Enlightened Agent or Low-information Agent?
Adjective: “Having or showing a rational, modern, and well-informed outlook.”
Synonyms: “Informed, well informed, aware, open-minded, broad-minded, educated, knowledgeable, wise.”
So are you an “enlightened agent” or as Ryan Fletcher, the author of “Defeat Mega Agents” refers to the traditional real estate industry licensee/salesperson, a “Low-information Agent”? From Ryan Fletcher: “It’s an unfortunate truth, but “The Guru Party,” made up of; the trainers, brokers & endless supply of coaches—and what they teach—are the architects responsible for bankrupting the real estate industry of trust. Because of them, the term “real estate agent” in the eyes of society has become a stain on your reputation.”
A Low-information Agent then is one who simply follows the rules as laid down to them by their team leader, broker, manager, trainer or coach. They follow the mantra that if you aren’t making the kind of money you want to make you have to double your cold-calls, do more pop-bys, send out more just listed, just sold cards, pester past buyer and seller customers, friends and relatives for more referrals, farm a larger area, call more expireds and for sale by owners or call the same ones again and again until you wear them down or get the phone slammed down in your ear for the fourth time. If that is you and you aren’t questioning what you are being taught or thinking that there must be another way, then you are the Low-information Agent.
On the other hand, an “Enlightened Agent” questions everything including the way the traditional real estate industry conducts business. The real estate industry was never as greedy and deceiving as it is today. Back in 1986 – From the NAR, National Association of REALTORS©, Publication, “Who Is My Client? A REALTORS® Guide to Compliance with the Law of Agency”: “The legal concept of Agency with which this booklet is concerned is, however, beyond question the most fundamental of all the legal concepts applicable to the real estate profession and professional. It is the very nature and function of the real estate broker, appraiser and manager to be an agent. The law of agency literally defines the species and gives real estate practitioners their identity.”
So the real estate industry embraced the concept of true agency and fiduciary duties. Even in 1993 – From the NAR Publication, “Agency Choices, Challenges & Opportunities – Agent’s Guide”: “Agency relationships make up the foundation of the real estate industry. Indeed, one reason why the National Association of REALTORS® (NAR) was formed at the turn of the century was to enhance the professionalism of real estate brokers by recognizing an agency relationship between the broker and her client, and educating all parties about the duties imposed by the relationship.”
SO WHAT HAPPENED? Why does the term “Agent” no longer mean “fiduciary” or “true legal agency”? It used to as noted by NAR’s publications in 1986 and 1993. Here is my historical take on this:
- From the beginning until the mid-1980’s, all real estate licensees represented the seller and the seller was a client and the buyer was a customer.
- Then came the early 1980’s Federal Trade Commission’s survey of real estate consumers revealing that home buyers were being misled into believing they had a true agent, when legally they didn’t.
- Then came individual state agency disclosures talking about real estate agency and forcing real estate licensees to decide and disclose their proposed relationship with the home buyer and home seller.
- Then came the consumer being educated to work with a buyer agent.
- Then came the desire by the traditional agent to market themselves as buyer agents.
- Then came the dilemma for real estate licensees trying to deal with the in-house transaction.
- Then came the dumb-down and watering down of true agency.
- Then came the successful lobbying to change state legislation to allow for the in-house double-dip of commissions under the guise that consumers were still being represented.
You can read more about this here: http://www.massreblog.com/so-what-went-wrong/
Some real estate licensees saw problems with this approach. They were and are truly “Enlightened Agents”. They believed and still believe in true representation, being a true protector of buyers and/or sellers. They believe today as the traditional real estate industry did 30 years ago, “The legal concept of Agency with which this booklet is concerned is, however, beyond question the most fundamental of all the legal concepts applicable to the real estate profession and professional. It is the very nature and function of the real estate broker, appraiser and manager to be an agent. The law of agency literally defines the species and gives real estate practitioners their identity.”
The Low-information Agent simply doesn’t understand this and won’t understand this. Some Low-information Agents, however, I believe can become and perhaps are Enlightened Agents but they just haven’t let that part of them emerge. If you are part of the traditional real estate industry and have a deep down feeling that something isn’t right, perhaps you can become an Enlightened Agent. Start questioning what your team leader, manager, broker, and coaches are telling you. Do you want to be something more than a real estate salesperson? Do you want to actually help people as their protector, as their fiduciary agent? Do you even know what “fiduciary agent” means?
The true “protector” agents in Massachusetts are known as exclusive buyer agents, exclusive seller agents or true single party agents. An “exclusive buyer agent” represents buyers only and never takes listings or represents sellers and who is with a real estate company where no one takes listings or represents sellers. Potential sellers are referred out to another agent in another real estate company so that they can get true representation. Exclusive buyer agents never downgrade their representation of buyers to that of a designated or dual agent, or facilitator.
An “exclusive seller agent” takes listings and represents sellers only and never represents buyers and who is with a real estate company that takes listings and represents sellers but where no one represents buyers. Potential buyers are referred out to another agent in another real estate company so that they can get true representation. Exclusive seller agents never downgrade their representation of sellers to that of a designated or dual agent, or facilitator.
A “true single party agent” represents sellers and buyers but never in the same transaction. Real estate buyer clients who are interested in buying a home from a real estate seller client are generally referred out to another agent with another company so that they can receive full representation. True single party agencies operate like law firms. Law firms represent sellers and buyers of real estate but never in the same transaction. Law firms have conflict of interest checks and balances so that they are aware of when there is a potential conflict between their clients and thus refer out one or the other to another law firm. True single party agencies never downgrade their representation of buyers or sellers to that of a designated or dual agency, or facilitator.
So what does all this mean? If you are currently with a traditional real estate company that practices dual and designated agency rather than true agency, and it somewhat concerns you but you can’t really discuss with your peers, contact me. I’d love to discuss how you can become a true real estate consumer protector, advocate and advisor and take your real estate practice to a higher level. The traditional real estate industry is ready for a revolution. There is a push in the investment industry, insurance industry, lending industry and in fact the entire financial services industry to bring true fiduciary, true agent services back into the process. Enlightened real estate agents are leading the way for the home buying and home selling consumer.
Read the rest of my posts in this blog. If questions start stirring up inside you and you wonder what it is you are doing in the real estate business, let’s discuss it. If you like working with both sellers and buyers, I’ll help you find a true single party agency to work with or help you start your own. If you like working with buyers, I’ll help you find an exclusive buyer agency to work with or help you start your own. If you like working with sellers, I’ll help you find an exclusive seller agency to work with or help you start your own. The point is, there is no excuse to continue being a low-information agent and to continue following the mantra of the traditional real estate industry. There is a better way. There are plenty of opportunities for you to join the true enlightened agents who are already taking the high road to true representation of buyers and sellers. Come check it out for yourself.