Once again I’m aghast.
I was just reading a comment(#43) to a post on deceptive radio advertising for mortgage lending on Seattle’s Rain City Guide regarding selecting an agent when I received a call from the selling agent on one of my recently closed transactions.
He said he was missing a copy of an Agency Disclosure Form signed by his buyers. I thought he had misplaced his copy of the form. I had one and offered to send him a copy. That wasn’t it. He simply didn’t understand the form. There’s more, but no reason to repeat it herein.
I thought to myself… “Wow. Here someone has placed responsibility for a purchase involving hundreds of thousands of dollars into the hands of someone with limited knowledge of the forms being used. What else doesn’t he know and what if something had gone south with this transaction (it didn’t)? Did the buyer have a clue when they chose their agent?”
It got me thinking (again) about the risks to which buyers and sellers are exposed… and the fact that they have no idea of the extent of their exposure. They simply don’t know what they don’t know.
The vast majority of the time nothing significantly untoward happens and the extent of their risk exposure is never uncovered. Oh, maybe they spent or received several thousand off of what they could have otherwise realized (enough to cover the cost of more knowledgeable professional?). But unless particularly egregious, there’s generally never any way it will come to light.
But then again why would anyone expect anything different? Isn’t this the same problem you confront when selecting a doctor, attorney, or auto mechanic?
The first axiom of selecting a real estate agent (or any other professional for that matter) ought to be an understanding that they (and the service they provide) are not fungible (interchangeable). In other words, not all are alike.
3 responses so far ↓
1 Jillayne Schlicke // Oct 1, 2007 at 8:53 pm
Hi there,
The last sentence in this post is telling:
“The first axiom of selecting a real estate agent (or any other professional for that matter) ought to be an understanding that they (and the service they provide) are not fungible (interchangeable). In other words, not all are alike.”
When a person holds himself or herself out as a “professional” consumers do hold a belief that the professionals “ARE all alike.”
For example, a doctor or a lawyer who has 1) spent an incredibly long time learning his or her profession, 2) has passed rigid, week-long state medical board exams or the very tough bar exam, 3) must subscribe to a mandatory code of ethics with sanctions for violations.
Consumers have expectations when selecting a doctor or a lawyer.
When a consumer selects a real estate agent or Realtor, the expectation is as follows:
1) high school diploma or GED
2) 2 weeks of education
3) licensing exam
4) voluntary code of ethics (Being a member of NAR is not mandatory)
So, in a way, real estate agents ARE all alike.
And yet they are so very different.
Realtors/RE Agents are judged by the lowest common denominator, not the highest, which is why doctors and lawyers are respected and Realtors still, after 100 years of having a very good Code of Ethics, are not as well-respected by the general public.
Make all the attorney jokes you want, but when we need an attorney, we really do appreciate and will pay top dollar for their level of expertise.
2 Lee Mason, The Masters Realty Group LLC // Oct 2, 2007 at 9:24 am
Hi Jillayane – Thanks for stopping by. I appreciate your thoughts.
I’m not exactly sure I’m clear on your point. I think you’re arguing for a raising the (minimum) bar of an accepted standard for real estate agents. In other words, you feel that: 1) unless one meets the accepted minimum standard, they cannot/should not be considered a “professional”, and, 2) that the standard should be raised. Is this your thesis?
The point(s) I was making (perhaps poorly) doesn’t conflict with what I’ve presumed is your thesis.
I was attempting to consider two points (and forgive me if I lapse into the philosophical):
1. Agents are not fungible. Regardless of the level of standards (and what goes into the make-up of those standards) one selects, some will barely make the minimum level, while others will far exceed it – either by lack of competence or skill, and/or lack of rigor (those who simply choose to do less).
The absence or presence of standards will not change this – regardless of whether one is selecting a mechanic, doctor, or lawyer. I contend there are good and not so good lawyers, doctors, and auto mechanics. I personally don’t hold your respected-as-a-profession opinion (although a majority of consumers may – I don’t know). (I didn’t understand the lawyer joke thing. Where did that come from?)
As you say, the majority of people will pay top dollar for top expertise (assuming they perceive a need for top expertise). I was considering how difficult it is for one not in the profession to identify such.
2. My second point concerned the issue that a lack of skill or competence goes unnoticed most of the time. It remains hidden only revealing itself when an infrequent untoward event appears (Taleb’s Black Swan).
In summary, I don’t think higher standards are a bad thing, although you and I might disagree on how they should be formulated and whether they should be voluntary or imposed by a government bureaucracy or a private entity.
But they aren’t a panacea. I’m sure you recognize the dangers of using standards as a crutch substituted in place of reasoned analysis (a’ la HUD-1’s).
I’m not sure the “problem” is really solvable as its genesis is rooted in how we as humans think. Which, I guess, brings us full circle to your original post regarding deceptive radio advertising (which is just a form of advertising as a whole).
Most people, if they took the time to rationally analyze an advertisement, would see its true elements. But we don’t normally do that. We unconsciously think emotionally unless we force ourselves to do otherwise. It’s quicker and doesn’t require effort.
In summary, raising standards may help to some extent. But I fear any standard that would be truly effective would be so demanding and arduous it would be opposed by most practitioners.
Never the less, it would have my enthusiastic support.
3 Rhonda Porter // Oct 23, 2007 at 10:14 pm
Lee, I’m always amazed at how consumers select professionals who will be working with them for 30 plus days on perhaps the largest purchase in their lifetimes.
And you’re right, some “professionals” are lucky enough to slip through the night without their weaknesses being exposed.
One of the positives of our current market is that it will “weed out” many of those who are not fully committed to their trade.
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