Real Estate and Ethics: Collision or Harmony?

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The “Party is over” for local company
Elizabeth Rhodes of The Seattle Times reports on the rise and fall of Merit Financial in today’s Sunday paper. Ironically, it is not in the real estate section (it should be) but the business section— a full page article, above the fold.

I encourage everyone who is in business and those not already aware of the demise of Merit Financial to read the article in Sunday’s paper. I grabbed the bulldog edition and read through it taking away several points and add a couple personal suggestions:

  • It is critically important to know who you do business with.
  • It is of equal importance to understand (as much as possible) the financial foundation with those whom you entrust your clients. Will they be here today and gone tomorrow? There are several ways to get a general snapshot of this legally and unobtrusively. It has saved me more than once of going into business with others who have a poor track record or are saddled with debt. Debt and escrow trust accounts are a disaster waiting to happen.
  • Success is not necessarily defined by owning designer shoes, clothes or driving Hummers, Porches, Mercedes, BMW’s or living in a McMansion. I think we all have our experiences of knowing a multi-millionaire or two who drives a modest car, shops at Goodwill or is found handing out $100 Bills to surprised people in Chicago, as was the case last week.
  • Worry about your very last customer’s experience and service satisfaction, not the trappings of the paycheck. Income will only follow if you are passionate about providing great service at a great price, in that order.
  • If the focus is only on the paycheck, increasing that yield spread premium, or making a “deal,” your customers will see right through you, sooner or later. It shows.
  • Fundamental real estate knowledge coupled with the experience of having a great support structure around you will lead to satisfied customers and foster long-term business relationships.
  • Make it a point in 2007 to surround yourself with real estate professionals in your support structure that may know more about their expertise than yourself. It is not necessary to be an expert in every arm of real estate. There are great loan officers, excellent escrow and title staff that are eager to assist you with your questions. The more I hear “I’ve been in this business x amount of years and I’ve never heard of escrow doing such a thing or…..(insert your own verbage)…. the more we know it is a dead giveaway that posturing is taking place and what is meant is “I don’t know.” There is much to gain and everyone learns more collectively if there are less “I know it all” personalities. What is sorely needed and refreshing to hear is, “I have never run into this scenario, please help.”

Escrow closes the door on a closing

Every real estate practitioner has had the opportunity to work through an ethical dilemma in real estate. Recently, our escrow office experienced probably one of the more difficult ethical issues: coming across highly probable transaction fraud a business day prior to closing. We wrestled with the issue all weekend a short while ago. Any way you sliced it, the ramifications were not good. In our minds, the “what-if scenario flow charts” were in full swing. For example:

  • Don’t close the transaction and lives will be turned upside down, not to mention thousands of dollars of commissions lost, including our own earned income. Side note: escrow (the “presumably” neutral party) only gets paid if the deal closes, an issue that I personally would like to see changed and take up with Dept. of Financial Institutions or others in Olympia.
  • Obviously, another downside is that we will probably lose the business relationship forever, regardless of whether we are correct or not. Certainly, how this plays out will clearly show the true colors of the agents involved.
  • Close the transaction and the risk grows exponentially as time goes on. Escrow will be named in a claim regardless of all the disclosures and tight legal language escrow has.

Interestingly, with the broker and sales agents fully aware of why we elected to not close, they have elected to try another company to close the transaction. Hopefully, they can work through the problem and get it done in a legal and ethical manner. We wish them the best.

In the end, pushing the ethical limit or being a party to fraud is just not worth the risk, short-term and long-term.

Getting in the holiday spirit yet?

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[photopress:139.jpg,thumb,alignright]Can’t say that I am. I’m just finishing the Thanksgiving leftovers. But you can’t wait for the spirit to grab you, or all of the best shows will be over…or SOLD OUT! So here’s an early heads up on some of Seattle’s favorites:

Kirkland Performing Arts Center’s “The Nutcracker” is coming up and will be over before you know it. Everyone should see it at least once. Or Maybe The 5th Avenue Theatre’s performance of Irving Berlin’s “White Christmas”.

[photopress:NW_20Boychoir.jpg,thumb,alignleft]Not quite as expensive are the Northwest Choir presentations of “A festival of Lessons and Carols” that travels to various churches in the area. The big St. Mark’s Cathedral presentation on Capitol Hill on the 18th, is probably the one I’d shoot for.

I’ve always been a sucker for big Cathedrals, and not just at Christmas.

Here’s a whole string of events from Emmylou Harris, to “Billy Shakespeare’s Christmas Extravaganza and Traveling Freak Show”, for a bit of the non-traditional.

[photopress:c.jpg,thumb,alignright] Getting in the spirit doesn’t need to cost anything. The Spirit of Seattle “Christmas Ship” should be floating around spreading good cheer by now. Apparently the ship pulls up to some bonfire beaches so people can hear the music without having to be on the ship. Anyone know where these “bonfire beaches” are? Here’s the quote: “On shore, thousands of people, young and old alike, gather around roaring bonfires to share the joy of the season. On the water, other decorated boats join in the festivities by following the Christmas Ship™, forming the largest holiday flotilla in the world, cruising to over 45 waterfront communities.”

I’d rather be at the bonfire on the beach than on a boat, so if anyone knows where those bonfires are, and when the boats will be happening by the bonfire, let me know.

No Public MLS Site?

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I just received an email that says, “San Francisco, CA – December 1, 2006 – The San Francisco Association of Realtors will remove public access to its MLS site as of January 1, 2007.”

It’s actually an advertisement of some kind suggesting that without the Public Access Site provided by the MLS, every broker will need their own, now more than ever. Robbie…Galen…there’s a heads up for you.

I thought NAR required that every MLS have a “Public Site”, albeit a crappy one. Anyone know if that rule changed?

Photos that tell you something

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Further to Galen’s post on photos, I like shots that tell you something. We have a 15 photo max, so that usually leaves room for more than just the obvious. Photo number one MUST be an EXTERIOR shot, per mls rules. And NO PEOPLE allowed. They seem to be Ok with pets…until they get one of those Boing-Boing shots. That will make for a “New Rule”.

This one of Soze (So-zay) saved me from the many calls I usually get, asking if the condo association permitted dogs :-)[photopress:tr.jpg,full,alignleft]

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This photo brought 20 people the first day, and two offers. At least half of the people who came to the first Open House said the free standing archway photo grabbed their attention and prompted them to come.

Your photos are staid because you do not obey the peekaboo law

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By and large, real estate photos are staid and boring. They don’t solve a problem and they don’t follow the “peekaboo law,” which states:

Evolution has seen to it that the very act of searching for the hidden object is enjoyable

i.e. they try to put it all out there. The first photo is usually the front of the house (that’s probably fine) and then we proceed to get a full view shot of each room. That’s not seductive! Usually the photographer (agent?) uses the same lens in each room and does nothing to focus the eye or the mind on what makes the property attractive or problem solving. Specifically: why show the kitchen, including the 6 burner stove from a distance? Why not take a very wide angle lens and show the rest of the kitchen from the perspective of the stove? Or show the view from from sitting at the counter?

One of my favorite real estate photos, which does none of the above, was found by BoingBoing a couple of years ago:accidental real estate pornography (safe for work).

(I’ve looked at a lot of real estate photos over the past couple of months preparing for the launch of ShackPrices.com. We’re coming down the final stretch – get your name on the list now if you want to hear about it when we launch!)

Snowing in Seattle

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[photopress:snow.jpg,thumb,alignright]Yes, they are the Seahawks.  Yes, they are playing here in Seattle and yes, that IS SNOW!

We don’t see a lot of snow around here.  I went over to Redmond Town Center to pick up new cell phones for the whole family on one plan before my daughter returns to L.A. tomorrow.  We got stuck in traffic on Redmond Way not far from Redmond Town Center for a whole hour of going absolutely no where, and the snow kept coming down.

We pulled over and got some dinner at Canyons where we got to watch the Seahawks game.  By the time we left there were many, many cars stranded on the side of the road and people just walking away from their cars.  I just saw some shots of Issaquah on the news, and it looks like it took a very long time for many to get home from work tonight.  Many just called someone with a bigger vehicle and left their cars behind.

This is the most snow, and most trouble caused by snow, that I’ve seen in Seattle.  Kim says it was probably the worst night he’s seen here since 1997.

Hope everyone made it home safe tonight! 

Worst Commute: anywhere to Bellevue

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I’ve had only unconventional communes: Seattle to Bainbridge Island (a 3 step bus/bike – ferry – bike/walk) and Capitol Hill to Belltown (walk or bike), but I’ve had early morning meetings on the East side and I can confirm that the commute stinks.

Last week the Seattle Times confirmed my suspicion: it’s worse to commute to and from Bellevue than anywhere else. Bellevue workers, would you support tolls to improve our region’s nasty traffic? I would.