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Real Estate Ethicist

The other day a car salesman boasted to me that he was a consummate “professional,” and that he always did his job in a “professional” manner. I asked him how he knew that this was so, and he engaged in a long-winded conversation about satisfied customers, pleasing the manager, and being able to sleep at night. I listened carefully and wondered how he was so certain that he was meeting “professional” standards.

He was in a hurry so I didn’t bother to explain to him that there really is a technical, traditional definition of “professional” status, which includes three criteria: 1) specialized knowledge; 2) group identification and membership; and 3) agreed-upon education and training, including ethics training, certification by examination and continuing education.

While he might have met the first two criteria, I wasn’t sure that he could meet the third. To attain professional status, someone selling goods or services must be obligated to follow certain, written ethical standards of practice. This allows individuals in a specific industry to maintain specific behavioral expectations amongst themselves as well as toward their target consumers. Without a written code of ethics, standards are nebulous and therefore cannot be formally learned or enforced. This breeds moral chaos.

In contrast, with written moral standards, certification and training, individuals have a real opportunity to develop clear expectations and trust amongst themselves and consumers. In this case, they could actually become professionals.

The Value of Having a Fiduciary Duty

One of the earmarks of being a professional is that an individual has a fiduciary duty to each of his clients that is clearly spelled out in a written code of ethics. Two good examples of professional status are lawyers and Realtors.

In contrast, non-professionals are workers who do not have a fiduciary obligation toward the people with whom they do business. The extent of this individual’s ethical obligation is usually delineated by contract (which also makes it a legal obligation), informal standards of the industry, or traditional expectations of the company for which he works.

Two good examples of non-professional status are courtesy clerks at grocery stores (formerly called “boxboys”) and haybailers (usually young men who stack bales of hay onto flatbed trucks). More specifically, having a fiduciary duty requires a professional to never put his own interest above the interest of his client. It requires the highest good faith and fair dealing, which often requires the sort of guidance a parent provides to his or her children.

Professionals who carefully abide by their fiduciary duties consistently and fully create trust in consumers and in potential customers. This is good for business. Without this fiduciary duty carefully delineated in a written code of ethics, it is much more difficult for a group of individuals who work in a service industry to create trust amongst members of the public.