NAR to consumers: Agents must put client interests first
With new industry rules now in effect, the association has released additional resources for buyers and sellers that focus on ethics and steering.
Realtors have always had to abide by NAR's Code of Ethics, a set of standards first introduced more than a century ago. But in light of new rules changes — and added scrutiny and skepticism around industry practices — the association appears to be emphasizing the ethical obligations of Realtors in a new consumer guide.
Last week, the National Association of Realtors published a fact sheet outlining the duties of member agents, leading with the statement that Realtors "cannot make decisions or provide representation in a way that puts their own interests or commissions ahead of their clients' interests."
Some in the industry have expressed concern that without a guarantee of cooperative compensation, agents could prioritize commissions over clients, and incidents of steering could increase. Steering-related scenarios include listing agents pressuring sellers to offer a certain amount of compensation, or buyer agents advising their clients against considering homes that don't include an upfront offer of compensation.
NAR's campaign to educate (and reassure) consumers
Well ahead of the Aug. 17 deadline to implement practice changes, NAR anticipated and addressed some of the concerns around steering, offering new guidance for agents on its settlement FAQ page.
Now the association is reaching out directly to consumers. At the end of July, NAR released a set of consumer materials — documents, videos and slides — to prepare buyers and sellers for the upcoming changes.
In its latest guide, NAR doesn't address the new rules directly but explains what it means for agents to act in the best interest of buyers and sellers. The association outlines three key aspects of the Realtor/client relationship:
What buyers should expect: NAR's guide emphasizes that "a Realtor has an ethical duty to tell a buyer about every home available for sale that meets their criteria," regardless of whether compensation is offered by the seller, or if the compensation is less than what the buyer agreed to pay.
What sellers should expect: Listing agents "should explain to their seller the benefits and costs of the various types of marketing that can be done for a listing, and how potential buyers might respond," NAR states, noting that agents are "ethically prohibited from telling a seller that their home will be hidden from buyers" if they decline to offer a certain amount of compensation.
On steering: NAR also said it has "long encouraged Realtors to enter into written agreements with their clients because these agreements promote clarity and transparency," and such agreements can specifically help protect buyers from steering. "Since a broker working with a buyer receives the amount the buyer has agreed to, the amount of any offer of compensation is irrelevant to the buyer-broker's compensation."