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Ethics

Know When to Blow the Whistle

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Basketball on the brain…

My first college basketball games of the season are just a few days away, and high school scrimmages start next week.  The officiating season has already begun, so I’ve got basketball on the brain.  Don’t worry, though; I’m still thinking about real estate. . .

People tend to watch referees when they blow the whistle, and pretty much ingore them the rest of the time.  Referees are okay with that, believe me.  If, however, people watched the referees when they weren’t blowing the whistle, they would gain a new perspective on the game.  One of the things that people don’t realize is that referees do more officiating without the whistle, then they do with it.  As I have always thought of it like this:  knowing when to blow the whistle is the science of officiating.  Knowing when not to blow the whistle is the art.

Trust me when I say this:  basketball referees do much more communicating without the whistle than they do with it.  Calling fouls is done when there are no other options.  Technical fouls and ejections are a perfect example of this.  No referee wants to call a technical foul.  Typically, there is a lot of communication that has gone on between referee and coach/player before the foul is called.  Referees do whatever is in their power to try and communicate to a coach/player before they have to resort to the technical foul.

Translating this into the real estate game

Let’s talk about the Code of Ethics for a minute.  Personally, I find it to be much more of a “Code of Rules,” since many of the articles have little to do with a REALTOR’s ethics.  Here is just one illustration of what I mean:

Let’s say you get a call from a buyer client who was looking at a listing on another agent’s website.  The client tells you the listing is $225,000.  She wants to see the house.

You go to the MLS and find the listing.  In the MLS, the price says, $200,000.  Hmmm. . .that’s not right.

According to Standard of Practice 12-8, one could argue the agent has violated of the Code of Ethics.  You are now face with 2 options:

1)  You could file an ethics violation and have your board investigate it.  Letters will be sent, maybe even a hearing will be held, yadda, yadda, yadda.

OR

2)  You could just call the agent on the phone, let him know that you have a client that is interested in the listing, and let him know that the price needs to be updated on his website.

If you chose option number 1, PLEASE don’t become a basketball referee.  You won’t make it through a middle-school game.

Know when to blow the whistle

I’m not saying that the COE isn’t important, just as I would never say that the basketball rule book isn’t important.  What is more important, however, is how those rules are enforced on the ground by the people responsible for/to them.

When I officiate a basketball game, I want the game to be conducted as incident-free as possible.  The game is for the players, so I want their experience to be a safe and enjoyable one.  I know that players and coaches are going to break the rules.  If I have an opportunity to talk to a player or coach before they commit a foul, I’ll do it.  If I have the opportunity to pass on a possible foul and talk a player out of doing that behavior again, I’ll do it.  Blowing the whistle stops the game.  The game is no good if it is stopping all the time.

When I practice real estate, I want similar things.  I want transactions to go smoothly. I want all of the people involved to have as pleasant and rewarding an experience as possible.  I know that sometimes, agents and customers are going to do and say things they shouldn’t.  If I have an opportunity to talk to them about it and address it, I’ll do it.  If I can help them from preventing mistakes in the future, I’ll do it.

Sure, I could run around, combing ads and websites, looking for COE violations.  I could spend time filing those violations, and I could spend even more time going to hearings and not talking about them (since the hearings are confidential).  Honestly, I have better things to do with my time, and phone calls and emails are far more efficient than any board proceeding I have ever been to.

But what if people don’t respond?

Good question.

I’m not stupid. I live in the real world.  There are some bad people in the real world, some real @$$holes.  I know this.  Between being a basketball referee and a practicing REALTOR, I think I’ve met most of them.  One thing I’ve learned is-  you can’t save everyone.

You might encounter someone who won’t respond to your communication, no matter how friendly or well-intentioned it may be.  When that is the case, you gotta do what you gotta do.  On the basketball floor, that means blowing the whistle.  In real estate, you just might have to go to one of those confidential hearings.  Part of subscribing to a Code of Ethics is accepting the responsibility for enforcing it.  Living up to that responsibility sometimes requires difficult action.

Knowing when to blow that whistle is critical to officiating basketball, and an often ignored part of being a REALTOR.  Making that choice isn’t always easy; but, as basketball officials often quip– hey, that’s why we get paid the big bucks. 😉

I'm a REALTOR, basketball referee, happy husband, and Community Manager (in no particular order). I have a passion for the real estate industry and officiating, a passion that I try to turn into inspiration on my blog, The Real Estate Zebra. I am also the Community Manager at Inman News. When I'm not blogging here on AG or the Zebra, you can usually find me on Twitter.

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7 Comments

7 Comments

  1. Matt Stigliano

    November 13, 2008 at 2:15 pm

    As a hockey fan, I see the referees do the same things. Its always fun to watch the experienced referees warn the players. They’re often as vocal as some of the players, but without the punching.

    I definitely agree with you on this one. Its easy to point fingers and file complaints. Its harder to speak to someone and mention the problem so it can be resolved. Of course, some people don’t like any sort of criticism, so I can imagine it can be hard to resolve something with another agent, but I do agree you should try that avenue first.

  2. Paula Henry

    November 13, 2008 at 4:18 pm

    Daniel – Last year our brokerage merged with another RE/MAX and I forgot to change the name and address on a few sites. It’s really hard to remember every where you put your info.

    An agent in the office told me one day – hey, do you know your site still has the old name and address on it. I was thankful for the polite reminder.

    I think most agents would feel the same, but know a few who would not be. It’s a tough call when you have to decide the next step, if you don’t get an amicable response.

  3. Daniel Rothamel

    November 13, 2008 at 4:24 pm

    Paula,

    Your example is a perfect one. As far as responses and the “next step” go, you are exactly right. It is a tough call. A Zebra lives for the tough call.

    Like I said, that’s why we get paid the big bucks. 😉

  4. Ben Goheen

    November 13, 2008 at 4:37 pm

    If I reported all the violations I see on our MLS I’d never get work done. You’re exactly right – just have to know when to say ‘oh well’ and move on. I’m not perfect and know I’ve possibly violated a couple rules here and there, but I’d much rather get a phone call from an agent than someone at the MLS board.

    By the way, is it sad that I wondered if @$$holes was already taken on Twitter?

  5. Missy Caulk

    November 13, 2008 at 6:31 pm

    I tried to call an agent today to give her a referral, and he old company and brokerage were still on her web-site. Oh my…

    I know some MLS’s are heavy into fines, our’s is just a report of something not right and the IT guy calls the agent. I check back and usually nothing has changed.

    Too busy to deal with it all…

  6. Matthew Rathbun

    November 13, 2008 at 9:11 pm

    I’ve said this before, and will repeat it here. I am concerned about the small group that intentionally try to harm people; all the rest simply need to be educated better.

    As a Pro Standards Administrator I see and hear tons of complaints and most of the time it’s about a bitter agent who “lost” an argument or deal. It almost always comes back to something not being “fair.” Life isn’t fair and there is no law against it.

  7. Deborah Madey

    November 14, 2008 at 3:12 am

    Ditto for reports to state real estate commissions. Clogging the system with issues that can be easily resolved in other ways leaves less time for the associations and boards to focus on situations that warrant their attention.

    I have a closet with a witch hat and a big broom, but I usually leave that closet door locked. Every once in a while, there is a need to open the closet door….just like sometimes there is a need for you to blow your whistle.

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Ethics

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.

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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

Ethics hearings in private a disservice to consumers?

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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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Ethics

Realtors, we really need to get over ourselves already

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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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