A Matter of Trust

A recent JD Power survey reported a trend in the real estate industry showing more homebuyers and sellers increasingly going without agents. It would seem that people are looking for cheap, convenient, and paperless transactions through non-conventional means.

However, sit-in at any closing table and you will find a room full of trusted people doing specialized jobs: the seller’s agent, the buyer’s agent, the buyer’s closer, the seller’s closer, attorneys, paralegals, etc. The priority of a cheap, paperless, and stress-free close seems 1,000 miles away.

Why? Because closing the sale of a home is such a major deal involving a large lump sum of money and a huge asset, the participants at either end are likely to want to look each other in the eye and verify one another as real, upstanding people. It comes back to trust. People will always pick trust over thrift and convenience when it comes to home sales.

But what if you could combine trust with convenience? Do you now have a complete and satisfying transaction? The future of the real estate industry (and human agents) belongs to those agents (and teams) that are most successful at serving both important attributes.

Why does it matter? Trust is the foundation of all relationships.

What exactly do you mean when you say you don’t trust someone? Do you mean you don’t think they are honest? Or, do you mean you don’t trust they have your best interest in mind? Or, do you mean you don’t think they can do the job? These are all different dimensions of realtor trust.

In a recent indictment of a local Minneapolis realtor husband and wife team, we sadly see another example of a violation of trust. It is alleged that these realtors devised a scheme requiring repair contractors to pay them kickbacks. In return, the couple used their position as realtors for the victim companies to steer housing repair contracts to contractors who paid the kickbacks. The indictment further alleges that they procured and submitted sham bids as part of the scheme to defraud the victim companies. The defendants created a scheme to siphon as much money as they could from these properties, no matter the method, no matter the victim. These scams victimize all of us. Trust is essential. These dishonest and untrustworthy criminals clearly broke the trust covenant that good realtors work hard to earn.

This concept is so important that an entire business model was developed by a popular radio/TV host to address the issues he had experienced in a real estate transaction. He developed a referral process to determine who you can trust and who you can’t…built on a proprietary vetting system. Trust is essential. But how do you define trust in real estate?

The Dimensions of Realtor Trust

Four dimensions of a trusted realtor

Integrity: Are they honest and ethical? The quality of honesty is the most important element and is the foundation of trust. Liars are not trusted. In fact, without integrity, the other dimensions of trust don’t matter.

Is there yes a YES and there no a NO? When your agent tells you something or promises something, do they follow through on those statements? Anyone can promise something, but people with integrity deliver on those promises.

When your agent tells you something and later you learn that it’s not true, how does that make you feel? Trust is like a bank account. You start with a certain amount of trust, and then over time, you add to that account by delivering on promises. And like a bank account, it can be emptied overnight if you’re caught under delivering and lying. Lying is a sure sign of someone who is in it for the paycheck and does not have your best interests in mind.

Does your agent demonstrate an awareness of other people? Are they respectful and courteous to others that are involved in a transaction? Integrity is also the quality of having strong moral principles and moral uprightness in how you treat people.

You can learn about a realtor’s integrity and reputation in several different ways. Start by checking online reviews. There are dozens of websites that allow users to leave reviews about realtors, so you should take the time to read some of their reviews prior to working together. If there is a single bad review and a handful of glowing recommendations, you shouldn’t put too much weight on that review. However, if there are reviews from multiple people that all say basically the same thing, you may see a pattern. With that being said, sometimes online reviews may not be complete or entirely accurate.

You can also ask for references. Better yet, ask people who work with your agent, their peers, or the vendors they associate with. Online reviews are helpful, but you won’t have the opportunity to ask the person who posted them any questions about their experience. If you want to engage in conversation with a former client to learn more about your agent ask him for references.

Competence: Do they know what they’re doing? If you hire someone to represent you, you want to be assured they know what they’re doing and can do the job well. What is their track record of success?

In other industries, a person’s level of success does not always correlate with his trustworthiness, but in real estate, it typically does. Trustworthy realtors have clearly won the trust of other clients and helped them successfully either buy or sell a home.

It’s also important to find a realtor who stays up-to-date with industry news. Does your realtor know what trends buyers are looking for this year? Does he know anything about the current interest rates on home loans? Are home values in your area expected to rise or fall in the next six months? These are areas that he should be familiar with, so if he doesn’t have the answers to these questions, he may not be as trustworthy as he claims to be.

Reliability: Can they be counted on to follow through on their commitments? Will they be there when they’re needed? If they agree to do something, are they dependable? Can they be counted on to complete things on time? Timelines and deadlines are absolutely critical in a real estate transaction. Missing important deadlines can cost you money and/or the possibility of losing your dream home!

Can you depend on your agent? Will they show up when they’re supposed to? Realtors who take a long time to respond to your emails or who say they will follow up with you on a matter but never do are not being professional. Likewise, realtors who are late for appointments or constantly reschedule with you at the last minute are not behaving in a professional manner. This is a sign of an unreliable realtor.

Concern: Are they genuinely concerned for your well-being? When we believe someone genuinely cares about our well-being, we are willing to open our hearts and become vulnerable. This is the deepest level of trust and is not to be taken lightly.

Part of showing concern for clients is having great listening skills. Trustworthy realtors are dedicated to finding you the home of your dreams. How do they know what your dreams are? During the first meeting with your realtor, he should ask you to describe some of the must-haves in your new home. If you mention that you absolutely must have a fenced yard for your three large dogs, but the realtor continues to send you listings for homes without a fence, he was clearly not paying attention during your conversation. This indicates he is more concerned with making a sale than he is with finding you a home that meets your needs. You shouldn’t trust a realtor who cannot demonstrate that he is able to listen to you and put your needs first.


Conclusion; does your realtor have your best interest in mind? Do they see you as an individual, and do they really care about your well-being? If they don’t, they may need to evaluate their mission statement or rethink their career choice. When you start to wonder whether you can trust someone or not, that is when you already know you don’t. Move on. Find a trustworthy realtor.
The sale of a home is a major deal. Don’t take shortcuts. Choose individuals with character, who are capable, and that you can depend on. It’s a matter of trust.

Hire an Agent

After asking yourself, “are you are ready” to buy a home, step number one on The Home Buyer’s Road Map is to hire an agent. Finding a good real estate agent/broker is essential to enjoying a successful real estate transaction.  The question is, how do you find a good real estate agent? The best agent for you doesn’t necessarily work at the largest brokerage, close the most transactions or make the most money. The best agent for you is an experienced professional who will:

Listen to you

Ethically conduct themselves

Knows your market

Beyond these seemingly obvious fundamentals, there are a few more attributes your next realtor should have. When a real estate agent or broker is acting in an agency capacity for a buyer or seller client in a transaction, they have certain legally mandated duties that are called fiduciary duties.

“A fiduciary duty is the highest standard of care. The person who has a fiduciary duty is called the fiduciary, and the person to whom he owes the duty, is typically referred to as the principal or the beneficiary. If an individual breaches the fiduciary duties, he or she would need to account for the ill-gotten profit.”

The position of the agent or broker is a fiduciary capacity, acting in the best interests of the client. The specific fiduciary duties in a real estate transaction are as follows:

  • Loyalty – a broker/salesperson will act only in the client’s best interest.
  • Obedience – a broker/salesperson will carry out all the client’s lawful instructions.
  • Disclosure – a broker/salesperson will disclose to the client all material facts of which broker/salesperson has knowledge which might reasonably affect the client’s use and enjoyment of the property.
  • Confidentiality – a broker/salesperson will keep the client’s confidences unless required by law to disclose specific information (such as disclosure of material facts to buyers).
  • Reasonable Care – a broker/salesperson will use reasonable care in performing duties as an agent.
  • Accounting – a broker/salesperson will account to client for all client’s money and property received as agent.


What value to realtors provide? What do they actually do?

With so much information readily available online, people sometimes ask me, “Why should we hire a real estate agent?” They wonder, and rightfully so, if they couldn’t buy or sell a home through the Internet or regular marketing and advertising channels without representation, without a real estate agent.

Consumers hate agents because the business seems easy on the surface. To sell a home, some people think it means just stick a sign in the yard and post photographs online. Those two actions might bring a buyer but they don’t necessarily sell a home. A lot can happen between signing the contract and closing. A smart agent knows how to negotiate and how to handle problems that can pop up such as appraisal issues, home inspection repairs, buyer’s lender requirements, price guidance, buying and selling concurrently, contingency releases and more. In fact, there is quite a bit that realtors do. Here is a list of some of the common responsibilities:

 

 

  • Schedule showings
  • Schedule listing appointments
  • Maintain required continuing education
  • Deliver earnest money on time
  • Coordinate property inspections
  • Keep up with mortgage company progress
  • Verify buyer’s new homeowner’s insurance
  • Coordinate home warranty company
  • Negotiate counteroffers
  • Schedule closings
  • Attend closings
  • Get all disclosures delivered & signed
  • Keep the transaction on track
  • Provide educational materials to consumers
  • Keep your blog active
  • Maintain active social media profiles
  • Answer the phone all day & night
  • Return missed phone calls
  • Return emails asap
  • Follow up with website inquiries
  • Keep up with changing laws
  • Run comparables for buyers & sellers
  • Determine accurate pricing
  • Help stage & present properties
  • Meet the appraiser at property
  • Meet the inspector(s) at property
  • Show hundreds-thousands of homes each year
  • Get signed contract to title company
  • Negotiate repairs
  • Keep clients updated with each step
  • Provide comps for the appraiser
  • Coordinate closing
  • Make sure there is a clear title
  • Explain the contract to clients
  • Provide advice on offer price
  • Explain the current real estate market
  • Explain pros & cons of each neighborhood
  • Verify completion of repairs
  • Make sure the loan funds
  • Schedule & attend the walkthrough
  • Dispute low appraisals
  • Verify delivery of title commitment
  • Remind clients to schedule utilities
  • Manage your online reputation
  • Compete with 1,000’s of realtors® for business
  • Deal with vendors
  • Keep mls listing data current
  • Attend real estate conferences
  • Network with local home builders
  • Coordinate open houses
  • Check up on past clients
  • Still have a life after you’re done!

“Finding a Realtor is not hard, but finding one that is best-suited for you and your purchase is a challenge.” – Mark Moffatt, McEnearney Associates


So, where do I find someone who holds and demonstrates the values I care about?

Tips for Finding the Best Agent:

Get Referrals

Most real estate agents stay in business because satisfied clients refer them to friends, family, neighbors, and coworkers. Ask the people around you who they have used and ask them to describe their experiences with this real estate agent. Successful agents make customer satisfaction their number one priority and put their customers’ needs before their own.

Seek Advice and Information from Known Professionals

Use the mortgage  guy you know as a resource for agent referrals as many brokers have first-hand knowledge of exceptional agents. Ask your plumber. Ask your lawyer. Professionals tend to refer other professionals like themselves

Google!

It seems simple, but this is one the most effective methods of researching someone. Creep a little. Browse social media profiles. You can learn a lot about someone by what image they present online – especially by what they post and share! You will be working with this person for anywhere from one to six months. You’ll want to make sure you know as much as you can about them.


Now that I’ve found someone, what do I ask before I hire them? Do I really need to interview them?

Yes! Smart consumers interview potential real estate agents before deciding which agent to hire. Just as you are sizing up the potential for a good fit, rest assured that the real estate agent will likely be interviewing you, too. It won’t take long before you can get a good feel for who you might be hiring. In fact, studies have shown that you can size someone up with 5-10 seconds of meeting them.

It’s not necessary to act like a corporate hiring manager implementing a full-fledged professional behavioral employee interview. However, you should ask questions that satisfy your requirements. Here are a few examples:

What are the top three things that make you better than the other guy? It’s a simple question. A good realtor won’t hesitate to answer and should be able to clearly and concisely articulate why you should work with them. Everyone has their own standards, but most consumers say they are looking for agents who are: honest and trustworthy, friendly, available, good communicators, excellent negotiators, assertive, and analytical.

What is your marketing plan or strategy for my needs? As a buyer, you will need to know: How will you search for my new home? How many homes will I likely see before I find a home I want to buy? Will I be competing against other buyers? How do you handle multiple offers? Do you present offers yourself? Your agent should have a game plan ready to show you.

How long have you been in the business?  Keep in mind that longevity does not automatically equal quality. There is an ocean of licensed realtors in Minnesota. Yet, it is astounding to me the number of low quality individuals I come across posing as realtors that have been in the business for decades that are disengaged, entitled, lazy, and frankly, ineffective.


Buying or selling a home is statistically one of the most stressful events in a person’s life. Just like driving a car from point A to point B there will be bumps in the road and unexpected hazards along the way. However, with the professional assistance of a skilled realtor, if you are prepared, organized, have reasonable expectations, and are willing to adapt and “flex” on the path toward home ownership, the buying process can be a satisfying experience!

If you want to be sure that you are working with an agent who understands you, listens to you, and truly puts your best interests first please get in touch with me!