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Professional Realtor

This post started as a comment to Matthew Rathbun’s brilliant post.   At the end I decided to make it a post

Truly a great post, Matthew!

I believe that the bulk of the clamor for “more professionalism” that emanates from agents is mostly self-serving gibberish. A person gets into real estate and then observes that the public does not tend to hold Realtors in extremely high regard. Personally, they want to be held in extremely high regard but can’t really see how they can differentiate themselves in the eyes of the public from all the other Realtors – so naturally, establish how “professional” they are by endlessly talking about how “unprofessional” some other Realtors are.

All the while, without once ever bothering to even trying to define “professionalism”.

You hit the nail on the head here with regard to more education: lawyers, for example, are all “highly educated” and yet are not much more highly regarded than Realtors. Why?

Professions that are “highly regarded” tend to be professions where the advice being given is *exclusively* for the benefit of the public or the person receiving that advice: a librarian, for example. The librarian’s personal biases and preferences may well be part of their recommendations – but few people would suggest that certain books get recommended for reading so the librarian can get extra money. The same “high regard” holds true for professions like nursing but tends to fall off a bit when it comes to physicians (they *are* sometimes thought of as money motivated).

We are all salespeople and therefore will always be – rightly – regarded by the public as salespeople. Some of us are quite “professional” at selling, some aren’t. No set of rules or regulations is going to cause people who have low or questionable morals to suddenly act right. Enforcement alone does that.

What would have to change is the complaint procedure – so that agents (who are in a *much* better position to observe wrongdoing) can easily, and in a very short amount of time, file a complaint (sort of like calling 911). Then the investigation and enforcement unit would have to be able to actually look – instantly dismiss complaints without merit or grudge motivated complaints – and take swift action. In short, we would have *real* justice. As we don’t have such a thing (real justice) anywhere else in our society – in this country or any other – I’m not holding my breath waiting on that one.

The most effective thing one can do is to BE the change they hope to see in others. That isn’t an original thought of mine. But I don’t know a better one.

Russell has been an Associate Broker with John Hall & Associates since 1978 and ranks in the top 1% of all agents in the U.S. Most recently The Wall Street Journal recognized the Top 200 Agents in America, awarding Russell # 25 for number of units sold. Russell has been featured in many books such as, "The Billion Dollar Agent" by Steve Kantor and "The Millionaire Real Estate Agent" by Gary Keller and has often been a featured speaker for national conventions and routinely speaks at various state and local association conventions. Visit him also at nohasslelisting.com and number1homeagent.com.

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32 Comments

32 Comments

  1. Matt Stigliano

    September 23, 2009 at 4:45 pm

    Russell – Great follow up. My comment to Matthew revolved around the “self policing” aspect, so I like your post. I don’t think that our own policing is working and of course, it has been used to fight dirty in the past (and in the present I’m sure). Without some sort of solid way to correct bad actions, I fear we won’t move terribly far forward in terms of “professionalism” (in our eyes or the public’s).

    I’m not 100% sure it will ever happen either. Not that I wouldn’t work towards it, but I’m just not sure it can be done without devolving back into exactly what it is now.

  2. Matthew Hardy

    September 23, 2009 at 6:02 pm

    > The most effective thing one can do is to BE the change they hope to see in others.

    … and life becomes easier and filled with more joy. Wonderful Russell.

  3. Kevin Forrester

    September 23, 2009 at 6:17 pm

    Russell,

    In 2008, the California Association of REALTORS obtained NAR approval of a “citation system” for enforcing the REALTOR Code of Ethics. Under this system, anyone (REALTOR or member of the public) can file a complaint (anonymously or otherwise) with the Association alleging a Code of Ethics Violation. Once an Association committee determines that a “citable offense” (according to the Association’s schedule of offenses) has been alleged, a citation is sent out to the alleged violator. The alleged violator can elect either to pay the fine (like a traffic ticket) or opt for a full due-process hearing on the merits. This system may adopted by any local Association, or not, at their option. The idea being that the “citation system” will result in greater enforcement of the Code of Ethics, as compared to the full-blown Professional Standards hearing which takes a very long time and a great deal of effort by everyone involved.

    The goal is, as you say above, to increase professionalism in the industry by putting in place a more effective procedure for enforcing the Code of Ethics. Our, approximately 4000-member Association has opted NOT to adopt the citation system because we are not convinced that it would be an improvement over our current system, and I can’t speak to the results of any other California Associations. But I think our, and your, intent of increasing professionalism is a good one.

    Does anyone else have experiences with this type of “citation” system? You are more likely to have experienced it in the context of MLS rules enforcement, than in Professional Standards enforcement.

  4. SarahGray Lamm

    September 23, 2009 at 8:09 pm

    Is this the chicken and the egg controversy? Will the public perceive we are “professionals” once they determine that they would benefit from working with a “professional” or will the public determine they should work with a “professional” once they perceive we are “professionals”?

    There is somebody out there for everybody…if you conduct yourself with integrity you will attract those with integrity…or is it that if you work with those with integrity you will conduct yourself with integrity? Or vice versa…

    I’ve known too many folks who confuse ethics with morals and then define each in their own terms. We must take personal responsibility for our own actions and then understand that still, not everyone will appreciate us. I’m going with BE the change and stop worrying about it!

  5. Bill Lublin

    September 23, 2009 at 11:04 pm

    Russell – Great post dude! Amazed that you always manage to speak my mind 😉

    Matt – Dude you really need to go volunteer for the local association grievance committee and then the pro standards committee. We/they need you there. And I think you may be surprised when you find out how much they do..

    Kevin; I have to disagree that the Pro Standards hearing system “takes a long time” though it does take effort – but everything good that I know about does – my guess is that my rockstar friend Matt didn’t play like a star the first time he picked up an instrument. – but the result was well worth the effort. The citation system does have a siren like appeal though – it just seems so easy – as long as no mistake is ever made…

  6. Matthew Rathbun

    September 24, 2009 at 6:42 am

    Kevin: Where can I get more information about the citation program?

  7. Joe Loomer

    September 24, 2009 at 7:34 am

    It is a very long journey from bad agent to criminal or unethical behavior. I’ve worked with several I’d sooner shoot than allow near a client, but their behavior and actions had a lot more to do with lack of education, being lazy, rude, inarticulate, or simply “not brought up right” – than it did with ethics or violations.

    These agents are the true enemies of the dilligent and ethical – not the other violators that will break a rule regardless of their chosen trade. They will harm our reputation more than the fined agent who didn’t put a picture in the MLS for two weeks.

    It is also a fine line between policing fellow agents with other firms through a complaint system, and maintaining your own professionalism by not speaking ill of the offenders (in other than the context of the complaint). In our own small area (approx. 1,500 member board), it’s the old boy network at play – so complaints are dealt with by the old guard at the board in a smokey back room over a glass of brandy – or so it seems.

    Navy Chief, Navy Pride

  8. Ken Brand

    September 24, 2009 at 9:52 am

    I think that professional standards enforcement would help if, as you’ve shared, the process was simple and effective. It’s been my experience that you’d have to murder or assault someone to get in real trouble with the board. Also, like you said, let’s not hold our breath.

    I’m encouraged by the progress internet rating systems will have. Real progress will be made when consumers have better tools to evaluate the credibility and ability of the agents they are considering. This evolution may take some time, but it’s moving pretty fast.

    Good stuff.

  9. BawldGuy

    September 24, 2009 at 12:20 pm

    Let me get this straight. An anonymous charge can generate a citation merely because it is ‘alleged’ that an ethics violation has occurred. Just alleged, not proven, no due process — the agent has the ‘choice’ of paying the fine or fighting what’s been alleged.

    Really? Is this a joke? In what country are we living?

  10. Benn Rosales

    September 24, 2009 at 12:26 pm

    @bawldguy it’s called Kangaroo court land 🙂 https://en.wikipedia.org/wiki/Kangaroo_court ‘see other usage’

  11. Matt Thomson

    September 24, 2009 at 5:46 pm

    My thoughts exactly! I wish those other non-professional agents would read thi…oh, wait. 🙂

  12. MIssy Caulk

    September 25, 2009 at 9:13 am

    How to you educate or give a citation to a agent that doesn’t call back? I’m not talking about calling other agents back, I am talking about calling potential buyers back.

    This is fresh in my mind as I had a call on Wednesday from a buyer…ie…investor who called. He said he had tried to call several Realtors as he was looking to invest in real estate and no one had called him back.

    One I answered the phone, when he called. Next got him to a buyer agent, who took him out, then he wrote a cash offer on a foreclosure. All within 2 days.

    How do you train or educate on this? His perception of Realtors was not good obviously.

  13. J. G. Keating

    September 25, 2009 at 9:54 am

    Anonymous charges can open a whole can of worms. Why can the charges be anonymous, even if you file a complaint with the police you have to state your identity?
    Oooh I would vote against allowing agents to file anonymously against each other. That would not be good.
    Even really good agents could find themselves spending countless hours defending frivilous claims and a lot of the charges may be JUST BECAUSE THEY ARE GOOD!

    I would really like to hear how that process is working!

  14. Bob

    September 25, 2009 at 11:57 am

    Once again Google has come to the rescue!

    With sidewiki you can just leave an anon comment on the offending (or is that offensive) agent’s website and let the world know how unprofessional and unethical the agent is.

  15. Jim Lee

    September 25, 2009 at 12:29 pm

    In the America I live in you have the right to confront your accuser, no anonymous BS.

    If somebody thinks you done em wrong, let em show up in front of a Professional Standards Committee at a hearing and prove it to them.

    As an active member of my association’s leadership I have served on Grievance Committees, Professional Standards Committees, and hearing panels. It’s pretty hard to BS members of your own profession whether you’re right or wrong.

    I would not be in favor of anonymous complaints.

    The process we have in place right now works fine in my hardly ever humble opinion.

  16. Jim Gatos

    September 25, 2009 at 12:48 pm

    Lately I had an epithany..

    I no longer give a “rat’s ass” about what others may think or say.. especially those “professional real estate agents” who always seem to have a smart answer for everything.. I do what I want to do (provided of course, I follow rules, laws, and the realtor code of ethics), and my marketing systems and programs are ONLY for my clients and prospects to judge, NOT “Joe Schmoe, I only sell 4 houses a year and yet I’m a legend in my own mind, Realtor..” LOL..

    If it’s true and works for me, THAT’S what matters..

    I can’t begin to tell you how many times I’ve had some dopey agent say to me “You can’t do that”.. They disappear and” shrivel” away when I email them a copy of the section of the code of ethics that show THAT YES, I CAN DO THAT!….

  17. Kevin Forrester

    September 25, 2009 at 2:03 pm

    Anonymous complaints are not a new concept. Citations issued on anonymous, or non-anonymous complaints are new.

    Today, in the system we all operate under right now, when complaints are received by the local AOR (anonymous or otherwise) they are sent to the Grievance Committee for evaluation. The Grievance Committee reviews the complaint to determine if the facts, as alleged, support a claim for violation of the Code of Ethics. The Grievance Committee can dismiss the complaint if the facts alleged do not support any claim, send the compliant on for a disciplinary hearing, or send the complaint on for an arbitration hearing if the complaint involves money, not ethics. The Grievance Committee can also, in the case of anonymous complaints supporting a claim for violation of the Code of Ethics, decide to step in as the complaining party and take the case forward to a disciplinary hearing. None of this is new. As REALTORS, this is the world you live in now.

    What is NEW is the idea that, after determining that a complaint supports a claim for violation of the Code of Ethics, the Grievance Committee can issue a citation for the alleged violation and send it to the alleged violator. The alleged violator, upon receipt of the citation can either take an ethics training (if that is offered as an option), pay the fine, or elect a full ethics hearing on the allegation.

    Those of you who drive cars will recognize this a similar to the option you have when you receive a citation for violating the vehicle code. You can elect to either pay the fine or go to traffic court. Paying the fine is quicker and easier than going to court, but serves the same purpose of encouraging compliance with the vehicle code.

    Encouraging compliance with the Code of Ethics seems to be one way to increase the level of professionalism in our industry. Establishing a process for citing agents for violating the Code of Ethics seems to be one step toward that goal.

  18. BawldGuy

    September 25, 2009 at 2:35 pm

    Sorry Kevin, no sale. Comparing a citation for ‘alleged’ wrongdoing to a traffic ticket is the argument against the new approach, not for it.

    Let me count the ways.

    1. The cop isn’t anonymous.

    2. He’s ready, willing, and able to show up to back his allegation.

    3. He has empirical evidence more than 80% of the time. Ex: Radar showing you going 45 mph in a 30 mph zone.

    4. It’s his job, and he knows exactly what he’s talkin’ about.

    5. It’s part of due process, as opposed to being strong armed.

    The new citation approach reminds me of Mexican traffic cops. You pay them out of fear and trepidation so as not to have your life interrupted by predetermined outcomes.

    ‘Course, all this is just my opinion.

  19. Kevin Forrester

    September 25, 2009 at 3:29 pm

    If anything I said in my above post led anyone else to believe that I thought that law enforcement could issue anonymous tickets, I apologize. Law enforcement officers must sign their tickets and show up for trial, if there is a trial.

    “Anonymous” is a red herring as it relates to the citation process.

    If John Q Public cuts out a real estate advertisement containing possible violations of the NAR Code of Ethics from his local paper and anonymously mails it in to the Grievance Committee of the local AOR, the Grievance Committee will act on that anonymous tip just as I have described above, because that is the Grievance Committee’s job.

    The Grievance Committee might decide to bring an ethics complaint against the agent or broker who placed the advertisement. The Grievance Committee would act as the complainant in this case, and would show up for any hearing and make its case.

    Under the Citation Process that I’ve described, the Grievance Committee could also issue a citation for the alleged offense, in which case the Grievance Committee would be named as the complaining party. If the agent or broker wants to have their “day in court” after receiving the citation (like a traffic ticket) they would be entitled to have their day in court. They would also be entitled to pay the fine.

    What the agent or broker would not be entitled to do (with any effect) is to argue that they are innocent of any Code of Ethics violation because John Q Public mailed in the offending advertisement without signing his name.

  20. Fred Romano

    September 25, 2009 at 4:17 pm

    Sounds like the CA real estate system is just wacked! Good thing I don’t live there.

  21. Kevin Forrester

    September 25, 2009 at 4:31 pm

    Fred, the National Association of REALTORS Code of Ethics enforcement process that I’ve described, except for the “citation policy,” is the same in all 50 states.

  22. Aimee Ghimire

    October 29, 2009 at 6:45 pm

    Russell,
    Yes! Great words on simply taking responsibility and actually being the change. Complaining is easy. Becoming a professional of absolute integrity is an entirely other matter.

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Coaching

Disputing a property’s value in a short sale: turn a no into a go

During a short sale, there may be various obstacles, with misaligned property values ranking near the top, but it doesn’t have to be a dealbreaker!

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magic eight ball

It’s about getting your way

Were you on the debate team in high school? Were you really effective at convincing your parent or guardian to let you do things that you shouldn’t have been doing? How are your objection-handling skills? Can you flip a no into a go?

When working on short sales, there is one aspect of the process that may require those excellent negotiation or debate skills: disputing the property value. In a short sale, the short sale lender sends an appraiser or broker to the property and this individual conducts a Broker Price Opinion or an appraisal, using special forms provided by the short sale lender.

After this individual completes the Broker Price Opinion or the appraisal, he or she will return it to the short sale lender. Shortly thereafter, the short sale lender will be ready to talk about the purchase price. Will the lender accept the offer on the table or is the lender looking for more? If the lender is seeking an offer for a lot more than the one on the table, mentally prepare for the fact that you will need to conduct a value dispute.

Value Dispute Process

While each of the different short sale lenders (including Fannie Mae) has their own policies and procedures for value dispute, all these procedures have some things in common. Follow the steps below in order to conduct an effective value dispute.

  1. Inquire about forms. Ask your short sale lender if there are specific forms that you need to complete in order to conduct a value dispute. Obtain those forms if necessary.
  2. Gather information. Your goal is to convince the lender to accept the buyer’s offer, so you need to demonstrate that your offer is in line with the value of the property. Collect data that proves this point, such as reports from the MLS, Trulia, Zillow, or your local title company.
  3. Take photos. If there are parts of the property that are substandard and possibly were not revealed to the lender by the individual conducting the BPO, take photos of those items. Perhaps the kitchen has no flooring, or there is a 40-year old roof. Take photos to demonstrate these defects.
  4. Obtain bids. For any defects on the property, obtain a minimum of two bids from licensed contractors. For example, obtain two bids from roofers or structural engineers if necessary
  5. Write a report. Think back to high school English class if necessary. Write a short essay that references your information, photos, and bids, and explains how these items support your buyer’s value. This is not something that you whip up in five minutes. Spend time preparing a compelling appeal.

It is entirely possible that some lenders will not be particularly open-minded when it comes to valuation dispute. However, more times than not, an effective value dispute leads to short sale approval.

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Coaching

Short sale standoffs: how to avoid getting hit

The short sale process can feel a lot like a wild west standoff, but there are ways to come out victorious, so let’s talk about those methods:

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short sales standoff

What is a short sale standoff?

If you are a short sale listing agent, a short sale processor, or a short sale negotiator then you probably already know about the short sale standoff. That’s when you are processing a short sale with more than one lien holder and neither will agree to the terms offered by the other. Or… better yet, each one will not move any further in the short sale process until they see the short sale approval letter from the other lien holder.

Scenario #1 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they will proceed with the short sale, and they will offer Bank 2 a certain amount to release their lien. You call Bank 2 and tell them the good news. Unfortunately, the folks at Bank 2 want more money. If Bank 1 and Bank 2 do not agree, then you are in a standoff.

Scenario #2 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they cannot generate your approval letter until you present them with the approval letter from Bank 2. Bank 2 employees tell you the exact same thing. Clearly, in this situation, you are in a standoff.

How to Avoid the Standoff

If you are in the middle of a standoff, then you are likely very frustrated. You’ve gotten pretty far in the short sale process and you are likely receiving lots of pressure from all of the parties to the transaction. And, the lenders are not helping much by creating the standoff.

Here are some ideas for how to get out of the situation:

  • Go back to the first lien holder and ask them if they are willing to give the second lien holder more money.
  • Go to the second lien holder and tell them that the first lien holder has insisted on a maximum amount and see if they will budge.
  • If no one will budge, find out why. Is this a Fannie Mae or Freddie Mac loan? If so, they have a maximum that they allow the second. And, if you alert the second of that information, they may become more compliant.
  • Worst case: someone will have to pay the difference. Depending on the laws in your state, it could be the buyer, the seller, or the agents (yuck). No matter what, make sure that this contribution is disclosed to all parties and appears on the short sale settlement statement at closing.
  • In Scenario #2, someone’s got to give in. Try explaining to both sides where you are and see if one will agree to generate their approval letter. If not, follow the tips provided in this Agent Genius article and take your complaint to the streets.

One thing about short sales is that the problems that arise can be difficult to resolve merely because of the number of parties involved—and all from remote locations. Imagine how much easier this would be if all parties sat at the same table and broke bread? If we all sat at the same table, then we wouldn’t need armor in order to avoid the flying bullets from the short sale standoff.

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Coaching

Short sale approval letters don’t arrive in the blink of an eye

Short sale approval letters may look like they’ve been obtained simply by experts, but it takes time and doesn’t just happen with luck.

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short sale approval

Short sale approval: getting prepared, making it happen

People always ask me how it is that I obtain short sale approval letters with such ease. The truth is, that while I have more short sale processing and negotiating experience than most agents and brokers, I don’t just blink my eyes like Jeannie and make those short sale approval letters appear. I often sweat it, just like everyone else.

Despite the fact that I do not have magical powers, I do have something else on my side—education. One of the most important things than can lead to short sale success for any and all agents is education.

Experience dictates that agents that learn about the short sale process
have increased short sale closings.

Short sale education opportunities abound

There are many ways to become educated about the short sale process and make getting short sale approval letters look easy to obtain. These include:

  • Classes at your local board of Realtors®
  • Free short sale webinars and workshops
  • The short sale or foreclosure specialist designations

As the distressed property arena grows and changes, it is important to always stay abreast of policy changes that may impact how you do your job and how you process any short sale that lands on your plate.

The most important thing to do is to read, read, read. Follow short sale specialists and those who blog about short sales on AGBeat, Google+, facebook, and twitter. Set up a Google Alert for the term ‘short sale’ and you will receive Google’s top short sale picks daily in your email inbox. Visit mortgagor websites to read up on their specific policies and procedures.

Don’t take on too much

And, when you get a call from a prospective short sale seller, make sure that you don’t bit off more than you can chew. Agents in most of America right now are clamoring for listings since we are in the midst of a listing shortage. But, if you are going to take on a short sale, be sure that it is a deal that you can close. And, if you have your doubts, why not partner up with a local agent that can mentor your and assist you in getting the job done? After all, half a commission check is better than none!

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