Professional Standards and Ethics
The two rulebooks
Every licensee answers to state license law; only REALTORS® answer to the NAR Code of Ethics (17 Articles plus Standards of Practice). Know the Articles candidates stumble on: Article 1 (protect and promote the client's interests, with confidentiality that survives the transaction), Article 2 (no exaggeration, misrepresentation, or concealment of pertinent facts), Article 3 (cooperate with other brokers unless it harms the client), Article 9 (written agreements), Article 10 (equal opportunity), Article 11 (stay within your competence), Article 12 (truth in advertising), Article 15 (no false or misleading statements about competitors), Article 16 (don't interfere with another broker's exclusive agreement).
Enforcement pipeline
Complaint → Grievance Committee asks only "does this state an ethics violation?" → Professional Standards hearing panel takes testimony and can sanction (reprimand, education, fine up to $15,000, suspension, expulsion) → appeal to the Board of Directors. The Ombudsman is informal and never adjudicates.
Where the traps live
- Ethics vs. arbitration: unpaid commission or procuring-cause disputes go to arbitration; conduct goes to ethics. Filing the wrong one gets a case dismissed.
- Antitrust: never discuss commission rates, splits, or co-op compensation with competitors. Price fixing, group boycotts, and market allocation are per se violations - no defense of "we were just talking."
- RESPA §8: no thing of value for referral of settlement-service business; marketing services agreements must reflect actual, fair-market services.
- Fair housing: watch steering, differential treatment, and ad language; disparate impact counts even without intent.
Rule of thumb: money → arbitration; behavior → ethics; when in doubt, the Grievance Committee decides the doorway, so file promptly within the 180-day filing window from the later of the act or discovery.
Worked example: Two brokers at a networking lunch agree they will "hold buyer-agent pay at 2.5%." That is price fixing - a per se antitrust violation (treble damages, license risk) and an Article 1/17 problem, not a clever business strategy.