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The Old Real Estate Bait and Switch – Writer Debut

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Please welcome Agent Genius’ newest writer, Renee Porsia who we have been working with for months to come aboard due to her wit, her ability to shake things up, and her chutzpah if you will. Renee is the Associate Broker at RE/MAX Action Realty and her being a gal from Philly explains why she isn’t scared to speak out, beginning with her article today about one of her biggest pet peeves about the industry. Please welcome her in comments!

Bait & Switch

Bait & SwitchSomething that really bugs me about my profession is how so many Realtors over price listings just to get business. I call it the old bait and switch.

Now, I know that this will upset many Realtors- well, those that are guilty of over pricing their listings that is. To those Realtors I say, too bad! You are hurting and discrediting our profession every time you take another over priced listing and giving the rest of us, honest, hardworking, knowledgeable, ethical Realtors a bad name.

So, why would a Realtor take or even want to take an over priced listing? Simple, to get business. They figure any listing is better than no listing and that the home owner won’t want to go through the entire process of finding and hiring another Realtor, so they will just reduce the price in time and eventually the home will sell.

It’s not just the Realtor

Now, I am not only going to only pass blame solely on the Realtor because the homeowner bares responsibility as well because they do not have to hire the Realtor with the highest value for their home. Naturally, every home owner believes that their home is worth more than everyone else’s but it is the responsibility of the “professional” to advise and be truthful with the home owner and to walk away if the home owner has unrealistic expectations for their home. Home owners look to Realtors for guidance, professional advice and for facts. When a Realtor over prices a listing to simply get business, what they are telling the public is that Realtors are useless, that we are a dime a dozen and we simply do not know what we are doing. Isn’t that what most of the general public already thinks about Realtors anyway?

I feel that as a “professional” it is my job to be the “expert” and to make sure that my opinion and my knowledge be credible. I take my career very seriously.

Many will argue that it’s just too easy to obtain a real estate license and that is why there are so many “bad” Realtors and that very well may be, but for now the requirements are the requirements we are not all bad. I myself worked very hard to obtain my license and then my Broker’s license.

Why the bait and switch happens

I feel one of the problems facing the real estate industry is that people get into the business for all the wrong reasons whether it be to earn extra money, to flip properties, or to buy investment properties and those are not the reasons to become a Realtor. Being a Realtor is not easy and is not for everyone. I know that I became a Realtor so that I could help people with what might be probably the biggest financial decision of their life and to educate, and guide them. I’ve never purchased an investment property, never competed with my clients, never threw them under the bus for my own financial gain and never will. That’s not to say that one day I won’t purchase an investment property but when I finally do, it will be to secure my financial future and won’t have been the reason or the motivation for obtaining my real estate license.

If Realtors want the general public to view us as “experts” and actually put a “value” on what we do, you have to stop being desperate for business. You have to be strong and believe in yourself, your expertise, your license, have respect for our profession, our Code of Ethics and stop misleading home owners by over pricing their homes. Have the competence to walk away when a home owner is unrealistic and show the home owner that there is a need for a Realtor. Home owners know that if you won’t do what they want, there will be another one who will and that needs to stop.

Stop the bait and switch. What does the old real estate bait and switch look like in your market?

Writer for Agent Genius Magazine. Renee's primary focus has always been on changing and improving the real estate industry through her words and her "big mouth." She is not afraid of a little controversy or ruffling a few feathers every now and again and is always up for a good debate. Renee prides herself on being different and is definitely not your Mary Jane, beige, tweed skirt suit, knee high wearing mother's Realtor. Renee is best known for her humor, sarcasm, her keen wit and is a social media junkie who can usually be found tweeting at odd hours of the evening. Check Renee out on her popular website www.reneeporsia.com

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62 Comments

62 Comments

  1. Jeffrey Douglass

    January 21, 2010 at 1:20 pm

    “have respect for our profession, our Code of Ethics”

    Start with representing our trademark correctly REALTOR®

    • Lani Rosales

      January 21, 2010 at 8:47 pm

      I typically just say Realtor- it’s not a sign of disrespect, it’s a matter of my hating that the trademark is in all frickin’ caps like it’s supposed to be SCREAMED AT EVERYONE!!!! lol 🙂

      • Jeffrey Douglass

        January 21, 2010 at 8:58 pm

        Lani, I understand your thoughts, but we all agree to use the Trademark in its proper format. The more that it is not used, the more chance the trademark can be challenged as being generic.

        I just found the article critical of REALTORS® being singled out, why not real estate agent?

        Sorry, I just feel strongly as a professional REALTOR® to use it correctly.

      • Fred Romano

        January 21, 2010 at 9:08 pm

        I agree with Lani. I use Realtor all the time. CAPS are annoying and it doesn’t change the meaning of the word.

        • Jeffrey Douglass

          January 21, 2010 at 9:19 pm

          Fred, Does not really matter what you think.

          Proper use of the MARKS can never be evaluated solely on the basis of the “intent” of the user but rather must focus predominantly on how each mark as used is likely to be understood by the public. The same evaluation must be undertaken even if the audience is expected to predominately or even exclusively be composed of members. Members and Member Boards are encouraged to assess each use from the perspective of the public. Will the public view the MARK, as it is used, as an indicator of membership? Or will the MARK, as it is used, be misunderstood as a synonym for “real estate broker” or some other term? It is imperative that Members and Member Boards work together and with the National Association to avoid all uses of the MARKS which may suggest to the public that, without regard to his membership in the National Association, a REALTOR® is simply a provider of real estate related services.

          realtor.org/letterlw.nsf/pages/mmmPartOne#OneI

  2. Larry Mel Baker

    January 21, 2010 at 1:25 pm

    I enjoyed reading this topic as presented quite nicely by Renee. She appears to have the wind and tides with her as I sailed this page and I enjoyed the mental voyage, wife will tell you I am not easily pleased in print. Thanks Renee.

    • Renee Porsia

      January 22, 2010 at 2:07 pm

      Larry,

      Thanks for your nice words. I am happy that you enjoyed my article.

  3. Ken Montville

    January 21, 2010 at 1:25 pm

    HI, Renee, and welcome to AgentGenius. I look forward to a rollicking good time.

    “Buying the Listing” has been around for as long as I can remember. Yeah, I’ve been guilty of taking an overpriced listing in the hopes that the Seller will come to his senses and lower the price to something that will attract a buyer. I’ve tried the 30 day approach (“Let’s price it where you want for 30 days and if it doesn’t get any action we’ll lower to my price.”) and that doesn’t work very well either.

    On the other hand, I’m not exactly sure Sellers hire Realtors for their professional advice and such. I think, many times, they don’t want the hassle of marketing their home as a FSBO or they don’t like the “negotiation” part of the transaction. However, they KNOW the price. Their house is special.

    You larger point is right on. Overpriced listings don’t help anyone. The house doesn’t sell. The Seller doesn’t get paid. The Realtor doesn’t get paid. And a lot of time is wasted.

  4. Duke Long

    January 21, 2010 at 1:51 pm

    Renne,
    Great points..and welcome to the jungle.

  5. Jonathan Benya

    January 21, 2010 at 2:24 pm

    Excellent first post, Congrats! I think as agents we have all been guilty of taking an over priced listing at one time or another. As agents, we don’t have the luxury of controlling what the price of a home is listed at. We can advise, recommend, suggest, etc. a given price, but at the end of the day the decision of listing price lies with the seller. We do however have the option of choosing to not take the listing.

    For agents that intentionally overstate the value of a home in order to get the list, shame on them. There is no place for that in our profession, period. For the agent that agrees to take a listing at a value higher than advised, that’s their decision. If they’re willing to take a gamble on it, that’s their business, but the key is to not be misleading to the client.

  6. Ellen

    January 21, 2010 at 3:01 pm

    This article was so great! Thanks for the advice!

  7. Mike

    January 21, 2010 at 4:16 pm

    Welcome Renee!

  8. Ken Brand

    January 21, 2010 at 4:51 pm

    I echo Duke’s welcome, “welcome to the jungle” = classic. I hear that skinny punk scream’n the lyrics and writhing like he’s jones’n for sweet jane. I like it though, it’s on my iPhone, etc.

    But I digress….

    Welcome, who doesn’t love lava, way to open.

    In our market we still see it, it’s sort-of like Bait seducing Bait, the whole affair is stinky.

    Cheers.

  9. Jay Thompson

    January 21, 2010 at 5:42 pm

    Wow Fred, those are pretty harsh words…

    I happen to agree with Renee on over priced listings. A good agent shouldn’t need to take an over priced listing in the “hopes” they can get a price reduction. Do your job right, educate the seller, and there is no “hope” involved.

    But that’s just my opinion, yours obviously differs. But there is no need to be an ass about it.

    PS: 99% of the time dual agency is evil.

  10. Ken Brand

    January 21, 2010 at 5:59 pm

    “Don’t kill the messenger” comes to mind, as well as, “Don’t hate the player, hate the game.” and lastly, “Punish the behavior, not the person”. What can be gained from attacking the person? Attack, argue, refute, agree or disagree with the ideas.

    You disagree, super cool, that’s what comments an discussion is all about, but like you said in your comment “So who are you to say what is a “good” or “bad” reason???”.

    Cheers Fred.

  11. Janie Coffey

    January 21, 2010 at 6:05 pm

    Welcome Renee. Duke said it best, welcome to the Jungle! I think we might be more like the Muppets and Sesame Street sometimes though. I will raise my hand as Miss Piggy and then we have Big Bird, Ernie and Bert and yup, Oscar the Grouch. But we are a big (mostly) happy family in the end with all the pros and cons of a family. More importantly, we share, learn, debate and discuss lots of meaty real estate topics, just like this one!

    I agree with you about the overpriced listings. In the end, they cost you time, effort, money, good will with the sellers and a lot of frustration. We have made it a key priority this year to NOT take any. I can’t say we have taken them as a bait and switch trick, but we did take them thinking the seller can try “their” price and then move to market price, but when that doesn’t happen it’s just bad all the way around and for that reason, no more OPLs for us.

    Have a great evening.

  12. Jay Thompson

    January 21, 2010 at 6:34 pm

    We’ll just have to agree to disagree on dual agency Fred. I abhor it. I think it’s wrong on many levels. To be brief, I don’t see how it’s possible to represent both sides of the transaction and give each client full representation. I think dual agency is one of the fundamental things that is wrong with our industry.

    But this isn’t the venue to debate dual agency.

    I don’t see where Renee is saying who can and can not be a Realtor. She said, “I **feel** one of the problems facing the real estate industry is that people get into the business for all the wrong reasons. . .” (my emphasis on ‘feel’)

    She feels that way, it’s her opinion, and she’s entitled to it. My thought is real estate is like any other profession — people become agents for a wide variety of reasons. There’s no universal “right” (or wrong) reason to become an agent. I do firmly believe those people that get into real estate only for the money generally don’t do well. I suspect the same could be said for any other profession where the potential to make a decent living is there.

    The barrier to entry into real estate sales is ridiculously low. In Arizona you can get a sales license in a 9 day “crash course”, hired by almost any broker in minutes and be on your way. All you have to be is 18 years old, have a relatively clean criminal record and pass a licensing exam that isn’t all that difficult. You could be a 4th grade dropout and get a real estate license. Partly because of that, and partly because so many brokers use a “hire anyone with a license and a pulse” business model this industry has more than its fair share of worthless practitioners.

    To be fair though, there are also some tremendously effective agents out there that make this profession shine.

    • Fred Romano

      January 21, 2010 at 7:58 pm

      jay this comment referring to me makes no sense because my previous posts seem to have been removed by the author. … are we in China?

  13. Jeffrey Douglass

    January 21, 2010 at 6:52 pm

    Why limit your concern just for us REALTORS®? How about real estate agents? How about For Sale By Owners? And finally the Holy Grail – real estate agents listing their own homes? Talk about a total disconnect from realty in listing price.

    We can dispatch 5 real estate professionals and probably get 5 opinions of value. How can anyone be arrogant enough to decide who is correct, until the listing is exposed to the MLS and the price is embraced or rejected.

    I don’t think that anyone in our profession has not missed the price at one point or another. Or after giving the Client our best council the Clients decides on the listing price. As stated above, it is up to each of us if we want to take on the listing or pass.

    I’m with Jay that we all have different reasons and motivations for getting into this business. In the final analysis is your opinion more important than another?

    It’s up the the consumer to pick out the best fit for the agent they want to work with.

  14. Patrick Hake

    January 21, 2010 at 7:43 pm

    When the main method of aquiring buyer leads was through listings, I can see why an agent might take an overpriced listing.

    Now that the entire MLS can be every agents own inventory through their website, I fail to see why an agent would enter into an agreement to spend money and time on a listing that will never sell.

    Basically, the ROI for a listing is much lower than the ROI of the same time, money and stress put into driving truly motivated buyers and sellers to the inventory on your website.

    If a seller is willing to price correctly, I will absolutely list it. I am even willing to accept a listing at the high range of my estimate of value, so long as scheduled price reductions are written into the listing agreement. However, I will not invest my time and money in someone elses delusion.

  15. Fred Romano

    January 21, 2010 at 7:54 pm

    Everyone has the right to their opinion (or so I thought). Realtors are very competitive and will do just about anything to get the listing… List to last right?

    So what if the price is a little higher (say 10-20k)… After a while the seller will realize it and and the agent will get them to lower it if they really want to sell. Nothing seems wrong with that.

    I hope this post does not get deleted like my previous ones.

  16. Sue Adler

    January 21, 2010 at 8:00 pm

    Renee, I love you for writing this. It’s been such a source of frustration for me because any successful agent in the business knows that the seller’s best chance of getting top dollar is to price competitively to create urgency, yet one of my biggest competitors overprices all of her listings, only to later chase down the market with her price reductions. It’s a lose-lose for both the seller and potential buyers who like the house because they cant understand why the seller was given such poor advice in pricing.

  17. Renee Porsia

    January 21, 2010 at 8:04 pm

    Fred,

    I think you are missing the point of my article. Realtors are supposed to be the “professional.” When Realtors over price a listing just to get the business, it devalues our expertise. Anyone can throw a price on a property and hope that it sells but it takes a true, confident, expert to walk away when a seller is being unrealistic.

    Renee

  18. Fred Romano

    January 21, 2010 at 8:12 pm

    It’s your opinion… I am not missing the point. If you ask a seller to get 3 agents opinions on price, all will be different. All will use different comps. If the seller picks the agent with the highest price that is their decision. It does not make the REALTOR any less “professional”.

    The reason I have issue with your article (and your past ones) is that they seem very one sided. This is not “personal”, it’s MY opinion. In many cases it’s not a matter of right or wrong, not bait and switch either, it’s just different views and opinions which we all have.

  19. Renee Porsia

    January 21, 2010 at 8:24 pm

    Fred,

    You are incorrect because if all 3 agents are going for the same listing, all 3 would have the same comps from the local MLS and all should come to a similar conclusion on price. Where there is a break down is when the seller pleads that they feel that their home is worth more than what everyone else is getting and then the agent gives in and prices the property for what the seller wants. Yes, the seller has the right to choose whoever has the highest price but we as professionals should know when to walk away. In my opinion when a Realtor misleads a seller it is acting in bad faith. It is a bait and switch because you are getting their hopes up by letting them believe that their home is worth the higher price and then you pull the rug out from under them when you go back to them and tell them they have to reduce.

    This is my first article here on Agent Genius so when you say “my past ones”, I don’t know what you are referring to.

    Of course my articles will be “one sided” as you say, because I am writing them from my point of view, my opinion and my experiences.

  20. Fred Romano

    January 21, 2010 at 8:37 pm

    I am not incorrect, it’s my opinion – there is no right way (your way – so you think) or wrong way (I guess that’s me – boohoo). I was referring to your Trulia Voices articles and comments.

    You say what you want, but don’t tell me your right and I’m wrong. We all have our own way of doing business and your way and mine are different – both can be professional.

    • Dan Connolly

      January 21, 2010 at 11:34 pm

      So Fred, in other words, you are saying she is wrong for telling you that you’re wrong?

      What color is the sky in your world?

  21. Renee Porsia

    January 21, 2010 at 8:37 pm

    Sue,

    I am happy that you like my article. What you have experienced is much what I have endured through out my career in my area and it inspired me to write this article.

  22. Renee Porsia

    January 21, 2010 at 8:39 pm

    Fred,

    I never told you, you were wrong. Certainly when I feel someone is wrong, I have no problem with letting them know.

    I stand behind everything I write. Thanks for being a fan! : )

    • Fred Romano

      January 21, 2010 at 8:41 pm

      I’d be more of a fan if you didn’t delete my comments = bad

  23. Ken Brand

    January 21, 2010 at 8:43 pm

    I talk to walls and rocks and pipe, etc.

    • Fred Romano

      January 21, 2010 at 8:46 pm

      LOL where did that come from? 🙂

  24. Lani Rosales

    January 21, 2010 at 8:59 pm

    Here are Fred’s original comments:

    COMMENT ONE:
    Well I have read your “junk” on Trulia, and I’m not sure how you got to be a writer on here with your attitude. I think they made a bad mistake.

    You say “people get into the business for all the wrong reasons whether it be to earn extra money, to flip properties, or to buy investment properties and those are not the reasons to become a Realtor” — So who are you to say what is a “good” or “bad” reason??? Give me a break.

    And there is nothing wrong with agents taking an overpriced listing in the hopes they will get it reduced and sell it. Oh I’m sure in your next post you be telling everyone about how evil “dual agency” is too. That’s a hot topic for you.

    COMMENT TWO:
    There is nothing evil about it… research her posts on Trulia (too bad you can’t see the one’s Trulia REMOVED from her)… But what about her point I mentioned Jay? Who is she to say who can be a REALTOR?

  25. Patrick Flynn

    January 21, 2010 at 9:26 pm

    I think our friend Fred might need to up his dosage on his anger medication.

    • Fred Romano

      January 21, 2010 at 9:29 pm

      Where are my meds!!!! LOL (JK) I’m fine now.

  26. Ken Montville

    January 21, 2010 at 9:29 pm

    I saw this in your bio, Renee: “She is not afraid of a little controversy or ruffling a few feathers every now and again and is always up for a good debate.”

    Ask and ye shall receive, I guess.

    I haven’t seen this much fun since I wrote about the death penalty.

    • Renee Porsia

      January 21, 2010 at 9:40 pm

      Hi Ken,

      LOL! It is fun isn’t it? I came in with a bang! : )

    • Nashville Grant

      March 2, 2010 at 5:23 pm

      Perhaps you guys should write about duel agency and the death of the real estate profession as a result of Google and others…now, we’re having fun!

  27. Anthony Galeano

    January 21, 2010 at 10:33 pm

    Ok this is what the Introduction To Ethics unit two from the Kaplan Professional Schools, California Real Estate Agent (First License Renew) book says on course 2: Ethics:

    ” Sale, Lease, and Exchange Transactions: Unlawful Conduct.

    1- Misrepresenting market value.

    Real estate law prohibits knowingly making a substantial misrepresentation of the likely value of a real property to an owner or buyer for the purpose of:
    a – Securing a listing. This practice is known as highballing. Agents know that sellers want to hear the highest price for their property ( even though it is not a realistic price). When asked why they would knowingly take an overpriced listing, agents give a dozen reasons, from “He can always come down; I want my For Sale sign in this neighborhood” to “I get lunch wiht the manager and win the monthly listing contest!”

    b – Acquiring an interes in the property for the licensee’s own account.

    c – Inducing the buyer to make an offer to purchase the real property.

    So, Renee I agree with you 100 percent we need to be ethical and professional on how we advise our clients.

    Great posting!

  28. Melissa Zavala

    January 21, 2010 at 10:59 pm

    In Southern California there seemed to be quite a bit of that a few years ago. But with so many distressed properties on the market and folks who are “upside down”, the bait and switch as you describe it is not as common right now.

  29. Anthony Galeano

    January 21, 2010 at 11:12 pm

    I still see agents in here do that. Not so much because they want the seller to go down but because they want to get more calls. More signs mean more publicity and more calls. More calls, the better the opportunity to sell something else.

  30. Dan Connolly

    January 21, 2010 at 11:21 pm

    Personally I think that if you tell the Seller what you think the home is worth and they want to list for more, knowing that they may have to reduce later, and you decide to indulge their fantasy, you have done nothing morally wrong. I know that often the seller will lay awake at night imagining how they can spend the money and when the time comes to reduce they won’t. I know that about half the time they will forget that you advised them to list for less. I know that frequently you are wasting your time, energy and money when you take listings like that but I really don’t think you are acting unprofessionally. Maybe stupidly, but not unprofessionally. You could look at it that you are truly representing the interest of the seller to let him sit on the market unsold for a year or two because that is what they want to do. Hell, you are doing the other homes sellers a favor, making them look like good deals!

    I have had several overpriced listings that actually did sell for substantially more than anyone ever thought they could. Cash purchasers. Fell in love with something intangible and bought. Really! Quite a few times. The sellers knew they were pushing the envelope and wanted to try it. That kind of thing is much harder in this market, but not impossible in the old days.

    However I think if you deliberately mislead the seller on value just to get a listing, you are very unprofessional and should be punished and sanctioned with license threatening action.

  31. Matt Stigliano

    January 22, 2010 at 12:01 am

    Renee – As a supporter of the Philadelphia contingent at AgentGenius , I welcome you. Even if I eat brisket, I still miss cheesesteaks.

    Looks like you dove in with an interesting conversation in the comments. Always a good sign. Whether you’re right or wrong, sane or out-of-your-mind a good conversation in the comment section is one of my favorite things, even if they can get a little feisty at times.

  32. MIssy Caulk

    January 22, 2010 at 7:59 am

    Welcome to AgentGenius Renee.

    What I see in my area, is the agents that list overpriced are those agents that don’t directly pay for their own advertising.

    Well they pay, in their splits…but they don’t see it that way.

    No CMA’s just “they ask me to list, so I did.” Then you fight the offer with comps, then the appraisers.

  33. Larry Mel Baker

    January 22, 2010 at 11:06 am

    A well researched and knowledgeable article that was precise, uncolored, to the point and easy to read. Food for thought after dinner…

  34. Russell Shaw

    January 22, 2010 at 11:44 am

    Please! Let there be no further disagreements on this blog. Ever! LOL.

    Welcome, Renee!

  35. Richard Johnston

    January 23, 2010 at 3:20 pm

    Hi Renee,

    Thanks for the great article. I’ve also told my clients that they are running a business and that they can’t help everyone they meet. Be selective and put yourself in a winning position.

    Thanks again.

    Richard

  36. Julie Ross

    February 3, 2010 at 8:53 am

    Renee–
    Great first article. I found it informative and was given a slice of your personality in there—all things that make for a great read. You obviously love your career and are excited about sharing information.
    Thanks!

    • Renee Porsia

      February 3, 2010 at 11:57 am

      Hey Julie! Your nice comments always mean the world to me!

      Renee

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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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