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Ethics

Who’s Crazy?

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How Could It Be Wrong

The listing agent totally freaked out because I hired the wrong inspector.  “I’ve been doing this 23 years.”  Oh brother.  Here we go again.  “He’s a lunatic.”  Well, I don’t exactly like the guy either.  “I’ve watched his mind deteriorate over the years.”  Uh-oh.  A little arrogant?  Sure.  Crazy?  Nah.

I’m not looking for the guy that won’t find anything.  Or the one who will help keep the deal together.  “I hire Abacus Inspections; they never find anything.”  Ever heard that one? 

Then she says, “He always finds stuff.”  Uh.  Yeah.  I want him to find stuff.   

When It Feels So Right

FYI:  This house is in a pocket where it’ll likely sell in two weeks, multiple offers, over asking.  And it’s priced right

She says the sellers are living in a hotel.  They wrote an offer on another house.  And the wife just quit her job.  What am I supposed to do with all that?  Beat the crap out of her – through negotiation, of course. 

I realize she needs a paycheck- everybody needs a paycheck – but geeze you don’t have to throw the sellers under the bus to get one.

As a lifelong resident and local Realtor, Vicki has established herself as a respected member of the San Mateo County real estate community. She’s known for her wit, sarcasm, and her personality that shows through in her posts. You can find her spouting off at Twitter, here at ag, and her personal blog, San Mateo Real Estate Blog.com.

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9 Comments

9 Comments

  1. Matt Wilkins

    November 3, 2008 at 10:38 am

    True story: a home in my subdivison went on the market about a year ago. I ahppened to cath the agent putting up her sign riders. I asked her the lit price (was not in MLS yet) and her answer caused he to pause for a moment. She then admitted it was high and proceeded to basically blab to me the sellers’ general situation.

    A few months later I was talkingwith my next door neighbor. She had call the agent regarding the overgrown lawn. The agent also told her the seller’s situation.

    The house switched agents once and never sold. The owners moved back inot the home this month.

    Personally I feel that even if the seller’s give you as their agent/broker permission to disclose your situation, disclosing it to anyone doesn’t really affect its sale. Buyer’s are interested in the house not the people who own it.

  2. Robert Masse

    November 3, 2008 at 10:43 am

    Not sure how you represent the buyer…via buyers agent or some other agency, but here in Florida, it would be my dutty to the buyer to let them know all the facts of the seller…so yes, even though I would not want to beat up the seller, I would have to if the buyer wanted to. Other than that, hear that all the time as well. My inspector I have been dealing with for a few years now, very thorough, always finds something which I expect to happen. After all, I dont want to be held responsible if something was there and he found nothing just to keep the deal together. My reputation and the client are higher up the food chain than my paycheck. A couple of bad comments and I will have no more paycheck!

  3. Vicki Moore

    November 3, 2008 at 12:59 pm

    Matt – Negotiation is the cornerstone of our job. How in the world is that agent going to do anything positive for the sellers when she’s shown everyone the cards she’s holding?

    Robert – I don’t just walk to the buyers with this information – I run.

  4. Paula Henry

    November 3, 2008 at 3:34 pm

    Vicki – Our buyers pay an inspector to determine the condition of the propery they are buying. To lead them to an inspector who will protect our paycheck is just wrong.

    For the rest of the story – well – the sellers never know what went wrong – kind a sad really. An agent who will give away all their information will also tell them the reasons they should accept this contract and do ALL repairs and just be happy they have a buyer.

  5. Missy Caulk

    November 3, 2008 at 6:45 pm

    I think we all have inspectors in our area’s that nit pick, but it is the buyers choice who they chose not ours. I would rather the buyers know up front than after move in date.

  6. Matthew Rathbun

    November 3, 2008 at 9:57 pm

    “Represent YOUR client, and I’ll represent mine…not the transaction.” Worked for me everytime.

    I also find that everytime an agent tells me their years of experience, it’s typicall their first year over and over again. True professionals with experience and wisdom know that the industry changes too often to claim that experience from 20 years ago counts for anything today.

  7. Vicki Moore

    November 3, 2008 at 11:00 pm

    Paula – Agents in my area have been getting both the property and the pest inspection ahead of time thinking that it will move things along faster. Problem is the buyer isn’t present so they can’t hear what they inspector is saying as they’re making their way around the house.

    In this case the first inspector didn’t see that a window wasn’t even finished. I found it which gave me a red flag to have the buyer get another inspection.

    Missy- Absolutely. Find out now during negotiations.

    Matthew – When an agent says I’ve been doing this for 20 billion years all I can think is: who are you trying to convince?

    Found out later that she thought I said 4 years – not 10. She thought she was going to railroad me. Nah-ahh. Not this kid.

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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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