OK, here is the one you were waiting for. If I were King For a Day what changes would I make to the real estate industry in the area of real estate agents and realty companies to better protect the public?
I have read thousands of news articles and blog posts, sat through hundreds of hours of training classes and meetings and participated in many real estate transactions. Through these experiences, I have formed some very strong opinions about changes I would love to see in our industry. This blog post is the final one of a small series of articles that pick on several parts of the real estate industry.
As in the other segments I would insert more accountability into the process.
If I Were King, These are a Few Things I Would Change:
- Real Estate licensees must be full time professionals. (This one will get a lot of responses. If I am King that is how it will be.)
- The NAR Code of Ethics would be enforceable by the state regulators on even those who are not members of the NAR. The Code will only be a starting point. (I would add a few more. That will be a post of its own.)
- Errors and omissions insurance will be required for anyone with a license. Currently it is not required in our state, only by most brokers.
- Increase the educational requirements to get a license.
- Increase both the hours of continuing education and quality of the classes to renew a license.
- Not allow real estate licensees to do mortgages, home inspections, sell home owners insurance, do escrows or appraisals. (Dual services on a transaction will be illegal)
- Real estate Companies can not own or be owned by:
- - Escrow Company
- - Mortgage company or lending institution
- - Home owners insurance company
- - Home inspection company
- - Termite inspection company
- - Appraisal company
- A real estate agent can not use a spouse or any relative 1st cousin or closer for any of the above service in one of their transactions.
- Any kick backs from service providers is a jail able offense.
- Outlaw dual agency. To make this a doable thing, designated agency would also be law in every state. (In Hawaii we do not have designated agency. So every deal that two agents from the same company are involved is a dual agency)
- Require all agents to return phone calls.
- Not allow agents to post listings in the MLS without pictures.
- Posting false information in the MLS will be a jail able offense (just kidding, well maybe not. If I am King I might do that).
- Peak-a-boo view (standing on a chair in the upstairs back bedroom) does not count as a view
- Needs paint and carpet and the termites holding hands are holding the roof up is Not Excellent Condition!
- The side of a cliff is not a gentle slope.
- If you have to ask or you are not sure about it, it should be disclosed.
- If you can not use a computer, properly fill out a contract or use the fax machine your license will be taken away. (sorry if this hits home with anyone)
- If you charge a fee and do not provide proper service you loose your license. (If you are not sure if you are providing proper service your client will know when they do not get it, otherwise check with the King for a Day.)
- If you are servicing a transaction you are required to follow the timeline. Not work at your own pace.
- Designations would be a minimum expectation. GRI within the first two years would be mandatory to keep your license.
- All companies will provide agent training whether done in house or hired out.
- Create a job training program for those who should not be in this industry to teach them how to cut hair or flip burgers. (Since I will never be King, this one will never happen.)
I run into many REALTORS® and real estate agents who are non-REALTORS®, who have no idea what is legal or ethical. Just like in the lending side there is a large number of agents running around with absolutely very little training and have no idea what they are doing.
The one good thing is there is recourse for the public. If they use a REALTOR® the public can go through the local Board with a grievance. Most REALTORS® such as me carry Errors and Omissions Insurance. In Hawaii they also have state regulatory agencies and a state recovery fund to go after if they have exhausted all other legal avenues.
We are speaking about folks who are handling the biggest purchase in most people's lives. They need to be held to the highest standards. If they are not comfortable with that concept they really should find another line of work.
I am a REALTOR® and I am good at what I do and take pride in my profession. I have very little patience or respect for anyone in this line of work that does not conduct themselves in a professional manner.
Other King For a Day Posts:
- King For a Day Series - Mortgage Industry
- King For a Day Series - Handymen
- King For a Day Series - Home Inspectors
- King For a Day Series - Escrow Officers
- King For a Day Series - Real Estate Clients
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Randy L. Prothero, REALTOR®, ABR, AHWD, CRS, e-PRO, GRI, SFR
Century 21 Liberty Homes
Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers. His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.
Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) and the Leeward Regional Chairman of the Honolulu Board of Realtors. To improve overall professionalism in his area Randy also offers classes for real estate agents.
www.HawaiiRandy.com * Oahu (Honolulu County) Property Search * Hawaii Military Relocations
I love this and I agree with each and every one. I found myself shaking my head up and down.
My vote also. I love the part about returning calls. I actually wrote a contract on a house and faxed it over without ever talking to the other agent (she wouldn't call me back) I was to the point I was telling my clients that we should be looking at other houses by the time she returned my first call.
Hail to our new KING
RANDY
Can I be your Queen??? Bold post. My dream as Queen for a Day is we go back to 750,000 members. I am not one to live in the past, or looking for the 'good old days' (as evidenced by my desire to be your Queen), the wheels have come off the wagon as it is overloaded. Even with 750,000 members the changes in your edict will be necessary. Hail King (for a day) Randy
Dan - If we make all the changes I suggest a lot of bad agents and dead wood would leave the industry.
Who do we have to de-throne? When's the coup-de-tat rally?
And while you are real estate king, could you please make a few client behavior laws?
"OFF WITH THEIR HEADS!!"
Great job, Randy.
Gosh, for what I pay, I get a great value in my subscription here...
Jayne - Great idea! I should have added that one in the series. I will go back and add the client post in the series.
Mike - I am glad you didn't ask for your money back.
Linda - Thank you. That is the beauty of Active Rain. We can not only think it we can publish it.
Randy~
Once again you prove why I subscribe to your BLOG. Thanks for the time and energy you put into this post...and for your "kingly" ways!
Good one. another
If you keep your license active, but do not belong to any MLS, you can not make a full commission from a sale to friend or a relative...
janeAnne - Thank you
Pete - I agree completely
Carol - :-)
Vincent - Thank you
Irina - I think that should be added to the COE.
Ginger and Roger - I totally disagree with an agent who does not join MLS. How can they properly service a client? I do not know of any who do it full time.
Randy, Nice serious of posts. Although to be honest I was not to crazy about the mortgage one. (maybe I am to sensative) But I really agree with you on this
I really think you are so right on this point
Randy,
Isn't it interesting who left comments and who didnt on this one? It seems to be a one sided thought to some...get my drift? But hey...the blog is still early:)
Matthew - I have dealing with service companies that are tied to real estate companies. I have had bad experiences and I think it is criminal that agents and real estate companies push their services on their clients.
Neal - It is early.
George - I have had a couple of them. In both cases they failed to disclose. The last was a really ugly one that fell out of escrow the day of signing. The loan officer was the agent's cousin and they did not disclose that. I found out well into the transaction.
Hey Your Highness,
How about elimination of the marketing services agreement?
Only seen one or two that ever worked out. Not worth the trouble most of the time. Problem is, a lot of folks on your side and mine don't really understand what they are. A green LO will think he can use it to buy his foot in the door of a high production office, and high maintenance (notice the use of the word "maintenance" in liew of the of the word "producing") Realtor will use it to try and sqeeze an LO for a monthly stipend. Sometimes you can actually see the eyes start shifting when you tell them that any MSA you enter in to has to be reviewed and approved by your corporate complaince dept and that Respa Section 8 is very clear about what constitutes compliance. Too much negative energy down that road and no way to begin a relationship in my opinion...
Don't get me wrong, I love to co-market with my Realtor partners. Joint promotion is a fabulous and fun way to make your business grow. But I don't go there until a history of transactions that establish a track record of competence, integrity, trust and professional chemistry has been established. When you know you enjoy doing business with someone, you don't worry about whether or not they'll respect you in the morning if you co-sponsor an event.
That doesn't comes from mutual trust, respect and partnership, not from an MSA.
Thank you. I realized later that I didn't really explain how they are supposed to work and I apologise for that. If you'd like, I can email you an example of a RESPA compliant agreement. The basic canon is, that a mortgage company can pay a Realtor (usually a broker) a fixed amount of money for "a thing of value". You can see how ambiguous that is.. It could be office space/desk rental, or marketing, commercials or whatever, in exchange for agreeing to promote the mortgage company as a preferred lendor. I have some very strong opinions on them...
I once had a Realtor who kept putting the squeeze on me for an MSA, saying "There's a lender on every corner and every one of them wants my business." I said "I've closed loans in 48 hours for you, never left you guessing and never missed a closing date. When you've asked me to participate in co-marketing events, I've never said no. When is my hard work and performance going to be enough?" She looked my straight in the face and said "Never".
That was all I needed to hear. I mean.. You've probably seen my picture.. Do I look like Lady Marmolade? Unfortunately, there seems to be a lot of that going around and it's a cancer in my opinion.
I have a question. Is it ethical for a real estate agent to give his/her client a lock box key to the property when he/she is not going to be there with the client for the viewing?
Ellen - Absolutely not!