Maybe it's the incredible empathy the entire nation felt at the horrific images of our country under attack on September 11, 2001. Maybe it is the fall of the stock market where trillions were lost on bankrolling unproven products and services that were unsustainable. Maybe it was the shock of finding out that well-paid executives at some of the country's largest firms got rich by lying through their teeth to their own employees and investors about their companies' viability.

Whatever the reasons, we seem to be a nation no longer able to stomach gains gotten through hurting others. A national zeal for playing fairly is beginning to take over, and it is permeating all sectors from sports to real estate.

The signs of change are everywhere.

• Unlike past events when irregularities were swept under the ice, Olympic officials acted quickly to award a gold medal to a Canadian skating duo when it was discovered that a French judge had succumbed to influences to make sure another pair got the gold. They acted just as quickly to remove the gold from a cross-country skating team found to have used oxygen-enhancing drugs before the event.

• High profile clients are deserting accounting firm Arthur Anderson LLP in the wake of its involvement in the Enron accounting scandal.

• Not to be tarred by the same brush, the world's largest publicly-held company, GE, has offered 30 percent more content than ever before about GE's operating results and financial position in its 2001 year-end report. CISCO also followed suit, ushering in a new era of more information being given to investors. (Earnings reports are still indecipherable, but at least there is more information on them.)

• Congressman Gary Condit's romp with a now-missing intern and his subsequent failure to be forthcoming to investigators caused voters to choose not to re-elect him.

What happens to real people seems to matter again.

Fairness (and isn't that what good business is really all about?) is becoming more fashionable in the real estate sector as well.

The Mortgage Bankers Association is launching a new Website for consumers aimed at reducing predatory lending practices. The new site, called Stopmortgagefraud.com, is part of a new campaign to help prevent predatory lending.

Stop Mortgage Fraud is a nationwide consumer education campaign that provides consumers with educational materials on their rights, warning signs of predatory lending, and where to report it. Some of the largest lenders in the nation including Chase Manhattan Mortgage, Countrywide Home Loans, Wells Fargo Home Mortgage, Washington Mutual and Bank of America Mortgage, among others, are endorsing the campaign with links on their Websites to Stopmortgagefraud.com.

How can Realtors benefit from the trend? The National Association of Realtors has provided plenty of resources to boost business through ethics. Reading between the lines of the NAR's Code of Ethics, two simple rules stand out that translate to one directive - be fair to others. Realtors should:

1. Be fair with consumers about representation.

2. Treat associates and competitors fairly.

These two ethical rules seem easy enough, but the industry is still built around a lot of secrecy where buyers have to beware and many sellers attempt to sell their homes without agents. Why is that, and what can be done by Realtors to improve relationships between consumers and practitioners?

Let's expand upon the list to see how easily these ethical practices dovetail with each other into a better business practice.

Be fair with consumers about representation - at first contact

Not only does full agency disclosure about how you work help the consumer better understand what you can do for them, it also saves you wasted time and effort.

According to a previous Realty Times story by Broderick Perkins, fewer than 10 percent of Massachusetts' real estate agents fully comply with agency disclosure law, according to a study by the state's real estate regulatory agency, the Board of Registration of Real Estate. "Likewise, John Pinto, a real estate broker and expert witness in San Jose, CA says nearly all real estate agents violate California's disclosure laws by not fully disclosing to consumers who they represent -- the buyer, the seller or both," writes Perkins. "And the Washington, D.C.-based Consumer Federation of America says because many consumers aren't even aware they have a right to know by whom and how they are represented, they are under represented to the tune of $10 billion a year in higher home costs."

Not only is it time to build more trust, giving agency disclosure gives you the perfect opportunity to explain,"I have two things to sell - my time and expertise. Here's how I can help you. And to help you meet your goals, I need to know if you are under contract with another agent, and if not, would you be willing to let me represent you? If so, I need some information from you."

By not being forthcoming, agents and their brokers are subject to greater liability. State legislators have been encouraged by the local and national associations to reduce liability through non-agency representation. But this measure would never have been needed if proper disclosures and representation agreements had been done in the first place.

The NAR is now in its fifth year campaigning to improve the image of Realtors. How much money could the organization save if agents were simply more fair to consumers?

Treat associates and competitors fairly.

If everyone used representation agreements, what a lot of time and money would be saved by agents! The best way to treat others fairly is to be fair to yourself. Start by protecting your time and resources so that you can serve clients better, and the best way to do that is to insist on a representation agreement from buyers, even if it is only for a day or certain properties. By not allowing prospects to waste your time, you won't allow them to waste the time of others.

This is also a good reason to ask your sellers to fill out disclosures on their home while you assist them. Ask your sellers to also get an inspection so you know beforehand if the home has a problem that needs remediation. Sellers inspections aren't required by any state, but they can go a long way toward pricing the home correctly and avoiding sales that fall through because of undisclosed problems. This is helpful to the seller; therefore, you are doing your job to ask for a seller's inspection. It also helps buyers and their agents - by coming to terms more quickly and decisively, which also helps the seller and you.

Save yourself, your buyer, other agents and their clients time and effort by asking for full finanical disclosure from buyers. Ask them to become pre-qualified by a lender before you put them in your car to look at homes. Otherwise, why are you wasting your time, and that of others?

Playing fairly. It's a great way to do business.

Published: March 14, 2002

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