Got a question?

Three-way Agreement National Association Of REALTORS® Arkansas REALTORS® Association Local Board of Realtors®

National Association of REALTORS® 1.3 million members Over 30 major policy suggesting committees Board of directors/executive committee Annual member meetings, May & November Convention

National Association of REALTORS® Chicago: all member services except political Washington, DC: legislative and political

Arkansas REALTORS® Association Membership of approximately 8,400 out of approx. 11,000 active licensees in AR 13 committees and task forces 38 member Board of Directors 8 member Executive Committee 9 member staff

Arkansas REALTORS® Association Member/Local Board support Update NAR with local and state political and market conditions Maintain open dialogue with state and federal agencies on behalf of the members Toll Free, or

Local Association Here

So, what does all this mean to me?

National Association of REALTORS® NAR Magazine: “Today’s REALTOR®” Up-to-date with: REALTOR.Org Member discount programs

Arkansas REALTORS® Association ARA Newsletter: “REALTOR® ‘Rightings” Up-to-date with: (some areas are secure for members ) Knowledgeable, professional staff Call us! or

Local REALTORS® Association

National Association of REALTORS® Mid-Year Conference in Washington D.C. Annual Convention with over 300 educational sessions

Arkansas REALTORS® Association Graduate, REALTOR® Institute Program (GRI) Annual State Convention featuring numerous industry speakers CRS courses sponsored by the AR Chapter CRS ABR Courses Annual Forms Training to Local Boards

Local Board Here

Graduate, REALTOR® Institute (GRI) Certified Residential Specialist (CRS) Accredited Buyer Representative (ABR) e-PRO

Certified Residential Broker (CRB) Certified Commercial Investment Member (CCIM) Institute of Real Estate Management (IREM)

National Association of REALTORS® Legal Action Program Legal Liability Series

ANTI-TRUST:

Arkansas REALTORS® Association ARA Legal HOTLINE via Legal FAQ site ON-LINE (secure, requires sign-in) Member discount on Real Estate Forms Over 2400 man hours annually spent by REALTOR® volunteers on forms development

National Association of REALTORS® A staff of over 50 in Washington D.C. serving as “watchdogs” and lobbyists for YOU and Property Rights! REALTOR® Legislative Network REALTOR® Political Action Committee (RPAC)

What can YOU do? Understand Private Property issues Come to the Mid-Year Conference and get to know your federal legislators Respond to the “Calls to Action” through Action Center on Realtor.org.

Arkansas REALTORS® Association Two Contract Lobbyist at the Capitol daily Member-driven decisions Members kept up-to-date during the Legislative Session through ARA website ARA is politically active year round watching out for your rights! ARA supports members seeking elected office

Local Board Informtion

REALTORS® Political Action Committee Allows members to help candidates who understand our industry Helps open doors and encourages lawmakers to keep an open mind on our issues Positions REALTORS® as legitimate players in the political arena who command respect

REALTORS® Political Action Committee What ARPAC is NOT!!! Partisan A Vote-buying vehicle

REALTORS® Political Action Committee RPAC’s Recent Successes: Private property rights bill Housing for Older Persons Act Health insurance deduction Maintaining mortgage interest deduction Prevented Banks from entering the Real Estate Business

Arkansas REALTORS® Political Action Committee In 2006, ARA Lobbyist voted best in the state. In 2006, ARA ranked 1 st in spending, preparing for and lobbying for the 2006 Session

Arkansas REALTORS® Political Action Committee WHY CONTRIBUTE? Investments in the future of your business Tax credit on State Income Tax, not a deduction Imagine the IMPACT magnified by over One Million REALTORS®

What If? You were responsible for discovering structural defects… You were required to research every listing neighborhood for registered sex offenders… You had to pay sales tax on your earned fee... You were responsible for ANY defects in a home you sold beyond required disclosure by law…

National Association of REALTORS® E-Commerce REALTOR.Org and REALTOR.COM Membership Records (NRDS) Technology is best observed at NAR Convention

Arkansas REALTORS® Association New Task Force named Task Force reports on software and hardware for members Real Estate Forms software Interactive, full-service website Large projects being formed now

Local Board Info

PROTECTED CLASSES The Fair Housing Act Prohibits discrimination on housing because of: Race Color Sex Religion National Origin Handicap Familial Status

National Association of REALTORS® Legal Liability Series Fair Housing Partnership Agreement At Home with Diversity Certification

Arkansas REALTORS® Association State Fair Housing Partnership Agreement with HUD Equal Housing Opportunity Posters provided Staff/Officers available to speak at Local Board Meetings

Local Board Information

FAIR HOUSING VIDEO

National Association of REALTORS® $50,000,000 Public Awareness Campaign 2008 and beyond year around.

Arkansas REALTORS® Association Award for Excellence Arkansas Special Olympics. Over 1.2 Million Dollars in 22 years. ‘House to House’ weekly column to over 320,000 households. Over 1,000 articles and news in newspapers throughout the state annually.

Arkansas Special Olympics ARA Becomes a Premiere Sponsor Since 1986, ARA has raised over $1,200,000 on behalf of Special Olympics

Awards for Excellence Program Statewide program to recognize Top Producers Based on listing, leasing and selling volume Available in residential, commercial, and property management

REALTOR®-of-the-Year Local Board: Honors outstanding board member of the year for industry and community involvement State: Local Board recipients honored at Gala during Annual Convention and Trade Show. One outstanding REALTOR® named ARA Realtor® of the Year at this Gala.

Local Board Information

CODE OF ETHICS

The REALTOR® Code of Ethics New Member Orientation Program National Association of REALTORS®

History and Background of the Code of Ethics National Association of REALTORS  formed in No license laws at the time. Real estate industry had a history of speculation, exploitation, and disorder. 2

History and Background of the Code of Ethics Code was adopted in 1913 to establish a professional standard of conduct. Code of Ethics formed the basis for license laws. 2

History and Background of the Code of Ethics From its inception, the Code of Ethics required arbitration of monetary disputes between REALTORS . 2

Under all is the land …

The Preamble The Golden Rule Widely allocated ownership” and “widest distribution of land ownership” Maintain and improve the standards of their calling. 3

The Preamble Share with fellow REALTORS  a common responsibility for the integrity and honor of the real estate profession. Strive to become and remain informed on issues affecting real estate. Willingly share the fruit of your experience and study with others. 3

The Preamble Identify and take steps to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. Urge exclusive representation of clients. Do not attempt to gain any unfair advantage over competitors. Refrain from making unsolicited comments about other practitioners. 3

The Preamble If an opinion is sought about a competitor (or the REALTOR  believes comment is necessary), the opinion should be offered in an objective, professional manner. The term REALTOR  stands for competency, fairness, high integrity, moral conduct in business relations. No inducement of profit and no instruction from clients can justify departure from these ideals. 3-4

The Three Major Sections Duties to Clients and Customers Duties to the Public Duties to REALTORS® 4

The Structure of the Code of Ethics Articles –Broad statements of ethical principles. Standards of Practice –Support, interpret, and amplify the Articles under which they are stated. 4

The Structure of the Code of Ethics Case Interpretations –Specific fact situations to which the Articles and/or Standards of Practice are applied. Only Articles of the Code can be violated, though Standards of Practice can be cited in support of an alleged violation. 4

Ethics or Arbitration Ethics: Basic Issue –Is there a possible violation of the Code of Ethics? Arbitration: Basic Issue –Is there an arbitrable issue, that is, a money dispute? –Typically a dispute over which REALTOR  is entitled to the cooperative commission in a transaction. 5

The Ethics Enforcement Process Who can file a complaint? 5

The Grievance Committee A screening committee comprised of members of the Association appointed to the committee. Key question for the Grievance Committee: If the allegations in the complaint were taken as true on their face, is it possible that a violation of the Code of Ethics occurred? 5

Professional Standards Hearing Panel Function is to conduct a full “due process” hearing with sworn testimony, witnesses and evidence. Hearing Panel is comprised of members of the Professional Standards Committee. 5

Professional Standards Hearing Panel After conducting a hearing, the Hearing Panel decides whether there was a violation of the Code of Ethics, proven by clear, strong and convincing proof. If the Hearing Panel finds a violation of the Code of Ethics, the Panel then determines the discipline to be imposed on the violator (respondent). 5

Authorized Discipline (and administrative processing fees) Letter of Warning Letter of Reprimand Education Fine not to exceed $5,000 Probation for one year or less Suspension for not less than 30 days nor more than one year Expulsion from membership for period of one to three years Suspension or termination of MLS privileges Administrative processing fee (if found in violation) not to exceed $500 (“Court Costs”) 6

The Arbitration Process Request filed. Arbitration is conducted under Article 17 of the Code of Ethics and the state arbitration statute (if any). 6

The Arbitration Process Article 17 provides that arbitration occurs under the following circumstances: –Contractual disputes or specific non- contractual disputes (see Standard of Practice 17-4); –Between REALTORS  (principals) associated with different firms; –Arising out of their relationship as REALTORS  6

Grievance Committee Committee performs a screening function similar to review of ethics complaints. Key question for the Grievance Committee: If the allegations in the request for arbitration were taken as true on their face, is the matter at issue related to a real estate transaction and is it properly arbitrable, i.e. is there some basis on which an award could be based? 6

Mediation A voluntary process in which disputing parties meet with a mediator appointed by the Association to create a mutually acceptable resolution of the dispute, rather than having a decision imposed by an arbitration hearing panel. 7

Mediation Mediation can occur before or after the Grievance Committee reviews requests for arbitration, depending on local Association policy. If a dispute is resolved in mediation, the parties sign an agreement spelling out the terms of the settlement, and no arbitration hearing is held. 7

Professional Standards Hearing Panel Function is to conduct a full “due process” hearing with sworn testimony, witnesses and evidence. Hearing Panel is comprised of members of the Professional Standards Committee. 7

Professional Standards Hearing Panel After the hearing, the Hearing Panel decides which REALTOR  is entitled to the award (typically a disputed commission in a transaction), proven by a preponderance of the evidence. Materials Page #7

Payment of the Award Generally, the award of the Panel in an arbitration case can be judicially enforced if not paid by the non- prevailing party. Some associations have procedures requiring that awards by deposited with the association pending review of the hearing process or during legal challenge. 7

NAR’s Arbitration Guidelines Found in the Code of Ethics and Arbitration Manual. Guidance to Hearing Panels as to how to determine procuring cause in arbitration hearings. Also referred to as “Suggested Factors for Consideration by a Hearing Panel in Arbitration.” Guidelines focus on “procuring cause” as the basis for resolving most commission disputes between brokers. 8

Key Factors in a Procuring Cause Dispute No predetermined rule of entitlement may be established by an association. Hearing Panels should consider the entire course of events. Matters such as the first showing of the property, the writing of the successful offer or the existence of an agency relationship with the buyer are not, in themselves, exclusive determiners of procuring cause/entitlement. 8

Key Factors in a Procuring Cause Dispute The key concepts of procuring cause are referenced in this definition from Black’s Law Dictionary, Fifth Edition: “The proximate cause; the cause originating a series of events which, without break in their continuity, result in the accomplishment of the prime object.” 8

Article 1 Protect and promote Protect and promote the interests of the client; This obligation to the client is primary; treat all parties honestly But must treat all parties honestly, regardless of agency or non-agency relationship. Standard of Practice 1-2 defines terms such as “client,” “customer,” “agent,” and “broker.” 9

Article 2 11

Article 2 exaggeration, misrepresentation and concealment Avoid exaggeration, misrepresentation and concealment of pertinent facts about the property or the transaction; But there is no obligation to discover latent defects, matters outside scope of license, or matters confidential under agency or non-agency relationships. 11

Article 9 Get it in writing!!! Get it in writing!!! 13

Article 9 Agreements shall be in writing whenever possible; In clear and understandable language; Expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party upon their signing or initialing. 13

Article 9 Standard of Practice 9-1 requires that reasonable care be used to keep documents current by use of written extensions and amendments. 13

Article 12 Truth in advertising!! Truth in advertising!! 14

Article 12 “true picture” Present a “true picture” in your advertising and representations to the public. Ensure that the professional status of REALTORS  is clearly identifiable in any advertising. 14

Article 16 Do not engage in any practice or take any action inconsistent with the agency or other exclusive relationship that other REALTORS® have with clients. 15

Article 16 Examples of issues covered by Article 16 and its Standards of Practice –Innovative or aggressive business practices –Advertising/solicitations which may be received by other REALTORS  clients –Solicitation of listings and agency relationships of clients of other brokers –Dealing with other brokers’ clients –Obligations when entering into exclusive relationships –Agency and/or brokerage relationship disclosure 15

The REALTOR  Code of Ethics … protects the buying and selling public. promotes a competitive real estate marketplace. enhances the integrity of the industry. is your promise of performance. is your promise of professionalism. 16

The images used herein were obtained from IMSI’s MasterClips  and MasterPhotos  Premium Image Collection, 1895 Francisco Blvd. East, San Rafael, CA , USA

Local MLS Rules and Regulations