when real estate agents go over the line

Although not listed in this year’s Careercast’s annual Top 10 Most Stressful Jobs, “real estate agent” has been included in previous years’ lists. Supposedly, real estate is one of those industries where “frequent or difficult interactions with the public or clients” along with high levels of stress may also be responsible for high levels of depression, as described by Wulsin, Alterman, Bushnell, Li, & Shen in their 2014 study (Prevalence rates for depression by industry: A claims database analysis. Soc Psychiatry Psychiatric Epidemiology, 49,1805-1821). Results suggested that the real estate industry has the second highest rate of depression, second only to bus drivers and transit workers. Certainly to be included in such lists is not an achievement. However, it may explain the erratic behavior of the few agents who are willing to go over the line to gain an edge over their competitors; such as in this recent account…

In their November 2^nd Miami Herald article (Secret tapes, blackmail threat: Luxe real-estate rivalry turns nasty in Miami; miamiherald.com), David Ovalle and Nicholas Nehamas gives us insight to the highly competitive Miami uber-luxury real estate market. What seems to be the plot of a TV crime drama is the real life story that will soon conclude in a court room. Having pleaded not guilty, a middle aged real estate agent is now awaiting trial for “felony extortion, resisting arrest with violence and attempting to deprive an officer of his weapon.”

The story’s main characters are the agent duo known as “the Jills” and Kevin Tomlinson. The Jills have been recognized as being a top producing team in Miami’s luxury real estate market for some time. Tomlinson is no slouch either. He has also been recognized as a top Miami luxury agent, and in the past served on the board for the Miami Association of Realtors®. And although Ovalle and Nehamas’ report suggested that the Jills garnered jealousy from other agents; others have also questioned their business practices.

At the heart of the matter was the allegation that the Jills hid expired listings so the properties would not be solicited from their competition. The allegation is that MLS listing data (such as address, city, and neighborhood) were changed to “hide” expired listings. In an attempt to end the practice, Tomlinson filed a complaint of listing manipulation in April of this year. And that’s when things got interesting.

Rather than waiting for the ethics complaint to process through the system, Tomlinson allegedly asked the Jills on several occasions for large sums of money (up to $800,000), to rescind the complaint. Tomlinson supposedly also threatened to go public if they didn’t pay up.

The combination of high end real estate, allegations of unethical behavior, extortion claims, a police sting operation, may already be the basis for a night’s entertainment. However, the ending sounds like a “take down” scene from Hawaii Five-0: no one expected that Tomlinson would be also charged for going for a policeman’s gun while charged for resisting arrest.

Although the public details may seem incriminating, it appears that there’s more to the story; and maybe each is a “villain protagonist.” Many in the Miami real estate community have rallied around Tomlinson, and some “have petitioned the Miami Association of Realtors® to take ‘disciplinary action of the highest severity’ against the Jills.” For the thrilling account details, please read Ovalle and Nehamas’ story at (miamiherald.com/news/local/community/miami-dade/miami-beach/article42178872.html).

Original published at https://dankrell.com/blog/2015/11/05/when-real-estate-agents-go-over-the-line-to-gain-edge/

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

October 7, 2015November 23, 2021

Real estate agents getting back to basics and focus on relationships

Don’t be surprised when you’re getting more real estate agent phone calls, or seeing more agents at your doorstep. You may be surprised to know that in this increasingly tech dependent world, agents are getting back to business basics; which is founded in personal introductions, building relationships, and providing personal service.

You see, many real estate agents (like the rest of the population), are realizing the limitations of the internet. What was once the promise of a new market place for products and services has become a super-saturated arena of information, advice, and “content” clamoring for your attention; and is a growing disappointment for many due to the increasing irrelevance of information, not to mention the surge of fraud and hacking.

The National Association of Realtors® (realtor.org) has reported on the growth of internet use in real estate over the last fifteen years in their annual Profile of Home Buyers and Sellers (the 2014 Profile indicated that 92% of buyers “use the internet in some way in their home search process…”). And although the statistic is astounding, it is becoming clear that is still not wholly understood how home buyers and sellers use the internet.

You may not be surprised to know that home buyers and sellers don’t entirely rely on the internet for choosing their agent. In fact, many choose an agent through friend/family referrals, personal introductions, and even serendipitous meetings (such as visiting an open house). Furthermore, buyers and sellers are increasingly aware of the internet’s limitations as well; as one home buyer’s recent statement of “…this home is not what was advertised on the internet…” illustrates the type of misleading information that is often found.

Although many are just waking up to the fact that “point and click” does not sell homes, “big housing data” knows it generates online revenue by capturing your information and selling it to real estate agents, loan officers, movers, and others. Last year’s acquisition of Trulia by Zillow was thought by many analysts to be an industry game changer by merging two of the most visited real estate portals. However, many did not consider that the move was to increase traffic and revenue for two companies that were reportedly not “yet profitable” on their own, by “grabbing a bigger slice of the advertising market” (Logan, Tim. “Zillow Deal to Buy Trulia Creates Real Estate Digital Ad Juggernaut.” LA Times. 28 July 2014.<latimes.com>).

More recently, HousingWire’s Ben Lane reported on Zillow’s downgrade by Barclays (“Is Zillow in Trouble?” HousingWire. 20 July 2015. <housingwire.com>), referring to a slowdown of traffic due to saturation and competition. Months after the major acquisition, growth of the online real estate portal is “slowing significantly.”

Just as the growth of the internet created markets and changed how real estate agents conduct business; personal needs and attentions are changing how consumers view the internet, as well as producing voids left by agents and brokers who heavily relied on the internet for business.

The NAR’s recent DANGER Report misses the mark by highlighting perceived shortcomings in Realtor® ethics and competency. However, the real issue may be more about the lack of professional intimacy; which is necessary for commitment, integrity, and building trust. While some already know it, others are waking up to the notion that the quality of the professional relationship is vital to the consumer’s satisfaction – and it all begins with an introduction.

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September 3, 2015November 23, 2021

Real estate agents, emotional intelligence, and sale price

Can real estate agents with high emotional intelligence get you a higher sale price?

When it comes to selling a home, the prescribed course of action is to set the right listing price and prepare the home to be shown. Real estate gurus proclaim these as the two most important items to making the most money from your home sale. And although these are widely accepted goals to getting your home on the market, recent research may actually counter the conventional wisdom about pricing and staging; while a new line of thinking suggests that you’re choosing the wrong agent too.

Staging, as we know it, has been a staple of home sales for almost forty years. And listing agents almost always discuss it during their listing presentation. Research has already proclaimed that furnished homes sell in less time than vacant homes (see Chien-Chih Peng’s study published in the June 22nd 2004 issue of The Appraisal Journal), but does staging add perceived value to the price? Well, Lane, Seiler, and Seiler (2015. The impact of staging conditions on residential real estate demand. Journal of Housing Research, 24(1), 21-35) conducted the first study to determine the virtues of home staging. Their results suggested that home staging does have some impact on the home buying process, as you might expect; “…we find a neutral wall color and good furnishings do significantly influence a buyer’s perceived livability and overall opinion of the home.” However, the study’s main conclusion was that staging a home does not significantly impact sale price.

If you think that pricing a home is a straight forward process of gathering and extrapolating the latest neighborhood data to your home, think again. There may be more going on in your head than you realize. A recent study by Loveland, Mandel, and Dholakia (2014. Understanding homeowners’ pricing decisions: An investigation of the roles of ownership duration and financial and emotional reference points. Customer Needs and Solutions, 1(3), 225-240) suggested that home sellers make different home pricing decisions based on the length of ownership, anticipation of financial gain, and emotional experiences in the home. It seems that the longer you have owned your home combined with a greater financial gain or positively associated memories, may incline you to over-price your listing and likely maintain a higher price; while those who have a shorter time of ownership combined with less financial gain or bad memories price more reasonably, and are more likely to make larger price adjustments.

So maybe getting the most money for your home comes down to your agent. After all, research confirms that experienced real estate agents sell homes faster and for more money than rookie agents. And yet, subjective conceptions of agent traits may guide you to choose your agent, regardless if your assumptions are valid or erroneous.

Forget savvy, forget aggressiveness, forget connectedness, or any preconceived notion about what personality traits your agent needs. A recent pilot study of licensed real estate agents by Swanson and Zobisch (2014. Emotional intelligence understanding among real estate professionals. Global Journal of Business Research, 8(5), 9-16.) suggested that the key underlying trait for real estate success and financial gain is emotional intelligence (EI). The concept of EI is complex, and is often confused with typical personality traits such as sanguinity or purpose. Rather, EI is the ability to be aware of, and command emotions in oneself and others. Those with EI are thought to be empathetic and able to acknowledge responsibility for actions and emotions. Additionally, those with high EI are likely to better understand and manage others’ motivations – which is fundamental to negotiation.

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July 23, 2015May 21, 2019

Bait and switch tactics by real estate agents

The Federal Trade Commission (FTC.gov) states in its Advertising FAQ’s: A Guide for Small Business, “It’s illegal to advertise a product when the company has no intention of selling that item, but instead plans to sell a consumer something else, usually at a higher price…”, when describing “bait and switch” advertising.

The term “bait and switch” is sometimes bandied about by disgruntled consumers, when referring to their encounters with real estate agents. Although the scenarios depicted by the annoyed consumers require legal scrutiny to determine if the situations meet the definition of bait and switch as described by the FTC, it makes you wonder about what some agents are doing and/or saying to get business.

Bait and switch complaints are often about homes that are advertised for rent or sale, but are found to be off market after calling agent. These listings are often the result of listing syndication gone awry; or worse, “scraped” listing information (Internet scraping is when website data is taken and collected, often without authorization) reposted by an unauthorized website to attract traffic away from the website of origin.

Scraped listing information can float around cyberspace for months or years after a home has sold. Although there has always been an element of out of date listing information found on the internet; sham listings and unauthorized postings of listings used to lure consumers, are frequently cited by both consumers and agents because the information is often misleading or incorrect. And although some responsibility may be placed on the workings of the internet; some real estate agents may be to blame for using questionable advertising practices to get their phone ringing to attract home buyers. Such practices include: advertising other agents’ listings as their own, or advertising homes that are off the market.

The MLS syndicates and distributes home listing information across the internet to authorized websites, and updates the listings to maintain accuracy and integrity of the MLS. Although the internet seemed to coalesce for a brief time to present reliable home listings and other real estate information, while deterring scammers and rogue websites; the recent surge in home sales and other economics may be responsible for a return to a “wild west” atmosphere in cyberspace. This year’s reshuffling of MLS data access to major real estate portals, forcing some sites to find missing information elsewhere, is likely to have added some confusion.

Home buyers aren’t the only ones complaining; as some home sellers have similar complaints, saying they’ve been misled. Sometimes the complaint is that their agent “promised” a high sale price, only to be coerced to reduce the price at a later time; or the agent over-promised services that were never delivered.

It must be said that many buyer and seller complaints stem from their dissatisfaction, rather than an actual breach of ethics; and yet many legitimate ethical breaches go unreported. Regardless, it is unfortunate that some real estate agents resort to questionable sales tactics to attract buyers and sellers; and either learn the tactics from real estate trainers, and/or develop them on their own and share with other agents. Even though a Realtors® Code of Ethics exists to guide professional behavior and business practices, some have a “catch me if you can” attitude.

Due diligence, on your part, can make your home buying or selling experience increasingly trouble free and more enjoyable.

Original published at https://dankrell.com/blog/2015/07/23/bait-and-switch-tactics-by-real-estate-agents/

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June 19, 2015December 13, 2022

DANGER Report not a mea culpa – but forecasts issues affecting housing market

News about the D.A.N.G.E.R. Report is making the media rounds, but maybe the excitement is more hyperbole than news. And contrary to the recent hype, the D.A.N.G.E.R. Report is not a mea culpa by the National Association of Realtors®.

D.A.N.G.E.R. is an acronym for “Definitive Analysis of Negative Game changers Emerging in Real estate.” The Report was commissioned by the National Association of REALTORS® as that is part of the NAR Strategic Thinking Advisory Committee’s attempt to identify issues affecting the future of the industry; the Swanepoel | T3 Group researched and authored the Report, which identifies trends and offers the residential real estate industry an impact assessment.

Described as a “…mix of yesterday, today and tomorrow…” the Report is intended to assist those in the industry to “…anticipate the forces taking shape that we can’t yet see;” by pointing out possible challenges, threats, and opportunities. Although the result is meant to “inspire” discourse, the reception has so far been mixed. NAR CEO Dale Stinton was quoted to say, “The D.A.N.G.E.R. Report is like 50 things that could keep you up at night. It isn’t a strategic plan. It isn’t telling you to do anything. It’s 50 potential black swans. It’s for your strategic planning processes. Digest it and cuss and fuss and decide whether it’s right or wrong…” (Anrea V. Brambila; ‘Danger’ report alerts industry to 50 biggest threats; inman.com; May 15, 2015).

One issue highlighted in the Report that has attracted the media attention is agent competency and ethics. The use of Report quotes such as, “the real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents…” is as if some in the media are saying “we told you so.” But the truth is that competency does not guarantee ethical behavior, and vice versa; the answers, like the issues, are more complex than you might expect – and do not assure advancement.

Like many of the issues reported in D.A.N.G.E.R., concern about agent competency and ethics is not new. The National Association of Realtors® has for years tried to influence public opinion of Realtors® and the industry by publicly promoting the high ethical standards by which Realtors® are held. Many are unaware that a code of ethics was adopted in 1913 by the association, and has since strived to instill and maintain a high level of integrity in the field. And yet with such emphasis on ethics, you might expect that public opinion would be much higher, but the limited research on consumer perception of ethics is mixed at best. And according to one study, consumers consider price, quality, and value more important than ethical criteria in purchase behavior (The myth of the ethical consumer – do ethics matter in purchase behaviour? The Journal of Consumer Marketing. 2001;18(7),560-577).

The D.A.N.G.E.R. Report may have missed the mark by not acknowledging that the industry’s transformation over many decades has been mainly influenced and driven by market forces, regulation, and technology. Discussing “black swans” with regard to these three areas may have been more valuable and practical to professionals and consumers.

However, as much as we try to identify unforeseen events; they are just that – unexpected and unanticipated. Take for instance the extreme changes that have occurred over the last ten years in the real estate industry – much of which were due to market forces, regulation, and technology.

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Can real estate agents with high emotional intelligence get you a higher sale price?

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