Posts Tagged ‘Ethics’
Thursday, January 21st, 2016
The real estate business has definitely evolved over the last few decades, with the growth of technology being the main contributor. But when it comes down to it, working with a real estate agent is not just about finding a savvy salesperson, but rather it is about finding someone who truly has your best interests at heart and is willing to work hard to find the right property or sell your home, at the right price, with the best terms. It is not so much a sales relationship as it is a trusted adviser relationship. An agent plays many roles throughout the buying and selling process – researcher, chauffeur, adviser, negotiator, paperwork coordinator, and therapist – to name a few.
As they always will, many people try to come up with ways to find and convert “leads” to clients, from advertising to cold calling to handing out cards to people all day long and asking for referrals from past clients, friends and family members. In the last year I have seen some interesting attempts to woo potential buyers and sellers, and although I am impressed with those who are trying hard, I must say I have been surprised at some of these methods:
1.Â Recorded Calls: I received my first recorded sales call from a real estate agent last year. I was surprised because the agent, who had a lot of enthusiasm, sounded like he was trying to sell me a used car. He went on and on about how he could help me buy or sell a home, and about his strengths as an agent. Now, I must say that selling real estate is not difficult – anyone can do it. BUT not everyone can do a great job at taking care of the PEOPLE, the clients. I have always said that this business is not about houses, it is about people.
2.Â Print Marketing: Marketing via mail and email has always and will continue to be a very strong way for the real estate agent to get business – s/he creates a lovely flyer or brochure and lists skills and past sales and testimonials to make her/him look amazing. S/he even uses words like “Number 1 agent” and “Top agent,” “sold more homes than anyone else.” The trick is that many agents can say these things by putting a spin on the information, and these statements can be true.
Many of these advertisements actually constitute ethical violations in my opinion (and I have been trying to get the rules changed to prevent this, but that is another story). For example, if you are a broker who oversees say 30 buying agents, and among those agents your brokerage or team sold 100 homes last year, how is it ethical for you yourself to claim you sold over 100 homes last year – you did not do that personally, your agents contributed many of those sales. But to the average homeowner who receives your marketing piece, you look like you have done more business than anyone else. Glossy marketing pieces with claims to being “the top producer” do sway the average Jane and Joe many times. Like the political arena, I think that if agents are going to make claims like this they need to explain the truth behind the claims.
3. TV Commercials and movie theater advertising: These types of marketing can also be valuable, but again the time is limited and the agent has only a few moments to convince you of how incredible they are at their job. There is no fine print – but if it gets you to remember their name and call them then the piece has achieved the goal set by the agent. Again, anyone can make a great marketing piece that makes them look like the best agent ever – and of course that is what all salespeople try to do.
4. Broker Calls to Agents About Homes “Coming Soon” to the Market: This newest method is interesting, and is aimed at local area agents. A broker has an agent make calls to other agents’ voicemails, reading from a script about a home that is not yet listed on the open MLS but soon will be – they tell the agents (it seems agents are chosen based on who sells the most in a given area – not all agents receive these calls) that they are giving them a chance to show the property to their buyers before it hits the MLS. Now, if you happen to be an agent working with a buyer and get a call describing the perfect home, this could be a win-win for your client. But if you are an agent and do not get that call, or if you are a buyer looking online and waiting for the perfect home to pop up, you are truly at a disadvantage in such a situation. So this can be a good or poor method of advertising, depending on how you look at it.
5. “Coming Soon” Listings Posted on Third Party Sites: There are some third party sites (such as Zillow and Trulia) that allow agents to post “coming soon” listings. Not all agents can do this – they must pay to become an elite member of these sites, and then they have the “privilege” of posting such properties. It’s great for the agents – they likely get at least some calls from potential buyers – but for those buyers who are not looking on those sites they get the short end of the stick if the home sells before hitting the MLS. Similarly, agents can send out e-flyers or emails about listings that are coming to the market soon, and if this is done fairly (sent to ALL agents in a county), then that is a great advertising tool. It is not fair to the potential buyer who is not working with an agent and who waits for properties to list on the MLS, but of course this is just one of the many benefits of working with an agent (we tend to hear about up and coming listings from many industry sources – agents, appraisers, lenders, sellers, etc.).
From my perspective I believe that all agents should be able to advertise and “sell” their services and skills. But I think there are 2 rules that need to always be adhered to by real estate agents and brokers: 1. Keep it classy. 2. Be honest and ethical. If the local real estate associations who govern agents and make rules set out to make the rules stricter, I think it would be beyond valuable to potential buyers and sellers.
If you are looking for a real estate agent, remember to get the full picture – what can s/he do for you that is different from other agents? Make sure you will not be just a number – some agents have teams of people working for them and they represent many clients – if you like this than great, if not you may want to look for an experienced agent who treats you like you are the only client. Everyone has different needs, so make sure you get all your questions answered and find the person who is best able to help you; shiny materials and boasts about being a “top producer” should play into your decision minimally (although you do want someone who can sell your home with strong marketing and advertising abilities), but you need to feel comfortable with the person and what s/he can offer you.
Friday, April 20th, 2012
Real estate agents or any professionals, take heed: Do you edit everything you send out? Do you read EVERY document the other side sends over involved with a sale? Do you read the contract (even better yet, have you EVER really read the contract in it’s entirety)?
In the real estate profession, as well as many others, there are those who are detail oriented, those who are completely sloppy, and just about all kinds of people somewhere in between. But it will never cease to amaze me when agents do not check their work product before sending it out. There is absolutely no excuse, as you are dealing with contracts that have legal ramifications.
If you represent somebody in a legal transaction, you better make sure you do the following – not only is the risk of a lawsuit great, but your entire reputation is on the line. As an agent, you are required to represent your clients to the best of your ability. If you cannot do so, you may need to seek another profession.
1.Â Read. This is so basic a requirement, yet it never ceases to amaze me how many agents do not read contracts, both before and after they have written them. First of all, if you have never read the required forms, you should! Once you have filled it in on behalf of a client, make sure you go over it with a fine tooth comb and fill in items you may have missed, change those that need changing, etc. If you forget to check or uncheck a box, it could cost your clients money, heartache, loss of a sale or subject them to a lawsuit. They are trusting you!
2.Â Explain. It is important to go over the contract with your clients before and after it is written. Explain to them what the terms mean, and make sure that you have conveyed their wishes properly.
3.Â Proof/edit. This instruction applies not just to a contract or other document you have written, but to everything you do. I am often dumbfounded by some of the marketing pieces I receive in the mail from real estate agents – typos, improper grammar, unfocused photos, blurry words…I would never send anything out like that! Even some big agents in my area do, and it usually makes me both laugh and feel angry…after all, it doesn’t raise the bar too high for the rest of us, does it?
4.Â Put all communications in writing. As a lawyer I know how important this is – even if your client is your family member. If you have a conversation with a client, make sure to send a message referencing what you discussed, and keep all communications in an email folder. If anything happens down the road, like a lawsuit, this is the only way you will be able to prove what was discussed.
5.Â Admit when you don’t know the answer, and get help or advice! It is ok to not know the answers sometimes – we all face this issue, and we are only human. Admit that you do not know and then find someone who does. This applies to tricky situations too, where you have to make a call. Getting the feedback of another whom you trust (like your broker, or if you are the broker, another trusted broker or attorney) could be a major difference in the outcome. The California Association of Realtors (C.A.R.) has a free legal hotline for members, as most associations do – take advantage of it.
6.Â Do your homework first. No matter what you do you need to investigate before submitting any offers, taking any listings, or venturing into a short sale or lender owned property. Contact your title representative and find out if title is clean and find out about liens on the property. Contact the listing agent and make sure s/he knows what they are doing if it is a distressed property. Pull up the assessor record. Don’t ever jump into something blindly without knowledge of what you may be getting into – it simply isn’t fair to your clients.
7.Â Always act professionally. This applies not only to your interactions with your clients, but also to fellow real estate agents and brokers. There are too many people in many industries who do not treat others in a professional manner. Eventually you will sink yourself with a bad rap if you can’t be a true professional. Real estate agents all know whom they don’t want to work with in their area…you don’t want to be that person.
As in any profession, there are always bad seeds who will tarnish things for the group as a whole, but if we all make sure that we do right by our clients, colleagues and by ourselves, we will not only make others happy, but we will also feel happier and have a productive career.
Friday, May 13th, 2011
To whom are you accountable? What popped into your head first – boss? Spouse? Friend? Yourself?
I am amazed every day by people, and usually in a positive way. I believe that the majority of people are good, have big hearts and care about others, seek to do justice and hold themselves accountable. But of course there are some who do not. They may by nature be unwilling to hold themselves responsible, not care about how their actions affect others, or may do so because of stress (economic, relationship, illness, etc). I do not hold a PhD but I am analytical by nature and consider myself a pretty good judge of character. I created the following categories of accountability…see what you think.
The moral person holds herself accountable to herself, first and foremost. She knows if she does something that is not right she will not only affect others, but feel badly. She will want to take action and admit her faults. She also holds herself accountable to others. For many this is just part of who they are. It is part psychological and may be inbred, but also has a lot to do with how you were raised, where you live and with whom you associate yourself.
The pleaser holds himself accountable to others, like his boss or teammate, someone he looks up to or with whom he is in a relationship. He is eager to please and if he is surrounded by moral people he will likely become a moral person. His confidence will rise when he does something right, and if the people around him teach him to hold himself accountable he will be successful and confident.
The know-it-all is the person who actually thinks he is in the right, even when he is not. He may or may not hold himself accountable to anyone in particular. He is the one who, when called out for being unprofessional or making a poor choice, does not admit he is wrong or even apologize. I think deep down he knows he is not in the right, but he may see himself as superior or may just not want to admit to others that he was wrong. This person may have been surrounded by hard to please parents or peers at times of crucial development. He also may just have low self-confidence. These types may hold themselves accountable to others they admire, but they may do so temporarily, depending on what the big plan is. These people CAN be healed with a little confidence and some good guidance.
The immoral person really only cares about herself and does not hold herself accountable to others, maybe not even herself. She does not consider the feelings of others, or maybe does but does not really bother with them. She is out for herself – maybe to make a quick buck, get to the top, make more money. She may have been raised that way, or she may have hardened herself due to circumstances she has faced in life. She may even not consider her actions to be immoral or even wrong, and may just need to associate herself with the right people to change her viewpoint.
I created the above list because I see these types of people all the time. I saw them when I practiced law, when I was not working and raising my children, and throughout my real estate career. There may be a few other categories you may think of, and some people may fall into several at different times.
I think the lesson here is that we all should ask ourselves to whom we are accountable. We need to be accountable BOTH to ourselves and to our clients, peers, family, friends. If you make a mistake, do not be afraid to admit it. Do the right thing and you will not only be more successful, but happier.
Thursday, September 17th, 2009
Has anyone wondered lately what happened to good old business ethics? With the overwhelming number of short sale and REO properties on the market, it seems that some real estate agents need a refresher course in ethics.
I have heard countless stories from agents about listing agents abusing their authority as the representative of or conduit to the lender. This typically has been seen, for example, when say a listing agent with a short sale or lender-owned property receives multiple offers. As most lenders do not want to have to sift through these the agent is usually asked to submit one or several of the best offers.
This gives the agent a lot of power. After all, what if all the offers are close but another agent in his/her office submitted one? Or what if the agent holds the home open and a buyer comes along who writes an offer with the agent? ORâ€šÃ„Â¶what if the agent uses the verbal intent of another agent to write an offer that is higher than offers he/she already has, and tells other potential buyers that a higher offer is coming?
Since the code of ethics tells us that we are representatives of our clients and must do right by them in protecting their interests, is there a conflict if your client is the lender? One can certainly argue that there could be in certain situations.
Unfortunately I have heard these stories too often. Why isn’t N.A.R. and the DRE policing this blatant disregard for professional ethics and unfair treatment of qualified buyers? The code of ethics gives the Commissioner broad authority to investigate ethical complaints, but the reality is that many agents are afraid to file these complaints. Why? Because it might mean losing a deal for their client or essentially â€šÃ„Ãºblacklistingâ€šÃ„Ã¹ themselves from writing future offers to agents who list many of these types of properties (which could be detrimental to future clients).
I have to say that there are many agents who uphold the highest ethical standards, and to them we are all grateful. But as you know, it only takes one apple to spoil the bunch. These are the kind of shenanigans that put Realtors in a bad light. For those who choose to make their own rules, stricter investigatory procedures and penal consequences need to be implemented.
Please join me in drafting letters to N.A.R. and the DRE to get them to recognize what is going on in this market. We need to use our voices; hopefully others will join me in making them as loud as possible. In times like these we need to band together and be even more diligent in protecting the interests of our clients.