TRUTH ABOUT THE REAL ESTATE INDUSTRY #01
The field of real estate brokerage and agents by law and common sense should be one of the higher requirements and practice careers. Some of the most valuable, personal, and confidential items are stored and displayed in homes. Yet over 20 years in my real estate career, the basic agent property etiquette has been violated repeatedly. In fact, this basic etiquette has gotten worse and worse each year. This means a severe lack of ethics has been viewed as unimportant. While the society in the U.S. industry has overemphasized creating conflicting laws and guidelines, not much has been done to teach children from a young age about common etiquette. If we investigate the root of most problems in society and workplaces, the cause has been the deterioration of ethics disguised by many other branch issues such as knowledge, experience, communication, training, and degrees.
Common Issues Encountered
- Real Estate System – There are many real estate test-taking programs offering answers for test takers to memorize in order to pass the exam without understanding the contents.
- No need for transaction experience– Being in the real estate field for over 20 years, I am still in awe that the Department of Real Estate still does not require a designated amount of in-person and hands-on hours of training before giving a real estate license. Real estate purchase for most people, is one of the highest asset purchases but yet, I can’t believe how many agents and even brokerage owners can’t communicate with daily-level English skills. How can they understand contracts? The root of the problem is the real estate oversight which allowed a highly professional career to deteriorate to a lowly public reputation. It shouldn’t be this way. The fact is, the greater the quantity of people entering the field of real estate regardless of his/her level of quality actually benefits most of the salary or hourly paid real estate entities such as various Realtor Associations. As a result, the entity that was supposed to protect the profession ended up harming the profession due to the conflict of interest. If the entity staff is paid mostly by commission method, this issue would be easily resolved since it is in the best interest of the staff members to focus on the quality of the profession instead of quantity. Offering classes to promote ethical conduct while the structure of the system is the opposite gets no sustainable results. It is the system structure that needs to be replaced. If 100% commission agents/brokers run the real estate oversight department, there would be a great improvement for the profession and industry. However, the current entities that oversee the real estate industry constantly ask realtors for feedback without compensation. To provide sufficient insight into actual welfare going on in the field requires a lot of time dedicated to writing or verbally explaining. However, in a fast-moving society, we are all busy. Who has a lot of time to constantly provide holistic feedback without compensation? Therefore, while 1-2 things may improve, at the same time, 10-15 things are deteriorating for the worse. How then, can anything be really changed for the better? This concept is not new, it was the basic structure for America to rise above the world in as little as 150 years of inception. Somewhere along the line, we have sidetracked the reason for a successful nation and started to deteriorate backward. Truth and honesty are usually difficult to hear and accept.
- Part-time, temporary agents/brokers – Whenever the real estate market is “hot”, lots of people get a real estate license and start representing clients without any experience. When serious problems arise due to these inexperienced, unknowledgeable, and/or unethical agents, these clients find me, seeking to solve their problems. Once the agents don’t know how to handle problems, they simply do not respond back to the clients anymore. There is usually a reason why some Brokerages do not accept certain agents (quality). At the same time, there are usually reasons why some Brokerages do accept these agents (quantity). The more problems a client has experienced in the past, the more he/she learns the importance of a trustworthy and experienced agent/broker. I get many calls for help when a transaction has already been closed. From the stories I was told, most of the problems can be avoided during the transaction. After a transaction is closed, usually, serious issues can only be handled with attorneys who will either decline the case or require upfront fees paid to take a case without guarantees of resolution. As an experienced Broker, I can only be hired as a professional to provide information on the witness stand. I had represented clients in small claims court that does not require an attorney license and so far, won all of the cases that I accepted to take on.
- Agents/Brokers do not read the MLS information in detail – Over 50% of agents/brokers call me to obtain information that has already been disclosed on the MLS. When I respond that they should have read the MLS diligently, they get angry and express how rude I am instead of being embarrassed by their own lack of professionalism. There are lots of documents that need to be read, written, carried out, etc. for each transaction. Being detailed and diligent is a requirement for this career. Can you imagine how these agents would perform when a transaction is in escrow with this type of attitude and mentality? Many times, the quality of real estate agents/brokers hired by the clients causes more problems in a transaction than anything else. Especially clients who prefer agents/brokers who sugarcoat things instead of desiring honesty and truth.
- Usage of Supra Lockbox with CBS Code – Over 50% of agents don’t know how to enter CBS code into Supra lockboxes even though I’ve indicated on the MLS showing description “please make sure you know how to use CBS Code to open Supra Lockboxes”. Any agent who read that and did not know how to use it should ask his/her broker. It only takes 5 minutes to learn it, but yet, over 50% of agents did not seek help prior to showing the property to their clients. As a listing agent, I then get calls that the Supra lockbox does not work. Most of the agents then fabricate the facts to their clients to avoid being embarrassed. This is just an example of many other basic tasks that have to do with the mentality of work ethics. Knowledge can be learned, but attitudes and mentality are a choice.
- Quality versus Quantity – When real estate clients do not perform a basic level of research and interview to hire the right agent/broker, ultimately, they suffer. With today’s online presence, it is easy to research agents and brokerages. When a conversation takes place regarding whether a discount agent/broker is more important to a real estate client or an agent who is capable and seeks his/her best interest, just about everyone says quality. What changes is when a real estate client encounters challenges that reveal the incapability of his/her agent/broker. It is then that client expresses the required level of quality desired, not just “undefined quality”. Typically, the larger the Brokerage, they rely on the quantity of agents, not quality. Their concept is the more quantity of agents, the greater the income for the brokerage. At the same time, the only way to deal with higher lawsuits caused by low quality of agents is by hiring their own attorney (grab what we can first and deal with problems later concept). Smaller brokerages tend to focus more on the quality of transactions to prevent legal liabilities (doing things right from the start as much as possible). Therefore, in my experience, I have better professional encounters with smaller brokerages. Agents who are successful without being under a brand name entity most likely have individual capability. Those who rely on highly advertised names usually have less capability. Most of my clients can’t remember the name of the brokerage I was with before. They just remember me. When I notify them that I’ve changed brokerage, they can’t even recall what brokerage name I was under. This is a good sign for any person to be labeled as professional and capable. Many things in life are opposite of what the majority presents or says to rely on.
The article continues with “The Truth About the Real Estate Industry #02”
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