The One Secret That Many Real Estate Agents Don’t Want To Tell You


Every Industry has secrets. Practitioners are aware of practices within the industry of which the general public is not aware. Real Estate Brokerage is no exception.

One of the biggest disservices to the general public are Real Estate Brokerages that do not belong to the National Association Of Realtors or NAR.  Why would firms choose not to belong to the umbrella organization for Realtors©?  The answer is that since these firms are not members of NAR they are not bound by the Realtor Code of Ethics.  The Realtor Code of Ethics imposes strict codes of conduct upon its Realtor© members which go far beyond the legal requirements of maintaining a real estate license. Real Estate Agents who do not belong to NAR cannot call themselves Realtors©. They are simply real estate agents

A listing Agreement usually specifies a brokerage commission. Say 6%. If the listing broker sells the property through another real estate broker, it is usual to share the brokerage commission – 3% each. If the Listing Broker finds the Buyer then the Listing Broker keeps the entire 6%. It is easy to see how this system is open to abuse.  It is in the Listing  Brokers best interest to find his own Buyer

One of the core principles of the Realtor Code of Ethics is that a property gets wide exposure to other Brokers and to the market.  That is a fundamental obligation of a Realtor©

Several large real estate firms and some smaller ones choose not to belong to NAR. Their marketing pitch to obtain listings is that they have a private database of qualified Buyers and they will sell the property in the shortest time to someone on their data base. So therefore they do not need to widely expose the property to other brokers. Because they are not members of NAR they are free to pursue this strategy which, by-the-way will pretty much ensure that they get the full 6% brokerage commission.

It’s a great system for the real estate agent. Not so great for the Seller. The agent may really have a Buyer that can move quickly but what is to say that the Buyer is offering the highest price. It may well be a serial Buyer who makes his living by scooping up properties at low prices.  If the property were widely exposed to other Brokers who have Buyers that are not are on the Brokers list, the Seller may well achieve a higher price. Another reason for wide exposure is that there may be first-time Buyer or a Buyer whose investment criteria has changed. For instance, An investor in office buildings may decide that it is time to purchase an apartment building. A real estate agent who markets only to his list of buyers will miss this investor, who may be willing to pay a higher price.  It is in the Sellers best interest to get as wide an exposure for their property as possible.

Often the listing agent who is not a member of NAR will tell Sellers that they will market the property to other Brokers.  Take that with a pinch of salt. Marketing to other Brokers will often be minimal and there is no protection for the Seller from the oversight of NAR. The listing agent may also not fairly share the brokerage commission so the incentive for other brokers is removed,

It is a case of “Sellers Beware” when it comes time to sell your property. There are plenty of excellent Realtors© to help you sell your property that are members of the National Association Of Realtors. Select someone who is bound by an Ethical Code Of Conduct for Realtors©. Its for your protection.

Would you go to a doctor who is not a member of the American Medical Association, or an attorney who is not a member of the American Bar Association? Why would you select a real estate agent who is not a member of NAR.


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