Do we as agents put ourselves at risk by marketing ourselves as something we may not be?

I had an interesting conversation with a broker and an attorney recently that has sparked my curiosity.  We see marketing everyday where we as agents tout ourselves as experts or specialists, whether that is a waterfront specialist, a condo specialist or an expert in short sales, REO etc.

At what point are we just puffing or exagerating when we are not an expert?  What makes us an expert in a particular field? education, experience, or both?

This comes on the heels of a Short Sale Expert or Distressed Property expert discussion that I had with a broker whose office sent all of their agents to get their CDPE designation.  There is a handful at most of those 100+ agents that got their designation that have actually closed a short sale, the rest have not.  The agents in that office that are closing short sales do not, ironically enough, advertise their "expert" designation while a large percentage of the agents that have never actually even worked a short sale are advertising themselves as experts who can stop foreclosure.

Where do we as agents draw the line at false advertising?  At what point are we in violation of the code of ethics?  Does an agent who actually is NOT an expert at short sales open themselves up to liability by marketing themselves as an "expert"  

For the record, this is NOT a bashing of CDPE or any other designation, I LOVE education and think that any form of education that we can get is vital.

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Permalink Reply by Brandon Marchand on October 9, 2011 at 6:17am

Good question. We are cautious of this too, we advertise as "Short Sale Marketing Experts" and do not mention the negotiation.

Permalink Reply by Raymond Kennedy on October 9, 2011 at 6:29am

The liability comes in when you give advice or direction that puts your client in harms way. Expert or no expert regardless of your experience or lack of, if your advice is wrong or detrimental to the public, you are opening yourself to liability. This is the risk we take as a professional representing the public.

 

That being said don't market yourself as an expert and provide direction or advice that you are unsure about and always give them direction on who to speak to such as attorneys, CPA's when it's applicable.

I don't think there is a clear definition on what an expert is in the subject of Real Estate since there are so many changes in our industry that happen overnight. As it is defined in the dictionary: "a person who has a comprehensive and authoritative knowledge of or skill in a particular area". So for us as long as we dedicate ourselves to mastery of the subject we claim to be an expert in, that should be sufficient. This will of require continuous education on a subject since it changes so often. As an example, I took CDPE a couple of years ago and at that time I have already been through a lot of education on Short Sales as well as having personally negotiated and closed them. While the information that CDPE had provided was good in many respects, there were tons of inaccuracies in what they were teaching. The only way I knew this is I had experience doing them myself. So simply taking one designation and one class does not qualify you as an expert, it's your continuous efforts to maintain the knowledge and a lot of that is just from experience.

Permalink Reply by Kevin - Greenville, SC on October 9, 2011 at 6:30am

Scouting Report Data No Longer Available


Dear Customers, 

Redfin is suspending access to Scouting Report, the online tool that publishes deal histories and performance metrics for agents across the United States. We will continue to show this information for our own agents. 

Our primary reason for excluding other agents is that the data we exposed has too many inaccuracies, mostly because agents work informally in teams, or don't formally record who represented a buyer in a deal. You can read more about the decision on our blog. 

We apologize to consumers and agents alike for discontinuing the service, and hope to restore it in the coming months. 

Glenn Kelman, CEO, Redfin 
Tuesday, October 4, 3 p.m. PDT

 

http://www.redfin.com/real-estate-agents/search-scouting-report

 

Permalink Reply by SAM OTHMAN on October 9, 2011 at 8:04am

For the last three years or so, we start noticing many companies that offer  Short Sale courses have created these designations all over the board, once you pay fees, and passed a test, now you are an expert. Many agents are hungry for business, that they are willing to take the chance and market themselves as experts. Ethics hmm what is that? Unfortunately, we let ethics slip by and lessen its value; you see it every day from Banks, corporations and Real Estate agents. If the majorities are doing, the wrong thing, by you doing it, doses not makes it right. At the end, we all going to pay for it one way or another. Clients are desperate for true help, good directions, and advice , we need to be true to ourselves and truly help them by telling them the absolute truth, then at that time we all know, understand and appreciate the word ETHICS. On the other hand, there are many great agents around that truly live by their word and do what they say.

Permalink Reply by Mike Horton on October 9, 2011 at 8:27am

Jeff, in the legal discussions I have attended with a panel of lawyers, using the word "expert" puts you in a special liability category. This puts a higher burden of performance on an individual. "Specialist" puts a lessor burden on the Realtor. Good or bad performance can not be mandated by insisting on a class or even the number of deals an agent has closed. Classes and experience help you cope with all the little and big challanges that happen during a short sale. Classes and experience is ok to advertise. In a competitive listing presentation, you should be able to tout your capabilities. Carrying this along to your advertising media of choice only makes sense.  Now how are false claims, poor performance, stretching the truth, ignorance of the latest changes in policy and a lack of contractual understanding that can get a realtor in to a pile of trouble. So how is performance inforced. First line is the agency broker. Broker that are not doing their due deligence with agents better keep their E&O up todate. The legal begals I talk to are begining to lick their lips over possible law suits. The next level of defense is us. Refusing to accept poorly written contracts, misreprentation on mls listings, or buyers agents who write multiple contracts without disclosure when only one buy is intended, etc. etc. The final level (not litigation) to combat poor performance is filing a complaint and put them in front of the board if it is serious enough. I think we (brokers and agents) need to monitor ourselves and use our code of ethics or someone one will come up with a one size fits all regulation or law which makes little or no sense.

Permalink Reply by Raymond Kennedy on October 9, 2011 at 9:06am

I agree, it's up to us to police ourselves. I have a few ethics complaints I will be filing here in the near future. It does no good to complain about it and just ignore it when we see it happen. So many agents talk about ethics but never act upon it when it happens.

Permalink Reply by Stephen B. McWilliam on October 9, 2011 at 8:43am

Jeff, a simple answer to your question: yes, extreme liability.  In the event the seller later becomes disgruntled they will typically reach back to the listing broker and associate for at least a negligence claim. Personally and professionally, I believe any Realtor working with short sale listings should know and understand the process but allow a competent attorney to actually provide legal representation and actually facilitate the lender negotiations.  Realtors are not permitted to be paid anything extra for the added work load and more importantly responsibility.  Realtors partnering with a competent attorney, in which the attorney is paid by the short sale lender, is the most efficient and safest manner to facilitate the short sale process.  When I reference an attorney I do not mean an attorney with a title company that typically only provides transactional representation.  I mean specifically an attorney that will fully represent the seller and their interests in a fiduciary capacity.   

Permalink Reply by Jaime Kosofsky on October 9, 2011 at 10:14am
As a former litigator, one thing I used to look for was someone holding themselves out as an expert or specialist. As soon as someone holds themselves out as an expertbor specialist, they will and should be held to a higher standard of care....
Permalink Reply by Ben Benita on October 9, 2011 at 10:55am
my 2 cents - I have heard you need to be "practicing what you preach" for at least 5 years to be an “expert” and, have heard others simply take a class and then consider themselves an "expert".

As always, case by case.

One of my BIG peeves with the CDPE is that it requires NO short sale experience to obtain, you take a class, and, you are suddnely an "expert". I think it has some great basic info. And follow up information, BUT< nothing beats experience, particularly with short sales.

Unbeknownst to most homeowners, they read "CPDE" and just ASSMUE they are getting a real “expert”.....as always, Buyer beware.

We are actually in the procss of trying to start our own short sle designation school that would REQUIRE XXX number of short sales, or REO tranactions to actuallly have been CLOSED AND VERIFIED before any type of designation would be issued.

Anyway, if you are crazy enough to deal with short sales, I wish you all the best!!!!

I could care less if you call your self an “expert”, just get out there and help some homeonwers
Permalink Reply by Paul Francis - Vegas Short Sales on October 9, 2011 at 11:01am

Excellent Points Jeff,

We were advised some time ago by some Attorneys not to advertise ourselves as "Experts" or "Specialists" when it comes to short sales. Of course... shortly after that Law Firm went around to all of the brokerages giving that advice, they started their own short sale mill run by real estate agents who could not make it on their own. I worked a short sale with them and I pretty much ended up doing the majority of the work. The "processors" assigned to "process" the short sale knew what to supply to the loan servicer.... but they did not know jack about negotiating and setting terms up front.

Sure... it was nice that the clients were able to get some legal advice from an Attorney assigned to their case that had graduated from Law School around the same time that I had started doing short sales... but I don't think it was worth the amount that was paid. I've always thought about that slick presentation the owner of that particular law firm did telling us not to use "Experts" or "Specialists" in our advertising and I really have to wonder if it was all just a set up for them to get more business. Hmmm..

Second -- You bringing up what I've always laughed about is the multiple "Specialists" designations such as CDPE (and others) using "Specialist" or "Experts" in the designation when you don't even have to have Any actual hands on Experience to start using the designation. Some of us have been doing short sales longer then these designations were made up... and in a case or two... I know of a short sale designation where the creators of the program had never even done a short sale. (I know... because one of them talked to me about short sales about 3 years ago before starting up the program.)

In these particular cases, I think it's very misleading to the consumer. I'll certainly agree that some education in short sales is better then no education but to me these designations are worthless until they start requiring a Minimum amount of transactions closed to be able to use the designation.

Precisely why I think the CRS and CCIM designations are the only worthwhile designations out there since they require extensive experience (minimum amount of transactions) to earn.

Just paying $400 or whatever, taking a 2 to 4 hour webinar and then advertising yourself as an "Expert" or "Specialist" hardly makes anybody an expert or specialist. ESPECIALLY since everybody who has been doing short sales for any length of time knows that everything is constantly changing. Short sales today are nothing like they were two years ago... and I'm sure a year from now they will be different then today.

I'm with the majority that some education is better then nothing.... but I'm on the side that unless you've closed 25+ short sales.... you are hardly an "expert" or "specialist".

 

 

 

 

 

 

 

 

 

Permalink Reply by Mike Horton on October 9, 2011 at 2:53pm

Just a thought on designations. CDPE, SFR, CSSN, etc. are all things that we as Realtor know and love. But do a little survey of clients and see how many know or care about these designations. A very high percentage of sellers who contact me to represent them in a short sale do so because of the information I supply them through my web site, blogs, and white papers. They thirst for information and I supply it to them in lots of different media. Most of my short sale listings are non-competive signings. So again, it is what you know and put into sellers hands that make the difference. Your education is important and educating your client is just as important. In my opinion, this is also a way to protect you as the agent.

Permalink Reply by Kristin Johnsen on October 10, 2011 at 2:01am

That is a very interesting question to ask, we also have a local real estate company that has taken the CDPE courses and display the designation proudly. I am not sure which state you are in and am sure that this varies from state to state, but in the State of Indiana the only people allowed to negotiate debt on behalf of someone else (i.e, short sales) has to to registered and bonded with the state, the only people that are exempt from that law are attorneys and licensed Real Estate Brokers. So the majority of Real Estate Agents that are marketing their skills are not even allowed to be negotiating short sales.

 

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