I hear a lot of chatter from successful REALTORS® about “raising the bar” for being a REALTOR®. In other words, do a better job of distinguishing between REALTORS® and licensees. This came up during a strategic planning break-out group today and we all thought it sounded like a good plan, but had no idea how to get it done. So where do you go to figure out how to make the term REALTOR® actually mean something more than a common licensee? A bar, of course. Surely a few beers would generate enough creative thinking to solve this conundrum.
“Sam Adams, please.”
The first order of business is to figure out how we got here – by “here” I am speaking figuratively and not how we arrived at the Dog House Bar and Grille. Why is there no difference between a REALTOR® and a licensee? I blame license law. That’s right, license law. It seems to me that over the years, state license law has “improved” to a point that there is very little difference in the REALTOR® Code of Ethics and state license law. The ironic thing is that the REALTOR® organization has worked hard to strengthen license law over the years. That’s a classic example of a raising tide lifting all boats.
Take disclosure, for instance. I can only think of one thing that the REALTOR® Code requires to be disclosed that the license law doesn’t – REALTORS® are required to tell their seller clients about verbal offers where license law only requires disclosure of written offers. Well there’s a strong marketing point! Other than that, I can think of nothing significant that REALTORS® are required to do that a licensee is not also required to do.
“Another Sam Adams, please.”
So, what is the solution? Do we think up a whole bunch of things that REALTORS® have to do or disclose that a common licensee does not? Maybe we could require REALTORS® to disclose that the neighbor will throw potatoes at you if you purchase this home? Or maybe we require REALTORS® to disclose all the future development plans within a mile of the property. (E&O Insurance companies will love that one.)
Maybe more disclosure is not a good idea. “Another Sam, please.”
How about education? We could require REALTORS® to take more education than a standard licensee. In Virginia, at the request of the REALTOR® organization, the General Assembly just increased the required hours of continuing education for all licensees to 16 hours and brokers to 24 last year. Hmm. Sounds like some more of that rising tide thing again. Man, all these Sam Adams and talk of rising tides gives me a strange urge to toss a box of tea in the harbor.
“Hey, beer me.”
So, education is out and disclosure is out. This is a harder problem than I thought. Maybe a little old fashion, out of the box ideas need to be considered. Sam, what do you think? Any ideas? Here are a few sobering ideas to consider:
- My personal favorite (Sam likes this one too) – mandatory on-line ratings for REALTORS®.
- Required apprenticeship during which you have to complete the GRI course before working on your own.
- Required training and use of top-notch marketing, technology, and negotiation systems and tools. (Sam will be in charge of determining what “top-notch” means.)
- Actively police REALTORS® for violations of the Code, license law, bad business practices and bad service. Bust’em and kick out the bad ones
This is not going to be easy. Is it worth the effort? Probably. Will it get done? Probably not. Is it time for me to tell Sam goodnight? Goodnight Sam.
Marlow says:
In Washington State, the Washington Association of Realtors requires ethics training and classes, in addition to the mandatory clock hours required for license renewal.
That’s a start.
April 16, 2008 — 9:26 pm
Wayne says:
(Any more Sam left?)
OK. Well, to paraphrase Supreme Court Justice Potter Stewart, “the difference between a Realtor® and a licensee is hard to define, but I know it when I see it.” According to Elizabeth Weintraub, there are 17 things a Realtor® promises to do that a licensee doesn’t. But, I’ve seen more than a few Realtors® that have broken a promise or two on this list. Making promises is great, but not being held accountable when you break those promises makes a mockery of the system. So, what about Dave’s ideas?
(bartender: ‘nother Sam, mister? me: still nursing this one, thanks.)
Mandatory on-line ratings: done by whom? Your clients? Other Realtors®? I can see the abuse of that system on the horizon. Make the wrong person mad, you’re toast. Besides, consumers will always have one unshakable method for rating you: they’ll run away and not come back.
Apprenticeship and more training? I thought education wasn’t the answer?
Kick out the law-breakers? Shouldn’t we be doing that already?
Well, as Dave rightly observes, this sure isn’t going to be easy. One last question though: who would we really be doing this for, the consumers, or ourselves? I don’t think the consumer really gives a damn what we call ourselves, they just want what they want and, like Justice Stewart, believe they know a Realtor® when they see one.
(OK, I’ll take that Sam now, barkeep…)
April 16, 2008 — 9:47 pm
Smithers says:
Dave,
I’m not in the real estate business, nor do I even know why I read this blog from time to time, but I do.
If REALTORS(R) want to improve their image, the very first thing they should do is to stop referring to themselves in the third person and in all CAPITAL letters with a registered trademark symbol. Can you guys not see how dumb (and insecure) this looks? Should we all refer to ourselves as TEACHERS(R) COPS(R), BUREAUCRATS(R), CONTRACTORS(R), BARISTAS(R), STOCK BROKERS(R), PIZZA DELIVERY GUYS(R), SHORT ORDER COOKS(R), and so on?
I would also mention cutting back a bit on the “Great Time to Buy” campaigns, but that topic is already well-covered by Mr. Cunningham (I like his posts, which are a much needed counter-balance on this blog. Keep stirring the pot, Barry – don’t let those REALTORS(S) gang up on you with all their bigshot capital letters and registered trademark symbols).
p.s., try the Red Hook IPA….
April 17, 2008 — 1:22 am
Russell Shaw says:
If it were possible to file a complaint the same way one can call the police I believe Realtors would be FAR more willing to turn in the “bad guys”. The present system requires the person making the complaint to get the proper forms and submit the complaint in writing. It is one thing for the accused to be able to confront his accuser but to also require that he “prove it” before anyone will even take a look leaves only those who feel personally wronged ever bothering to do anything about it.
Nice post, Dave!
April 17, 2008 — 3:21 am
Michael Cook says:
Might I also suggest getting new economists and forecastors that dont make outrageous claims every three months or so? If the NAR data and projections are a joke, it only takes a very small leap to assume realtors are also a joke.
April 17, 2008 — 7:30 am
Vance Shutes says:
Dave,
In the marketplace of ideas, there’s a wide-open playing field for all types of licensees. Those who choose to ascribe to the Realtor code of ethics will do so. Some will choose to remain independent.
As for me? I’m happy to compete with all of them. Agents will attract the clients they deserve. Clients will choose the agents they deserve. We cannot simply legislate uniform excellent service delivery.
I’m reminded of those who move out to the country, to “get away from it all”. Once they get there, they want to put up barriers to keep others from moving out to the country as well, to “get away from it all”. Why should we, who’ve been in the business a while, enact new barriers to entry for new licensees? To keep out the competition? Again, let the marketplace of consumers decide.
I’m also reminded of the line “What you are speaks so loudly that I cannot hear what you say.” Those in the business who flout the Realtor code of ethics, or, worse yet, commercial law, will be discovered. They will reap what they sow. And again, clients will choose the agents they deserve. With the transparency of the web these days, savvy consumers will know much about their agent before choosing them.
April 17, 2008 — 7:44 am
Teri L says:
Dave-
You come to this subject from such a different place than I do, it’s great to see this from the other side of the fence.
Wayne said all the things I was thinking as I read this post, but I would emphasize his final point- from what I can tell, the only people who give a hoot about the difference seem to be the NAR. The public uses the words Realtor and real estate agent interchangably.
Vance adds: >let the marketplace of consumers decide.
I’ll drink to that- Barkeep, one bourbon and water, please.
April 17, 2008 — 9:09 am
Dave Phillips says:
Great comments everyone. Gold stars to Wayne and Teri for carrying the theme and to Smithers for a the fresh take on the public impressions of REALTORS(R).
April 17, 2008 — 10:50 am
Matthew Hardy says:
The things you’re talking about are never going to change because the recruiting practices of brokers are not going to change; that is, hire all the noobs you can, glean the deals from their sphere-of-influence then let the under-performers fire themselves.
> Smithers: “…PIZZA DELIVERY GUYS(R), SHORT ORDER COOKS(R)…”
LOL! The term realtor (with or without the “R”) is meaningless to the public. It’s just another word for real estate agent.
> Russell Shaw: “If it were possible to file a complaint…”
I believe they call this a “lawsuit”. 😉
> Vance Shutes: “We cannot simply legislate uniform excellent service delivery.”
This is America and the more we get AWAY from the quasi-governmental bodies that purport to make things “even” and “fair” and “standardized” the better.
Advice to public: interview the agent and determine if they know what the hell they’re talking about. If they don’t, don’t hire them. Ask for referrals and follow up. This beats relying on any designation or ratings system you can develop.
Can you imagine anyone hiring a lawyer or accountant who says “I know I’ve only been in the business for less than a year, but I got really good grades on all my tests (see all my accreditations?!) and I’m really excited to see how this book-learning works in the real world!”
In other professions, new graduates take a job (internship) with a salary, and the bosses don’t let the noob work on anything really important until they’ve proven themselves. Perhaps this is different in real estate because the buying and selling of property is so trivial. 😉
April 17, 2008 — 11:20 am