Most realtors face a variety of ethical decisions on a daily basis when bringing together buyers and sellers of properties. The nature of the business is that each side of the deal wants to have an advantage. This can put an agent in a tough situation in which they must trust their moral compass and do the right thing for all involved parties. Fortunately, in the long term, the business usually fares well for those agencies that operate ethically and with integrity.
Indeed, some measure of accountability has come to the real estate arena in recent years. The National Association of Realtors has a code of ethics that lays our best practices and preferred methods for real estate agents and agencies to abide by. It mandates the completion of at least 2.5 hours of ethics training every two years.
How Ethical Relators Conduct Business
Here are a few areas in the real estate field where ethical responsibility is of critical importance:
- Transparency. Be transparent in business dealings: It sounds so simple but is easily cast aside. The best in the business keep their word and outline ahead of time the way that they will conduct business. This includes making sure ahead of time the nature of potential agreements and the details about documentation that will be signed.
- Social Standards. The best firms deal with every potential client the same way: with respect and integrity. They deal the same way with people regardless of their status, job title, social connections, or skin color. In addition, they are sticklers for truth in advertising on all social media channels. Description and imagery of the properties that represent are true to their actual state.
- Money Matters. Consider this situation. A young couple who have never owned a home before comes to a real estate agent excited to purchase their first home. As the agent gets to know them, he sees that they are fairly unknowledgeable about properties, and their income is a bit too low for most homes in the area. The realtor knows he can push over a sale because of the couple’s emotions. Instead, he counsels them to lease for a few years and save up for a bigger down payment. He lost a nice commission but did the right thing. Indeed, he gained a future set of customers. In summary, in the short-term, it’s not about the money. Rather, it about the client. In the long-term, the money will follow.
- “Coming-Soon Sales”. Also known as “pocket sales”, this situation arises when a property is not quite ready for listing and an agreement is made between a real estate agent and a seller to market it through the agent’s private network. Although not outright illegal in California, coming-soon sales make for murky ethics. In some cases, the agent may collect double commissions, if he or she represents both the buyer and seller.
What You Should Look For in a Real Estate Agent
Now you have seen how ethical real estate agents conduct themselves when doing business. With these observations in mind, here are a few tips for finding just such a realtor:
- Ask for Referrals. If people have a bad experience with an agent, they generally want to let others know. When searching for a realtor, ask your friends and acquaintances if they’ve had any experience with the firm You’ll sure find out quickly if they had a poor one.
- Check the Better Business Bureau. It may sound trite, but make sure the agency you are looking to work through has no red flags with the Better Business Bureau.
- Does the Agency Promote a Commitment to Ethics? It comes down to core values. You want to work with an agency that values honesty and ethics and part of their firm’s culture.
- Does the Agent Listen to You? You need to feel completely at ease when working with a realtor. Do they listen to your concerns and address them in a simple and honest manner? If the initial conversation feels awkward, then perhaps look elsewhere.
- Is the Agent Overly Flattering? Good interaction with your realtor is a key to success but it can be overdone. Overuse of fluff and flattery on the part of the agent may indicate an underlying issue with their ethics or competence. Make sure they are able to be realistic and factual about properties before you choose to partner with them.
Ashby & Graff Real Estate: A Type Example of Realtor Integrity
Ashby and Graff is an example of a business that is thriving, in part, because of their excellence in ethics. They set the standard for integrity within the field of California real estate agencies. Chief among their principles is that they are committed to transparency and offering equal and honest service to all.