Real Estate Agents

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Let me start by saying that I have many good personal friends who are real estate agents and I could not function as an investor without them.  In my investing journey however I have met and tried to work with several hundred agents and I can understand why they have generally a bad name.  I use this as preamble because

A: I received an email about yesterdays blog I want to comment on and:

B: The new real estate law kicks in today which will change the face of the industry it is hoped.

Yesterday in discussing property wealth I mentioned real estate agents only talking about gross yield instead of net yield.  Well a former agent emailed me and said this:

“I was one of them (a “real estate agent”) and while as an agent had numerous arguments/debates with different agents regarding this very issue.  Every time I ‘d sit down with one of them and pull out a pad and pen (to work out the return on the property) most of them ran for the hills. That was one of many reasons I quit the industry.

As a former agent my observation was -  “agents see investors and potential investors as cash cows”.  They couldn’t care one iota about the selling investor/vendor or the buying investor/purchaser, it’s just a pay check and for most of them these are rare.  They are for most investors/purchasers a necessary evil and anyone buying or investing in property would be better off with a cleaner marketing process than the “civilized world” currently accepts as the norm.”

So that is an insiders opinion of his own industry and matches my experience exactly.  In fact I teach investors how to filter out all the bad eggs to find good trustworthy real estate agents.

The agents I work with are fabulous and I know how may hours they have spent studying to be able to comply with the new regulations.  We are moving towards the Australian model which simply pushes corrupt or unethical people out of the industry.  In typical kiwi fashion however I also know that the majority of real estate agents under some brands are basically doing nothing to ensure they are up skilled to comply.  I know one company ran a training day and booked a venue to accommodate their 500 plus agents, less than 50 bothered to attend.

In reality the new act is great for real estate agents because it means that every agent is a licensee in their own right giving them more control over their own destiny. In addition they can now own more than 1 office and work for more than 1 company simultaneously.

What has significantly changed is that there will now be a real estate agent register available online to expose the shonky ones and the rules around agents making offers on their own listings has been significantly tightened up.

The best news is that there is a compulsory conduct and client care code and this all has nothing to do with the “old boys bury the dirty laundry REINZ”.  Finally an independent body will control and monitor agents complaints etc.

So all in all we should see a higher level of professionalism from real estate agents. For many agents there will be zero changes to implement, however a large number will have to clean up their act or go back to selling cars

Stay Inspired and Stay Safe ~ Dean Letfus

The Ethical Investing Strategist

PS: See you Saturday