The latest New Zealand Readers Digest annual survey of professions is out, and guess what? Real estate agents haven't progressed too much in the trust rankings. I wrote about the 2010 survey in an earlier blog in March - your trusted agent. In 2011 real estate agents came bottom of the heap at number 39. In 2010 agents were ranked higher than sex workers, car salesmen, politicians, and telemarketers - this time they are not included on the list.
So maybe this is not the most robust survey, but it has to be a concern that the person engaged to assist the most significant financial transaction a person will undertake is one of the least trusted professions. What is trust? It's a measure of belief in the honesty and fairness of another party and the law of agency is about placing a person in a position of trust. The survey says the industry fails in the trust stakes.
Indeed, government felt compelled in 2008 to legislate to protect the interests of consumers in relation to real estate transactions.
Why the lack of trust? The common theme in the least trusted professions is one of personal self interest overpowering the responsibility or care for the other person - often in relation to money. The view that the untrusted person will do whatever is needed in order to get paid, whether in the best interests of the other party or not. The traditional real estate compensation environment is built around a small number of high value commission transactions with a binary outcome (ie they either happen or not). We expect the sales person to do one thing while driving them through compensation to do pretty much the opposite. It's pretty hard for the sales person to be Mother Teresa when they haven't been paid for several months and the mortgage is due!
To put it bluntly real estate sales people are paid too much, too infrequently, with too much risk attached to expect them consciously, or unconciously, to subjugate their needs to their client. They are human.
When will we take this seriously? Like the legal changes in 2008 will the horse have well and truly bolted before the industry finally wakes up?