Alienation or Amelioration?
It’s been a catch phrase since my first day of licensing class… I remember distinctly the instructor saying, “We need to increase professionalism in this industry and good education is the key.” He then proceeded to ask each student to read a section of the proceeding chapters out loud. And that’s what we did for sixty hours. We read out loud, had some nominal discussions about agency and then took a test. All the while being reassured the the licensing program had little to do with actually practicing Real Estate – great. What a waste of potential time to influence the next wave of practitioners…
Now I am an educator and have also served clients both as an agent and broker. I have worked with some of the best and the worst the industry has to offer, but all the while I’ve heard and participated in talk about “Raising the Bar”. This is almost always on the heals of an agent getting scorned in some way. At some juncture an agent finds something unfair or unsettling about a transaction or practice and shares it with anyone who will hear. Will they gossip and complain about it? Yes. Will they reduce it to writing and put their name to it? Rarely.
The concern I have today is that many people who declare that the “Bar” needs to be raised aren’t utilizing that tools that are out there to actually bring some change to the practice of another agent. I’ve heard the rationale of inaction, but sometimes I don’t think it’s justified. Could it hurt your future dealings – maybe. Could it label you as a tattle-tale – probably. Will it make you any friends – never. Regardless, the real aspiration to change is usually in direct proportion for potential repercussion of indiscretion.
Therefore I am left with the question: Why would a group of people who have the ability to pursue justice desire to not do so and then ask for more regulation? Wouldn’t more requirements simply be just more rules to infringe upon with no real deterrent? Or is it that many would simply like the requirements of education to be higher in order to dissuade individuals from getting or keeping a license thus eliminating competition without the need for actual action?
How High(or low) will You Go?
Mandatory Education as a tool against nefarious action is myth. Mandatory Education as a tool to increase professionalism is a scheme without foundation. People will swim across dry deserts if they think there is an easy reoccurring six figure income at the end. You can increase pre-licensing education all you want, but without actually using the time to teach something of value it’s pointless. Mandating excessive educational requirements in the hope that problematic people will go away, is a waste of good legislation. We can mandate 100’s of hours a year of education for REALTORS®, but all you will have are weary and bitter practitioners in your classrooms… Yeah, that’s a great learning environment. Covering Fair Housing for three hours every year, when it hasn’t changed in my state since 1988, is a great waste of time. Look, I’m not knocking Fair Housing training. Frankly, I think it’s one of the most important issues we sometimes face – but, it hasn’t changed. If you limit someone’s right to live peacefully, because of their color – you’re an idiot and nothing in my lecture is going to change that. This point is compounded by the fact that only 2% (according to some reports) of Fair Housing violation deal with Residential Sales (83% of practitioners) and deals mainly with rentals (4% of agents). Only enforcement of the rules will dissuade you from acting that way, not laboring that point with people who aren’t misbehaving.
Giving educators more time in the front-end of licensing will help to better prepare the agent, if we’re allowed to use that time for budgeting, marketing, business planning, professional development etc. I’m all for that. That better prepares the agent to go serve the pubic – but it wont’ make them more responsive, more ethical or change their desire to put money before people.
At what point do we stop ‘Raising the Bar”? Is it when there is such a high requirement of mandatory education and manure to wade thru that you can’t possible have time to actually find and work with a client. This industry is highly regulated – it’s simply that no one is initiating the process.
The Case Against Mandatory Education
I am all for education – it’s the silver bullet that sets us apart from one another. However, some jurisdictions have taken this too far and have enacted or proposed regulations to make education something agents will resent and not embrace.
Some of the worst white collar offenders are highly educated people. That education just gave them the tools to steal more money, than those who weren’t as highly educated. Way back when I worked in IT, my primary clients were schools. I remember vividly the conversations amongst the teachers talking about the crappy performance of most of the teachers in the system. In one long conversation the teachers pointed out that those educators with Masters Degrees and PhDs were so full of theories that there were no longer relevant to today’s learners. (I don’t think that’s always the case, but I’ve personally been bored more often that not with the uber-educated.) Every industry has good and bad employees…
There is something in people that makes them ideally suited for jobs they do well. It’s the perfect aggregate of personality, intuitiveness and desire to do well. Without the desire to do well, REALTORS® will continue to give poor service – that is not something we can change.
The higher the demands on mandatory education, the more it will push agents to take the path of least resistance. They will go to the online schools that allow you to get 10 hours of credit for 25 minutes of reading and a quiz. What will that accomplish?
No REALTOR® Left Behind
It dawns on me that Public School system as given the “No Student Left Behind” edict and has taken the actually learning process out, in order to ensure passing a test. We’ve done the same with vocational education. Many educators no longer even try to teach Critical Thinking Skills. They simply read or lecture what’s given, never trying to help the REALTOR® actually put the pieces together.
Doesn’t the Infinite Monkey Theorem tell us that given enough time and enough monkeys that they could type the works of Shakespeare? I don’t want to be trapped into to actually getting the attention of an agent in a learning environment, and then have to drill drivel about basic agency theories every year. Let’s make education count and not use it as a broadsword to sweep away competition. Let’s use it as a tool to mold learners.
The Real Answer
So as not to be accused of not wanting to increase professionalism, I want to be very clear. I am of the opinion that professionals need to be held accountable and that we have a lot of growth to be done in this industry. That said, the answer in my opinion is enforcement. No one knows better than an agent what is legal and acceptable practices. Why shouldn’t they also be the primary defense of the consumer against those agents who do not adhere to regulations?
If agents do not want to be accountable to hold others accountable than the only other option is to increase licensing fees and hire people to do field reviews of transactions – but warned… It’s been my experience that virtually no agent has practiced without a mistake somewhere. The issues with investigators is that the will hunt to find something that will justify their existence – you’ve been warned.
I think clearer regulations, more agents holding others accountable and Brokers being made to suffer the same consequence as an agent who causes malice are all better steps to improving the industry than simply making people hate to get training…
What do YOU think will make a difference?
Bob
September 23, 2009 at 3:11 pm
Ethics and moral behavior is a moving target, so you cannot depend on increased professionalism as a governor.
I agree that enforcement is the key. There needs to be a deterrent to doing what is wrong, especially when trusted with something that carries the financial consequences (both good and bad) as real estate.
The concept of ‘raising the bar’ only works if failing to clear it means falling on the bed of nails beneath it.
Matt Stigliano
September 23, 2009 at 4:28 pm
Matthew – On the issue of “policing ourselves” I’m curious to see what your take is on this…
I went for a listing appointment. One of my first ever. Didn’t get the listing. It went to another agent. That agent then used a little trickery to reset the cumulative days on market counter (moving the home to a different, but similar address for a short period of time – the address was so similar that it looked the same if you were reading it, but showed up on a different spot on the map). The home had languished on the market at a lower price and this particular agent cleared the records and then (gasp) raised the price. Had the listing history been there, no one would have wanted to buy that house at it’s new price, but since it was no longer an issue…
(The house has not sold to this day.)
Of course, I was a bit bitter because I had lost the listing, but the more I thought about it, the more I got frustrated by the other agent “not playing by the rules.” So I went to the board with it. After three weeks, they still couldn’t understand what the problem was. I drew it out for them, sent them a detailed email of how it occurred, sent them MLS numbers and links supporting my complaint – everything. And they still couldn’t see it. It was plain as day to everyone else (agents) who saw it.
The problem was that the people at the board that were to deal with the issue didn’t even understand how the MLS worked or how this could be possible. So nothing was ever done, because in the end, I had a business to run and couldn’t spend another hour on the phone with someone who couldn’t understand how to look up and compare two properties (that were actually the same thing).
It was frustrating to say the least and my first experience with dealing with something like that. I have not sworn off “policing” when necessary, but have not had the most confident response to it in the first place.
So I’m curious to see what your solution would have been.
Lani Rosales
September 23, 2009 at 5:21 pm
@mattrathbun you hit the nail on the head here of one of the things that drives me absolutely effing insane about the real estate industry… too many “raise the bar” screams but little enforcement. Like you, I don’t think over policing is the answer but shoring up the existing infrastructure is.
Although I can’t remember the name of the city, there is a New England town that sits atop a massive water supply line that is so decrepit and old that they cannot empty it to repair it because the pressure of the water is holding it together. Surrounding cities with good infrastructures are screaming that infrastructure money for the state should be devoted to mandating solar panels on all homes while this one particular town could potentially be eternally flooded and destroyed if not somehow repaired.
That is kind of how I see the “raising the bar” issue- it’s a bellow of the yarping masses that equates to screaming for solar panels. Great, hug a tree, hippie, but my house might be completely underwater for eternity if a problem I didn’t create that no one knows the cure to becomes disastrous.
So what is the answer? Revitalizing the existing infrastructure of the real estate industries starting with massive audits of instructors and teaching methods all the way down to allowing anonymous complaints to the board (with the burden of proof being on the complaint lodger). Holding brokers to a higher standard to enforce the bar is the easiest solution, however and also the least likely as the industry standard is still to be a slash and burn recruiting model.
I don’t know, Matt, there’s not a realistic answer and the “police yourself” thing is a freakin joke- tell a crackhead not to smoke the crack you conveniently left on the counter and walk out and just SEE if you don’t come back to a crackless counter and a dude licking your walls and rearranging your furniture.
Matthew Rathbun
September 23, 2009 at 10:00 pm
Matt,
That’s a great question, but I think you answered your own question. It’s not that there wasn’t enforcement options, but it was that you didn’t feel the issue arose to the level that it was more important to pursue your other work than to spend the time to write the complaint.
I would imagine that your state has regulations against deceptive or misleading marketing, if not the Code of Ethics does. So even if the MLS committee was a bunch of wing-nuts, there were still options for you.
You decided directly or indirectly that your energy was better spent elsewhere. That’s ok… Not ever battle is yours. But the burden of proof of a potential infraction should be yours to put together – otherwise we just have people filing complaints just to harass you and investigators spinning their wheels on complaints with no basis; all the while detracting their attention from honest-to-goodness issues.
Lani,
The policing-yourselves may be a joke… but it is what is. With the exception of sting operations, most of America’s justice system is based on someone needing to sign a complaint somewhere. There may be some independent police work to the contrary; but the vast majority of those law enforcement actions still require a victim or witness to call the Police to file a report or to go to the magistrate and swear out a warrant. I can’t call 911 and say that someone just beat the crap out of me, hang up and never to speak to someone expecting that the assailant will get found arrested and disciplined without my involvement.
Dan Connolly
September 23, 2009 at 10:07 pm
@Matthew, this is a great post! You have really hit the bulls eye. I am tired of the endless calls for more education and higher entry fees. Ethics can’t be force fed. I have always felt that either you believe it and live it or you don’t. No amount of education will change that belief, but fear of punishment may change the behavior and give the same result.
@Lani Wow you can really paint a picture! “just SEE if you don’t come back to a crackless counter and a dude licking your walls and rearranging your furniture.”
Matthew Rathbun
September 23, 2009 at 10:10 pm
@laniar @Dan… Honestly I had to re-read her “licking the walls” comment to make sure that was really a “w”… #justsayin you never know what may come out of her keyboard
Bill Lublin
September 23, 2009 at 10:55 pm
Matt R. great post but , with all due respect, you really don;t provide credit for the efforts of the pro standards committees in every associaiton in the country. Those are people that are devoted to raising the bar – and they work on it all the time
Matt S. Go back to your board and make a formal complaint that the agent violated Article 12 of the Code of Ethics – that’s the “true picture” article of the code – If the agent failed to present a true picture in thier representations to the public, they can be found in violation of the code – If you need help framing the complaint just call me or DM me on twitter – but you have the basis of a legit complaint – which the hearing panel may or may not determine constitutes a violation of the code – but that’s due process –
Lani – The enforcement mechanism for our industry is not the crack addicts, they’re the five-oh – the po-po – the Professional Standards committees – and they’re generally not the bad guys – just use them – its why they volunteer
😉
Jim Duncan
September 23, 2009 at 11:48 pm
I’ve said my piece on this several times, but I’ll say it again here, with an example.
I was in a recent meeting with a bunch of top Realtors, discussing this very issue. I asked the dozen or so Realtors in the room how many had ever *ever* filed an ethics complaint. Only one raised his hand.
Until we get our leaders to buy into the “policing our own” façade, how can we expect “boots on the ground” Realtors to abide by either the ethics or the policing option?
Another example – in a Realtor board of 10k+ agents, last year there were 40 ethics complaints, ~ 10 of which were filed by the public. Does anyone think that there are so few violations?
The system is broken.
All I can do is lead by example.
Jillayne Schlicke
September 24, 2009 at 12:14 am
A code of ethics with no sanctions for violations is like having no code of ethics at all.
The Bar association has a test that lasts for 5 days. One entire day is devoted only to a test on ethics. They ruthlessly self-regulate. When an attorney violates one of their code provisions, there’s a formal system in place to gather all the facts, etc. We offer members a mandatory 3 hour class every four years.
Regulating ethical conduct takes time and money. If an industry wants to raise the bar on professional conduct and ethics, then the industry should be prepared to pay their due$ in order to raise the professional conduct for all.
All attorneys must be a member of a state Bar.
Not all real estate agents are required to be a member of their state assoc of Realtors.
These changes can happen gradually but they must come from within the profession itself.
Yes there will always be sociopaths in any profession much like what Lani describes. It is up to that profession to quickly identify them and kick them out.
Sometimes they are the top producers…..
Bill and Matthew are right. Realtors need to be educated on the long term (good) consequences of the minor time invested to make the industry better.
There are many paths to follow.
Here’s another suggestion. What about creating a mentorship system where new agents would be mentored for the first X number of years of their career? We’ve moved away from having sales managers or any kind of supervision of agents nowadays and I think we have a decade’s worth of agents who could use a Realtor Code of Ethics mentor, one on one.
So many times I hear Realtors in class saying “that’s not ethical!” when talking about what one agent is doing. However, maybe that person’s conduct actually is ethical but the first Realtor was missing some key facts. When people talk WITH each other directly, without some scary enforcement mechanism looming overhead, we might see that instead of ethics problems we have communications problems instead.
Paula Henry
September 24, 2009 at 12:18 am
Lani – only you could make me laugh at such a serious issue.
Policing ourselves is a grand idea, but in practicality leaves the complainant open to retaliation by their peers.
The answer IS to “keep on fighting” but like Matt S. said, at some point, you still have to do business. Of course, you could continue the fight and the other agent gets a slap on the wrist, a warning or nothing and you have wasted hours trying to fix an obvious problem.
My own experience has been the powers that be like to hold up the “self policing proclamation”, while deciding who has to play by the rules.
Regardless of how many times we write about it, the truth is, the process is time consuming and hinders our business.
Matthew Rathbun
September 24, 2009 at 6:29 am
There are all great points. Let me give you three other thoughts not in my post…
a.) The “Code of Ethics” is a inherently bad title. I cannot regulate “ethical” behavior… They are in fact a standard of practice, but I cannot make you ethical in a three hour class every two years. All I can do is teach you NAR’s rules of conduct. Too many times agents come to me with gripes about another agents such as “they never return phone calls” or “the other agent was just rude”. Those aren’t violations, they are bad business practices…or lack of “professional courtesy” There’s really no way to regulate that and it appears in every aspect of life.
b.) The peer based NAR Professional Standards system is a good concept, but occasionally those panels are woefully under prepared. Our Association works hard at finding experienced and educated folks, but not all Associations do. I’d like to see a two day very demanding annual re certification program for all professional standards members. That’s just me…
c.) I don’t know if anyone is doing this, but I’d like to see a highly trained state investigator in every local jurisdiction who is able to take on some of the ongoing issues, do random spot checks for Brokerage compliance and investigate complaints, using the complainant as a witness. Then taking the matter to the Pro Standards Committee or Real Estate Board for a hearing. It’s expensive and will terrorize even the good agents, but it’s the only option (IMHO) other than what we’re doing…
Joe Sheehan
September 24, 2009 at 8:01 am
Responsibility also lies with brokers who’s primary interest is to fill seats with warm bodies.
How about a little due diligence?
I’ve sat on both sides of the interview desk on many occasions through my career. It’s OK to ask prospective agents questions. News travels fast in our industry.If there are anecdotes or gossip about someone’s ethics, ask them about it. Ask them for their side of the story. If they can’t adequately account for their behavior, send them down the street.
If the brokers skillfully interview agents, they can keep the charlatans out before they commit ethics violations.
Ken Brand
September 24, 2009 at 10:08 am
What a sticky-wicket. I don’t have anything brilliant to add to your points and those of the commenters.
What does come to mind, is the nightmare of enforcement. Suppose next Monday all offenders were reported. I don’t know all the rules, but I guess they get a hearing. That means a jury. That means jury duty for someone. If it’s a committee member, will they have the time. What about an appeals process. I imagine an eventual lawsuit against the Board, restraint of trade, etc. would materialize and slow the enforcement process.
It’s a freak’n mess for sure. I am encouraged by the evolving ability for consumers to rate their agents. Consumer power is the mightiest.
Great points all….