Archive for the 'Military Installations' Category
First Things First in Real Estate Practice
November 2nd, 2009 categories: Military Installations, Real Estate News
Most of us that have served time in the military have been the beneficiary of training that develops skills that serve us well for the remainder of our lives. One of those skills is punctuality.
Recently, I attended a local Real Estate Expo. Arriving early provided me the opportunity to spend a few minutes discussing the state of real estate practice with the event’s featured speaker, who is recognized as one of the nation’s premier coaches in real estate. During our short exchange, I mentioned the need for better training, and much more demanding pre-licensing requirements for Realtors. The speaker agreed, but indicated that real estate leadership, national and local, would never let that happen for one simple reason – MONEY. Extending the time, and the difficulty of obtaining a license means more money required to get into the profession by applicants, and a longer training time. In simple terms, that means fewer Realtors. Why? Some just won’t have the dollars, and others, the time and proficiency.
But, the speaker’s words spoke volumes. And, while he willingly voiced them, doubtless there are many others who share his feelings.
Fundamentally altering how real estate is practiced must begin with a change in what’s valued in the business. And, as any organizational change expert will tell you, that change has got to begin at the top. Without “buy in” from those in leadership positions, changing the standards in an organization or profession is virtually impossible.
But, one may ask, what’s in it for them? Why should those in leadership positions in the real estate business change anything? Do leaders have an ethical and professional responsibility to improve the way their business operates?
Have your ever wondered what the difference between leaders and managers is? The short answer is, managers manage things, and leaders lead people. Another simple distinction is that leaders point out the right things to do while managers ensure things are done correctly. In simple terms, the responsibility and charge of leadership is not simply to make sure things get done, it is to make sure you and those you are “leading” are doing the right thing. As Stephen Covey emphasizes in his book, The Speed of Trust, this develops trust among a profession’s members, but just as importantly, the clients that use it as well.
For Realtors, the importance of trust, and faith in their practices, is the basis for their referral business. For many, it’s the lifeblood of their practice. For real estate leadership, trust is the bedrock of the business. Without faith in the profession and professionals they’re using, why should buyers and sellers of real estate rely on Realtors and their profession to do business? Simply put, they shouldn’t. Instead, they’d be better off depending on an alternate source to place their faith in. So, what might leadership do to fundamentally and radically transform real estate practices and procedures to enhance the public’s trust?
It must begin by realizing that the overhaul must be “transformational”, not piecemeal. That means a new level of change featuring innovation and daring by leadership and practitioners alike. The characterization or term, “Transformational Leadership”, was coined by Presidential historian James MacGregor Burns in 1978, to describe a model relationship between the leader and their followers. Burns focused on a more moral and virtuous example featuring new attitudes and perspectives – in other words, a new way of thinking, and new approaches to old problems. In many cases, this new approach requires a new “breed” of leadership. Because, as we all know, it is certainly hard (but not necessarily impossible) to teach an old dog new tricks.
This new level of might begin by including a tougher standard for owners and brokers, the key players in our profession. The old standard of “what they knew or should have known” is just the beginning of what this group of leaders should be held accountable for. How about greater responsibility for the practices of their agents that are a party to a transaction? For example, how many mistakes are made today by agents (how many of these errors result in a failure of the agent to act in the best interest of their client?) involved in short sale or foreclosure transactions due to the agent’s ignorance because they’ve had little or no training in the specifics of either type of those special circumstances? More than a few. In each of those transactions, specialized training is one of the keys to success. Yet, there is no requirement for the necessary specialized training by leadership at the local, state or national level. You have to wonder why?
Secondly, better communication standards or practices would greatly enhance the way business is carried out. The time wasted by trying to track down agents and information due to unanswered and unreturned inquiries is enormous. Now, are those missed or unreturned calls the fault of the managing broker or owner? Well, not directly. But, if their firm’s culture (not to mention, this profession’s) is one that tolerates unprofessional practices, then the blame is certainly partly theirs. As many Realtors would admit, many firms willingly look the other way rather than confront those that are routinely guilty of these faults.
Most owners would rather not upset the money cart. One too many admonishments might scare off the money maker. But, what if managing brokers demanded the same higher standard of practice from all the agents they oversee, and none was “above the law”? How easy would it be for an agent to find another enabler to practice under?
Do better practices mean a better product? By all measures, yes. So, why aren’t they required? When will leadership begin to set higher standards for those practicing real estate? Perhaps these are questions, we who practice real estate, need to be asking more and more of those who sit in the seats of real estate leadership.
As mentioned recently by Lem Marshall, the Special Counsel to the Virginia Association of Realtors(VAR), in discussing what’s needed to dramatically improve the Short Sale process, he said that improved competence by agents would go along way in making a dysfunctional process much better. His audience was a group of brokers and owners. Lem was making it clear to those who hold the reins of power that they are responsible for having their agents prepared to practice properly. Demanding competency is simply good leadership. And, after all, accountability is a strong motivator. Let’s hope those in the audience were listening.
While Lem’s Road Show was sorely needed, in an attempt to improve a Short Sale process badly in need of repair, let’s hope it is just the beginning of a larger effort to move this profession’s leadership in the right direction.
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Reforming Pre-Licensing Requirements for Real Estate Agents
May 27th, 2009 categories: Military Installations, Relocating
In this second of a four part series on Improving the Practice of Real Estate in the Commonwealth of Virginia, we’ll begin the look at reformation, appropriately, at the beginning. In other words, where Realtors receive their pre-licensing training or instruction, the traditional classroom coursework that must be completed prior to testing by the state for a Realtor’s license.
Current Requirements
As stipulated by the Virginia Real Estate Board (VREB), and set forth in the Virginia Code, § 54.1-2105, pre-licensing education requirements for those seeking a real estate license are:
1. Every applicant for an initial license as a real estate salesperson shall have:
a. At a minimum, a high school diploma or its equivalent; and
b. Completed a course in the principles of real estate that carried an academic credit of at least four semester hours, but not less than 60 hours of classroom, correspondence, or other distance learning instruction, offered by an accredited university, college, community college, high school offering adult distributive education courses, or other school or educational institution offering an equivalent course.
In other words, to legally practice real estate in the Commonwealth of Virginia you need:
- 60 hours of classroom instruction (you actually don’t have to be IN the classroom – online courses meet the requirement)
- Passing a written examination.
- Oh, I almost forgot, you also need a high school education, or its equivalent.
So, having passed the state test, without having handled a contract, toured a home, negotiated a contract term or clause, or spoken to a client, a brand new licensee can “practice” real estate. Is that adequate preparation to carry out a responsibility involving hundreds of thousands of dollars? Is there another profession whose qualifications are as minimal?
Can you imagine a surgeon performing surgery without having gone through the steps a few times, not to mention hundreds of times, prior to going solo? What about obtaining a driver’s license? How many practices has the student driver had before they are operationally ready? Before they are licensed?
One might argue that those are poor comparisons since a lack of adequate training or preparation in those professions might lead to death, whereas nothing that extreme might occur as a result of an error in a real estate transaction. And, they have a point. It may not result in a death, but incompetence and real estate “malpractice” could certainly costs tens of thousands, if not hundreds of thousands of dollars.
If you’re not satisfied with the comparison with a surgeon or a driver of a vehicle, what about teachers? Are they licensed to teach without student teaching many, many times while being supervised. What about an accountant? An architect? A bank teller? In each case, minimal hands on “real life”, supervised training is required prior to the ”students” being given the OK or being certified to operate on their own. Likewise, should this be required in our training?
In our profession of real estate, one may ask if this should be a pre-licensing criteria, or is it more suitably done after licensing, but as a first step of a mentoring program Realtors participate in once licensed and prior to operating on their own under the Broker of their choosing. Hmmm…that’s something to consider. For now, let’s begin by looking at improving pre-licensing training with a requirement of 60 college credit hours.
Learning is a never ending process. While there are many constants in a real estate transaction, there are some variables that may change depending upon the client, brokerage firm, financing involved, and other related factors. It’s important too remember that a standard curriculum can’t cover all the possible contingencies or circumstances a practitioner might face, however, it certainly should include many.
Current pre-licensing coursework provides students with little practical instruction of how to do their job. Its intent seems to be one of preparing students to pass a written test of concepts instead of preparing them to practice real estate. But, in examining how Realtors are trained prior to being certified or licensed to practice, maybe we’re not asking the right questions. Maybe we the should be asking, “What should pre-licensing instruction be designed to do?” What outcome are we looking for? Shouldn’t it be designed to prepare a candidate to do their job? If not, why not? For the sake of this series of articles, let’s assume that’s the objective. We want to prepare Realtors to do their job properly, plain and simple. In other words, to carry out their job related tasks in a “professional” manner.
Proposed Requirements
- A first step in better preparing our prospective real estate agents for their job begins with dramatically increasing their pre-licensing requirements. This can be accomplished through augmentation of the depth and breath of the classroom curriculum. While there is no substitution for experience, the increased use of case studies, and a more detailed examination of contracts and real estate practices, to include real estate finance among other topics, will provide candidates with a better base of practical problems and solutions to learn from.
- To adequately prepare Realtor candidates, the pre-licensing curriculum should be expanded from the current 60 classroom hours to 60 college credit hours. Not only would these college credit hours substantially increase students exposure to real estate material, but, doing so would also provide them with college level credit. In accordance with state guidelines, the specific content of the real estate courses “shall be in real estate brokerage, real estate finance, real estate appraisal, real estate law, and such related subjects as are approved by the Board.” Incorporated in this coursework should be 10 hours of “hands on” practice. This practice includes interaction with clients, both buyers and sellers, writing contracts, negotiating terms, and experiencing the entirety of a real estate transaction from beginning to post closing follow up.
While current pre-licensing training material provides students with a familiarity of real estate procedures (concepts can be identified if seen on a test), it does little to prepare these aspiring agents for practical problems they’ll face in a typical transaction. Increasing classroom time, improving the course material, and providing “hands on” practical experience with real estate trasactions, are three steps that need to be taken in order to improve the pre-licensing requirements for those training to be real estate agents.
Improving pre-licensing requirements for real estate agents is an initial step in attempting to improve our profession. By providing new agents an improved foundation to build on, they’ll be better prepared for actual real estate practice and carrying out their job. But, while they can now legally practice, how capable are they? Probably capable enough to be dangerous, but not capable enough to be on their own. And, that’s where the second step of the improvement process comes in, the use of a Mentoring program.
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A Modest Proposal (On Improving the Practice of Real Estate)
May 18th, 2009 categories: Military Installations, Relocating
Previously, I focused on the #1 complaint voiced by Realtors about their profession of Real Estate, that being, other Realtors. After discussing the most prevalent complaints voiced by them, the article concluded by asking, “How do we improve the way we do business”? Since licensing requirements and/or standards vary by state, I’ll focus, specifically, on improving the standards of practice in Virginia.
If agents aren’t performing up to the standards our profession requires, how do we ensure they do? Is it a matter of better preparation? Better oversight? And, more importantly, how do we fundamentally change the way we do business? If the current standards used to conduct business aren’t getting the job done, if it isn’t compelling the type of professional behavior we want from our practitioners, what changes are needed?
Believe it or not, the National Association of Realtors(NAR) established professional standards for real estate practice nearly 100 years ago, outlined in their Realtor Code of Ethics. But, the Code is not law. For Realtors, the Code defines duties and obligations required in the public interest, which are beyond the capacity and power of the law to mandate, and supplements the law by requiring a higher sensitivity to the duties and obligations which it imposes. The Code’s “bottom line” rests upon putting the client’s interest first in the transaction.
While the Code of Ethics provides an excellent set of rules or guidelines, what are they worth if they aren’t followed, or Code violations not reported? Or, in some cases, for various reasons, not punished?
While few doubt the Code’s intent, many of my peers have voiced concerns over how well or closely those in our profession practice the Code. And, remember, adhering to to the Code is not optional. But, the Code is supposed to be a starting point. And, if the Code is a simply a beginning, what other preparation or training is needed to develop the standards we need to more effectively professionalize our business. Let me propose three steps:
1. Dramatically increase required Pre-licensing course work, to 60 college semester credit hours of only real estate coursework.
2. Mandatory, Standardized Mentoring Program for New Agents.
3. More Effective Use of Grievance and Professional Standards Processes.
Each of these recommendations will be examined in articles to follow. While these proposals aren’t new, the need for each hasn’t disappeared. Instead, according to anecdotal data, they’re needed now, more than ever.
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We’ve Seen The Enemy
May 13th, 2009 categories: Military Installations, Real Estate News, Relocating
One of the benefits of being a teacher or instructor is the interaction with peers. The opportunity for feedback is almost limitless. Discussions with students are almost always entertaining, and hopefully instructive. And the “instructive” aspect goes both ways. As many teachers will tell you, we, more often than not, learn more from the students than they do from us.
This column has been in the works for weeks. Well, at least I’ve mentally started it on various occasions. But, as life tends to do, other, more pressing tasks have, in the meantime, overtaken my schedule. But, yesterday, after coming across an article on the Real Estate blog, Agent Genius, written by our local Association’s Education Director, Matthew Rathbun, I was reminded of my article-to-be . Our director’s article echo’s the many complaints I’ve heard from students since stepping into the classroom as an instructor a little over a year ago. Their biggest complaint isn’t about the real estate process, or the contracts that they have to use, or the mortgage industry, or even the erratic appraisal business. Their biggest complaint is about other agents. And, it isn’t even close!
Complaints about agents aren’t something new. We’ve heard it for years from home buyers, home sellers, and yes, other agents. But, it reminds me of the outrage and uproar about members of Congress. How they are all crooked and self serving. Well, all of them except my Congressman or Representative.
What are the complaints about Realtors? They run the entire gamut, from lack of communication to various forms of “unprofessional” behavior. These include, in no particular order:
- Lack of communication – Difficult to get ahold of, not updating clients or other agents on the status of a property, not returning phone calls or e-mails, etc (you get the picture)
- Unaware of what real estate contract verbiage says or means – Unable or unwilling to explain what contract documents say to their clients, negotiating contracts based upon false assumptions or a misunderstanding of what the contract says (Do you know what broom swept or clean means?….and that’s the easy part)
- Not showing up – have you ever heard the term, “required formation”?
- Not being on time – agents are notorious for being late (and, yes, so are clients)
- Others….
Every profession has its share of complaints about the way business is conducted. But, normally, the majority of the criticism comes from consumers, or from the “cheap seats” (those critical of the business but not involved in it). But, our profession, the real estate industry, probably hears more criticism from its’ members than it does from outside sources. Are we just a profession of whiners or is the criticism justified? More importantly, if the critics are even close to the mark, how do we improve the way conduct business?
We’ll get into that on Page 2.
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Aren’t Foreclosures Easy To Buy?
April 18th, 2009 categories: Military Installations, Real Estate News, Relocating
Have you ever heard the bar bell? The one that rings around closing time for last call, and as a reminder that it’s time to pay the tab. In the U.S., the bell is oftentimes used to signify a generous tip.
In the home foreclosure business, there aren’t any bells to ring, but there are an abundance of great deals to be had, if only ready, willing and able buyers have the necessary tools to avoid the pitfalls.
There are a number of roadblocks to purchasing a foreclosed home. They include:
- The Bank handling the property. As most Realtors can attest, this is THE most difficult hurdle in the transaction process. The bank is THE BIG DOG. They literally control the entire transaction. Unfortunately, when, what, and how they process a foreclosure is less than transparent. When they speak, we all listen attentively.
- Many agents haven’t been trained in the finer points of listing or buying REO (Real Estate Owned – by banks or lenders) properties. As a result, one side of the transaction never gets any traction, and unfortunately the clients are left holding….nothing.
- Buyer expectations aren’t realistic. As I’m reminded from time to time, “Disappointment is the result of expectation. If you have no expectation, you won’t be disappointed.” Foreclosed properties can be a great deal, but they are purchased, “As Is”. According to the Northern Virginia Contingencies/Clauses Addendum to the Sales Contract, that meaning is fairly clear:
“The seller makes no representation or warranty, express or implied, as to the condition of the Property, or any equipment or system contained herein.”
Pretty clear, don’t you think? Unfortunately, many purchasers don’t feel that way. Despite the “As Is” clause, they want guarantees. So, many resort to home inspections as a condition or contingency in the contract. While many of these begin as “for informational purposes only”, before it’s all over with, they’re used as leverage in the transaction. And, the good news is, as this chapter in the mortgage mess has evolved, so too has the attitude of many banks in attempting to get these transactions closed. What banks often refused to repair/replace two years ago when the mortgage dominoes began to tumble, are now often given a thumbs up when requested by the purchaser. So, as they say, you never know unless you ask.
4. Lastly, many will argue that today’s market is the polar opposite of what it was in 2003-2005. However, there is one striking similarity to those days that makes buying a foreclosure a challenge; multiple offers. Everybody wants a bargain, especially investors. So, not only do prospective home buyers have the normal ”other buyers” to compete with, they also have the bargain hunter experts, whose FULL-TIME job is to purchase distressed properties.
So, facing all those challenges, how does a buyer compete?
- The best way to buy a home is to use someone who has the expertise. Yes, a real estate agent is probably a good start. But, how about one that’s had some experience or training with foreclosures and short sales. Both of these types of transactions require more than a passing understanding of what those terms mean.
- Catch the properties AS SOON AS they hit the market. If you don’t, another buyer will.
- Trust your agent. If you’ve done your due diligence in selecting your agent, and discussing your needs, then leave it in their hands. It is what they are trained to do!
- Go in with your eyes wide open. It not only improves the odds of success, but minimizes any unnecessary worry and disappointment.
Are foreclosed properties easy to buy? If you’re fortunate, perhaps. But, more than likely, if it’s a bargain property you’ve got your eyes on, you’re not the only interested party. So, do your homework first. Have realistic expectations. Enlist the aid of a knowledgeable, experienced agent that’s worked some foreclosed property transactions. And lastly, you might want to get ready to rumble!
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Are You Being Served?
February 6th, 2009 categories: Military Installations, Relocating
When you’re interested in purchasing something, where do you turn for information on the product you’re after? Friends? Family? A local store? Well, according to those that study buyers’ habits, more and more consumers visit the internet at least once before purchasing an item they’re interested in.
Today’s home buyers are using the internet more than ever to begin their home search. According to NewCondosOnline, over 80 percent of home buyers use the Internet as a Primary tool in their home search.
So, if that’s the case, and you’re a provider of data on homes (that means, Realtors), are you providing prospective home buyers & sellers with what they need? If not, why not? Perhaps it’s because you’ve bought into (haven’t we all, at one time or another?) one of those “can’t miss” get-rich-quick marketing schemes that convinced you, it’s all about your image. Well, while there might some truth to the image thing, customers and clients are looking for information on homes, first & foremost.
Surveys have shown that those seeking a home, and using the web for their search, are looking for:
1. Information on homes.
2. Neighborhood information, to include school ratings.
3. Transportation options. In our location, Northern Virginia, commuting options are something almost anyone relocating to this area considers before deciding on their choice of where to live.
4. Community Activities, to include recreational and cultural opportunities for the entire family.
In today’s digital world, it’s vital that you at least participate in the game. Because, as they say, “if you don’t play, you can’t win”. In other words, if you don’t have an online presence, you won’t be seen or found. So, if you go to the trouble and expense to market yourself online, just make sure you’re “answering the mail.” If you’re not providing prospective home buyers and sellers with data that assists them in pursuit of their objective, there are plenty of others who are.
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