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Real Estate
PROFESSIONAL ETHICS
NOTE: Real estate people are viewed by many as one step above used car salesmen. The challenge here was how to address the ethical issues without appearing to lecture from a posture of self-righteousness. Playing off the oriental quote was intended to lighten things up. But what made this one work were the interviews; as you will see, the topic evoked strong opinions among the Realtors themselves, and they pulled no punches about the need to elevate their profession and were forthcoming with practical tips on how to accomplish that. This story turned out to be an appeal to the best in all of us.
How Ethical Are You? No, Really!
Although gold dust is precious, when it gets in your eyes it obstructs your vision.
— Hsi-Tang Chih Tsang,
8th Century Zen Master
By Randy Heuston
Ah so. Hsi-Tang speaks great wisdom, which you, dear Realtor, do well to ponder.
Does the glitter of potential profit cloud your ethical vision? Sure, you don’t lie, but have you ever hid, distorted or inappropriately disclosed information, leading people to believe that which lets you manipulate them? Any gold dust in your eyes right now?
Even if you are a paragon of virtue, above reproach and highly respected for your ethical standards, do you believe the same is true of this profession? Critics claim it’s poorly regulated, controlled by the people inside it. Is the fox guarding the chicken coop? Quality varies state by state as well as agency by agency. How can we achieve more ethical consistency? In short, how can we elevate professionalism in real estate?
Whatever you think, what does the public—including your present and future clients—think about your ethics and those of your profession? They’re becoming more knowledgeable and suspicious, yes, even paranoid in this Enron-ethics world. They’re hardly philosophical about their gold ending up in somebody else’s purse. They feel, as it might be phrased in those weirdly translated Kung Fu movies, “damn unsatisfied to be killed in this way.”
Exposed on the Web. The Internet has given the public knowledge. If you have a Website, you hang out there for all the world to see. And if prospective clients go Googling, they may stumble onto messages like this one from the Jenman Group, a self-appointed industry watchdog:
“The current lack of ethics in real estate is one of our greatest national scandals. It is hard for anyone who is not involved in the real estate industry to comprehend the magnitude of what goes on 'behind the scenes.' Thousands of consumers are being ripped off. In these days of high consumer protection it is amazing that the ethical crisis in the real estate industry is scarcely mentioned….”
Where is the real estate profession ethically at this point in its development? What are some common ethical pitfalls? What should Realtors do to resist temptation and why? Following the master, how do we keep the gold dust from our eyes?
Making progress. Nancy Colson, CRS, SRES, in Auburn, Washington, has been at this business for nearly 30 years. The profession has come a long way in that time, in her opinion, thanks to the increasing rigors of the certification process. “Our profession is putting more emphasis on ethical business practices, building in more checks and balances. It doesn’t do our profession any good to overlook, let alone defend, unethical practices.
“Now that we are doing a better job educating ourselves, the challenge is to educate the public about differences among agents and agencies. For example, the public needs to understand the training needed to become a Certified Residential Specialist.” She’s right. As far as most people know, all those letters after your name could be Chinese.
“The problem we have here in Tennessee,” says Cindy Edwards, CRS GRI, a respected Realtor in Johnson City, “is that brokers are exempt from the 16 continuing education hours every two years. Some of these brokers have had their license for 25 to 35 years and haven’t had continuing education for close to that long. Without it they make us look like a bunch of proverbial ‘used car salesmen.’”
With apologies to the many honest folks selling automobiles, Cindy wants it known that she too believes the profession is gradually improving its public image, and education is the reason. The profession has made great strides but still has miles to go.
Up to the individual. Her point, though, is that after all the laws are written, all the ethical standards are put in place—certainly the National Association of Realtors has a comprehensive Code of Ethics and Standards of Practice—and all the professional education has been made available, it still comes down to the individual agents. Do they want to be ethical, or is the gold just too bright to see what’s right? Another philosopher named Plato put it like this: “Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws….”
Nancy Colson agrees that “who you are as a person is a huge part of how ethical you are as a professional. Without an ethical family upbringing, it’s harder. If it’s not inbred, a lot more rules and penalties are needed. It involves little things as well as big. There are lots of subtleties in this business.” All the seminars in the world may not keep you from diving over the line to snatch the gold….
Speak up even if it hurts. Buyers, too, deserve to be warned away from costly mistakes. Is the kind of building material they’re used to in Kansas City practical in the climate of Key West? Did they notice the honkin’ huge power line stanchions just a block away? Are you willing to forego splitting a commission in order to find for the eager buyer the place that will really be right for them? When they’re ready to jump, are you ready to nail their feet to the floor?
Sandra Evans, BRI, CIPS and a CRS candidate, buys and sells homes in the Bahamas, an area with some unique issues. “It is a complex environment here. Buyers are not always aware of some of the cultural undercurrents in the Bahamas. We try to walk the thin line between offering our take on some of the realities of living here and not scaring the buyers away….”
Why be ethical anyway? It comes down to this simple question: Why should you be ethical? Jenman quotes a writer who says “ethical behavior requires self-sacrifice but in the short-term ethical behavior may not be rewarding.” Agents usually have short-term relationships with their clients, so what are the rewards for being squeaky clean? How about the ability to sleep with a clean conscience? Confucius isn’t the only one to say virtue is its own reward.
The secret, Nancy Colson says, is don’t let the gold dust get in your eyes. “I have learned to draw a line between what is right for the people I serve and how much money I might make.” She gives herself the “mom test.” “How would I want this to go if the client were my mom?” She says you should be willing to give up a few bucks in order not to hurt someone you care about.
Professionals should care about their clients.
Cindy Edwards says you need to really identify with people who, when selling their home, are moving away from perhaps a lifetime of memories. Those wanting to buy are often trying to fulfill their dreams. The ethical agent does not crush memories and dreams.
And more pragmatically, she says, as you sow you reap. “There can be legal consequences. Everything catches up sooner or later. I ask myself, what if I do this, what if I don’t do this. My license is my life. I don’t want to do anything to lose it.”
How about you? Some things are more precious than gold.
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