Do you know that the Realtor who you have your house listed with is actually still earning their living as a Realtor? That was the concern recently voiced and posed to us by a concerned agent in Poinciana, Florida.
“In Central Florida, for example, over 50% of real estate agents are not actively working their listings. (That’s an approximation based on the number of agents who never return my calls and/or are know to now have full-time jobs doing something else.) Seems to me that there is something inherently unethical about REALTORS who don’t disclose to their customers that they aren’t working full-time to sell their properties.”
While I understand that this agent is probably a bit frustrated with her Central Florida colleagues and may be embellishing a bit, this comment gave me reason to ponder the implications of her statement.
A real estate agent approaches a homeowner and seeks to obtain a listing, prepares a listing presentation, and obtains a listing, all the while knowing that they will only be working part-time to sell the homeowner’s property. The homeowner, of course thinking they are hiring a professional, would probably not think to ask this “professional” if they are only in the game on a part-time basis.
Obviously this is not something the part-time “professional” is going to offer or disclose willingly, so therein lies the dilemma. Is there an inherent misrepresentation if an agent does not inform the homeowner that they are not earning enough of a living as a real estate agent and is not a full-time agent?
Does the homeowner have the right to know in order to make a fully informed and properly represented hiring decision that could possibly involve the signing of a binding contract?
In reviewing the National Association of Realtors Code of Ethics there seems to be some evidence to support the notion that an agent should indeed inform a homeowner of their status as a part-time agent.
Article 12
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.
In a real estate market that provides its own challenges, should a homeowner not be entitled to know whether or not a real estate agent is truly making his or hers best efforts to sell and market their home?
Is this why so many calls to agents go unanswered? Is this why so many offers go without a response? I wonder with so many agents leaving the business, how many have stayed, only to be working in a part-time status?
How many have taken listings and already have moved on to their “day job” never informing the homeowner of their career change?
In this litigious climate wherein lawyers are lining up to take shots at Realtors, should agents be giving homeowners more lawsuit fodder?
As I am not an agent, and in light of recent articles I have written that have been seen as inflammatory, I am going to step back and just ask the questions this time. My opinion does not matter in this regard, I don’t have a listing with an agent and I am not a Realtor. I am however very interested to hear from other real estate professionals as to what they think about this. I’ll reserve comment for a follow-up article.
I would also like to hear comments from consumers as to what they think about this. When you hire an agent, do you think you are hiring a full-time professional? What would you think if you found out that the Realtor you had hired had another day job?
We won’t even ask the question as to whether a “part-time” agent should be entitled to 3%-4% commission on a second job gig…not yet anyways.
What say you all on this?
Greg Cremia says:
I believe that an agent who does not tell their client they are only selling real estate part time is guilty of willful omission.
I am quite sure that if all of these part time agents out there were disclosing this, their business would go away.
So yes, I believe it is not only unethical but borderline illegal.
April 14, 2008 — 6:14 am
Broker Bryant says:
Now that’s funny!! I just heard this from a seller yesterday. They mentioned to me that they had their home listed with a REALTOR(R) for about 2 months then one day they were at the mall shopping and lo and behold there’s their REALTOR(R) working behind the counter!!! Needless to say they were shocked. Turns out their agent had a full time job at the mall.
I certainly believe this needs to be disclosed to a potential customer/client.
April 14, 2008 — 6:43 am
Barry Cunningham says:
Greg: Unethical..but illegal?
BB: OMG! BB that is hilarious! I could not even imagine that.
April 14, 2008 — 6:49 am
Beth Incorvati says:
I’m always proud to tell my potential clients that I’m a successful, full time REALTOR(R). My credentials and experience are an important part of my listing presentation…I provide to prospects a “Things to Ask When You are Interviewing an Agent” sheet , and that question ” Are you a full time practitioner?” is on the list. With so many agents to choose from, why not pick the one who will be working full time for you? The full-time status, in my opinion, definitely builds my value.
April 14, 2008 — 7:00 am
Dave Shafer says:
Huge problem here in Florida, where we have always had a high percentage of “part-time” RE agents. Now that many aren’t making enough money to live on it is compounded. You wonder why many folks go to FSBO or discount brokerages?
April 14, 2008 — 7:48 am
Thomas Johnson says:
Barry: Sure to inflame the guilty. Why do brokers allow part time players? I have heard the rationalizations. I have never seen one transition to full time.
April 14, 2008 — 8:34 am
Norm Fisher says:
The legislation in my province requires disclosure to the client but I don’t believe it ever happens. Over the years I’ve seen a handful of agents attempt to work another job as they get themselves established in real estate. It has never worked well. If you’re not in the business full time, you’re not really in the business.
April 14, 2008 — 9:20 am
Jim Duncan says:
I agree with you almost entirely – however the consumer also has a responsibility to ask the Realtor this question before hiring.
April 14, 2008 — 9:43 am
Barry Cunningham says:
Hey Jim, Thanks..quick question. Isn’t it implied that a Realtor is a full-time professional? Are we going to ask the consumer to ask in addition to everything else..now determine if the “professiona” is a professional or just having slept in a Holiday Inn Express? How does one verify the answer given?
April 14, 2008 — 10:01 am
John Kalinowski says:
Can you be a full-time Realtor, but also have another part-time job? Is the part-time job oustide of real estate any of the client’s business?
Depending on whether or not you have an assistant(s) helping, and based on how much business you handle at any give time, I think anything’s workable.
Greg Swann is obviously a full-time Realtor, but couldn’t you argue that he also has part time jobs as both a mega-blogger and as a software programmer and developer (Engenu)?
As long as your part-time work outside of real estate doesn’t hinder your ability to sell your client’s home, I don’t think it’s any of their business.
April 14, 2008 — 10:33 am
Greg Swann says:
> How does one verify the answer given?
Ask better questions:
* Is it okay if I turn off all the utilities to save some money?
* My wife is leaving me. Will it be all right if she takes all our stuff and leaves me with the big screen TV and a lawn chair?
* I won’t be around to mow the lawn. That won’t be a problem, will it?
* How many cats are too many?
When I’m working with buyers, I care a lot less about how many hours a day the listing agent works and a lot more about how the stuff between his or her ears works. There are a whole lot of full-time Realtors with part-time minds.
April 14, 2008 — 10:33 am
Greg Swann says:
> Greg Swann is obviously a full-time Realtor, but couldn’t you argue that he also has part time jobs as both a mega-blogger and as a software programmer and developer (Engenu)?
Remember, I’m a broker. I have a moral — and legal! — obligation to work Cathy to death before I lift a finger in my own behalf. 😉
April 14, 2008 — 10:40 am
John Kalinowski says:
Man, if I could only get my wife to agree to the same!
April 14, 2008 — 10:42 am
Barry Cunningham says:
Hello John, you are correct. i do not believe a part-time job outside of real estate is at all a problem or of any concern of a Seller. In this market, a second income could mean all the difference between making it and not making it.
However, it was the alternative that was questioned and of more concern. The part-time realtor working a full-time job ELSEWHERE. That seems to be a completely different paradigm from that which you mentioned.
April 14, 2008 — 10:43 am
John Kalinowski says:
I think you’re right, Barry, but especially if the agent is doing a horrible job and claiming to be “full-time”.
I think it all comes down to how efficient the agent is, and what they accomplish in the time spent on the job. One person’s version of “full-time” may not match another’s. I know many agents who seem to work 24/7 but don’t accomplish nearly as much as others who work less hours. Look at Russell Shaw and how much he accomplishes, and I imagine he’s not working 7 days a week in real estate, and answering the phone at 10:00 at night.
The bottom line is whether or not the agent is getting the job done and supporting their seller. It doesn’t really matter if that takes 12 hours per day or three.
April 14, 2008 — 10:52 am
Norm Fisher says:
The test in my area is whether or not the other “opportunity” requires you to be at a certain place for certain times.
“Part-time Registrant means a registrant who is engaged by, is under contract to, or has another occupation with any party other than his or her registered broker whereby the registrant may not be authorized to leave that other occupation to trade in real estate.”
“No registrant shall trade in real estate as a part-time registrant unless he or she discloses this fact in writing to a buyer or seller prior to the establishment of an agency agreement.”
These seem like reasonable parameters to me.
April 14, 2008 — 11:07 am
Broker Bryant says:
Personally, I don’t think the amount of hours we work has anything to do with being “part time” or “full time”. It’s all about effort and being available.
When I first got into real estate I had several jobs. My wife and I owned a guest services business, selling attaction tickets and transportation to English vacationers staying in vacation homes. We did this from about 7am to 10 am in the mornings. I then worked real estate all day, then waited tables at night. BUT….I was always available. I actually sold quite a few vacation homes to folks I would wait on at night. I did this for about 2 years until real estate took off.
My sellers and buyers knew what I did and how I worked. It was never an issue. Since I dealt mostly with English “holiday makers”, all 3 of my “jobs” were connected. I would sell them tickets in the morning, houses during the day and serve them steaks and beer at night!!!
April 14, 2008 — 11:25 am
Doug Quance says:
This is both funny – and tragic – at the same time.
While the guy at the mall is just trying to earn a few bucks so that he can eat – it’s probably a part time job there, as most mall jobs are.
I believe it should be disclosed, whether required or not. I know many sellers who picked part timers because they were willing to work cheap… as the regular job gave them the ability to work for next to nothing.
April 14, 2008 — 12:29 pm
Jeff Kempe says:
I ran into a friend at the store Saturday. Now with a different broker, she’s been in the business certainly over ten years, most of those in partnership with her mother, who died last summer. She has over $5M in listings, and is very, very good at what she does.
She’s working part time at the mall to help make ends meet.
She’s told all of her clients and offered them an out; all have stayed with her. They know they’ll get more attention than they would, say, from the full-time hyper-lister who has two assistants and 43 listings.
She’s been caught, as have many of us, having to continually revise downward the business plan; PDX sales were off 40% in March.
There are going to be lots of damned good agents working at the mall until this clears out.
April 14, 2008 — 1:14 pm
Sue says:
In my opinion a part-time realtor is not as effective as a full time realtor. Availability and keeping up with the market in my area is more than a full-time job. I can understand a full-time realtor doing some part-time work with minimal hours that allows flexibility and perhaps is linked with real estate and networking…such as staging homes, photography…even RE blogging as it requires research, knowledge and expertise. I believe this information should be disclosed as well.
April 14, 2008 — 3:07 pm
James Boyer says:
I don’t know about ethical or not, but while at a listing appointment I always point out that I am a full time REALTOR and why it is important to work with a full time REALTOR. I personally do not believe that a part-time REALTOR can represent the best interests of a seller or buyer.
I think that NAR should require every REALTOR who does less than 1 deal in a calendar year to have to go though the licensing process again.
April 14, 2008 — 5:22 pm
Overland Park Real Estate says:
It seems a lot of the public believes Realtors are a bunch of part timers. It must be one of the few jobs with that perception. That is why it is so important to inform a seller on a listing appointment, I am full time.
April 14, 2008 — 7:12 pm
Sue says:
I am not even sure the public realizes the true total value added by Realtors and all the nuances that come up in the course of a real estate transaction.
April 14, 2008 — 8:10 pm
Dave Shafer says:
There is a significant minority of folks who I describe as “do-it-yourselfers” who think that they can do any job. Most of the time they get away with it, but occasionally they get burned and then they get really hurt. I have learned to simply ignore these folks when I run across them until they are to a point where they ask for help. These folks are the ones that question why realtors make so much money on a transaction and flock to discount RE brokers, Stock brokerages, legal paperwork mills, 1-800 loans, etc. I mean anyone that thinks they can handle a complex transaction like a real estate transaction by themselves with no experience is naive at best!
April 15, 2008 — 6:50 am
northern indiana real estate says:
This is a well written post. Whenever I speak with potential clients I try and help them understand this is my job not a hobby. I will be actively selling every listing not just putting it on the mls and crossing my fingers.
April 15, 2008 — 7:35 am
Matt Gentile says:
Contact anyone of Coldwell Banker Residential Real Estate’s 5,500 Realtors across the state of Florida and let me know if you do not receive a call back within the hour. Through Leadrouther, our online rapid response system, all our associates’ leads are converted to voicemail and routed to their cell phones within seconds.
We have had remarkable success stories regarding how our Realtors called customers back while they were still online and got the business. I think you are raising a red herring, as if there were not enough bad news stories to deal with right now.
Maybe you and Jeff “PB Post’s ‘The Real Deal’ Ostrowski can sit around and think of more negative angles to publish. Cheer up man, it’s Florida, 300 days of sunshine and there ain’t no lookin’ back!
Regards,
From the Beach Chair,
Matt Gentile (FloridaMoves.com)
300 Days of Sunshine
April 15, 2008 — 1:02 pm
Chris says:
One can argue the merits of part vs full time all day long. Naturally full time is preferred and the only way to really take this business seriously and try to make it work.
But sadly reality hits everyone and you need X number of dollars to cover your monthly nugget. If the choice is to get a part time job for 12 or so months to help cover that nugget until the market starts to improve; or simply get out of the business all together… I think many of us would get the part time job.
Everyone is hurting, even the mega listers from what I have seen.
April 15, 2008 — 8:38 pm
AndyinPC says:
I’ve had to work part time jobs before, but I did everything possible to ensure that my part time would not interfere with my career. Sadly though, I admit I didn’t disclose that I was working a second job. Looking back now I can see that may have been the wrong choice, but at the time I justified it by telling myself I didn’t have any seller’s to whom I was beholden; I just worked with buyers.
Is not disclosing illegal? I don’t think so. Is it unethical? Very possibly. Is it potentially problematic? Almost certainly. If it ever comes up again, I would disclose.
April 15, 2008 — 11:56 pm
Sue says:
Matt, Good point about calling back while they’re still on line or shortly after. That definitely increases conversion rate.
April 17, 2008 — 5:03 am