As a prerequisite to selling real estate, a person must be licensed by the state in which they work, either as an agent/salesperson or as a broker. Before a license is issued, minimum standards for education, examinations and experience, which are determined on a state by state basis, must be met. After receiving a real estate license, most agents go on to join their local board or association of REALTORS® and the NATIONAL ASSOCIATION OF REALTORS®, the world’s largest professional trade association. They can then call themselves REALTORS®.
The term “REALTOR®” is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics (which in many cases goes beyond state law). In most areas, it is the REALTOR® who shares information on the homes they are marketing, through a Multiple Listing Service (MLS). Working with a REALTOR® who belongs to an MLS will give you access to the greatest number of homes.
An agent is bound by certain legal obligations. Traditionally, these common-law obligations are to: Put the client’s interests above anyone else’s; Keep the client’s information confidential; Obey the client’s lawful instructions; Report to the client anything that would be useful; and Account to the client for any money involved.
NOTE: A REALTOR® is held to an even higher standard of conduct under the NAR’s Code of Ethics. In recent years, state laws have been passed setting up various duties for different types of agents. As you start working with a REALTOR®, ask for a clear explanation of your state’s current regulations, so that you will know where you stand on these important matters.
Suppose you sign an offer to buy a home for $150,000. You really want the property and there’s a chance other offers are coming in, so you tell the broker that “We’ll go up to $160,000 if we have to. But of course don’t tell that to the seller.” If you’re dealing with a seller’s agent, he or she may be duty-bound to tell the seller that important fact. In most states, the seller’s agent doesn’t have any duty of confidentiality toward you. Honest treatment might require that the agent warn you that “I must convey to the seller anything that would be useful so don’t tell me anything you wouldn’t tell the seller.”
TIP: If you’re dealing with seller’s agents, it’s a good idea to keep confidential information to yourself. These days many home buyers prefer instead to hire a buyer’s broker, one who owes the full range of duties, including confidentiality and obedience, to the buyer. A buyer’s broker is often paid by the seller, regardless of the agency relationship.
In making your decision to work with an agent, there are certain questions you should ask when evaluating a potential agent. The first question you should ask is whether the agent is a REALTOR® . You should then ask:
(Information therein © 1995-2014 National Association of REALTORS®)