Investigation Finds 6 In 10 To Be Unethical
Yep, they’re back at it. The Unethicals.
“Attempting to buy a home in a red-hot market can make it feel like the deck is stacked against you. But if a real estate agent is behaving unethically, it could cost you tens of thousands of dollars—even the house of your dreams.”
That is the opening paragraph from a recent article, as a result of Marketplace’s hidden camera investigation. The investigation reveals, “some real estate agents are breaking the rules in an effort to double their sales commission.”
“Using hidden cameras, Marketplace, documented how top agents…breached ethical and legal rules aimed at protecting consumers.”
As one honest agent put it, Josie Stern, “There’s a lot of money at stake and corruption is just all over the place.” And she is, I agree, absolutely right.
Why be paid just one commission, when through secrecy and a little bit of three card monte, you can be paid a double commission?
Referring to hot markets and multiple offer situations, the article states, “With bids [that are kept] secret, it’s hard to catch,” referencing the corruption.
To conduct the investigation, Marketplace staff posed as homebuyers and visited real estate agents in the [local area.] The faces and names of the agent s have been concealed, as experts told Marketplace the problems are not specific to individuals but exist across the industry.
Now, can we stop there for a moment?
Do you not find it interesting and fascinating, as well as troubling and concerning, that the problem is apparently so widespread in real estate, that experts see no need to hold any individual accountable for their unethical actions? I mean, think about that. What would we do if the act of murder became a societal wide-spread problem, would be stop holding individuals accountable?
It seems to me, the only way to reverse an industry-wide problem like this, where agents are choosing to be unethical for personal enrichment, is to make it known that the punishment to any individual found in violation of the rules, would be swift, massive and extremely painful.
After all, if there is no fear of punishment for breaking the rules, putting consumers at risk of being exploited, victimized, taken advantage of, then what prevents the industry from continuing the behavior?
From the investigation, it was found that 6 out of 10 agents [when dealing with multiple offer situations] promised to share confidential information and give and advantage if they were to represent both parties in a bidding war. An obvious violation of ethics.
When Marketplace followed up with the six agents found to be breaking the rules, most said they did nothing wrong or were merely passing on their professional expertise. One agent said behavior like this happens all the time.
Now, I won’t bother to paint the parallels. But in other professions, whether you’re a practicing physician, licensed attorney, or a trader in the stock markets.
Disclosing confidential information, and/or using confidential information for the enrichment of self, is not only unethical, but in many cases illegal, and likely to lead to the loss of personal freedom or professional license.
In real estate, though, discipline is rare.
After Marketplace presented the finding of their investigation, the regulatory Real Estate Council wrote this message to its members:
“These practices are a clear breach of Real Estate and Business Brokers Act, 2002 and the Code of Ethics. Engaging in this sort of behavior undermines consumer protection, consumer confidence, and puts the reputation of the real estate profession at risk. Anyone can lodge a formal complaint against an agent with RECO. However, people may not know if an agent acted unethically and the closed-bidding system can make complaints hard to prove — even harder to prosecute.” Then added, “The system, as it is now, obviously isn’t perfect.”
Which if I’m not mistaken, translated, here’s what that says. “You can file a complaint if you wish. We know the system is broken. Corrupt even. But we aren’t going to do shit, because we’re here to collect membership fees and dues, not to spend time, money or resources on investigation.”
That means, my friend, that your best protection is to learn how the game is played inside and out, so no one can play you like a fool.
I continue to be dumbfounded by the vast number of homebuyers and sellers, that continue to take the advice of a real estate agents at face value. “Well, my Realtor said…” Which then leads into the horror story, that continues to haunt. The saddest part? These homeowners think there is something they can do. In most cases, there isn’t. Because in real estate The Code of Ethics isn’t any kind of a formal law. It’s just a set of guidelines.
And how do you prove unethical vs. incompetence vs. an honest mistake?
Take it from me. The best protection you have against The Unethicals in real estate is due diligence. You should ask 1) Do they have a Documented Approach that has been researched and proven to achieve for clients a superior result? If they do, ask for a copy of their book so that you may consume the research for yourself. Also, you should ask for case studies of their Documented Approach, put to work on behalf of their clients, to verify the consistency of the results for yourself.
Steven Weirich is the co- author of ‘The Value-Driven Approach: A practical guide to protect yourself from REAL ESTATE GREED & bank and extra $30,000 by THINKING like the great Warren Buffett.’ He is a licensed agent with @properties and a local entrepreneur as well. For a free copy of his book visit: www.literature4charity.com