Chuck Ponzi January 31st, 2007

In a recent New York Times article, Vivian Toy gave an insight into many people’s fears of working with real estate agents. Those fears are so pervasive that the Harris Poll she quoted placed real estate agents at the bottom of the list of 23 professionals with respect to prestige.

Who do people have a hard time trusting them?

If you’re a seller, you’re worried that there is a conflict of interest; does the agent think it’s a good offer, or are they just after a commission?

If you’re a buyer, do they pay attention to your needs, and just as importantly, is the house a right fit for you and your family, or is the commission just to tempting to gloss over the details?

Vivian states it as such:

To start with, brokers are salespeople, so buyers with suspicious minds would naturally suspect brokers of trying to sell them something they don’t necessarily want or need. But brokers also admit that some real estate agents help to perpetuate stereotypes with classic bait-and-switch schemes and by putting their own desires to close a deal over a client’s best interests. The fact that brokers themselves sometimes find it hard to trust one another only compounds the level of suspicion in real estate.

If real estate is only a small portion of your monthly income (such as in places in the Midwest), overlooking a bad deal means a few thousand dollars. In Southern California, it means the difference of 20, 30, 100, or even several hundred thousand dollars. Got your attention yet?

Here’s another gem:

Some brokers say their colleagues should not try to hide a property’s blemishes.
Jill Sloane, a senior vice president at Halstead who is Ms. Mizrahi’s new broker, said she once represented a seller whose apartment came with a 33 percent flip tax, and she made a point of including that in her advertising materials.
“There was no point in hiding something like that because buyers would eventually find out about it anyway,” she said. “It’s just not worth the damage it would do to your reputation to be deceptive.”

If any agents are faced with the above type of ethical dilemmas, I would suggest reviewing your E&O insurance.. the upcoming bust is going to be rough when overcommitted homedebtors are looking for a scapegoat for their misfortune.

RE Agents now have it good. Low credentials for admission, simple relicensing requirements, a powerhouse organization that twists the truth for you, and a commission structure that puts doctors and lawyers to shame. Most other developed nations operate their real estate transactions on less than 1% of the total purchase price, what makes us so different?

But, are they self-policing and good to their clients, or are they arrogant and self-serving? Perhaps the mistrust is deserved. Not for all, but definitely for some.

• Uncategorized