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Know Your Real Estate Rights


Whether you are buying or selling a home, it’s important to understand what legal rights you have in the real estate transaction. Below you will find information on how working with a professional REALTOR® ensures you are treated fairly not only by legal standards but by strict ethical standards as well. You can also learn how to avoid legal issues common in real estate transactions.


REALTORS® uphold specific duties to clients at all times.

Many consumers are unclear as to what rights they have when working with a REALTOR®. To protect both the REALTOR® and the consumer, members of the Austin Board of REALTORS® (ABoR) follow a strict Code of Ethics set in place by the National Association of REALTORS® (NAR). This document provides rules, regulations and boundaries that bind a REALTOR® to his or her duties to the consumer. The REALTOR® Code of Ethics includes:

  •     Loyalty to clients;
  •     Fiduciary (legal) duty to clients;
  •     Cooperation with competitors;
  •     Truthfulness in statements and advertising; and
  •     Non-interference in exclusive relationships that other REALTORS® have with their clients.

 

Overall, REALTORS® protect the right of individuals to own real estate and widen the opportunity to enjoy it. Through the REALTOR® Code of Ethics, REALTORS® are obligated to provide confidentiality, honesty, loyalty, fairness, competency, expertise and knowledge of the industry in interactions with clients.

Furthermore, the Texas Real Estate Commission Rules includes Chapter 1101, which is the Real Estate License Act. This outlines prohibited practices as well as the standards a REALTOR® must uphold in order to keep his or her license. Click here to view a complete copy of the Real Estate Commission Rules. These rules state that to engage in the practice of real estate in Texas, one must comply with five major licensing requirements, which include taking specific courses, being of moral character, passing a real estate exam, obtaining an inactive real estate salesperson license and receiving an active real estate license under the sponsorship of a broker.

Knowing that REALTORS® must abide by these rules in addition to the Code of Ethics is another reason why consumers rely on REALTORS® as a trusted source of sound real estate knowledge.


If a consumer is not satisfied with his or her REALTOR®, a grievance process is available to help reach a resolution.

Buying or selling property is a major business transaction, so it’s only natural that a consumer should maintain the best relationship with his or her chosen REALTOR®. However, in the event that a consumer feels his or her REALTOR® is not upholding all duties of practice, there is a course of action the consumer can take.

The most common source of conflict is misinterpretation or a lack of communication. Because of this, the first step toward resolution should be to address the issue with your REALTOR® or the principal broker in the firm. You may choose to speak with your REALTOR® or the broker about the matter yourself, or you may contact the Professional Development and Education Department at the Austin Board of REALTORS® (ABoR) to have an ombudsman, or neutral investigator, assigned to your case. The ombudsman will listen to your story to determine what happened and what you want from your REALTOR®. The ombudsman will then contact the REALTOR® or broker to see if he or she is willing to satisfy your request. More often than not this simple action will solve the problem. If this does not resolve the conflict, the next step is to call ABoR and file an ethics complaint.

An ethics complaint must be filed within 180 days from the time you knew (or reasonably should have known) that potentially unethical conduct took place. Complaints must cite one or more articles of the Code of Ethics that may have been violated. Your complaint should include a narrative description of the circumstances that lead you to believe the Code of Ethics may have been violated. It is always assumed that the consumer’s testimony is truthful when filing the complaint.

The formal complaint will go to a grievance committee of trained ABoR members who will review the complaint in detail and decide whether a violation has occurred. The grievance committee will ask one question: “If the facts were taken as true, would the Code of Ethics have been violated?” If the answer is “yes,” the complaint is forwarded to the professional standards committee, who will conduct a live hearing to decide the outcome. If after the hearing you are still not satisfied, you have the right to appeal.


When a third party is involved in a real estate transaction, a consumer should be aware of a few things before committing.

During the real estate transaction, several third parties will play a role. These third parties include appraisers, movers, interior decorators and various other service professionals. Consumers should keep in mind that these services are separate from the relationship between the REALTOR® and consumer.

For instance, common law rights apply to all third-party relationships. It is the consumer’s responsibility to find out all costs and specific services of the third party and to review the contract in detail. Although REALTORS® can assist the client in finding a third party service provider, it is prohibited that he or she specifically recommends someone. It is common for your REALTOR® to provide a list of third parties they’ve previously worked with successfully, but by no means does this make the REALTOR® responsible for the relationship between the client and third party. Standard of Practice 6-1 of the Code of Ethics recognizes this.


Consumers can avoid common real estate issues by working with a professional REALTOR®.

As previously stated, all REALTORS® adhere to a strict Code of Ethics that reflects their higher degree of professionalism in serving clients. The experience, expertise and ethical standards that REALTORS® apply on a daily basis are used to safeguard the best interests of their clients and save consumers time, money and legal troubles.

For example, REALTORS® must truthfully disclose all known information pertaining to the property. No buyer or seller would want to go through a transaction without being fully aware of everything that could sway the deal. For instance, one single feature of a property can make or break a deal. REALTORS® understand this and inform their clients of important information up front.

In a real estate transaction, consumers rely on their REALTOR®’S dedication to finding the perfect property, without having to jump through hoops to get there. REALTORS® present all facts to their clients to avoid misrepresentation of themselves or the property. REALTORS® are bound by both the law and their Code of Ethics to disclose any and all relevant information to their clients.

Another common cause of confusion is when the consumer does not fully understand who the REALTOR® represents. REALTORS® represent the client who hires them. For example, if there is an open house and the seller’s REALTOR® attends, but a buyer requests the REALTOR®’S advice, the REALTOR® remains loyal to his client, the seller. The buyer might ask the REALTOR® if there are any homes in the area that have the features he or she is looking for. In that case, the REALTOR® may provide the consumer with a few potential addresses. Nevertheless, the REALTOR® does not represent the buyer; he still only represents the seller of that open house.

REALTORS® provide valuable service to the person who hires them, and they uphold their duties to their client regardless of who enters the transaction. As stated in the Code of Ethics, no REALTOR® shall provide service to more than one party of a real estate transaction unless it is agreed upon by everyone.

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