Simplify

All agents – all people – have momentarily lost their minds and have done things that that cause them angst. While the National Association of Realtors is considered a “trade association” and is seen by many as merely a lobbying organization, its key reason for forming over 120 years ago was to provide standards of conduct for its members as well as a means of co-operating with other brokers. Prior to this, many real estate “dealers” were not just perceived as being ethically unhinged, they often actually were. And brokers were reticent about cooperating with others if everyone could not be held accountable for their actions.

The Code of Ethics, with its iconic line “Under all is the land” as its opening, simply takes the Golden Rule and applies it to the business world. Ethics are higher than the law. The law only establishes a bare minimum of what should or should not be done. An agent may not break the law, but there are many instances where what he or she has done causes harm to others – even when it was not intentional. Here are few ways to avoid situations like this.

Stop doing “dual agency” (“me and me”) transactions. My father used to periodically say, “always know who you are working for” even when the context seemed strange. But it is a great way to ground yourself, no matter what service you provide. Almost all states still allow the practice of an agent “representing” both the buyer and the seller in a transaction, though often in a more limited way. Whether or not your firm permits it, you can choose not to do this. In what way can you navigate pricing, inspections, and the large number of other transaction details in a way that is equal in representation to the buyer and seller? For years, I thought that I could mentally erect the Great Wall of China and serve both clients well. In fact, I enjoyed it because I didn’t have to communicate with another agent. To me, it simplified things. Until it didn’t. I had listed the significant home of good friends. Other friends came through my open house and asked me to write an offer on it. Two weeks later, the buyers decided to back out due to some inspection concerns. While no one blamed me in any way for the situation, I began to imagine various “what ifs” that could easily have happened. A few other agents in my area had recently stopped doing “me and me” transactions and were helpful in suggesting alternatives. Now, when confronted with a similar situation, I simply refer the buyer to another agent in another company. Everyone is aware that I will receive a referral fee, but that I will not be a “dual agent” for this property. No, I won’t make quite as much money in these situations, but it is one less complication in my life that has also impressed clients.

Get it in Writing. It is not possible that you have not heard this from every managing broker or training session. Take notes, keep all of your paperwork… You know what to do.

Another story from my father involves a wealthy fellow who was later found to be suffering from a mental degenerative disease. He and his recent wife wanted to sell their significant home, but they didn’t want everyone to know about it – no advertising, no multiple listing, etc. A difficult way to market a home! Still, my father eventually found a good buyer and the home was sold.

A couple of years later, however, with the recent wife now in charge, they brought a lawsuit against several people, a bank, and my father. In his case, they said that the home would have sold for much more if only my father had used advertising, put it on the MLS. I’m sure it would have, but for their own wishes. Fortunately, my mother remembered that they had signed a note outlining their marketing restrictions. Since he kept the company files in storage forever, it was a quick matter of presenting it in court. I’ve had similar situations. It’s simply not enough to say, “I recall there was some confusion…” Keep your notes, have your clients sign acknowledgements or releases, make things clear from the outset so that they will be clear down the road.

Disclose! In most markets, buyers make as a condition of their offer a time period to conduct and respond to inspections on the property. In our area, one to two weeks is the norm. So, just as many buyers begin to have buyers remorse, they are handed an eighty page inspection report that, essentially, tells them they are fools for continuing with the purchase. And the seller is surprised to find out things about the house that had previously gone unknown.

In most purchase agreement forms, however, is a line that says that anything that has been disclosed prior to the accepted offer can’t be used to terminate the transaction. While the verbiage differs from place to place, it is why I have long asked my sellers to have their own inspection before going on the market. We then give the report to anyone considering the property. This gives the potential buyer the chance to see in person the “uncovered junction box” or “unprotected Romex” is less scary than it appears in print. By disclosing as much as possible at the outset, it creates a sense of trust between the buyer and seller. The seller has gone above and beyond what most sellers do (in most areas) by conducting the inspection. The buyer now has this knowledge and negotiates the purchase price on that basis. Should something new come up in the buyer’s own inspection report, then that would be fair game for a renegotiation. But it rarely happens. This approach eliminates the uncertainty and possible surprise that the typical inspection process produces.

Do you have a pit in your stomach? It is not unusual for us to not be able to enjoy a beautiful day. Something upsets us. Some therapists say that it is best to write down all the things that are bothering you – and then throw it away. I disagree. For me, much of the problem is not remembering why I am unsettled in the first place! I extend the torture of the problem by spending even more time going through a litany of other negative thoughts to find the one that is the root. Keeping the written list not only helps to avoid this, but serves as a checklist of what I should do to clear things. What bothers me most is not a bad appraisal or vast amounts of mold in the attic, it is if there is something I should have done that I didn’t. Addressing that problem as quickly as possible helps to keep my conscience – and my sense of worth – in good shape.

GB Landrigan