Happy 4th! Back Monday the 9th but here’s a post that originally appeared January 29th of this year.
True Gotham was born to help clean up the reputation of the real estate industry by giving the consumer insight into the inner workings of the industry and some of the tactics that agents use to "seal the deal." The big idea is to be honest and open, which in the long run might to inspire the idea that there are professionals in this line work with integrity. There is a right way to do things, and I know for a fact that there are plenty of professionals doing things that exact way.
So imagine my surprise and disappointment when I read the Sunday New York Times and stumbled upon Vivian S. Toy’s article "Agent Angst." I wasn’t surprised or disappointed by the article itself because it is an old story and one that continues to be told but I would have jumped at the opportunity to speak with Ms. Toy regarding the industry, it’s self-policing, and the "used car salesman" stigma that many of us are trying to dispel.
After all, I cover this topic daily and it remains the mission of True Gotham. Toy writes:
A Harris poll conducted last year that ranked occupations in terms of prestige placed real estate brokers at the very bottom of a list of 23 professions. (Firefighters and doctors were at the top.)
Brokers themselves seem well aware that their business isn’t always held in very high regard. The National Association of Realtors has an advertising campaign called “Someone You Can Trust,” which stresses that Realtors are subject to mandatory ethics training. “Not many professionals can claim that on their resume,” the ads read.
I have written about this Harris poll on True Gotham, most recently in a post about agent self-esteem. And the NAR ads suggesting that Realtors are "someone you can trust" seem to make an attempt at addressing our "bottom of the barrel" and "scumbag" reputation that is voiced on a daily basis on other blogs like Curbed and Patrick.net.
Now if Ms. Toy had contacted me for my views on this subject, here is what I would have added:
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Although the Real Estate Board of New York is making great strides at monitoring and policing the industry, membership is voluntary and those who do not belong to this organization are not subject to its rules.
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Most New York City real estate agents are not Realtors.
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Rumor has it that the Department of State is incredibly lax about fining or disciplining agents who exhibit unethical behavior.
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I have also had a colleague "manufacture" other offers in an effort to get my buyers to raise their bid on an apartment.
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I believe that most buyers who feel taken advantage of are too embarassed to report it to the Department of State or simply feel like they should have been more aware of the possibility that they were being mislead or lied to (ex. I myself was once told by a colleague that I could install a washer/dryer in an apartment that my wife and I were buying when the building policy was NO washer/dryers. This colleague worked in the same office as me and I was beyond embarrassed that I took her word for it.)
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The industry does seem to be improving but their is still much more room for improvement.
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And all of this said, the best way to select an agent for representation is through a referral from someone you trust. I have many more thoughts on choosing a good agent.
Finally, Ms. Toy seemingly polled some of my colleagues to come up with the following tips which I agree are useful in selcting an agent:
QUALIFICATIONS Make sure the agent is licensed. In New York City, to ensure an agent has access to all available property listings, check to see that he or she is a member of the Real Estate Board of New York. In New York State, you can check the Department of State’s Web site to see if the agent has had any licensing violations. In New Jersey, go to the Real Estate Commission’s Web site, and in Connecticut, the Department of Consumer Protection’s site.
EXPERIENCE Check real estate agents’ Web sites for lists of recent sales or ask for printed lists. These can give you an idea of the kind of experience an agent has and specific areas of expertise.
REFERRALS Ask friends and relatives for recommendations, because good brokers tend to get most of their business by word of mouth. But even a broker who comes highly recommended may have some weaknesses. Ask the recommender about any broker shortcomings, so that you can work around them.
CHEMISTRY Just in case negotiations get rough, you want to be comfortable with your agent’s personal style because he or she may have to bring you news you don’t want to hear. So think about whether you want someone who will take control and be blunt or someone who will hang back or pamper you a bit. Be prepared to move on if your personalities don’t click.
TYPES OF AGREEMENTS Although there are various types of agreements between buyers, sellers and brokerages, two are common.
When you choose a broker to sell your house or apartment, you will have to sign a contract giving the broker the exclusive rights to list it for a set length of time. So make sure you and the broker get along before you sign.
If you are buying, you don’t need to sign an agreement to have a buyer’s broker represent you. Or you can work with the seller’s broker. As helpful as they may be, you need to remember that the first loyalty of sellers’ brokers is to their clients, not you.
I would add that Ms. Toy missed a very important group of people in her story: real estate bloggers. People like Kevin Boer of 3 Oceans Real Estate, Noah Rosenblatt of Urban Digs, and Pat Kitano of Transparent Real Estate are raising the bar in the industry by holding it accountable and making the real estate transaction less of a guessing game for the consumer. It’s a new, and potentially very important, resource.
