May 1, 2008 at 11:17 pm
· Filed under Bainbridge Island Real Estate, Bites of Kitsap, Buyers, Real Estate Bites, Sellers, Sparks from Sparky
With the advent of the Internet, information has become accessible at blinding speed. Want to know the migrating habits of the South African Gnu? What is the proper way to eat sushi? Or what was the original color of coca-cola? Powerful search engines enable us to locate virtually anything we want at the touch of a few keys. Websites, forums, and networks abound where we can obtain answers for every conceivable question. Information equips and empowers. It serves to form our opinions and guides our decisions.
This rapid accessibility and transfer of information is changing the way we conduct business as well. Companies and business professionals are moving away from one-sided, static websites to dynamic, interactive platforms, such as blogging, that allow consumers the ability to directly engage in virtual conversations.
Open and transparent dialog is a welcomed development in the real estate industry. The shrouds of mystery surrounding our profession have been quickly dissipating, offering consumers a well-deserved look into the inner-workings of the real estate world.
But there are inherent dangers to this new-found ‘free-for-all’ of information. And the potentially damaging ramifications exist for either side of the discussion.
Here’s an example of an actual ‘real’ question that was recently posed by a consumer on a popular real estate site:
“We just recently put our home on the market and we’re wondering, what is the selling market like now? What is the average time to sell a home in the $800K range?”
I’m not going to publish the various ‘responses’ to this inquiry (there were 5 answers at last look), but suffice it to say that all of the respondents chimed in with very detailed local markets statistics, jockeying and positioning themselves as the undisputed resident authorities. Almost all of them offered some measure of advice or counsel, and added the ‘perfunctory’ “for more information, my website/email is blah, blah, blah“….
What I found curiously missing was the question that should always be asked right out of the gate:
“Are you currently working with a licensed real estate professional?”
I’m thinking to myself, does this person have their home listed through a licensed agent, or are they attempting to market it on their own?
As real estate professionals, it’s ingrained into us from almost day one (Realtor Code of Ethics, Article 16) NOT to engage, counsel, or solicit someone who is, by contract, under representation by another agent. When in doubt, ASK!
And, as a consumer who is asking the question, how do you know if the individuals responding to your questions are actually ‘qualified’ to answer accurately? Are they licensed in the State where your home is located? Do they know and understand the unique nuances of your particular area? Who holds them accountable if they provide you with misleading or false information? How do you know for sure if they’re even a ‘real’ real estate professional?
Now don’t get me wrong. I am thrilled about all the advancements in Internet technology and their impact on the real estate industry. Many of the applications are having a very positive effect, both for us professionals, and for consumers.
But as real estate professionals, in our drive and desire to be helpful, we need to be ethically prudent, and exercise caution on what we say, and to whom we respond.
And, as consumers, though the Internet opens up a unlimited wealth of resources, remember that ultimately, real estate is local. The best way to obtain a qualified response?
Ask a local expert.
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debbie wrote @ May 4th, 2008 at 9:22 am
The Kitsap Sun from Washington. “In yet another indication Kitsap County is not immune from the current housing crisis, the number of properties that were scheduled for foreclosure auction during the first two months of this year is 140 percent higher over the same period last year.”
“About 110 properties were scheduled for auction in January and February combined, compared with 46 in 2007, according to the Bellevue-based ForeclosurePoint.com. Most were single-family homes.”
“Numbers from Kitsap County Assessor Jim Avery told the same tale. ‘Forced sales’ recorded by his office more than tripled between January and February 2007 and the first two months of 2008, from 33 to 101.”
debbie wrote @ May 4th, 2008 at 9:23 am
The Kitsap Sun from Washington. “Houses are still moving in Kitsap County, albeit not at the past rapid pace. At ‘The 400′ in Bremerton, …the price on some new condominiums has been slashed by 58 percent, from $259,000 to $109,000.”
“Perhaps at the height of the housing market this 577-square-foot, one-bedroom, one-bath condo was worth $259,000 — but no more.”
“Welcome to another slumping housing market. I’m sure the current slowdown has surprised those who think most investments, including houses, only move upward in value. Sorry, that’s never been the case.”
Debbie - Just a couple things….first, we welcome intelligent and civil debate/discussion here on SoundBiteBlog. Secondly, we ask that your comments be relevant to the nature of the specific post to which you are commenting. And lastly, please refrain from using any slanderous or derogatory labels or language. Calling me a ‘moron’ doesn’t add much credibility to your comments. Thank you.
Hi Rich,
On the popular real estate forums, Q&A’s of Trulia and Zillow discussions, Linked In Discussions, etc. under the Code of Ethics, would a real estate professional be required to ask the consumer posing the question if they are currently working with an agent. And then, if another consumer chimes into the conversation, does the real estate agent then need to ask that consumer if they are working with a real estate agent before they answer them.
Please note, I ask this question in all sincerity. Thank you in advance for your response.
Sparky wrote @ May 7th, 2008 at 3:26 pm
Rebecca - Thanks for stoppin by! The ‘red-flag’ phrase used here was “we just put our house on the market.” Before jumping into the fray, a discerning agent would naturally qualify any further discussion by clarifying what exactly does that mean? Are you working with another agent? Or are you marketing the home by yourself? Each response takes you in totally different directions. Unfortunately, in many of these ‘Q&A’ feature platforms, agents seem more concerned about promoting their contact information than they are providing solid, ethical responses. In my opinion, we undermine the value of agency relationship when we rush in too quickly to answer.
Vinny wrote @ May 23rd, 2008 at 10:20 am
I’m about a month late to this, but I just found you through Twitter - nice blog you have here.
I might take issue with the exact wording of your position - I think you are advising Realtors to stay far and away from giving any represented clients any kind of advice.
And I don’t think this is entirely related to Q&A type forums:
Standard of Practice 16-6 states:
When REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type of service, and REALTORS® have not directly or indirectly initiated such discussions, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement.
Ok so 16-6 is a little different in that we are assuming the client is contacting the 2nd Realtor for the sole purpose of entering into an agreement.
But as we know in the real world client arrangements rarely work like this (even for the first agent). Most sellers at first want to know what you’re going to do for them before they agree to list with you. The same would be true of any subsequent agents - if not more so (since they are decidedly unhappy with their 1st agreement).
It was also interesting that you used the word “counsel” when you said “NOT to engage, counsel, or solicit someone who is, by contract, under representation by another agent.”
I checked http://www.realtor.org/MemPolWeb.nsf/pages/COde and the word counsel was no where to be found in section 16.
I bring this up for a few reasons - only somewhat related to Q&A forums.
In the last few months I’ve been contacted by clients who were already represented by an agent.
One was a buyer who happened to overhear me talking at an open house I was visiting (I blogged about it on Active Rain: http://activerain.com/blogsview/485775/Another-Reason-to-Visit).
In that particular case I don’t feel I did anything unethical and they definitely contacted me to engage in an exclusive arrangement (as per 16-6) - so I’m all free and clear ethically speaking.
The other was a seller who contacted me via my blog and said:
“Our house is currently on the market with another realtor, however we are very unhappy with their service and wish to find another realtor to list our house with. If possible, could you please tell me what kind of marketing strategy you use to advertise the houses you have on contract and what kind of commission you expect for your services. Our house is located in Crofton and we need to sell asap, as we are moving overseas. I would appreciate any information you could provide about your services, as we would like to relist our house next week. Thank you kindly.”
Well - this is a nice little gray area. They are clearly in the market for a new Realtor - but they aren’t outright approaching ME for an exclusive arrangement.
If this same question appeared on a Q&A Forum would the Code of Ethics preclude me and other Realtors from answering? I don’t think it would. But I know that’s not a universally held opinion.
A similar question was posed in the last ethics class I took a year ago.
Essentially the agent wanted to know how she should handle real estate related questions from friends and family members she knew were represented by other Realtors - but approached her with the questions about what the other Realtor had advised, market conditions, etc.
Our instructors response: Walk away. Hang up the phone. Be polite as possible, but get yourself out of the conversations - otherwise you are asking for a world of trouble.
(Ethics instructors rarely deal in gray areas and always err on the side of caution. This same instructor said a Realtor was a fool if they ever represented themselves as a buyer or seller. His claim: even if they disclosed it (which was required by law) the non-Realtor party to the transaction could always claim there was an unfair advantage - even if they were represented by their own Realtor. I see his point, but again - that’s a bit extreme).
I thought his advice to “walk away politely” was a bit of overkill and called him on it.
I personally felt (and still feel) you can answer such questions if you couch them with a lot of disclaimers (e.g. “I’m answering as your friend and not as a Realtor, but…” or “Some agents do it that way, others do it this way and if you have questions go back to your agent and ask them”, etc.)
The instructor came back to me and said by doing that I was injecting myself as a person of authority/value and as a source of information into an agency agreement and by doing so I was threatening that exclusivity.
It was interesting to see the battle lines being drawn in the room. Older and more experienced agents sided with the instructor, younger and more green agents didn’t think such an extreme was called for.
(as a point of reference - I’ve been in real estate professionally since 1991, and licensed since 1995, I have about 200 transactions under my belt - you can decide if I’m experienced or not).
Look, we all know our industry is changing.
In the past our value to clients came from information, service, know-how and the MLS. Sites like Trulia and Zillow and even web available property records are taking one of the most vital assets (i.e. information) away from us. And with discount brokers, web access and open IDX standards - the MLS is becoming available to anyone.
So what we’re left with is service and know-how (how to market, how to negotiate, how to finance, etc.).
If Realtors can’t keep their clients with service and know-how, and their clients turn to the web for answers - I don’t know why the Realtors who represent them should be protected against all other Realtors by a Code of Ethics.
And how does this veil of secrecy benefit the perception of our industry?
It just doesn’t make sense to me.
But nice blog you have here 
Vinny: Wow! What an incredibly intelligent and detailed response. I am truly honored.
My point here wasn’t necessarily to examine the finer points of the COE, but to simply caution agents as to the nature of their comments on Internet-based forums and social networks. On ActiveRain, we have a ‘Q&A’ section that is frequented by consumers, and our members post responses to their questions. It concerns me, in this instance, that no one responding even asked the question. I simply felt it was warranted in order to guide further dialog.
Thanks again for your comment and compliment of our site. We kinda like it!
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