Archives
July 2007
|
Real Estate, like most businesses, focuses on keeping customers and clients happy and making them customers and clients for life. Most agents agree that they are looking for referrals from existing and past clients and are focused on providing satisfactory service. Yet, many times either we fall short, or, the customer or client has exaggerated expectations that we simply cannot meet. What's a Realtor to do? Part of what you do should be carefully selecting who you will work with as a client. Not everyone who comes your way is good client material--it's just like your Mom always told you--all those potential dates out there might or might not be 'husband or wife' material. Someone who expects you to do something illegal should be off your list--"Only sell my home to people who are (are not) in Group A, B or C". Someone who has unrealistic expectations should be off your list: "I know the average price of a home here in Upscale Estates is $1.5 million, but I need you to find me a motivated seller who will take $300,000 down and finance another $300,000 at 1% for a hundred years". Someone who has exaggerated expectations should be off your list: "We think we will need to view at least 400 homes before making a decision, and we expect you to be available 24/7 until we find the right home". The problem is, most unreasonable people are not this blatant. They start off sounding reasonable and then continue to increase their demands. Here's an inescapable truth: You won't make everyone happy. Here's the second truth: As long as you are honest, ethical and consistently work in your client's best interests, you'll still be able to sleep at night. Much of what happens to make clients unhappy is simply beyond their control--or yours. Early in my career, I had to take a female client who had 'lost it' at a closing into the Ladies room to calm her down. She was angry--at me, at the lawyer, at the lender--but, at the end of the tirade, she was really angry at her soon to be ex-husband and the position he had gotten them into. I got her to focus on the fact that selling the house was one more thing 'off the list' of stuff holding her to the ex. I reminded her that she had hired us to sell her house, and we had done that. She calmed down and went ahead with her closing. More recently, I had a seller client known for being a 'hothead'. Our transaction proceeded smoothly--until on the final walk through the buyer observed what looked like a leak on the furnace (it was). When I called the seller to tell him about the problem and suggest solutions, he went ballistic on me, the buyer, the other agent, and everyone involved. Later, we lined up a plumber to go look at it (after he had verbally abused my husband--also a Realtor--and threatened to 'punch him in the nose' for bringing up the problem). We got the plumber there by agreeing that we, the listing agents, would pay the plumber if there was 'no problem'. Well, there was a problem. The seller paid the bill. He didn't attend closing, and I'm sure he is still out there somewhere, angry (he moved out of state). I did write him after the closing reminding him that he had hired us to sell his home, which we had done (we got more than asking Price for it) and that our job was to resolve problems and take it to settlement. We never got an apology from Mr. 'Hothead'--and we probably never will. Was he happy? No. Could I have made him happy? I don't think so. Could he have been more unhappy? Yes, if we had managed to drop the ball entirely, so he had no closing. So what's my point? Do the best you can--every time, even to the people who probably don't deserve it. Understand that sometimes you will get the fallout from other things going on in your clients' lives. Best of all, know that for everyone who is difficult and unreasonable, there are usually 10-15 folks who are wonderful.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
|
|
Comments (1) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
Date: Jul. 10, 2007
Tags: None
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
Agency—not well understood, not well practiced and a ticking time bomb for our industry—in my opinion.
For years, I have been saying that if more attorneys understood agency and fiduciary duties, more real estate agents would be sued. As I write this, I’m looking at an email I received from a buyer I am representing. I had sent this buyer a listing from the local MLS, along with my comment that the property has been on the market awhile and that the seller might entertain offers. I do not represent this seller, so I owe him no fiduciary duties—in other words, I can suggest these things to the buyer. The return email I got from my buyer said “I went through this on the open house weekend….Way too much money for the shape it is in….(so far, so good) then—X Realtor said to offer any price because it has sat for a long time….” Excuse me—this was the seller’s agent telling the buyer to offer any price. This would be the person who is supposed to be representing the seller—getting him the highest price, best terms, etc. This goes into my file of unbelievable agent stories—right next to several others, just as bad. It is right next to the MLS print out with this in the notes: “Sellers are getting a divorce. Bring any offer!” Agents either don’t get it, or they are conveniently forgetting what they do know about agency. With all the pressure on our industry from everyone from the Department of Justice to the consumer, we either have to get back on track with agency or we’re going to lose what we still have.
The Code of Ethics says that “Realtors® shall put their client’s needs above all others, including their own.” In practice, many agents put their own needs and their own pocket, above that of the client’s—with predictably bad results. If the price the seller wants is so unreasonable that the agent can’t defend it—she shouldn’t take the listing. As soon as the agent starts talking to the other side in any way that runs counter to the principal’s needs, or harms the principal’s negotiating position, he has violated this fiduciary duty. This can be as casual as a comment like: “My buyers really like that house—they’ll probably come up” or as lethal as those given to my buyers by the listing agent at an Open House: “I’ve been trying to get these sellers to come down in price, but they are just unreasonable. They had an offer of $XXX,XXX which they turned down. I doubt we would get that now. I told them I don’t think it is worth over $XXX,XXX.” Here’s the rule of thumb if you are the agent—you should never say anything when your principal is not present that you would not mind your principal hearing you say.
But what is really happening? Agents are doing whatever it takes to put and keep deals together. I teach appraisers and agents, and I just finished a CE cycle in my home state of Pennsylvania. One of my appraiser students said: “I’m waiting for the day a buyer’s agent gets sued for allowing their client to spend too much on a house.” Sound farfetched? I don’t think so! I just saw a sale go through in a community which is extremely economically depressed. The buyer’s agent had out of town buyers (who presumably did not know the area). They paid in the range of 50% to 60% more for the house they purchased than market data would indicate it is worth. The question is: “Did they know they were doing this—or did their ‘buyer’s agent’ simply let them pay the asking price—which was beyond aspirational? The listing agent, who told me the story, said: “When we listed it, we knew the price was way too high. I couldn’t believe an agent working for the buyer brought a contract in at full price.” Who knows what the final chapter in that story will be—will those buyers try to sell the house in a few years, only to find out they overpaid? Or will they try to put a loan against it and get the sad truth from the appraiser? Am I saying buyers should never pay more than market value? No, but they should know what they are doing. After all, if a consumer thinks she is being represented, she ought to have representation.
An area wide open to abuse involves the unrepresented consumer. It can be a buyer or a seller, but either way, the consumer has lots to lose and little to gain from being the unrepresented party. When an agent who is already representing one consumer in an agency relationship, like a buyer agency agreement, approaches an unrepresentedconsumer—for example, a FSBO, the agent should take great pains to make certain the seller understands who the agent is representing—and who the agent is not representing. Sometimes, you can’t save people from themselves. This story comes my way from my fellow trainer and good friend, Lynn Madison. It happened to an agent she knows. The seller was not unrepresented—the seller was just not well represented. The seller had opted to list with a limited services company, and in the state in which this occurred, the agent did not have the obligation to present offers to the seller directly (in some states, agents must present all offers, regardless of the services agreed to between seller and consumer). The seller was paying a lower fee in return for doing some of the work himself. The instructions in the MLS said that if a buyer’s agent had an offer, she was to call the seller and present it directly. The buyer’s agent called the seller and said: “I have an offer on your home which I would like to present. May I come over?” The seller promptly replied: “Thank goodness you called! I’m sitting here looking at an offer and I have no idea what I should do with it.” The buyer’s agent went over, and appropriately “Mirandized” the seller—just like the cops on TV do—“You have the right to an agent; unless or until you make me your agent, I’m not representing you, and you should not tell me anything you don’t want the buyer to know.” The agent went on to specifically state: “I’m working for the buyer, not you.” The seller said “Yeah, yeah, yeah---look at this offer. If your buyer can do better, I’ll take it” and then shoved a contract in the buyer’s agent’s face. The contract the seller had was for $40,000 less than the offer in the agent’s briefcase. He got up, stammered that he needed to call his client, went outside, called the client, said: “Meet me at my office immediately!” and met the client and re-wrote the contract for only $5000 above the offer the seller already had—in other words, for $30,000 less than the buyer was originally willing to pay. The seller took it—and left $35,000 on the table. By the way, in this scenario, the buyer’s agent did his job—he represented his client.
In real estate, only material facts about the property and the transaction must be disclosed. The motivation of either party, the price they will take or the price they will pay should be kept confidential by agents representing those parties. These issues are huge, because in the hands of a skilled agent, they can (and will) be used against the other side. Here’s a true statement once given to me by an agent ostensibly representing the buyer, who was bringing me an offer on one of my listings: “They didn’t come in at full price. He likes to bargain on everything. But, she loves this house and if they don’t get it, she’ll kill him. They’ve been looking forever and nothing else has suited them. See what you can do.” See what I can do??? I went to my seller and said: “Hold firm at your listed price—they’ll come up.” They did; obviously the husband didn’t want ‘cold shoulder’ on the menu at home for the next six months. And yet, on a daily basis, I see comments in the MLS like: “Sellers are in a jam; bring any and all offers.”
The sad truth is that these things happen on a daily basis; and many agents delude themselves that it is okay because they are practicing end result ethics—e.g., in the end, the house got sold; the buyer got it; I got paid a commission, so it’s all good. And our industry does not particularly protect consumers—dual agency is only outlawed in a handful of states; in most states it is still allowed. Even in states which practice ‘transaction brokerage’ the agents are representing either one side more than the other, or worse yet, representing themselves (“I need this commission bad”). The industry continues to drive buyers to the listing agent, where in most cases, there is a great possibility of a dual agency—disclosed or not. We do this through signs, sign riders, print ads, websites, and company policy, in some cases, which drives all ‘cold calls’ on a listing to the listing agent. Once the agent has both the buyer and seller, it’s an easy step to put making the deal happen above everything else. We need to clean up our industry and promote representation of clients and what it really means, before someone else does it for us.
The above blog is a portion of the book: It’s Not Rocket Science, It’s Just Real Estate© which Melanie McLane is currently writing.
|
|
Comments (2) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
Sigh! Another week, another set of poor manners to affront me. I love technology. Let me say at the outset that technology has made my life, and your life, so much easier. But, it shouldn't be a license to be rude. Things I saw this week: a man and a woman, at a restaurant, for lunch, seated on the same side of a booth table. Romantic? Hardly--she gabbed the entire lunch to some friend--about truly inconsequential things (I know because I, like everyone else in the restaurant, could hear her entire conversation). Next day--place--our house--situation--the landscapers arrived. My husband went out to (kindly) tell the workers that we had cold bottled water and soft drinks in the garage refrigerator, and they should help themselves. At least that's what he wanted to tell them. The foreman wouldn't quit yakking on his cell phone long enough to hear. For all the foreman knew, my husband was going to say: "We've changed our mind and want an ornamental pear instead of the weeping cherry", but he never found out. Then there's my childhood friend, whose name I won't use, to protect our friendship. She's the queen of: "Hold on, I have another call coming in." This happens whether I call her land line or her cell. Either way, sometimes she gets back to me...sometimes I just hang in limbo, knowing that whoever was on the other line was obviously more titillating that I am. And finally, to relate it to our industry, it's the agents who take calls from Buyer B when they are with Buyer A. Sorry, you are just not important enough for my undivided attention. Sigh!
|
|
Comments (1) :: Post A Comment! :: Permanent Link :: Email This Entry
|
Page 1 of 1
|
|
RSS Blog Feed