There are too many mistakes made by real estate agents – some come from a true lack of understanding of the legalities that are inherent in buying and selling real estate, and others from ignorance, selfishness or stupidity. But either way the fact is that real estate agents need more training and licensing requirements should be much stricter.
I was contacted last week by a lady who felt she had been taken advantage of by her current agents. They failed to inform her about the process of accepting a particular tricky offer, and the ramifications associated with doing so, in order for her toÂ make an informed decision on whether to accept the offer. They did not explain many other things she had the right to know. She was beyond frustrated.
The reason this home seller called me is that she had been referred to me, and liked my legal background – she wanted to fire her agents and have me list the home. I counseled her on the terms of her listing agreement, and provided options and advice; in the end I told her she should try to resolve issues with her current agents so that she could get her home sold since they had already done so much work, while renegotiating some terms and making clear that she needed to be kept in the loop throughout the process. She said she felt much better after speaking with me, and I was glad to help.
The listing agent team she was working with is seasoned, so I was rather surprised that they did not provide information and explanations on many of the forms and processes that come with selling a home. They also charged a 6% commission fee, and they offered 2.5% commission to the selling agent, so they were planning to make 3.5% on the sale! She tried to negotiate with them but they would not do so. She was told that was standard and she had no idea that commissions are negotiable. But I am more disgruntled with other aspects of the sale that I feel were not handled properly.
It is time our national, state and local associations set up mandatory training programs for every agent, and license renewal programs that touch on much of that training so that agents are reminded of their professional and legal responsibilities every time they have to renew their license. Here are some suggestions:
1. Real estate exam – this needs to be more difficult and more expensive to take – that will keep those out who are only in it because they think they will make a lot of money.
2. Across-the-board mandatory training programs – these need to be implemented for all new agents – every broker must comply. This will ensure that all new agents have the same degree of basic knowledge about real estate and law, and the practicalities of sales (forms, paperwork protocol, transaction management, etc.).
3. Stricter license renewal requirements – these also need to be addressed, because the license renewal requirements could be more challenging.
4. Stricter punishment for ethical violations and breaking of laws – as the current rules stand in my state, an ethical violation may or may not be punished – it all depends on whether the agent on the other side of the violation, or a disgruntled buyer or seller – reports the behavior. Unfortunately many do not, because they do not want to be involved in a situation where they are pointing a finger. Agents especially do not like to get involved in ethical hearings because they feel their reputation may be at stake for calling out a fellow agent – thus many unethical agents continue to slide downhill. Punishment is also not meted out often enough or enough to match the crime. The same is true of agents who break laws, like committing fraud. Reporting and punishment need to change.
The real estate business would benefit immensely from the above changes – real estate agents would be a more educated, professional and savvy group of people, and home buyers and sellers would win in the biggest way.