At the recent Inman Disconnect in Palm Springs, California, a group of industry leaders came together to address a number of leading real estate issues. This innovative group consisted of startup entrepreneurs; disruptive company founders; top-producing practitioners; owners of brokerages big and small; coaches; executives across new and old franchisors; MLS and association leaders; big data experts; and technology giants.
What they came up with was 12 concepts or principles — unofficially dubbed the Parker Principles. And among various other industry-related issues, they advocate for stricter enforcement of the code of ethics. (Parker Principle 4 says “strictly enforce ethical standards to increase professionalism.”) Moving forward with these principles would be a giant leap forward for our industry.
The fact is our industry is in dire need of improvement — there are way too many agents out there that shouldn’t be practicing. At the very least, they need better training and education before dealing with the largest asset that most people have.
The topic of requiring higher standards to enter the real estate profession has been discussed for years. Yet in almost every state, you can go from handing out Happy Meals to becoming a “professional” by taking a 60- to 160-hour course, and passing a test. If, as Parker Principle 3 states, we are going to hold the industry to a higher standard of service, we must start with the associations and brokers.
The government won’t help
It should be obvious to us by now, that the regulatory departments of our respective states are not going to solve the problem for us. In most states, it is just too easy to get a real estate license. Although mandatory continuing education helps, this is only required after people have been practicing real estate and are renewing their license. That is often too late.
It reminds me of the guy who simply read a book on scuba diving, then strapped on a weight belt and tank, and jumped into the ocean. He drowned. Perhaps continuing education before taking the plunge would have been a good idea.
I sit on the grievance committee of two local associations. I have noticed that many of the complaints filed, particularly ethic complaints, are against Realtors who have had their license less than two years. Often their defense is, “I didn’t know,” and they aren’t lying. This is rather amazing, considering a code of ethics class is required to become a Realtor.
Brokers should be held accountable
In another time, most brokerage firms were small “mom-and-pop” type operations. In this environment, new agents often received a lot of guidance and help.
Today, however, we have a number of brokerages that are huge. In some cases, they are simply an agent mill, where recruitment is the primary goal. Some of these brokerages can’t or won’t train, supervise or monitor the activities of each agent.
One remedy would be for local associations to require brokerage firms to document agent training, making sure all agents are proficient in basic things like completing listing and sales contracts.
Could local and state associations, or NAR, be the answer?
Another idea that might be worth considering is expanding the code of ethics class, which is required to become Realtor. One of the most common violations of the code of ethics seems to be making disparaging remarks about other agents, firms and the real estate profession. Next on the list: the solicitation of sellers who have their property listed with another brokerage.
It might be worth the time to put a special focus on these areas. The state of Florida is trying to address this issue by requiring an ethics and business practices class as a part of its continuing education requirements.
Local associations could be our best solution
Most local associations require that new members attend things like a “new member orientation.” To improve upon this, associations could also include a workshop period where new members physically complete listing and sales contracts, and where common code of ethics violations are discussed.
At the end of the day, it is up to us to improve our profession
Almost every self-help group encourages new members to get a “sponsor.” The idea is that the new member will be guided down the right path. Such a concept works well in real estate too.
When I first got a real estate license in 1995, I was fortunate enough to have experienced agent Tom Gale take me under his wing. His help proved invaluable. Perhaps we should all consider “adopting” the newbie in our office.