80% of Real Estate Agents Make Our Industry Look Bad

We have all heard of the 20/80 Pareto principle and how it equates to every industry. This specific story of the Pareto principle goes out to 80% of real estate agents, I know it’s true, because I happen to be a real estate agent. As a real estate agent, we have all sat through ethics classes, bored to tears, because we understand what ethics are but someone please answer this; why do 80% of real estate agents look past ethical behavior? A prime for instance; I was previewing a house for my Real Estate investment group and the MLS sheet clearly stated, “Ready to Move In”. Once I looked the property over, I immediately went to my smart phone and looked up the real information about the property. It had been purchased two months earlier by an investor, who had just turned the property, (put lipstick on a pig). When I looked for the disclosure statement, it was crossed off and hand written over the disclosure; “Owner never occupied”, so no disclosure. Our listing agreement asks; “has any improvements to the property been made which required a permit”; and there had been such improvements made, several... Here is the question; where is the ethics and why did the agent allow their customer to commit fraud? Some may comment; they just didn’t know, or they were unaware of what needed to be permitted but in all actually, they didn’t care, they just got a listing. Here’s what is going to happen; a first time home buyer is going to pull up to the property and see all the fresh paint and flooring and fall in love. The buyer’s agent will write an offer and now the fun begins. The buyers, (who have limited funds), will spend $300-$400 for a home inspection, which may or may not report the non-permitted repairs. If it’s brought up; what do the first time home buyers do, they just spent their last few hundred bucks for the inspection? Panic sets in, both agents start the negotiations and it’s suggested just flip the buyers into a 203K to fix the problems. Now the buyers feel forced to go back to their lender and sweat out the details and often believe they are forced to buy a home they would have never have looked at if the listing agent and selling agent would have done their due diligence, because they just spent their last few hundred bucks.

Many agents are going to read this and say; it’s not our job to insure repairs have been done properly, that’s why the buyer hires a home inspector. Other agents will decry, they are not qualified to determine whether repairs needed permitted or not. For 20% of the 80%, I believe you, but for the majority, I’ve caught many of you in a lie, you know what is right. For the 20% of agents who do their business ethically and are willing to pass on a commission because it's the ethically and honest thing to do, thank you. For the 80% who think real estate is just about commissions, you won’t last long and I applaud your early exit from the industry. The only problem is, you will be followed by another 80% who will attempt to make the honest 20%, look bad in the overall public view of the real estate industry.