Imagine a day when consumers rate Realtors’ performance and they meet simple performance standards like showing up to appointments on time.
A group of Realtor associations across the country is embarking on an ambitious effort to improve the professionalism of Realtors — and this push for higher standards in business practices is all about common courtesy and customer service.
Leaders of an effort to develop national standards of daily business practices for the real estate industry have announced plans to create a not-for-profit corporation to train Realtors and brokers across the country in better serving consumers.
The public announcement of the intent to launch this real estate standards institute followed a national steering committee meeting in December. The institute will help to create standards and coordinate training and certification relating to these standards, said Greg Rokeh, a Florida Realtor who is chairman of the standards committee.
A group of 51 state and local Realtor associations, representing about 280,000 of the more than 1 million members of the National Association of Realtors, banded together to provide seed money to support the standards movement. So far the group has met its ambitious timetable, and the institute is expected to launch this spring, Rokeh said.
Sponsoring organizations for the effort include state Realtor associations for Arizona, Kansas, Maine, Nevada and Oregon; and local Realtor associations, among them: Albuquerque Metropolitan Board, Bakersfield Association, California Desert Association, Chicago Association, Denver Area Board, Greater Tampa Association, Houston Association, Kansas City Regional Association, Minneapolis Area Association, Northeast Florida Association, North San Diego County Association, Oklahoma City Association, Pacific West Association, and the Phoenix Association, among others.
“We’re all facing the same issues around the country, whether east or west, large or small – and that is the inconsistency of the quality of service. These standards are really consumer-based. We’re really trying to turn the focus back to the consumer,” Rokeh said.
There are certainly regional differences in the way that real estate business is conducted, Rokeh said, but there are many more similarities. “The regional differences are much less today than they were even 10 years ago. Our industry is more national. We’re finding we’re a lot more alike than we really thought we were.”
He added, “If we don’t get together and set our own standards then someone else is going to set them for us.”
Jim Gamble, president of the Kansas City Regional Association of Realtors and a member of the steering committee for the standards group, said the rapid growth of the national Realtor population has contributed to the need for standards.
Gamble said that with all of the newcomers choosing a career in real estate, “it kind of causes issues with respect to the standards of practice that the consumer expects.”
According to a November document related to the standards effort, the residential real estate industry began to shift toward an “agent-centric” business model in the 1960s, and “brokers began to exercise less and less control over their agents.”
But a shift toward a “strongly consumer-centric environment” has left brokerages and their agents at a crossroads, according to the document, “Real Estate Standards Based on Best Practices & Proposal for a Real Estate Standards Institute.” The document states, “At a time when customers say they want a reliable, dependable, consistent home buying or selling experience, the industry is hard pressed to provide one, despite millions spent by brokerages nationwide in the attempt.”
And, “most local real estate association executives would agree that the majority of complaints from the public and other real estate professionals concern unprofessional behavior – calls not returned, no-shows for appointments, lack of feedback and customer communication, sloppy paperwork and follow-through, etc.”
The core group of standards, as defined in the document, include: customer care and communication, technology proficiency, professional development, risk management, transaction management, and customer dispute resolution.
Participants in the standards effort have also produced a “Real Estate Customer’s Bill of Rights,” which states that consumers have the right to “a well-trained, competent, ethical and respectful professional to serve you,” “communications in the manner and frequency that you desire,” and are “informed to the level you desire about the entire process for buying or selling your home,” among a list of 12 items.
While the National Association of Realtors has a code of ethics, Rokeh said that there are many issues within the real estate world that are not covered in this ethics code. Some participants in the effort to develop national standards have complained about “shoddy work” performed by some real estate professionals, and Rokeh said that the quality of customer service “is a major concern.”
“We’re one of the last industries that does not have a true national standards-setting body,” he said.
Leaders of the standards movement have contracted with a Boston law firm, Gesmer Updegrove LLP, to help establish the not-for-profit agency.
“Initially we passed the hat and collected about $125,000 worth of funding just to get us to this point,” Rokeh said, and the standards leaders are now working to collect more money to get the institute up and running.
There will likely be annual dues to belong and participate in the institute, he said, and these dues should make the organization self-sustaining. “Our goal is to make it as affordable as we possibly can,” he said.
Participants in the standards-setting group are conducting a national survey of brokers to gauge interest in the process, as brokers will be the key drivers in the training and certification process, Rokeh said.
Gamble agreed, “We need to convince the owners and brokers across the country that this is good for business, that it will save them money and make them money. The institute is looking for big hitters that can buy in on this.” Savings on errors and omissions insurance and a reduction in lawsuits are possible benefits of the effort, he also said.
Don Cohen, general manager for McMillan Realty in Bakersfield, Calif., and a member of the steering committee for the standards group, said, “On a nationwide basis we’re all very concerned about the standards of practice of the real estate industry, and that in the eyes of the public things were going downhill.”
He added, “It is critical for our industry to keep standards as high as we can. I think this will be a mechanism for doing so.”
A Web site will be established as a place for consumers to report on service that they receive from real estate professionals, and Rokeh said the Web site may parallel the ratings system for buyers and sellers in use at Ebay.com.
“We would anticipate that the primary mechanism for the public would be Web-based where consumers would actually report on the quality of the performance. The model will have to be left up to the leaders of the institute – we envision something of the eBay-type concept where the consumer would be able to report back feedback,” Rokeh said.
“None of us envisions a ‘standards police.’ In a lot of ways it will be self-policing. The ultimate arbiters will be the consumers,” he said.
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