanctions for those who act unethically.

The enforcement process can include the following:

  • A letter of warning or a letter of reprimand placed in the violator’s file
  • A formal hearing process
  • A fine of up to $15,000
  • Suspension or expulsion from the association

How to Apply the NAR Code of Ethics

Understanding the NAR Code of Ethics can be a complex process. However, there are several tips that can help you navigate the code and apply it in real-world situations.

One of the most important things to remember when applying the code is to always act in the best interests of your clients. This means putting their needs ahead of your own and making sure that you are providing them with the best possible service.

Another important tip is to always be transparent and truthful in your dealings with clients and other parties involved in a transaction. This means disclosing any known facts about a property as well as disclosing – and avoiding – any conflicts of interest.

Some examples of how to apply the NAR Code of Ethics when working with clients include:

  • If you discover a defect with a property you are selling, you need to disclose this to your buyers.
  • If you’re representing both the buyer and the seller in a transaction, you need to disclose this to both parties and obtain their consent.
  • If you are advertising a property for sale, you must ensure that all information provided is accurate and truthful. Photos of the property cannot be digitally altered, for example.

Ultimately, ethical decision-making in real estate is key. Not only does it protect the interests of your clients, but it also helps to build trust and credibility in the industry.

Benefits of Adhering to the Code of Ethics

There are a number of benefits to adhering to the NAR Code of Ethics as a real estate professional. For one, ethical behavior can help build trust and strong relationships with clients, which is essential for success in this industry. Clients are more likely to trust and respect a real estate professional who they know has their best interests in mind. By putting ethical behavior at the forefront of your business practices, it demonstrates your commitment to serving your clients with honesty, integrity, and professionalism.

With trust comes referrals. Building trust among clients is one of the best things you can do as a Realtor, because it often leads to referrals – meaning more business for you. Clients who are satisfied are more likely to refer friends, family, or colleagues. Referrals are an excellent way to grow a real estate business. Ethical behavior can help ensure that clients are happy with their experience and willing to refer others.

Adhering to the Realtors Code of Ethics can also boost your reputation among other industry professionals as well. A positive reputation in the industry showcases your credibility. It can also lead to increased business opportunities and better relationships with lenders, inspectors, and appraisers.

The NAR Code of Ethics is an essential component of the real estate industry. It can help you to build strong relationships, increase referrals, and build a positive reputation in the industry. By focusing on transparency, honesty, and professionalism, real estate agents and brokers alike can position themselves for success in such a dynamic and challenging field.

Advance Your Skills and Expertise with Colibri Real Estate

Ready to take your real estate career to the next level? Get started with our online continuing education courses to enhance your skill set. Colibri Real Estate has helped hundreds of thousands of real estate agents and brokers throughout the country.