Navigating the Ethical Path: A Realtor’s Responsibility to Clients and the Industry
As realtors, we’re entrusted with one of the most significant responsibilities in our clients’ lives—guiding them through the process of buying or selling their home. With this responsibility comes a set of ethical guidelines that go beyond just being a good negotiator.
We must navigate the complexities of legal obligations, transparency, and maintaining integrity in every transaction.
With recent industry changes, one practice that can trip up even experienced real estate professionals is "steering." It's something many of us may be doing without realizing it, and it can have serious legal and ethical consequences. In this blog, I’ll break down what steering is, how it can sneak into your day-to-day, and why avoiding it is critical not just for your career, but for maintaining trust in our profession.
Wondering how your response to a commission could put you at risk?
What Is Steering?
Steering, in real estate, refers to influencing or directing a buyer’s decision based on a protected characteristic—such as race, religion, or in this case, commission structures. You might not immediately think of commissions as something that could lead to steering, but let’s take a closer look at a scenario that might seem all too familiar.
Imagine this: A listing agent informs you that the seller isn’t offering the level of commission you typically expect, or worse, they’re offering no commission at all. Your immediate reaction might be to respond with, “I won’t be showing this home.” While this response might seem like a natural business decision, it actually falls under the definition of steering. By withholding the option to view that home, you're influencing your buyer’s decision based on the commission offered, rather than the property’s merits or suitability for your client.
Transparency is Key
At the end of the day, commissions are an integral part of the real estate business, but it’s important to remember where the money comes from—it’s the buyer’s funds, whether paid through the seller or not, that cover the entire transaction. So, rather than shying away from a deal due to commission discrepancies, it’s critical to have open, transparent conversations with your clients.
Explain the situation to your buyers, let them know how commissions work, and encourage them to make an informed decision. Yes, they may have to compensate you directly if the seller isn’t offering a commission, but clarity and communication can avoid misunderstandings and legal pitfalls.
Avoid the Lawsuit Pitfall
Here’s the tough truth: if you send a text or email saying, “I won’t show this home because the commission is too low,” you could be opening yourself up to legal trouble. There’s a paper trail, and that trail can lead to lawsuits. No commission is worth putting your career and reputation at risk.
By focusing on serving your client’s best interests—regardless of the commission offered—you protect yourself from legal liability and build long-term trust with your clients. And remember, when clients trust you, they are more likely to compensate you fairly for your hard work.
As real estate professionals, we need to hold ourselves to the highest standards of ethics and integrity. Steering may seem like a harmless response to a frustrating situation, but it can quickly become a legal and ethical nightmare. Instead, focus on transparency, communication, and the long-term trust that comes from doing right by your clients.
Let’s move forward with integrity, and in doing so, set an example for the rest of the industry. It’s about doing what’s right, not just what’s easy, and ensuring that we maintain the trust and credibility that are the cornerstones of our profession.
In the fast-paced world of real estate, take a step back and reflect on the choices you make. The right decisions will not only protect your business but also elevate the industry as a whole.
