BACKGROUND
In the 1800s, real estate transactions were primarily the result of direct negotiation between buyer and seller,
sometimes conducted with the aid of lawyers when transactions were more complicated. As specialization
developed within the field of real estate and the mobility of people increased, particularly during the western
movement, there was a good deal of unorganized and often unscrupulous real estate competition. Real estate
practitioners began to feel the need for some controlling organization. This was first attempted in 1891 and
1892 with the organization of the ambitious but short-lived National Real Estate Association. In 1908, the
National Association of Real Estate Associations/Boards was formed by the unification of a nationwide
complex of local units or Associations/Boards. The newly formed California Real Estate Associated (CREA,
now CAR) and Los Angeles Real Estate Association were part of the original founding members of the
National Association of Real Estate Associations/Boards. On January 1, 1974 this organization officially
changed its name to the National Association of Realtors® (NAR). Every business and professional group
seeks to attain recognition and acceptance by the public. There is the conviction that if members reach
professional status, such as that held by lawyers, doctors, clergymen, engineers, the standards of business
would rise. Yet experience has shown that even in these recognized professional groups, there must be
supervision by the organization itself as well as by some government agency. All members of an
Association/Board of Realtors® commit to adhere to the N.A.R. Code of Ethics. All real estate licensees,
whether Realtors® or not, are under the jurisdiction of the California Department of Real Estate (DRE),
which was founded as the nation’s first state licensing over-site/licensing agency in 1917.