Who holds the ultimate authority on ethics in real estate?

Ethics is a cornerstone of the real estate profession, but the question of authority—who decides what is ethical?—is one that continues to challenge us. As professionals held to high ethical standards, we must ask: Who determines these standards, and what gives them legitimacy?

This topic came to the forefront for me recently while reading Ayn Rand, a thinker known for her sharp intellect and polarizing ideas. Whether one agrees or disagrees with her, her work prompts critical reflection. In an essay titled ‘Who is the final authority in ethics?’, Rand explores this very question in a broader context. It’s a discussion that resonates deeply within our industry, where ethical decisions are not just theoretical—they shape our daily interactions and professional conduct.

What process guides your ethical decision-making?

Before continuing, my question to you is, what process do you follow in your ethical decision-making? Take a few minutes and ponder what your thoughts are, who or what you think is the final authority in real estate ethics and why, because my ultimate answer may surprise you.

This question cuts across all of human history and will likely never be ultimately resolved to everyone’s satisfaction; I must leave these deeper questions out of today’s discussion, but let me start with a personal example and a point of view that will delve into the controversy somewhat.

While I’ve never been in this situation, I have an issue with an Alberta regulation.

Alberta’s rule surrounding personal real estate trades

Wild Rose Country has a rule for Realtors surrounding personal real estate trades; it requires industry members who wish to purchase a property from a person who has chosen to represent themselves to disclose to that person any contemplated future trade of that property and anything we know that could affect the value of that property—so I must tell them they underpriced the property.

This rule was brought in at a time when agents themselves were buying and selling a lot of real estate. I completely understand why it was brought in as we have market knowledge the average person doesn’t but I find no ethical justification for it in most markets.

The seller has chosen as an adult and of their own free will to represent themselves for the express purpose of saving my fees yet I must provide the most valuable service I can offer—for free.

What are your thoughts? Do you have an ethical issue that you question?

My truths and your truths

Given that we have a personal interest in this issue, the first point of view we must consider is our own.

Are each one of us individually our own final authorities on ethics? What’s right and good for me is my decision and what’s right and good for you is your decision—and we may both have different views on ethics. My truths and your truths. Before reading further, toss this around for a few minutes and see what you think.

This is a combination of two closely interrelated ideologies; relativism and subjectivism. Relativism suggests that there are no objective values or truths; all truths are relative to time and place. Subjectivism suggests that all values are subjective, a matter of personal opinion.

While there are arguments to be made for both of these points of view, and they are gaining some popularity, as a worldview they break down.

Popularity often wins but it wins by brute force, not by good arguments. In the end, we are asking to rule by our personal whims. I reject them both categorically.

This quickly leads to anarchy and degradation of society. While many of us make good value judgements, our prisons are full of people who didn’t and more still are walking the streets after having paid fines for lesser violations.

“Organizations are human endeavours and are subject to human failings.”

We also see real estate organizations claiming to be authorities on ethics. This is a powerful claim—to be the authority on ethics for an industry. These organizations must also answer the question: says who?

Organizations are human endeavours and are subject to human failings. If it hires unethical management, its whole claim to ethical authority is undermined. I’ve seen it happen, we all have. Authority is not something we claim, it is something we earn, and still, the question must be answered, says who?

That said, we do have real estate organizations with legitimate claims to being the authority on ethics—namely, our regulatory bodies, but they gain their authority by legislation, not by any proof of ethical superiority and so, their rules must also be subjected to the question, says who? We must legally obey their ethical proclamations but it is also our ethical (and legal) duty to respectfully question their ethical proclamations; they are proven wrong from time to time.