Bums in Seats

As a broker, what are your hiring practices?

Do you interview prospective practitioners? When they’re transferring from another brokerage, do you ask them about their disciplinary history or current investigations? Does the existence of a history or current investigation bother you? Are you simply trying to put bums in seats, so to speak?

The reputation of your brokerage is only ever as strong as its weakest link. When you hire, there are certain steps you can take to determine a real estate or mortgage professional’s “fit” with your brokerage and to ensure he or she will positively represent your brokerage.

If you’re considering having someone join your brokerage, some questions you may want to ask them include:

• Have ever been disciplined by RECA?
• Are you currently under investigation by RECA?
• Is there anything you need to tell me now that would affect our relationship when I find out about it later?

Something else you might want to consider is formally requesting a disciplinary/authorization history from RECA. Generally, you’ll receive a response from RECA to that request very quickly; typically no more than a couple of days.

Of course, a disciplinary history from RECA won’t give you any information about current investigations. To that end, you can have your potential new registrant send a letter to RECA requesting that PAST disciplinary outcomes, and information about CURRENT investigations be released to you as his or her prospective new broker.

By making a few quick inquiries into an industry member’s past, you can be that much more confident that he or she will represent your brokerage in a professional manner with a good reputation. This not only helps your business, but the industry as a whole.

Does your brokerage have any minimum hiring standards when bringing in new industry members?

 

Taking Time to Save Time

It’s undeniable that taking extra care with something that may seem insignificant at the time can actually make a world of difference in preventing headaches in the future. Take your car for example; going for regular oil changes and maintenance can save you from more costly repairs down the road. The same is true for industry professionals when dealing with contracts.

Ensuring that all contracts are completed correctly and completely is vital to having real estate transactions go smoothly. Real estate lawyers have contacted RECA with concerns about incorrectly completed contracts including sometimes having to search for a full name for a contract because the industry professional has only provided an initial or an abbreviation (i.e. Jim instead of James).

As a best practice, industry professionals should include the full names (not abbreviations), addresses, and telephone numbers of all parties involved in the transaction. Without this accurate information, there can be problems at closing as lawyers scramble to correct deficiencies.

An industry member’s duty to provide competent service extends into the realm of contracts. So, while filling out contracts may seem commonplace or ‘easy,’ correctly doing so is essential to any real estate transaction and care needs to be taken.

CRL Wrap-Up: Collaborating for Progress

The leadership of real estate regulators from across Canada met in Calgary last week at the Canadian Regulators (Real Estate) Leadership (CRL) conference. Commission, Council and Board members joined senior staff from the regulatory bodies at the CRL conference, where a number of speakers led sessions designed to engage, inform and provoke discussion amongst the attendees.

The day kicked off with a presentation from Kit Krieger on the demise of the B.C. College of Teachers.  Mr. Krieger was the Registrar for the B.C. College of Teachers when it ceased operations. Mr. Krieger’s presentation provided some advice for professional regulatory bodies based on the B.C. College of Teachers experience:

• Cultivate a professional identity that includes an understanding of the benefits of self-regulation and attention to the public interest
• Grow awareness that if the profession does not value the privilege of self-regulation, it is unlikely others will defend it.

Senior education staff from the Real Estate Council of Ontario (RECO) and the Real Estate Council of Alberta (RECA) provided an update on education initiatives of real estate regulatory bodies from across the country. The RECO update focused largely on RECO’s new continuing education program. The new RECO program is similar to the program RECA introduced in 2007. RECO administers the online-only program, which focuses on consumer protection, regulatory compliance and current industry issues. Registrants are required to complete one mandatory update course and two elective modules every two-year registration cycle.

The Alberta education update actually served as an update from regulators across the country, particularly relating to initiatives to harmonize education standards. In summary:

• regulators are increasingly involved in the development of education initiatives
• there is considerable support for competency-based workplace learning
• there is ongoing discussion regarding common education standards and course curriculum
• there is an increase in more flexible ways to provide learners access to pre-licensing and/or re-licensing education

James Casey, an Edmonton lawyer whose primary areas of practice are professional regulation, labour relations and administrative law, was the pre- and post-lunch speaker, covering a number of topics – including tips for regulatory tribunal panel members, recent regulatory court decisions, and recent developments and challenges for professional regulators. Mr. Casey’s presentations provided insight for professional regulators and tribunal panel members in terms of the challenges facing them and he made the point that identifying and managing key trends is essential to effective self-governance during a time of rapid change.

After a presentation from staff at RECO, RECA and the Organisme d’autoreglementation du courtage immobilier du Quebec (Quebec’s regulatory body) on public awareness strategies, the day concluded with a presentation from John Mayr. Mr. Mayr is the Executive Director of the British Columbia College of Social Workers. Mr. Mayr’s presentation, “Public Perception of Professional Regulation,” delved into the role of professional regulatory bodies, focusing on the perspective that the regulatory function should remain their primary focus – not advocacy.

CRL was a significant learning and networking experience for RECA staff and Council members, and for those from jurisdictions across Canada. By collaborating and sharing ideas at such events, each regulatory body is able to find the practices that will best serve its stakeholders.

Numbers Show A Career in Real Estate Remains an Attractive Option

A career in real estate in Alberta remains an attractive option for thousands of people in the province.

From its launch in September 2011 to the beginning of May 2013, RECA’s Introduction to a Career in Real Estate Information Session has drawn nearly 37,000 unique visitors to its web page. Of those 37,000, just over 5,000 completed the session in its entirety.

In order to be eligible to take the Fundamentals of Real Estate, the first course in the Real Estate Associates Program (REAP), learners must first complete the Information Session. If an individual is seriously considering pursuing a career in real estate, and wants to complete REAP, they need to submit their personal information upon completion of the Introduction Session.

Of course, not all 5,000 individuals who completed the Introduction Session will go on to complete the REAP program and become authorized real estate professionals, but even if half did, that would be 2,500 new professionals in an industry sector that has hovered around 11,000 professionals over the past decade. With many baby boomers considering retiring in the next few years, it appears there will be new industry professionals ready to take their place.

To view RECA’s Introduction to a Career in Real Estate Information session, click here.

Promoting Professionalism: How Industry Members Can Do Their Part

Earlier this week, a question came to us via Twitter – what’s the point in having rules if they’re not going to be enforced? The question related to rules surrounding incentives offered via social media.

The fundamental rule of incentives is that only brokerages can offer them and the incentive must be available through every industry professional registered with that brokerage.

RECA knows there are likely industry professionals who, purposely or not, are not onside with the Rules when they use social media to advertise, including in the offering of incentives. Contrary to what some believe, though, RECA does enforce the Rules – but only if it is informed about the breach.

So what is an industry professional to do if they come across a Tweet or Facebook promotion or other marketing technique that breaches the rules? How does RECA view these breaches?

If RECA receives a complaint or information, typically in writing, about an advertising breach, as a first step, RECA will usually contact the individual industry professional in question and/or that individual’s broker. In doing so, RECA can, hopefully, correct the errant behaviour without going through a formal professional conduct review. If the broker, or the individual industry professional, does not respond appropriately to RECA’s requirements for changes, RECA can and will proceed with the professional conduct review process, which could result in disciplinary action.

Of course, industry professionals who come across errant Tweets or Facebook promotions or other marketing initiatives have other options that don’t require them to contact RECA right off the bat. RECA encourages industry professionals to contact the individual in question or that individual’s broker to bring their attention to the marketing that is out of bounds.

In a self-regulating industry of professionals, it’s important that everyone work together to ensure continued professionalism, competency, and consumer protection. Each authorized industry professional has an important role to play in this – and part of that role can be in assisting other industry professionals in maintaining high standards, acting professionally and competently, and in line with the legislation and rules. That may mean having an uncomfortable conversation with a peer who isn’t doing things right, but at the end of the day, if that leads that individual to alter their behaviour – self-regulation has worked.

What do you do when you come across advertisements that aren't following the rules?

Incentives, Marketing and Social Media

Like my professional profile on Facebook and be entered into a draw for an iPad!

Follow my real estate  Twitter account and be entered to win a draw for an e-book reader!

Join my mortgage broker LinkedIn group and you could win dinner on me!

What do these three statements have in common? They each include an example of an incentive, which is anything that is advertised, communicated or offered by a brokerage to the public or a person for the purpose of attracting business to the brokerage. They include a promise, good, service, game of chance, contest, or anything else of value.

Regardless of how an incentive is communicated or advertised, the rules surrounding incentives are the same. All incentives must be offered through a brokerage. Individual real estate (or mortgage brokerage) professionals cannot offer incentives separate from or in addition to those incentives offered by their brokerage. Any incentive offered by one industry professional within a brokerage must be offered by all industry professionals registered with the brokerage.

Industry professionals often treat online advertising/marketing differently than traditional methods, but they shouldn’t. The line between a professional profile and a personal profile can get blurry, especially when the same content is used for both. Simply mentioning that you are an industry professional on a personal social media profile is not marketing per se; it simply identifies your profession.  However, when you set up a presence on LinkedIn or Facebook, for example, and your profile clearly promotes yourself and/or your brokerage, and may include marketing tactics such as the incentives above, that professional profile falls under RECA’s Advertising Guidelines and RECA views it as brokerage advertising.

To keep the personal/professional distinction clear, you may want to maintain two accounts in various social media platforms.  One would be a personal account that you don’t use for marketing.  The other account would be for you to market your services and RECA would consider it a form of marketing or advertising.

RECA is very pro-social media; and a contest through your Facebook page may seem like an innovative marketing idea, but even those must abide by the guidelines. Likewise, inviting followers to your Twitter account is fine, but providing a gift or contest entry in return may breach the guidelines.

To read more about incentives, check out RECA Information Bulletin: Incentives, click here.

To review RECA’s Advertising Guidelines, click here.

So,Your Buyer Client Wants a Home Inspection…

Just when your buyer client thinks the hard part is done – they found what seems to be the perfect home for them, they have a number of other things to consider and look after, one of which is often a home inspection. More often than not, a buyer’s home purchase will be conditional on a satisfactory home inspection.

There are two issues that sometimes arise with respect to home inspections:

1) Can or should the buyer’s representative be present during the home inspection?

2) Can the buyer bring additional people (family members, etc.) to the home inspection?

When a buyer has a home inspection condition, his or her representative will typically make an appointment to gain access to the property for the inspection through the seller’s representative. Typically, the buyer’s representative will request that the seller not be present during the inspection, which means the buyer’s representative will access the property using the lockbox or by picking up a key. The Real Estate Council of Alberta (RECA) expects the buyer’s representative to be present during the home inspection because it is he or she who is responsible for access to the property and the care of it during the inspection. It is inappropriate for the buyer’s representative to open the property and then leave the home inspector and buyer alone. If the buyer’s representative is unable to stay for the entire home inspection, they need to first ask permission from the seller’s representative to leave the buyer and the home inspector in the property alone.

Some industry professionals may believe the buyer’s representative should not be present as he or she may “influence” the inspection. The fact is, though, home inspectors have standards they must follow – and a real estate professional’s attendance at the inspection must not influence them. Additionally, a buyer’s representative should stay for the inspection in the event the buyer wants guidance on how to proceed once the inspection is complete. Of course, the home inspector is a service provider for the buyer and the buyer's representative should let them carry out that function. The buyer's representative is not present in order to interpret the home inspection results.

So, a buyer and his or her representative should always be present at the inspection – but what about additional people? The issue of having additional people present at a home inspection may seem harmless, but it can lead to problems. While buyers are often excited about their purchase and anxious to show their new home to those closest to them without having to wait for the purchase to close, having additional attendees is inappropriate without permission from the seller (obtained through the seller’s representative). What happens if one of these “additional” people touches something belonging to the seller and breaks it? What happens if they “test” something (a toilet, faucet, furnace), and something goes wrong? Who will take responsibility for any damage that may result? The fact is, it is not yet the buyer’s home and it is not up to the buyer to decide who should have access to and can view the property; it is only a seller who can make that decision.

While the home inspection itself isn’t the responsibility of the real estate professional, the real estate professional is responsible for safeguarding the property while it is in their care during the inspection.

For more info regarding industry members and home inspectors, be sure to check out the RECABlog, Recommending Home Inspectors.

How do you usually manage home inspections for your buyer clients?

RECA Practice Tip: Inducements

RECA Real Estate Practice Advisor, Doug Dixon, explains what qualifies as an inducement and the difference between "inducements" and "incentives."

Charging for Charity

A luxury house-for-sale in Toronto is in the news  thanks to the listing industry professional charging $50 for a viewing. Now, before you spill your coffee in shock, you should know that the $50 is a charitable donation to the SickKids Foundation of Toronto.

The idea was conceived by the listing industry professional at the request of the seller to help keep gawkers and looky-loos away from this $5 million property. All of the attention the tactic has garnered has certainly gotten the attention of buyers who wouldn’t necessarily have known it was for sale. So really, it’s a win for everyone involved. Potential buyers have said they applaud the idea – after all, what’s $50 to someone looking to buy a $5-million property?

RECA’s counterpart in Ontario, the Real Estate Council of Ontario (RECO), has stated there is nothing wrong with the tactic, provided it is not misleading in any way and has the seller’s permission. RECA agrees with RECO’s stance, but Alberta industry professionals who may be interested in trying something similar need to make sure they don’t run astray of the legislation.

• Make sure you proceed only at the seller’s direction. The seller needs to know that although this tactic may keep gawkers away, it may also turn off certain buyers.
• Make sure the money goes directly to the charity and not first into your brokerage trust account or your personal account. A good way to avoid this is for people to make their cheque out to the charity you’ve chosen.
• Be up front with the requirement. Any advertisements for your listing should prominently mention this viewing requirement, so no one is surprised by it at the door.
• Run it by your broker. Brokers need to review and approve all industry professional’s advertising since it’s done on behalf of the brokerage. Run any marketing ideas by your broker and get their support before proceeding. If your broker is unsure whether something is acceptable, he or she can contact the RECA Real Estate Practice Advisor for advice.
• Make a courtesy call to the charity you have in mind, informing them of your intention.

RECA supports industry professionals’ innovation and efforts to stand out – but only if that innovation doesn’t fall outside of the Rules.

 

Third-Party Sites: Looking for an Edge, Staying Professional

Third-party sites such as Kijiji or Craigslist have become increasingly popular for real estate industry professionals to promote their listings, usually without any cost. These third-party sites have sections to advertise homes for sale or rent; often times these sites are used by the actual owners of the properties – but sometimes they’re used by the industry professionals hired by the owners to sell the property or find a tenant for it.  Beyond that, though, industry professionals sometimes use these sites as a means of working around the advertising rules.

An example of a real estate industry professional using a third party site in a misleading manner would be a sellers’ representative who had a listing on MLS® at one price and also advertised it on Craigslist at a different price with the condition the buyer use their services to purchase the home. Equally misleading would be if one associate took pictures and descriptions of a property listed by another associate and then posted an ad on Kijiji as if the property was their own listing, in order to attract new clients. Behaviour like this is misleading and could undermine the public’s confidence in the industry.

Using third-party sites can be a very effective way for a real estate professional to gain more exposure for a listing, at a relatively low (or zero) cost. When industry professionals use third-party sites for marketing while abiding by the advertising guidelines that are in place, they are an effective way to reach out to an even broader clientele base. The may give real estate professionals that extra bit of exposure it takes to move a listing.

Generating new business is often about finding an edge, and no place offers more ways to promote yourself than the Internet. But when looking for that edge, make sure you don’t fall off of it.

RECA encourages industry professionals to review the Advertising Guidelines and the Information Bulletins on advertising.

Do you use third-party sites to market your listings or yourself?