You worked hard to get your real estate license and your REALTOR® membership.
You provide a valuable service to consumers.
You work hard to maintain your real estate license and your REALTOR® membership.
So be confident in explaining your services and your compensation.
NAR Code of Ethics
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)
• Standard of Practice 12-1 REALTORS® must not represent that their brokerage services to a client or customer are free or available at no cost to their clients, unless the REALTOR® will receive no financial compensation from any source for those services. (Amended 1/22)
Misconduct and Redress
SECTION 40-57-710. Grounds for denial of issuance of license or for disciplinary action against licensee.
(A) In addition to Section 40-1-110, the commission may deny issuance of a license to an applicant or may take disciplinary action against a licensee who:
(1) makes a substantial misrepresentation on an application for a real estate license;
(2) makes a substantial misrepresentation involving a real estate transaction;
(3) makes false promises likely to influence, persuade, or induce;
(4) pursues a continued and flagrant course of misrepresentation or makes false and misleading promises through any medium of advertising or otherwise;
(5) in the practice of real estate, demonstrates bad faith, dishonesty, untrustworthiness, or incompetency in a manner as to endanger the interest of the public;
(6) represents a real estate broker other than the broker-in-charge or property manager-in-charge with whom they are licensed;
(7) guarantees or authorizes and permits an associated licensee to guarantee future profits from the resale of real estate;
(8) makes a dual set of contracts, written or otherwise, by stating a sales price other than the actual sales price;
(9) is convicted of violating the federal and state fair housing laws, forgery, embezzlement, breach of trust, larceny, obtaining money or property under false pretense, extortion, fraud, conspiracy to defraud, or has been convicted of a felony sex-related, felony drug-related, felony real estate-related, felony financial, or felony violent offense, or pleading guilty or nolo contendere to such an offense in a court of competent jurisdiction of this State, another state, or a federal court;
(10) fails to report to the commission in writing by certified mail, within ten days, notice of conviction of a crime provided in item (9);
(11) fails, within a reasonable time, to account for or to remit trust funds coming into his possession which belong to others;
(12) pays a commission or compensation to an unlicensed individual for activities requiring a license under this chapter. Notwithstanding this section, a licensee may not pay or offer to pay a referral fee or finder’s fee to an unlicensed individual who is not a party in the real estate sales or rental transaction;
(13) violates a provision of law relating to the freedom of a buyer or seller to choose an attorney, insurance agent, title insurance agent, or another service provider to facilitate the real estate transaction;
(14) fails to disclose in accordance with Section 40-57-370 the party or parties for whom the licensee will be acting as an agent in a real estate transaction, if any;
(15) receives compensation in a real estate transaction or directly resulting from a real estate transaction from more than one party except with the full knowledge and written disclosure to all parties;
(16) represents more than one party in a real estate transaction without the full written knowledge and consent of all parties;
(17) acts as an undisclosed principal in a real estate transaction;
(18) accepts deposit money which is to be delivered to the licensee’s principal in a real estate transaction without informing the payor and having the payor acknowledge in writing who will hold the money received by the licensee;
(19) issues a check in connection with his real estate business which is returned for insufficient funds or closed account;
(20) fails to disclose in accordance with Section 40-57-350 a known material fact concerning a real estate transaction;
(21) violates a provision of this chapter or a regulation promulgated under this chapter;
(22) violates a rule or order of the commission;
(23) knowingly gives false information to an investigator or inspector;
(24) engages in a practice or takes action inconsistent with the agency relationship that other real estate licensees have established with their clients;
(25) fails to make all records required to be maintained under this chapter available to the commission for inspection and copying by the commission upon request of an investigator of the commission, fails to appear for an interview with an investigator of the commission without due cause, or provides false information upon direct inquiry by the investigator or inspector;
(26) fails to promptly submit all offers and counteroffers in a real estate sales transaction;
(27) fails to provide current contact information to the commission; or
(28) allows or creates an unreasonable delay in the closing of a transaction or act in a manner which causes failure or termination of a transaction due solely to a dispute among participating licensees concerning the division of a commission.
Case # 12-7 : REALTOR® Advertising Free Market Analysis
(Reaffirmed Case #19-9 May, 1988. Transferred to Article 12 November, 1994. Revised November, 2001 and May, 2017.)
REALTOR® A advertised on his website as follows: “Free Market Analysis With No Obligation.”
A property owner complained about REALTOR® A’s attempts to solicit the listing, and the complaint was referred for a hearing before a Hearing Panel of the Professional Standards Committee.
At the hearing the property owner testified he had called REALTOR® A to have him prepare a market analysis of his residential property, “. . . with no obligation. . .” as claimed in REALTOR® A’s ads. However, the property owner said that when he and REALTOR® A spoke, he explained that he would be glad to provide the market analysis, but said, “I presume you understand that when we provide this service, we also expect that if you list your property, you will permit us to serve you.” The property owner testified that REALTOR® A did not press the matter at the time and did provide a market analysis. The property owner told the panel that for the next three weeks REALTOR® A or one of his representatives called “practically every single day” soliciting the listing of his home. The property owner testified that on several occasions, someone from REALTOR® A’s office reminded him that REALTOR® A had provided a “valuable free service and we feel that you owe us the listing of the property.”
REALTOR® A responded that he had provided the “free market analysis” as represented in his advertising, and had provided it “. . . with no obligation.” He stated that he had neither asked for nor received a fee for the market analysis. He could not understand why he was required to appear before a Hearing Panel in connection with allegations of a violation of Article 12 of the Code of Ethics.
The Hearing Panel noted that offering premiums or prizes as inducements, or the advertising of anything described as “free” is not prohibited by the Code of Ethics.
While REALTOR® A was free to advertise “free market analysis with no obligation,” such a representation was not a “true picture” if the terms and conditions of the offer were not clearly disclosed in the ad or representation. The Hearing Panel noted that the statement by REALTOR® A when he provided the “free market analysis” that it was “presumed” the property owner would list with REALTOR® A if the property was offered for sale, and the subsequent “reminders” by sales representatives of REALTOR® A about the “expectation” made the representation less than a “true picture.” The panel noted that the property owner did not have a clear, thorough, advance understanding of what would occur at the time the offer was made. The panel concluded that REALTOR® A was in violation of Article 12.
Case #12-10: REALTOR® Advertising Free Market Analysis
(Originally Case #9-21. Revised and transferred to Article 19 as Case #19-13 May, 1988. Transferred to Article 12 November, 1994. Revised November, 2001 and May, 2017.)
REALTOR® A advertised on his website as follows: “Free Market Analysis With No Obligation.” REALTOR® B presented a written complaint to the Professional Standards Administrator of the Association filing a charge against REALTOR® A of an alleged violation of Article 12 of the Code of Ethics.
The matter was referred to the Grievance Committee which concluded the matter should be considered by a panel of the Professional Standards Committee. A hearing was convened with both REALTOR® A and REALTOR® B present.
REALTOR® A advised the Hearing Panel that he had placed the advertisement on his website and in good faith. He stated he felt his ad did present a “true picture,” and was not unethical. When the panel asked if his offering of a “free market analysis” was contingent upon his obtaining a listing or commission, REALTOR® A answered in the negative. He pointed out that he charged no fee for the service and provided it as represented on his website.
In the absence of any evidence indicating that the advertising by REALTOR® A was misleading, the Hearing Panel concluded that such advertising by REALTOR® A is not prohibited by the Code of Ethics nor can such advertising be prohibited by an Association of REALTORS® unless it presents less than a “true picture.” However, if a charge is filed against a REALTOR® alleging violation of Article 12 and there is a hearing before the Professional Standards Committee, determination may properly be made of the truth of any representations made.
The Hearing Panel concluded that REALTOR® A had demonstrated that his ads presented a “true picture” and that he was not in violation of Article 12.
Posted by: Byron King on 03/17/23 (This information is only accurate as of 03/17/23. You must contact SCR for updates and changes to this information after 03/17/23 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org or email byron at screaltors.org)
This information is not legal advice. This information is intended only to provide general information and may not be relied upon as specific legal guidance. Legal counsel should always be consulted before acting in reliance on this information.