StraightTalk is a great place to start learning how living the code can help improve your business, but it’s no legal substitute for the Code of Ethics.
Thoughts on Article 11
Don't talk about expertise. BE an expert.
If you provide a service as a REALTOR®, make sure that the service you provide conforms to the “standards of practice and competence” that a normal person would reasonably expect to receive. People in our industry specialize in particular disciplines, specifically: residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.
Don’t try to provide clients specialized services in an area where you have no expertise, unless you work on the transaction with someone who is an expert. If you are a residential broker, don’t get involved in an industrial transaction without the assistance of a REALTOR® who is an expert in industrial real estate. Legally, of course, you can do the deal on your own—as long as you tell your client that it is in an area outside of your expertise. Disclose the facts. If you bring in a specialist to provide certain expertise on a deal, make sure your client knows exactly what role that person will play.
Standard of Practice 11-1
If you prepare an opinion on the value or price of a piece of property for something other than an attempt to get the listing or to assist a client in making a purchase offer, your opinion has to include the following:
- Identification of the subject property
- Date prepared
- Defined value or price
- Limiting conditions, including statements of purpose(s) and intended user(s)
- Any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants
- Basis for the opinion, including applicable market data
- If the opinion is not an appraisal, a statement to that effect
Standard of Practice 11-2
You have an obligation under the Code to provide clients and the public a reasonable level of expertise necessary to protect their rights and interests given the complexity of the transaction, the availability of expert assistance and, if you are an agent or subagent, the obligations of a fiduciary.
Standard of Practice 11-3
If you consult with a client for a fee (as opposed to a commission), your advice has to be objective, and the fee can’t hinge on the advice you give. If you act as a broker as well as a consultant, it’s ok to get paid twice for the two different services, as long as you agree in advance on the details.
Standard of Practice 11-4
The competency required by Article 11 relates to services contracted between you and your clients or customers, the duties expressly imposed by the Code of Ethics and the duties imposed by law or regulation.
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Terms to Know:
Before we begin, there are several terms that appear in the Code of Ethics that could use a little clarification:
Client is anyone that you or your firm has a formal agreement to work with. It could be an agency relationship or you could be providing a non-contracted service.
Customer is a party to a real estate transaction who receives information, services or some other benefit from you, but doesn’t have a contract with you or your firm.
Prospect is a buyer, seller, tenant or landlord with whom you or your firm has no contract. An agent is anyone with a real estate license (though not necessarily a REALTOR®) acting in an agency relationship as defined by Virginia law.
Broker is someone with a real estate license (including brokers and sales associates) acting in an agency relationship as defined by state law or regulation; and “broker” means a real estate licensee (including brokers and sales associates) acting as an agent or in a legally recognized non-agency capacity.
REALTOR® is someone who has earned his/her real estate license and also earned the right to use the title. REALTORS® serve many roles in different real estate transactions. For our purposes, we mean the term to be all inclusive, whether the REALTOR® represents a buyer, seller, tenant or landlord. Whether they provide contracted services or provide a service without a contract.