When it comes to working with a broker, we can find articles that tell us what to look for. We are told to look for those with a track record, those who specialize in working with investors and those who specialize in the area we are interested in, but for some reason we seldom look for anything under the surface. What I want to encourage you to do is to check the moral compass of these team members.
I don’t expect you to search criminal records for prospective agents, but you can at least determine if they are operating a sound business as determined by the licensing body. What most of you already may know is that we can often search state records online for active licensees and see if they were ever disciplined. However, we can take this a step further and look to the monthly reports that are published by many states that include much more detail when a fine or other penalty was handed down.
What You Should Know
What you need to know is that often infractions do not lead to a revocation of license but rather a temporary suspension or a reprimand. However, when it comes to my operations, I would prefer not to engage with individuals with questionable practices, and given the amount of quality agents, I don’t feel I need to settle. You may not mind working with someone who missed a deadline for continuing education credits, but do you feel the same for those who did any of the following?
- Failed to account for escrow monies, failed to maintain escrow records, failed to exercise reasonable care/skill of services, engaged in dishonest dealings, and failed in his supervision responsibilities as a managing broker
- License revoked and agent fined
- Conviction of sexual assault and failure to provide documentation when requested
- License revoked
- Conducted business as a “Broker” with expired license
- Failure to rectify a dishonored check
- Resulted in reprimand
- Criminal conviction/mail fraud
- Probation or suspension for those involved
This is just a very small sample (5/224) of those charges that I found in one year alone, but the point is that this is information that we may want to know. The last three cases resulted in individuals that are still able to practice, and it is not as though you would know by looking at them. They carry no scarlet letter beside their designation, which puts the responsibility on us to protect ourselves.
It is our responsibility to know who we are partnering with, and since we can investigate much of this without raising any red flags, the real question is, why wouldn’t you take the time to make sure your partners have a moral compass that is similar to yours? The initial search is a lot less demanding than the cost associated with working with a potential crook.
Have you ever looked into the history of your brokers? Will you be implementing this in the future?
Leave a comment, and let’s talk!