Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
Everything is fine, or generating fines, as agents and brokers are discovering that their multiple listing services (MLSs) meant business about fines for violations around the commission language and rules created from the settlement lawsuits.
While fines are nothing new in the real estate industry, these fines are still seemingly catching agents off guard, caused by workarounds, misunderstandings, and what seems to be just poor planning and oversight.
TAKE THE INMAN INTEL INDEX SURVEY FOR SEPTEMBER
But it’s not just MLSs and consumer complaints you need to be ready for; you also need to be ready for the fact that your competition is about to be fierce. In fact, it may be a fellow agent turning you in for violations at the state and local levels as well.
Why? Let’s face it, there is not enough business to go around, and top-producing agents who are determined to stay in business are tired and burned out from other agents who make their jobs more labor intensive — and make transactions a nightmare — because of negligence.
So what is a broker, admin, or agent to do to make sure that unnecessary fines and violations don’t stack up like an unlimited pancake platter at IHOP? What can you do to possibly help prevent landing in a sticky situation? There needs to be a collective plan to make sure that everyone is on the same page, creating a consistent experience for all consumers involved.
Here are three pitfalls that you may have missed in your preparations and some cleanup recommendations that may help avert disaster.
Stop using your presentations and documentation from 2023 or older
Pitfall No. 1: Trying to make dated materials work by just throwing new materials into the mix
It’s time for a fresh approach, meaning you need all new materials, systems and presentations. I think where many folks will struggle is they try to adapt older packages and systems with new materials. In doing that, you may miss sections of language that may be out of context or contradictory to the new systems that will be falling into place.
Clean it up: Do a careful audit, and make sure to throw out all older materials. Craft fresh packages with the latest state-approved revised documents. Carefully document when and how you did this process in case it’s ever brought up in court or in front of a grievance committee.
This also means making sure that you audit all listing descriptions and documentation of active listings that your team has held previously.
Make sure that if you are a broker and you have gone through this audit system and provided guidance and materials to your team that you have written documentation that they understand the new process and that they have culled and removed materials.
Stop creating a digital paper trail online of rants against consumers
Pitfall No. 2: Social media and marketing habits that give the wrong impression about commissions
Many agents are crafting an easy-to-find digital footprint of evidence that could be collected against them to support fines and violations because of their social media rants and activities. For example, depending on the context, ranting in “private” Facebook groups could be a huge problem for you.
Creating and sharing videos about how you are going to treat clients if they pay you less (pretending to rush them or acting like you will do the least amount of work) is not only in poor taste but also implies that you are looking to obtain a certain commission rate and are not going to be open to negotiate.
- Make fun of misinformed or discount-seeking consumers
- Are overly aggressive with what services you will not perform if you work at a discount
- Are just silly and satirical
In other words, if you find yourself caught with a fine and have to explain yourself, your business, and your dedication to customer service, those videos are not going to do you or your brand any favors.
With the Consumer Federation of America (CFA) heavily invested in protecting consumers, now is the time to make content for supporting consumers, not for entertaining other agents or making fun of the industry. Professional agents are going to work to raise the bar, not polish their stand-up comedy routines.
Liking and commenting on content from influencers and coaches who create hype videos promoting aggressive tactics to manipulate consumers into any type of commission structure leaves a digital trail that can be easily traced with a screenshot. In other words, be careful what you like and share because you never know where it will resurface.
Author’s note: If you don’t think anyone is paying attention, I will caution you this: When I was previously involved in grievances and fines discussions at the association level, it wasn’t the consumers you needed to be worried about. It was the agents who knew how to put a case together against you because you had either intentionally, or sometimes not intentionally, done something to cause them grief in a transaction. They came prepared with enough documentation to win.
Clean it up: Get a handle on your personal and team social media hygiene habits. You will be standing next to them at board grievance investigations and likely have to accompany them to court. Also, beware of anyone who is promoting themselves as an expert to coach you in what to do. This is the Wild West, and there are no experts yet.
Supercharge prospecting with disclosures and respect for the consumer
Pitfall No. 3: Stop over-complicating information for consumers
One thing that is critical moving forward with consumers is to have educational materials available to them with very low friction or incumbrances on their part. They need to obtain information about new practices from reliable sources that are easy to understand and delivered in multiple formats to accommodate accessibility and different learning styles. Think like a fast food drive-through menu; they need to be able to glance at some options and point to what they want.
These could include short video explanations, FAQ pages, informative and professional educational posts in your marketing, and a dedicated area on your website to find disclosures and materials that are easy to understand and that are provided multiple times during your interactions with the consumer.
I sell homes in a retirement community and have been working through some policy changes and purchase language updates. Our team devised a plan of carefully curated updates for our clients in a variety of formats, including a written letter, digital updates and in-person meetings.
What our team has found is that, even though we launched our plan many weeks ahead to give notice of the changes, it took a very personal, hands-on approach to help the clients understand what the changes were.
Many clients simply will not take the time to read the information, and many others are so busy they do not have time to retain the information. Clients will also question your expertise, and bring your materials to consultations to interview you line by line of what they are reading to see how prepared you are.
Perspective is key, and your clients will be interested in their personal outcome, not how you are paid. It’s important to keep the conversation focused on their goals and their desired outcome.
Clean it up: Be clear and concise. Be a good listener. Be willing to repeat and offer presentations often — even if you think your clients understand.
Much of the training and education around prospecting is about how to catch the attention and “convince” a consumer to work with you. There is a great deal of bad and high-pressure advice out there from coaches who are pushing tactics from 20 years ago.
Much like throwing out old presentations, you need to throw out outdated prospecting tactics. You will have to untrain yourself from tactics that may be harmful to working with consumers in this new environment.
Operating with professionalism isn’t necessarily about the suit you are wearing. It’s about your behaviors inside transactions with your peers. You will need to study and be prepared to work in this new environment with your team and other agents, and if you show up unprepared, you could be paying a steep price, where what you don’t know could potentially turn your business into a no-go with some serious debt.
Watch your back, stay polite, and be very careful with what you send in texts and emails.
One last piece of advice: Volunteer at your local association for grievances. This is going to give you the best education possible about pain points, pitfalls and areas where your business could be at risk, and it will potentially be the best new think tank for creating the “experts” we need to help navigate this moving target from now into 2025.
Stay in your lane, stay sharp, keep it clean on social media, and if you mind your own business, you should be just fine — when it comes to avoiding unnecessary fines.
Rachael Hite is a business development specialist, fair housing advocate, copy editor, and former agent. Rachael is currently perfecting her long game selling forever homes in a retirement community in Northern Virginia. You can connect with her about life, marketing and business on Instagram.
