9 Biggest Enemies of Real Estate Professionals

1.  Dual Agency – The potential (and existence) of a conflict of interest is so overwhelming that there could never be a good argument for dual agency.  If it was appropriate, attorneys would do it.

Commissions

2 .  Commission Structure – The unwillingness to separate the commission and allow the consumer to negotiate each side individually says to the consumer that we are perpetrating a scam and deteriorates our standing with them.

3.  NAR Website and Advertising Campaigns – Just try and find anything on this website.  It is beyond horrible.  And the advertising campaigns make us look like total idiots.  Our hard earned dues are continually flushed down a toilet by the management of the Association.  Check out Narwisdom.com for more blunders and gaffes.

4.  Ethics and Regulatory Enforcement – No one gets thrown out of the NAR for violating the Code of Ethics.  And very few if any real estate agents lose their licenses to practice.  The states and the associations make their money by having more members, therefore it is counterproductive to toss out any potential dues paying agents.

President_of_oompa_loompas 5.  Banks – Banks are the reason for almost all of the market problems.  Their lax monetary policies created a hyperinflated market that has caused all of the current foreclosure and short sale problems of today.  They don’t care about people, their policies and procedures are ridiculously antiquated, they answer to no one and they create this same indifference in the agents that are working with them.  The management teams at banks are the worst executives in America.

6.  Licensing Requirements – The barrier to entry is a pulse and a check.  No need to speak English or have any reading comprehension.

Pyramid_scheme_2 7.  Brokerage Business Model – Hire anybody with a license, charge them as much as you can and hope someone sells a home to their aunt, cousin, brother or sister.  Collect your cut.  Repeat.  No need for training or minimum sales requirements.  In fact, lets create a multi-level marketing company (pyramid scheme) where you don’t even need to sell homes.  Be sure to bring your cards to church this Sunday.

8.  MLS Companies – A worse run organization can only be found running Realtor.com.  Build higher walls around the data, fine agents for giving you the data, waste millions on unneccesary programs and sit in your ivory towers collecting my money.

9.  Ourselves – We need to stand up and demand that changes be made.  We need to stop accepting the status quo as the only way to do business.  In some areas, we need to rebel against that which is destroying this industry, be it our own association, our own brokers or our own complacency.

Did I miss anything?  Let me know.

Previously published here.

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21 Responses to 9 Biggest Enemies of Real Estate Professionals

  1. Cindy Jones says:

    I’m especially fond of #4. Most Realtors seem to bury their heads when it comes to reporting another agent for violations. So instead of weeding out agents we allow them to stay and continue to drag us all down.

  2. Schaefer Oglesby says:

    As a member of the Virginia Real Estate Board for the last seven years, I can assure you that the amount of money coming into the VREB has never been a money issue, nor would it. We are a self funding board and under the requirements of the Callahan Act, our income is regulated to break even. Also, the funds from sanctions goes into the State Literary Fund, not to us.
    We may be hamstrung by the requirements of the General Assembly, but never a concern of “putting mone money in our coffers”
    I would encourage our licensees to report violators by filling out the forms available on the Real Estate Board web site. PS:Hope spelling is OK!

  3. Jim Rake says:

    Bravo! The points are well taken, and glad to see them on the table. A criticism of leadership and organizations has traditionally been that they don’t want to hear criticism, or contrarians. Yet, in most cases, that’s exactly what most of us, and the institutions we work for, need. The new face of Real Estate is just getting its legs underneath it, having the curtain drawn back further and further to expose what we do and how we do it. It’s certainly important for us to “get it right”, and there are going to be some bumps along the way. The good thing is, more and more folks are joining the effort to push the boulder up the hill, and before we know it, we’ll be heading downhill instead. And, Tony, keep up the good work!

  4. Dave Phillips says:

    You totally missed the most important enemy of the industry – poor customer service, or as it is more often called “lack of professionalism.” I have written about it extensively. There is NOT a lack of ethics in REALTORS or in people in general, but many people confuse bad service with bad ethics. The Code does not prohibit folks from providing poor customer service.

    Check out this post – http://www.davidrphillips.com/?p=143
    or this classic – http://www.bloodhoundrealty.com/BloodhoundBlog/?p=2979

    I do have one question about #8. What walls are MLS’s putting up? With IDX, RETS, data sharing like the VA MLS Alliance, and many national aggregators, what “walls” are you talking about?

  5. Tony Arko says:

    Schaefer, Thanks for the input. I was mainly talking about the process required to report an ethics violation and the fact that no agents get kicked out of the NAR. I asked a member of the staff at NAR how many agents get kicked out and he/she said they cannot remember one. I am not sure how many people lose their license in Virginia but I read the results published in the newsletter and I cannot ever remember seeing anyone tossed out. Please correct me if I am wrong. It seems hard to believe that 1.3 Million Realtors and 35,000+ Virginia agents have never done anything bad enough to warrant ejection.

    Dave, Thanks for the comments. In my head I was putting bad customer service in the “Ourselves” category. And it could also be argued that poor customer service in some instances is negligent behavior and would in fact be an ethical violation. At least I think it is.

    As for the MLS putting up walls, they control what data you can put out to the public. Even though I am the agent supplying the data and I am the agent paying the fees and I am the agent that pays their ridiculous fines, they control the data. One day they will either change or be replaced and I don’t think they are smart enough to change. Their only value proposition at this time is hoarding data and forcing agents to join.

  6. Well number 5 is sure showing it ugly side these days. Seems the banks (with 80/20, 80/10/10, etc…) have really hurt not only our business but also affected the economy for years to come…

  7. Candy Lynn says:

    Tony:

    Looking forward to your post on the 9 ways to correct the above problems.

  8. I agree that these are issues, but I want to say, what I feel like I’ve been saying all along… It is not “they”, but us. Members vote on leadership at your local board to represent you and that leadership votes on their leadership etc…

    “We” elect a Governor who appoints the Real Estate Board…

    “We” need to take more responsibility for our actions or inactions. If a member doesn’t like the enforcement efforts of the Association’s Professional Standards Panels, then go take the training and get on the panel. I think what “we’ll” find out that most agents aren’t intentionally harm clients. However, most agents fail because of ignorance.

    I am not opposed with increased pre-licensing education, but I think that the pre-licensing requirement for BROKERS should the first thing that we do.

    The continuing education requirements for agents is very low and still the MAJORITY of agents are ticked off that anything new is required of them. The more money the make and more successful they are the less cooperative they become in regards to education.

    As far as speaking English etc… Now a High School Diploma or GED is required to get a license, but so long as the schools have a “No Child Left Behind” mentality and keep teaching to the lowest common denominator; than we’ll keep our “No Realtor left behind” mentality.

    Having said all that…. I fully support getting rid of single agent dual agency.

  9. …BTW, I did like #8… Mr. Is!!! Up, up and aaaawwwwwwwaaayyy

  10. Candy Lynn says:

    Not all MLS’s are bad.
    Our MLS runs as a committee of our Local Association. We make the rules & oversee the compliance of the MLS rules. Our MLS provider is FBS – FLEX MLS. They are top flight as to technology & ease of use.

  11. Schaefer Oglesby says:

    Tony, you need to read the VREB Speaking sanction column closer. We routinely revoke and suspend licenses.

  12. Tony Arko says:

    Schaefer, would “routinely” be less than 2%? Less than 1%? Less than 1/10th of 1%? Did you revoke or suspend 170 agents in the first six months of this year? 17? Less than 17 would be less than 1/10th of 1%. How many of them were brokers? I am guessing none.

    I don’t think my perception of the lack of teeth in the governing bodies enforcement of its membership is felt by me alone.

    And you should not be attacking me but looking at yourself as a 7 year member of one such board and asking yourself, “Why do some agents feel this way and how can we fix this perception?” Here is a perfect forum to do. I encourage you to defend the actions of your board if you are able to do so.

    Matt, Why is it that we can’t rely on the people that are already in the positions of power, who are able to make meaningful and substantial changes, to do so? Are they blind to what is happening? Can they not see the problems?

    I believe that the only meaningful change comes from outside pressure, not internal wrangling. I believe that the people already in the leadership and management positions can make the right decisions, they just need a mandate from the minions. They need to believe that worker bees in the trenches will support them when they stick their necks out against the status quo.

  13. Matt Wilkins says:

    I think change will be a collective effort betwen governing authorities (VREB/REALTOR associations) and the brokerage brokers/managers/owners.

    The brokers who take a hands-of reactive attitude towards their agents are one of the big factors. They keep and recruit agents who do not feel that they need anyone to be accountable to.

    Once everyone is on board that a profession/ethical REALTOR is an assett and start weeding out those that are not then many of the complaints and issues will start subsiding and the remaining pool can start blazing forward with transforming the industry into what the public has been wanting for years.

  14. Schaefer Oglesby says:

    Tony, I don’t know the answer yet, but I’ll find out and let everybody know the statistics.

  15. Karen Eades says:

    Why on earthy do agents pay all the montly fees to MLS and Association Dues and Broker fees, and then just give away the information? This makes no sense. MLS and Realtor Association websites also give away info to the public, this is info and data that REALTORS pay fees for.
    You don’t see any other industry giving away their proprietary information. Realtors need to take a part in their own profession.
    Karen

  16. Single Agency vs. Dual Agency. What I prefer is competent agency. Because 100% of my business is in land all of my marketing, education, and experience is derived from working this niche. With thirty years experience I feel it is my responsibility to be well educated. Wisdom comes from your ability to know how to handle a situation and I find most of my business is done as a dual agent. Currently, working as a dual agent is neither illegal or immoral. – I know I’m not loosing any sleep over it. Since we are looking at statistical data regarding the revocation of real estate licenses it might be interesting to look at statistical data for education. The last time I looked I was one of twenty-one Virginia REALTORS with an ALC designation. That means 0.0005% (21 ALCs/38,000 Virginia REALTORS) of us hold that designation. I am the only REALTOR in the Lynchburg MLS with this designation and there are no ALCs west of the Roanoke MLS. If this statistic bothers Shaffer or the Policy Board I’m sure changes will be made and most likely I will be in favor of them, but let’s not kid ourselves. Having a dual agent “may” not resolve the competency question. I’d love to know how many of you have walked the land of a 50, 100, 200-acre tract when you did your weekly caravan? My observation is that it is rarely to never done. Until we resolve the competency question I will support dual agency.

  17. Candy Lynn says:

    Karen:
    I don’t look at it as giving away information. Part of my job as a listing agent is to market the property. In today’s world with around 85% or more people starting their search for property on line, I consider it a part of my duties to get the information out there in as many locations a possible. Not doing so is kinda like the folks that “really really want to sell their property BUT they don’t want it on the MLS, or advertised or to have a sign.”

  18. Tony,
    Your MLS is a huge regional(I think) and does have a lot of rules and fines. CAAR, and other boutique MLS’s have very few restrictions on the data and rarely fine people. There seems to be a lot of anger in blogusphere about MLS and I can not figure it out. If we made our data any more accessible I’d have to hand deliver it door to door. We have even published addresses for properties for sale on-line since around 1994.

  19. Julie Emery says:

    I’m late to the party, but love the list. Like others I’ve got some reservations about the MLS complaints, but perhaps only because REALTOR.com makes most MLS look good!

    But Matthew is right. We have only ourselves to blame. I think one of the reasons is that so few practitioners actually think of this as a real career or profession. If you don’t really rely on real estate income to pay your bills you’re less invested. It’s always easier to take the check or two you get from your transactions each year and ignore the bigger issues.

  20. As a new Realtor, we are all taught the many of the same things. One of those things is to start with your sphere of influence. Your goal should be to make sure ALL of your friends and family know what you do so that they can turn to you when they need a real estate professional.

  21. As a new Realtor, we are all taught the many of the same things. One of those things is to start with your sphere of influence. Your goal should be to make sure ALL of your friends and family know what you do so that they can turn to you when they need a real estate professional. But, as most of us that have been in the business know – things don’t often work out that way.

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