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Give Way to Your Clients Needs




Regardless of what the sign says, it’s universal in it’s meaning. Caution, Yield, Give Way…. There appears to be much written about ethics lately. I wonder if it’s a result of agents desperate for business taking on business they have no business doing.

AG Gives Answers

I have seen a few posts come across from consumers who asked about what they should do because they felt their personal representation was shoddy. They did receive some good advice from the AG crowd and hopefully, they now believe they have reached an audience of agents who care. Agents who know what they are talking about.

It’s this caring attitude which makes the difference in agents. But…….the care has to be genuine and backed by knowledge.

Bad Representation

Last week in my representation of a buyer who is interested in a property which is a short sale, I came across what may be the lowest form of client care I have yet encountered. When I set the appointment, the agent said the key is in the mailbox. Not just the key, but the garage door opener, as well. The tenants just moved out and she had not had a chance to put a lockbox on. Okay, I get that. Well, kinda! This company also represented their client in the rental of this property. I don’t do rentals or leases, but assume an agent should check the premises when the tenant moves out, which would include making sure the keys are returned. This home is a mess, with all appliances gone, including the dishwasher.

My client is interested in the home, so I call to see if I can gather some information from the agent. Yes, she has an offer, but it has been at the bank for over 90 days and she hasn’t spoken to the buyers agent to see if they are still interested.  She tells me she is trying to get out of short sales and back into property management. The company she works for does both sales and property management. I let her know the heat is not working and the place is cold; she may want to check on it so the pipes don’t freeze. Three days later, she still has not spoken to either the bank or the buyers agent and the key is still in the mailbox. I wonder if the heat has been checked?

I submit an offer to which she responds she will send to the bank on Monday morning. But wait……the contract has not been signed by the sellers and she didn’t submit a counter. Is she just going to send the offer to the bank with no seller signature? No short sale disclosure? If so, it may be at the bank another 3 months, since the offer will most likely be relegated to the bottom of the pile. The banks do not have time for incomplete short sale packages, which includes seller signatures.

Give Way for the Client

I know it’s difficult in the current market to resist the temptation to turn away business. We have to, though, in the best interest of the people we choose to represent. Yes, I said choose! Everytime we take on a client who has a transaction which we are not qualified to do, we have chosen to misrepresent them. As professionals, we must Give Way to business for the good of our clients. Refer them out or let them know their situation is outside of your personal expertise. They will appreciate the honesty and you will ultimately be glad you did.

Paula is team leader for The "Home to Indy" Team in Indianapolis . She is passionate about education and client care and believes an empowered client is better prepared to make good decisions for themselves. You'll find her online at Agent Genius,Twitter and sharing her insights about her local real estate market at Home To Indy.

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  1. Clint Miller

    December 11, 2008 at 8:30 am

    Paula — Great post! I couldnt agree with you more about turning away business. Sometimes, when your gut tells you its a bad idea to get involved…it is a bad idea to get involved. 🙂

  2. Benjamin Bach

    December 11, 2008 at 9:25 am

    Paula, you’re right.

    Yesterday I took part in a discussion about principles and values that we hold true in our business, and the one that kept coming up was that we’re our client’s fiduciary – we are legally required to do what is in their best interests, and to protect their interests (as long as doing this doesn’t run foul of the law).

    When people forget to act as a fiduciary, they’re doing a diservice to their clients, and likely breaking the law (at least here in Ontario) by doing so.

  3. Vance Shutes

    December 11, 2008 at 11:44 am


    Like you, I have encountered some awful representation of lender/seller interests in our marketplace. If any of those lenders/sellers read AG, then wake up! You can do MUCH better than some of the agent representatives you have in each marketplace around the country. And who knows? Maybe you’ll actually get some of these short sales and foreclosures moved through the REO inventory a whole lot quicker.

    Last I looked, banks are in the business of lending money, not homes. The quicker they convert the REO to money, the quicker they can get it back in circulation. Seems simple to me.

  4. Missy Caulk

    December 12, 2008 at 8:55 pm

    Paula, I have often thought and said, “if these sellers only knew how their agents were representing them”. You hit the tip of the iceburg with careless agents.

    I am dealing with a short sale now and the bank is being fantastic, the buyer agent is going to end up not getting this house 130K under value because he has NOT a CLUE what he is doing.

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The problem with a self-policing industry: you have to be a narc

Ethics violations in the real estate industry can make or break a Realtor’s career, depending on the severity, so it would stand to reason that all would be mindful of the rules, but there are always individuals in the field that act as if the Code of Ethics is irrelevant.



An animated discussion on ethics training

“Does anyone else find it ironic that NAR – the trade association for Realtors – has to mandate that members take an ethics class every four years?” An agent who attended one of my company’s broker opens yesterday posed that question to the wine and cheese grazing attendees. Of course, that opened up an animated discussion on the value of etchics training and the lack of enforcement when the rules are violated.

One agent volunteered that the guy sitting next to her in her last ethics class played games on his cell phone and then cheated during the test at the end of the class. Seriously, dude? You cannot even pay attention long enough to pass what should be the easiest test you’ll ever have to take in your career? Perhaps he was just seeing how far he could push it by cheating during an ethics test, to see if anyone else around him caught the extreme irony there. None of the other agents around him – including the agent he cheated off – turned him in and the instructor didn’t notice.

This same agent later called one of my sellers and tried to convince him to break a listing contract with me, because he had a “guaranteed buyer” in the wings. The seller was an attorney, and this bozo tried to get me cut out of the deal, offering the seller a reduced fee to dump me. The seller held firm and directed the agent to call me, then the seller called to let me know about the conversation.

“But you know if you file something the other agent will know.”

It gets better. After the deal closed, I requested paperwork from our local Board of Realtors to file an ethics complaint. The person in charge said, “But you know if you file something the other agent will know.” Gee. Really? I asked her to send the paperwork over anyway.

I called the seller/attorney and asked him to repeat the conversation to me, because I was documenting it to file a complaint. He turned wishy washy on me at that point and his story changed from “The other agent tried to get me to dump you as the listing agent to cut you out” to “Well he really only asked a few questions and I told him to call you. He probably didn’t mean any harm by it.” So there goes my star witness, who doesn’t want to rock the boat.

I didn’t file the complaint. I resorted to the “turn the blind eye but never trust the sleazeball again” path. And that is what happens to almost all ethics issues I hear about / see in person.

That’s what happens when you have a self-policing group of “professionals” who would rather not “narc” on a fellow agent. After all you’re probably going to end up on the other side of a deal from this guy some day, right? The guy in my example has sold two of my houses since that run-in. Why tick him off by filing a complaint and going through all that hassle? If he stops bringing buyers to my properties then my sellers ultimately lose, right?

Boiling down the CoE

The NAR Code of Ethics takes up pages and pages of tiny print, and it runs each year in their trade magazine (I think it’s the January issue). Does anybody read that? Probably not many. I’d argue none of us ever should have to read it again. Simply follow this advice instead. The thousands of words in the Code boil down to one thing: Do unto other agents, and consumers, and clients, what you would have them do unto you. It’s the Golden Rule. Simple. Well, obviously not, for many agents and brokers.

The sad part is the agent in my example had no clue how close I was to filing that compaint, and if he did know he’d probably scratch his head and wonder why his actions were “wrong.” Making us take a one-day class every few years won’t “make” the unethical agents suddenly operate ethically. Most of them just don’t get it.

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Ethics hearings in private a disservice to consumers?



Fight Club and real estate

For those of you that saw the movie ‘Fight Club’ you’ll remember that Rule #1 is “You do not talk about fight club,” followed closely by Rule #2, “You DO NOT talk about fight club.” Which, believe it or not, brings me to today’s topic: The Real Estate Code of Ethics and Arbitration. Article 17 obligates Realtors to resolve fights disputes with another Realtor through arbitration (not litigation). Arbitration is conducted at the local board level, and I am not aware of a local board that doesn’t require arbitration to be confidential.

I respect that public internecine warfare amongst Realtors isn’t in the interest of our industry, and doesn’t belong in the public spotlight. I’m not here to advocate the collective airing of our dirty laundry. That said, I wonder if our collective agreement to keep our concerns confidential can inadvertently harm the consumer and ultimately makes all of us look a little shoddier?

To find the first arbitration guidelines created by NAR and distributed as a set of suggested rules for boards to follow, we have to travel all the way back in time to 1929. NAR’s first Code of Ethics & Arbitration Manual wasn’t created until 1973, and it credited a 1965 California Association of Realtors version as its model.

Appalling conduct

I can think of two instances in the past year where I was so appalled by the conduct of a fellow Realtor that I went to the trouble to inquire about how to lodge a Code of Ethics complaint with my local board. After weighing the time required to make a competent complaint and comparing it with the best case outcome (a closed-to-the-public hearing in which they were found to have violated the code of ethics), I decided not to pursue a complaint in both cases. My association’s bylaws (and probably yours) give it the power to discipline any member based on the results of a Code of Ethics hearing, “provided that the discipline imposed is consistent with the discipline authorized by the Professional Standards Committee of the National Association of REALTORS® as set forth in the Code of Ethics and Arbitration Manual of the National Association.”

“Sanctioning Guidelines” – (Appendix VII of Part 4 of the 2011 manual for the very curious), guides member boards to impose disciplinary consequences that are progressive and fair, taking all considerations into account. Sample first-time disciplinary actions include suggestions of a letter of warning, a fine (amounts range from $200 to $5,000 depending on the severity of the violation), and attendance at relevant education sessions. Not to sound defeatist, but a confidential letter of warning and a fine of around $200 doesn’t seem like an outcome worth investing much of my time in.

Practicing in the internet era

Given that we live and work in the internet era, and review sites like Yelp abound, it seems a bit odd to me that a local board might know of an agent with problem behavior that is documented yet choose to make that information unavailable to consumers. My understanding is that the results of a code of ethics hearing are confidential with disclosure authorized in a few situations, none of which deal with informing the public.

Many of my fellow colleagues feel that the best response to a bad agent is to be patient and give them enough time to work themselves out of business. I can respect and understand their hands-off approach. But what about the damage that individual does to our industry as a whole? While we whisper, warn in confidence and know amongst ourselves how awful they are, the public doesn’t get the benefit of our perspective. Deprived of it, they turn to consumer review sites like Yelp.

How do you think we, as an industry, can help consumers in their quest to find a trustworthy agent?

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Realtors, we really need to get over ourselves already



A letter from the child of a Realtor.

Real estate now vs. 1987

In Real Estate, some things are always changing, like financing, education, laws, rules and technology. The two that will always remain constant, as long as they are within the law, are following our clients’ directions, and working with their best interests in mind.  I’m not sure we always follow through with this, though.

Some of us knowingly take over priced listings.  Some of us take listings that are out of our area of expertise.  Some of us won’t show short sales or REOs.  Some of us won’t show homes with low co-op splits.  Some of us don’t have Supra/e-Keys, and miss out on those listings entirely.

Putting our interests first

When these things occur we are putting our own interests first, not our clients’.  We may think that by having as many listings as possible is a good thing, that’s what we’re taught after all, isn’t it?  It may not matter that some are overpriced, eventually, whether one month or four months down the line, the price will be reduced.  It’s just a matter of time and money, for our clients, after all.  The same can be said when we take listings outside our area of expertise, just to add on to our inventory.  If we don’t know what we’re doing, on a short sale listing, for example, it will only cost our clients a lot of time and money.  A lot.

By eliminating certain houses our clients see, that may already fit their criteria, we’re taking away their choices.  Distressed sales account for close to 40% of the market.  This is probably higher in some local markets.  There is no legitimate way to ignore roughly 1/3 of the homes being sold.  Co-op fees are often a touchy subject, especially when they are, not “enough.”  If everyone utilized a Buyer Broker Agreement that stipulated what their fee was, the issue would take care of itself.  Not being able to access listings with the use of Supra/e-Keys is a choice.   Choosing not purchase one will mean agents will not be able to access Fannie Mae (and eventually, probably additional Gov REO homes) along with the listings that are already using them.

Our priorities versus theirs

We totally need to get over ourselves already.  We are not bigger than our clients.  Our priorities are not more important than theirs when it comes to the actual listing and selling of homes.

Recently, my awesome parents dug through a few boxes and rounded up one of my first art projects. About 25 years ago I did the poster featured above about my Mom, and her Real Estate career.  It was for an Open House (no pun, honest!!!) for the elementary school where I attended first grade.  It was just, what she did according to me way back then.  Things are way more complicated now, than when I was six.  There’s a heck of a lot more paperwork for one.  But the same basic principle still applies.

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