Why an agent must be more than an ‘unopinionated order-taker’
Real estate professionals have an obligation to put their clients’ best interests first. Sometimes, that means telling them their inclinations may be wrong.
Key points:
- Licensed agents and brokers have a duty to work toward a client's best outcome. Guidance, not deference, is the requirement.
- When working with sellers, that usually means encouraging participation in marketplaces that provide broad exposure, more competitive buyers, and clear rules of engagement.
- The industry needs to offer flexible, modernized choices for consumers — but it must also ensure that the foundational rules of the marketplace remain.
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The views expressed in this column are solely those of the author.
There's a push-and-pull for real estate licensees: They have to become good salespeople to succeed, and at the same time must put their clients' interests ahead of their own. Navigating their capabilities and responsibilities requires a big picture view of government, trade, and business-centric decisions.
Licensed real estate brokers, and the agents who carry out the broker's activities, owe duties to their clients (buyers, sellers, renters) — including common law fiduciary duties, or in some cases, overriding statutory duties in their states — that require licensees to put their clients' needs ahead of what's best for themselves or any other party. The focus is the clients' best outcomes.
Doing what your client suggests isn't always the right choice
Some in the industry will summarize these requirements as, "Do what your client tells you to do as long as it's legal." That's an oversimplification. The requirement is to do what's best for the client — including telling them that their inclinations may be wrong — and providing the information, tools, and opportunities to get the best outcomes for them, whether it's the highest price or other contract terms they desire.
Unquestioningly doing everything a client initially requests isn't the licensee's mandate if those decisions are likely to have a negative effect on the client's transaction. Guidance, not deference, is the requirement.
Salespeople are persuasive. There's a reason that "overcoming objections" is one of the most popular coaching and training topics for agents. Persuasion can be used to change a consumer's mind about a decision — which might, in turn, create a new listing or buyer for the agent — but it must create better outcomes for the client.
For sellers, open marketplaces usually lead to the best outcome
Participating in marketplaces that provide broad exposure, more competitive buyers, and clear rules of engagement will typically offer sellers the best result. These features create a more efficient market that leads to better transactional/closing terms and experiences for those sellers.
These marketplaces also have additional rules for participation, which is why agents must act ethically above the minimum requirements of the law, and why they must act cooperatively above the minimum requirements of the license.
Those shared, agreed-upon guidelines exist because the brokers who create these MLS marketplaces understand that the market will create better outcomes for consumers and professionals because of those rules.
The marketplace can offer flexibility without abandoning its rules
The real estate industry needs to continue creating new flexible, modernized choices for buyers and sellers, and it must also ensure that the foundational rules of the marketplace remain. Both of these things can be true at the same time.
Real estate professionals are hired to provide experienced advice and representation — not to be unopinionated order-takers. Ultimately, the client's legal directions to the licensee are final, and the professional must abide by them or advise the client to seek different representation. Either way, there is a lot of inquiry, education, and consultation that should occur between a client's initial idea and the shared, final decision they make with the support of their agent.
The MLS marketplace and the capabilities of licensees in the U.S. are a model that the world admires. Industry professionals must continue to protect the foundational structures that keep these markets strong and effective for our consumers and communities.
Sam DeBord is CEO of the Real Estate Standards Organization (RESO) and the author of Working with Real Estate Data, organized real estate's premier technology course for onboarding and professional development. He has served as President's Liaison for MLS and Data Management with NAR, and he has also worked as a consultant, managing broker, NAR REACH mentor, and board director for association, MLS and venture fund organizations.