Investor/Real Estate Agent…and ethics ???

Question

…so in talking to a real estate agent yesterday.  She said that most real estate investors that she knew who were agents too, eventually deactivated their license so that they "don't have to adhere to a higher standard of ethics"…what exactly does this comment mean…???

James Mudd · Answer

Thank you for the responses…I plan on doing things the right way anyway, so shouldn't be a problem.  I believe when you do things shady…it will ALL come back to you.

J Scott · Answer

My suggestion is to always disclose that you're licensed and to always act ethically.  If you do that -- and if you follow your state's license laws -- you shouldn't have any issues...  :)

James Mudd · Answer

Thanks @Joel Owens @Karen Margrave Account Closed  for the responses.  I do believe the agent I was talking to did have a bit of bias against investors.  It's okay, I am going to activate my license and do it myself.

James Mudd · Answer

@Tyler H. …thank you Tyler.  I appreciate the input.  I am filling out my sponsor paperwork today !!!

Tyler H. · Answer

@James Mudd Sounds like this agent is spreading "hearsay". A lot of agents are mis-informed about the investment side and vice versa.

+1 for full Disclosure on all transactions, Thoroughly document everything in writing, maintain proper insurance and work with a reputable broker.

Congrats on your decision and I'm sure you will do well.

Karen Margrave · Answer

Whether or not your license is active, it inactive, you are still held to the standard, and considered an expert. If you're honest, there's no issue, if not, you can be sued licensed or not.

Ethics are a part of the law, not just Realtor Code of Ethics.

Joel Owens · Answer

There are people that are agents only and some that are REALTORS. Some of them can't even fold a napkin to save their lives. I have seen good ones on both sides of the fence.

To say they are only good if they are an agent or a REALTOR is a mistake.

The code of ethics as mentioned in general applies to REALTORS. Many states do not care about the ethics. They go by the license laws of that state and whether the public at large is harmed by violations of a brokerage, agent, etc.

Ethics is different from disclosure license laws which in many states say on all contracts and contact you need to disclose you are licensed. Whether it is fair or not the real estate commission views licensees are trained in contracts and therefore have an advantage over sellers. In many cases this can be true and in some cases with seasoned sellers it is not.

If an agent had an ethics violation the typical remedy is they have to go before their local chapter board of realtors review committee and might get  a slap on the wrist and a fine for their first offense if found guilty of an infraction.

For license law infractions which is handled by the state commission it depends on first offender or multiple times and also the severity of the mistake that determines what happens. A fine, temporary suspension, or permanent revocation or combo of multiple sanctions might happen. Real estate commissions typically make you sign under oath and get notarized the events you are claiming to have taken place along with supporting documents. If the investigator deems it has merit they will proceed but if not they will drop it. The staff is very limited and will take on the clear as day cases to allot their time properly. Kind of like cops will look at petty theft if they have time for it but not at the expense of investigating robbery and murders etc.

The notary and under oath is to keep people from calling in and making worthless threats that are not based in fact they just want to stick it to somebody on a deal.

Bill Gulley · Answer

Good point Craig, an ex Realtor investor got tagged here, an escrow issue, even though she turned in the license, it was clear she knew better.

I'd say it's not so much as an ethical matter as investors and Realtors should be operating at the same level.

Probably has more to do with the requirement of giving notice that they hold a license, if not done tactfully, poor Harry homeowner may perceive the slick Realtor is going to skin them having greater knowledge. :)

Craig E. · Answer

The duty owed by a professionally licensed person is higher than the public's.   This duty attaches based on the presumed knowledge and experience required to obtain the license.  You can't deactivate your license and claim you no longer have the requisite knowledge and experience of a licensed professional.  That said, disclosure requirements do change.

Investor/Real Estate Agent…and ethics ???

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