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Applying for a home? Robots and automation may decide your fate

(BROKERAGE) The next background check you have run may not be in the hands of another human being. Is this automation helpful or harmful?

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Man signing application may only be seen by automation

Leasing approval for your next apartment may not reside in the hands of a human being.

Automation has become an integral part of the decision process for landlords when it comes to deciding who to accept as tenants. Screening tools such as ScorePLUS from CoreLogic use a “statistical lease screening model” that calculates a score and determines a potential tenant’s overall risk. CrimCHECK, another product from CoreLogic, can be used by landlords to search a database of more than 80 million booking and incarceration records across 2,000 facilities. This type of software helps landlords and large apartment complexes streamline their processes and reduce manual reviews of leasing applications.

Housing advocates, however, view such automation as more of a problem than a solution. According to advocates when screening tools bypass human “judgment calls”, those decisions fail to take into account critical details and attempt to solve complex choices with a simple pass/fail algorithm. Eric Dunn, director of litigation at the National Housing Law Project, says that nuance is lost when landlords solely rely on automated screening tools and don’t always capture extenuating circumstances around a possible tenant’s record.

Large automated systems often have inaccuracies as well. Monica Webly, the deputy director of litigation at the Legal Action Center, has said that such checks are “notoriously” inaccurate. For example, a record might end up including information from someone with a similar name, leading to a denial in a renting application for a tenant.

“I’ve looked at more criminal records reports than I could count, and I would say that well over half the ones I’ve looked at had some kind of inaccuracy,” Dunns said.

Companies like CoreLogic have faced lawsuits over such inaccuracies. In 2015, a South Carolina man sued the company after he was flagged by a CoreLogic tool as a registered sex offender due to someone with a similar name. While the man was eventually able to resolve the issue, the process took weeks and cost him the apartment he was applying for as a result.

As automation increasingly becomes a part of our everyday lives, scenarios like the above will become more common. Although software like CoreLogic can help landlords process information faster and reduce human error, it comes with its own set of downsides. How to strike the right balance for things such as leasing applications, is the million-dollar question.

At least not all automation has such drawbacks.

Patrick Auger is a management consultant and entrepreneur who resides in Austin, Texas. He has a Bachelor of Arts in Business Management from Western Illinois University, and is the Founder and Principal Consultant at Auger Consulting Group, LLC. When he's not writing for The American Genius, he's writing about the business of Mixed Martial Arts for The Body Lock or learning how to cook, one burnt recipe at a time.

Real Estate Brokerage

Safety concerns are top of mind for realtors, but what about our clients?

Seller safety is an overlooked topic that the industry should focus on to create an overall secure transaction for all, from meeting to closing.

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affordability home sales

There has been lots of advice recently about Realtor safety, but what about the home seller’s safety?

This area seems a little scant on advice, as a profession we probably owe more consideration to the sellers who pays for the food on our table. The appropriate moment to discuss safety with your new client is probably right after the listing is signed.

There are the points you should be covering with your seller:

Explain that you can’t protect valuables

If you’re planning on hosting an open house, remind them that you likely won’t be following every prospective buyer around the house. Unless you are insisting on visitors signing in or checking IDs, you also won’t know exactly who’s walking through the house either.

Unless you as the agent plan to be there for every showing, you’ll need to explain that you can’t protect their valuables.

Remove pharmaceuticals for every tour

Jewelry, laptops, iPads, personal mail, and especially pharmaceuticals are prime targets for thieves if not put away properly. Encourage your seller to remove prescription drugs from the home prior to every showing, or properly dispose of expired prescription drugs.

Mail may contain personal information and bank statements and are a risk from identity fraud. Explain that agents don’t want to be confronting someone taking these types of items from a home.

Put away knife blocks

Ask the seller to put away any knife blocks before showing. These may be a safety issue for any showing agent in the home.

With all those high-definition images of the home’s interior out there on every listing site, it’s like a robber’s take-out menu.  Suggest to your seller that they consider putting high-end stereos, flat-panel TVs, etc., in storage until they sell.

Surprising tip: remove pics of kids

If your client has photos of their wife, teenage daughter or children displayed, tactfully suggest that this might not be appropriate, if say a pedophile or stalker walked through their home.

seller safety tip

Tell sellers to not offer tours on their own

Even without a sign outside a property, the fact that the address is on every website in town is an open invitation (or an excuse) for someone to knock on the door and ask the sellers to “take a peek” inside. Explain that it’s not a good idea to let them in and that they should simply state “Please call my agent with any questions or to make an appointment”.

Explain Craigslist scams

With the growing rental fraud scams (listings are scraped by scammers who post bogus rental listings on Craigslist and other sites) potential renters could possibly be showing up at their doorsteps too, ready to move in

Check locks after tours

Discuss with them how to make their home burglarproof when it’s on the market and the need to check that a prospect has not deliberately left a door or window unlocked, so they can gain easy access later.

Recommend that if they don’t plan on returning directly home after a showing, they should ask a trusted neighbor to pop in, to make sure your doors were locked and the windows are secured.

Consider that there would actually be a whole lot less to worry about if we knew exactly who was looking at a home.

How are we protecting sellers?

So why are we letting any old Tom, Dick, or Harry look at homes in the first place? Why are we allowing unverified buyers into our seller’s homes?

Agents should consider counseling the seller to only allow verified prospects into their home.

The Des Moines Area Association of Realtors has already come up with an innovative seller contract, that states that no real estate agent is allowed to show the home to anyone the agent has not previously met and identified.

As a positive side effect, with this contract in place it allows agents to tell prospective buyers they have no choice but to first meet the agents in public because it is required by contract with the seller.

The other upside to this is respecting the seller’s time and effort in preparing for each showing.

After all, sellers are expected to keep up with tidiness and be ready for the next showing. I’m sure many sellers spend quite some time preparing for the next showing, then having to leave the house, sometimes with kids and animals in tow.

The cheat sheet for your sellers:

Here’s a shortened version of the suggested list of points you should discuss with a home seller:

  • Explain you can’t be there for every showing or be responsible for their valuables.
  • At open houses, you won’t be showing every visitor around the home.
  • Jewelry, money, laptops, cellphones,  gaming systems, and pharmaceuticals should all be stored away from plain view and out of the front of drawers.
  • Put high-end stereos, flat-panel TVs, etc., in storage until you sell.
  • Remove any knife blocks and mail on their kitchen countertops
  • Remove personal photos of your wives, teenage daughters, or children.
  • Never agree to let in a stranger knocking on the door.
  • Check doors and windows after each showing.

September is Realtor Safety Month

Consider making these recommendations your own personal standard. Ask your broker to incorporate these into their Broker Safety Policy (they have one, right?)

Talk to your local Realtor Association about the Des Moines Area Associations initiatives and how you can implement it.

(Disclosure – Peter Toner is founder of the safety app Verify Photo ID which verifies strange prospects photo IDs and checks against a National sex offenders list).

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Real Estate Brokerage

How to scout, secure, and supervise a team of true all-stars

(BROKERAGE) Building a team can be hard, especially building a team of all stars. Here are a few tips to make the process seamless.

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assertive broker meeting negotiation team

A good way to win? Play as a team. The best way to keep winning? Build an awesome team. There’s strength in numbers, even for the best broker — but that doesn’t mean you can just throw together a few qualified realtors and expect sales to double.

According to a recent survey by Bain & Company, the majority of senior executives form teams based on whoever is available rather than scouting the best talent for the job. Sure, the first method is easier, but it’s also 25% less productive.

As a broker, you can’t rely on your best guy to carry the firm’s success.

Realtors can come and go as they please.

If your best guy/gal decides to jump ship, they could leave your whole brokerage, for lack of a better word, screwed. You need all your guys to be your best guy. Keep these important tips in mind when building your real estate team.

Potential is great, but performance is what moves the needle. When interviewing candidates, seek out those who are not only experts, but who are also energetic, driven, and enjoy working in teams.

In most organizations, one in seven employees is a star.

When seven in seven are stars, productivity increases exponentially.

Everyone from your admin assistant to your coordinators to your agents should be passionate about their work and focused on success. All too often, firms hire “good enough” people in the interest of time, assuming things will come out in the wash thanks to one or two awesome agents.

But here’s the thing: a balanced team isn’t an all-star team.

It might stay afloat, but it won’t pick up speed.

Chances are the agents on your team know how good they are, and that means they also know their talents would be valued elsewhere — possibly with a competing broker. It’s your job to give them incentive to stay onboard.

Acknowledge achievements by awarding leadership roles to standout individuals so they know they’re a crucial part of the firm. Meet regularly with each team member to go over any issues or highlights they’ve experienced and identify any themes that may be emerging within the team as a whole.

Make encouraging and motivating one another an integral part of your team’s interactions.

They should be competing against themselves, not each other.

Make team performance a major determinant for compensation and promotion rather than strictly rewarding individual performance. This way the whole team will strive to help each other be at the top of their game every day. This also helps keep egos in check, which is necessary in all-star teams: when everyone’s the best at what they do, they’re bound to get a little cocky sometimes.

There’s no perfect formula for managing a real estate team. As you hire and train employees, keep your standards high and your mission focused.

Do this, and you won’t have to search for the best; the best will come to you.

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Real Estate Brokerage

Realtors in this state are at risk of losing independent contractor status

(BROKERAGE) Realtors in NJ are being threatened to have their independent contractor status revoked. What this means for the industry going forward.

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New Jersey where Realtors are at risk of losing independent contractor status.

Independent contracting comes with its pros and cons. The major pros are choosing a self-supporting career that doesn’t hold you to a specific time limit, how many hours to work in a period, being liable or loyal to your sole employer, and so on so forth. There’s a lot of autonomy in being an independent contractor and many, both in and out of the real estate industry, have chosen this path in recent years.

However, due to its newfound popularity, independent contractor status has come under fire in the past few years. Most notably was the controversial California legislation, AB-5, which some say devastated the freelance industry in the state. The latest issues over independent contractor status comes from New Jersey, in which a bill was introduced to protect the status of real estate agents as independent contractors. The legislation, A6206, was introduced in December 2021 and passed in both Houses in just two months. A6206 “Codifies right of real estate broker-salespersons and salespersons to define the relationship with the broker as one between broker and independent contractor or employee and enforces current and previous written agreements addressing relationship.”

Will A6206 pass?

A6206 is waiting for the governor to sign it to finalize the legislation. The New Jersey REALTORS® association asked real estate agents across the state to contact the governor to sign the bill. As the bill passed the Senate with governor’s recommendations, it may have been simply a formality. The bill passed unanimously through the State Senate and the State Assembly, but many professional organizations suggested that real estate agents let the governor know they supported the bill.

What this means for the future

According to the NAR, new federal and state legislation threatens IC status, especially that of real estate agents, which is a bedrock in the industry. The federal government is very interested in workers’ classifications, as it has direct implications on taxes. To that end, many states are now looking at workers’ classification and attempting to push through legislation to protect workers. Real estate agents need to be aware of the issue to ensure that their rights to continue to work as independent contractors aren’t taken away.

This could be a sign of things to come across the board. NJ is up against a huge fight, so watch your own state’s legislation closely and if you feel strongly on the matter, don’t be afraid to call your state representative and let them know your thoughts.

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