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The Truth About the Real Estate Industry #02

The TRUTH ABOUT THE REAL ESTATE INDUSTRY #02

  1. True Real Estate Professional is NOT Easy – There are many things that need the attention of real estate professionals. I have closed thousands of transactions and not one is exactly the same.
    • A)  Interviewing Like-Mindedness – Just as a real estate client seeking a good real estate professional, good real estate professionals also only accept reasonable and cooperative clients. However, the process of searching for one often takes a lot of time, effort, and even pain.  Many clients believe agents are getting paid too much for such an easy job.  Well, first of all, agents/brokers risk his/her life daily out in the field meeting or serving new people not knowing who they are first.  There are too many examples of agents/brokers being robbed or killed performing tasks.  I remember as a new agent, some people pretend to be foreign investors only to use new agents to provide free transportation to places.  Even more, times when men pretend to be real estate buyers only to meet me and ask me out.  Most recent times, service providers and contractors pretend to be renters only to meet with me and ask me for business to give them.  How then can agents/brokers trust people without a true client representation agreement?  These are only a few examples mentioned and have to do with the ethical conduct of people.  All these encounters do cost time and money.  Therefore, there is a lot more to this industry than most people realize.
    • B)  Taking time to understand client needs – is the most important before putting any actions into seeking financial and property needs.  One property may be perfect for one but not for another.  One type of timing may be great for one but not for another.  One type of loan product may be good for one but not for another.  Sometimes there is only one decision maker involved and other times there can be a group of 10 people’s input involved.  I find myself taking on as a family counselor more times than being a broker.  The ability to speak the language that balances all decision-makers cannot be learned from any book but via real-life experiences.  Unless a certain level of acceptance is agreed upon, there will not be any success in a transaction.
    • C)  Financial Readiness – Without obtaining a full picture of a client’s financial capabilities first, we will all be wasting time looking at properties without knowing if a real estate client has the capability to finance a certain property. Different people also have different lifestyles and goals.  While one planning may be good for some, it may not be good for another.  Some clients also require a non-standard type of loan for their circumstances.
    • D)  Title Issues – Various title problems can come up and experienced real estate professionals need to know how to deal with them before, during, and after the transaction.
    • E)  Disclosures – It is important to know about the factors of a property as much as possible which may affect the value, health, and safety of the buyers. Disclosures are approximately 80% of a transaction and are growing in the number of documents as years go by.
    • F)  Compliance with Laws – Laws change often and can be several times a year. Most laws are established due to repeated conflicts.  Other times are due to being politically driven which may contradict common sense.  Knowledgeable professionals can best assist clients to minimize legal conflicts.
    • G)  80% of Unprofessional Agents in the Field – For the past 20 years, I have encountered approximately 80% of agents categorized as “Unprofessional”. I am embarrassed to say that I am not proud of being labeled as an “Agent/Broker”.  Another 15% of my encounters as “standard/acceptable” and less than 5% of the agents are labeled as “preferred/desirable/professionals”.  Quality is also reflected in the pattern of cities and counties.  For example, from my own experiences, LA County usually has the worst agents with all types of unethical conduct, Orange County usually has better quality agents and San Bernardino County usually has a mid-range level of agents in terms of ethics and knowledge.  I have educated my client sellers regarding screening agents first and offers second.  Since we are not allowed to contact the cooperating agent’s client, that means the conduct of the cooperating agent will be the most important aspect of a successful, pleasant, miserable, and even harmful transaction process.  With the deterioration of buyer agent quality year after year, buyer’s commission has also declined as a result of listing agents often needing to “clean up” after the buyer agent’s unprofessionalism.  As a listing agent, I would say for the past 20 years, I had to step in as a secretary for the buyer’s agent in order to successfully close a transaction.  While I, myself pay a secretary/assistant to conduct my own tasks.  Obviously, this does not make sense.  Since the Department of Real Estate and the National Association of Realtors have not made much progress in promoting professional quality as a system structure, professional agents/brokers can only seek other solutions in the meantime for the sake of our clients.
    • H)  Above mentioned are only approximately 30% of challenges and difficulties in the field of real estate. It will take hours for me to state them.  In short, the current structure of the real estate field promotes unprofessionalism, inexperienced/temporary agents, unsustainable long-term careers, disloyal parties, and increased legal disputes.  As a result, good agents and brokers are becoming rare and almost distinct.  The interesting thing is that everyone (both clients and professionals) desires quality and loyalty; however, the current system makes it extremely difficult to get there; while third-world countries such as Taiwan rarely have these problems.
  1. License Revoked/Suspended/Disciplinary Actions – There are thousands of people and/or entities with their licenses revoked, suspended, and disciplined due to various reasons. Usually, it takes quite a few repeated serious offenses to get negative license consequences.  There are many more that are still out doing business in various unethical or illegal ways.  Just like any career or job out there, interviewing and hiring people is an extensive job itself.  Clients should perform research, and interviews before hiring.  The good news nowadays is that we have websites and technology to use, making it so much easier to get to know people before hiring them.
  2. United States Real Estate Market Standard versus Other Countries – Many Asian countries that are labeled as third-world countries actually have much better real estate systems than the U.S. Take Taiwan, for example, a seller or landlord researches a real estate brokerage and agent to list with.  Each seller/landlord and each buyer/tenant hire his/her own agent to work with.  The commission is paid by each side of the client according to the level of knowledge, services, experience, etc.  There is not much need for “ethical” courses.  Each agent naturally represents his/her client in the best possible way to earn the commission.  In addition, it is standard for every client to turn in his/her financial proof before agents offer any type of service.  A deposit and payment agreement is signed prior to any type of service being given.  This is a win-win for everyone.  Real estate clients are committed to the selected agent/brokerage.  At the same time, the real estate agent/brokerage is committed to the client.  No party wastes time or plays games.  Everyone understands the seriousness of getting the job done right.  However, in the U.S., the way the system is structured encourages disloyalty, wastes time, and discounts agents to compensate for quality, professionalism, knowledge, and experience.  This system discourages the desire for quality professionals…and what is left gradually are the substandard agents/brokers in this field.  Those who are more capable and ethical gradually seek other types of focuses and careers.  Since the good ones have to constantly do the jobs of the less knowledgeable and ethical cooperative agents while getting paid the same.  It is like doing twice the number of jobs and getting paid for one.  After a while, both financial and mental results are highly unsustainable.  Can you blame them?
The article continues with “The Truth About the Real Estate Industry #03” Contact Alisha today for your real estate needs – 949.229.5987
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