Real Estate Code of Ethics: What It Is and Who Is Bound by It?

Posted on 02.19.26

Would you trust a real estate agent who didn’t follow ethical guidelines?

Buying or selling a home is one of the biggest financial decisions people make, and they rely on real estate professionals to act with honesty and fairness. That’s where the Real Estate Code of Ethics comes in.

Whether you're continuing your education in the industry or still considering which pre-license courses are right for you, understanding this code can help you on your real estate journey. Let’s explore what it entails and who must abide by its rules.

Real Estate Reputation: The Statistical Argument for Building Trust

Ethical real estate practice should be an industry-wide concern because real estate’s reputation is – at the moment – not stellar.

According to a 2024 Gallup poll, only 24% of the public rate their trust in real estate agents as “high” or “very high” for honesty and ethics.

Believe it or not, this is an improvement. Thirty years ago, the percentage of the public with a positive view of real estate ethics was a full ten points lower. There has also been progress on the other end of the scale. In 1988, a whopping 35% of those polled had a “low” or “very low” trust in real estate professionals, but today, it’s 19%.

This tells us that while the profession as a whole has made great strides toward building trust, the work is far from done. Current perception puts real estate professionals on par with bankers and local politicians; for a profession that wants to be known as a public service, not a bid for wealth or power, that’s bad news.

As real estate agents consider how to build trust and reputation in real estate further, it’s important to first understand the history of ethics in real estate and the current safeguards for setting and enforcing ethical real estate practices.

What Is the Code of Ethics in Real Estate?

Officially, there is no single code of ethics real estate agents must follow industry-wide. The real estate board that governs professional licensing in each state sets ethical standards and enforces them with a disciplinary board, but the rules vary by jurisdiction.

The closest thing the profession has to a national code of real estate ethics is the NAR® Code of Ethics. This is the real estate ethics guide for agents and brokers who are members of the professional association known as the NAR® or National Association of REALTORS®.

The REALTOR® Code of Ethics was initially established in 1913 to set minimum standards of practice for agents and brokers. It’s been updated many times over the years – after all, racial discrimination through redlining was, once upon a time, considered an ethically responsible practice, which is certainly no longer the case.

Below, we’ll explore the modern REALTOR® Code of Ethics’ ethical practices in the real estate industry and the underlying principles that guide them.

Who Must Follow the REALTOR® Code of Ethics?

Technically, the REALTOR® Code of Ethics only applies to members of the National Association of REALTORS® (NAR®), and not all real estate agents belong to the organization. In fact, there are twice as many U.S. real estate licensees as NAR® members.

That said, there are cases where the NAR® Code of Ethics becomes legally mandatory. It’s not unusual for the ruling real estate body of a jurisdiction to adopt the REALTOR® ethics guide in whole or in part. When this happens, the adopted aspects apply to all licensed real estate agents operating under that jurisdiction’s authority.

What Principles Form the Basis of the Real Estate Code of Ethics?

The NAR® developed its Code of Ethics to promote high standards of conduct among its members and to establish guidelines for fair and honest business practices.

As a result, the code is based on several fundamental principles, including the duty to:

Treat all parties honestly and fairly.
Avoid misrepresentation and deception.
Maintain the confidentiality of client information.
Put client interest ahead of your own.
Avoid conflicts of interest.

What Does the Real Estate Code of Ethics Require Specifically?

The NAR® Code of Ethics outlines the specific standards of practice that real estate professionals should adhere to when working with clients, customers, and other industry professionals.

The code consists of 17 articles that cover a wide range of ethical considerations, including a REALTOR®’s duties to clients and customers, the general public, and fellow REALTORS®.

Duties to Clients and Customers

The first nine articles of the NAR® Code of Ethics address the responsibilities and obligations REALTORS® have to their clients and customers. These include the duties to:

Prioritize the best interests of their clients in all transactions (Article 1).
Avoid misrepresentation, exaggeration, or concealment of facts related to the property (Article 2).
Cooperate with other real estate professionals, except when such cooperation is not in the client's best interests (Article 3).
Disclose any personal interest in a property (Articles 4–5).
Refrain from collecting money under the table or recommending services for a kickback (Articles 6–7).
Keep client funds separate from their own funds (Article 8).
Present all transaction documents in a clear and understandable format (Article 9).

Duties to the Public

The next five articles in the REALTORS® Code of Ethics address the responsibilities and obligations owed to the general public. These include the duties to:

Refrain from discrimination when providing services (Article 10).
Provide services within your professional scope of competency (Article 11).
Avoid false or misleading advertising (Article 12).
Comply with all laws and regulations (Article 13).
Cooperate with investigations by the REALTOR® board if charged with any violation (Article 14).

Duties to REALTORS®

The final three articles of the NAR® Code of Ethics address the responsibilities and obligations REALTORS® have to other REALTORS®. These include the duties to:

Avoid false or misleading statements about other real estate professionals (Article 15).
Refrain from soliciting clients who have already signed an exclusive listing agreement with another REALTOR® (Article 16).
Resolve any contractual disputes through mediation or arbitration by the REALTOR® Board (Article 17).

Who Benefits from the Real Estate Code of Ethics?

The NAR® Code of Ethics is designed to protect and benefit a variety of parties in the real estate industry, including clients, customers, REALTORS®, and the general public.

Clients and Customers

First and foremost, guidelines for ethics in real estate are intended to protect clients who rely on the expertise and guidance of their real estate agents or brokers when buying, selling, or leasing property. The benefits for real estate clients include REALTORS® being required to act in their clients’ best interests, provide accurate and truthful information, maintain confidentiality, and avoid conflicts of interest.

The real estate code of ethics even benefits home buyers and sellers who are not represented by a REALTOR®, because REALTORS® are required to treat customers (not just clients) fairly and honestly and provide accurate information about properties and the transaction process.

The Public

The REALTORS® Code of Ethics protects the public by promoting fair and honest business practices in the real estate industry. In particular, owning real property is such a critical aspect of building wealth that the requirements to avoid discriminatory practices create ripple effects throughout society.

REALTORS®

The NAR® Code of Ethics benefits REALTORS® both directly and indirectly.

The articles addressing REALTORS®’ duties to other REALTORS® benefit all members directly by enabling them to expect a certain level of cooperation, honesty, and transparency even when professional interests diverge. There is an assurance that you can trust other agents and brokers because there are official consequences for untrustworthy behavior. This keeps everyone on an even playing field.

The REALTOR® ethics guide provides many indirect benefits to everyone in the profession as well. When the public knows there is a set of ethical standards being enforced, building trust and confidence with new clients is that much easier. It also helps promote a positive reputation for the industry with the general public by showing that the profession prioritizes conducting themselves with integrity and professionalism.

Consequences of Violating the Real Estate Code of Ethics

The Code of Ethics is not just a set of nice-to-have guidelines; it is a binding agreement that all NAR® members must adhere to maintain their membership. Real estate agents and brokers who are members of the NAR® can face disciplinary action if they are found to have violated the code in their professional dealings.

Per the Code of Ethics and Arbitration Manual, sanctions for an ethical violation may include:

A fine of up to $15,000.
Suspension from the board or association.
A letter of reprimand.
Required education courses.

Where the NAR® Code of Ethics has been adopted into local regulations, there will be additional consequences imposed by the real estate board or commission, including suspension or revocation of a professional’s license to practice.

Finally, code violations can damage a real estate professional's reputation and credibility, making it necessary to put effort into rebuilding trust in relationships with both clients and other professionals.

Building a Trustworthy Reputation in Real Estate

There are many challenges to building and maintaining a successful career in real estate, and building a reputation as a trustworthy professional is certainly one of them. You’ll find that you need to implement strategies for ethical real estate behavior rather than simply avoiding breaking the real estate codes of ethics that apply to you.

For example, while real estate ethics codes require you to avoid misrepresentation or deception, you might choose to proactively set additional standards for minimum transparency.

Learn More About Ethics in Real Estate

By continuing to adhere to a strict code of ethics, real estate agents can shift public trust further in their favor. For most people, learning ethical guidelines well enough to consistently apply them is too complicated to grasp through reading a simple blog article.

Whether you're just starting your real estate career or renewing your license, our online pre-licensing and continuing education courses offer flexible, self-paced learning to help you stay informed, confident, and compliant.

Start exploring your options today and build a career grounded in integrity.