Unethical Conduct in Real Estate: What You Need to Know

Real estate agents have a responsibility to market homes with accuracy and precision. Unfortunately, some agents may resort to deceptive tactics in order to increase buyer interest. This could include using outdated photos of a house, exaggerating the square footage, or counting half a bathroom as a full one. These practices are unethical, and in some cases, illegal.

Agents should also be mindful of any discriminatory language they use when advertising a property. For example, if an advertisement states that a house is suitable for families, this could be considered a violation of fair housing laws. Under the Federal Fair Housing Act, buyers are protected from discrimination based on race, sex, religion, family status, disability, national origin and color. A real estate agent cannot refuse to work with someone because they belong to a certain group.

Misrepresentation is one of the most common illegal practices in the real estate sector and is the reason for more than half of all lawsuits against real estate agents. Misrepresentation occurs when an agent misstates information about a property, such as structural features. This can be done accidentally or intentionally in order to drive sales. To ensure ethical conduct, real estate agents should adhere to the National Association of Realtors' Code of Ethics.

The Code of Ethics consists of 17 articles that provide standards of conduct with clients and other real estate agents. Agents who are members of the National Association of Realtors must sign the NAR Code of Ethics. This code prohibits agents from providing legal advice, which means they should not interpret contracts or discuss their implications with buyers.