Pop quiz: what do real estate agents have in common with car salesmen, telemarketers, and members of Congress?
Answer: They’re among Americans’ least-trusted professions, according to a recent Gallup poll.
In fact, with just 21 percent of respondents ranking the profession as trustworthy, real estate agents ranked below notoriously hated groups like lawyers and bankers.
As the co-founder of Castle, a Detroit property management company, I’ve met a lot of great people in the real estate world. But I’ve also met a lot of people with highly questionable ethics.
What is it about real estate that attracts scumbags? I have a few ideas.
Some professions, like dentists or accountants, have customer relationships that are like marriages: they’re consistent and ongoing, and while they may not be passionate, they’re reliable.
Your relationship with your real estate agent, though, is much more like a one-night stand: a burst of intense activity, a moment of closure, and then you never see them again.
People in professions without ongoing customer relationships have less of an incentive to behave well. And unless you’re a real estate investor with deep pockets, you’re unlikely to be a repeat customer — so an agent isn’t automatically losing repeat business if they screw you over.
High Switching Costs
If you buy a computer you don’t like, it’s pretty easy to return it the next day.
But if you buy a house you don’t like? Not so much.
The absolute nature of most real estate transactions — and the high commissions involved — often leads to a “close at all costs” sales mentality that can easily cross the line into, well, asshole behavior.
Get Rich Quick
If you search for information about how to build wealth, vault yourself out of the middle class, or even “get rich quick,” chances are you’re going to find a lot of books and articles urging you to invest in real estate.
There are good reasons for this: real estate has been an effective way to build wealth for many people, and unlike many other paths to riches, it’s accessible even to those without a formal education, or who don’t live in a major metropolitan area.
But any path that attracts lots of people who want to get rich is going to attract people who are willing to cut corners to do so. All too often — whether it’s sellers hiding problems with a property just to close a deal, or landlords skimping on essential repairs to their properties — people are drawn to real estate solely for the wealth they imagine it bringing them, and not for any inherent love of the game itself. Unethical behavior is the inevitable result.
Of course, good conduct should be it’s own reward. But for those of us in real estate, there’s another motivator at play: only by going out of our way to behave with honesty and integrity can we make a dent in our industry’s terrible reputation. Together, we can make those in real estate as beloved as teachers and nurses — or at the very least, not as hated as used car salesmen.