Knowledge is power, so they say. As a professional who realizes the importance of education and staying current on trends, I dedicate a few hours each day to my continued real estate education.

Last week, I read an article that made me feel embarrassed to be a real estate broker. The article “33 Professional Etiquette Tips” was published in the March 2008 Illinois REALTOR magazine and gives “professional etiquette” advice. While I do not think that it can hurt to remind people of the common courtesies of doing business, I found some of the tips pretty basic. Basic, as in behaviors that should have been learned by young adulthood.

Here are a few of the points:

“1. Don’t answer your phone—or check your Blackberry—during a closing. This is the time when everyone’s efforts and hard work come to a successful conclusion. Show all parties involved the respect they deserve by focusing on the closing.”

Do my peers need to be reminded how to use common sense or common courtesy? I mean come on! Does any adult need to be told not to talk on the phone during a business meeting? When I was in corporate America, no boss ever had to tell me not to answer my phone in a meeting. Doing so probably would have gotten me disciplined. Why do real estate agents just need an extra reminder?

“3. Please pronounce who you are correctly: REAL-TOR, like DOC-TOR. (Not REAL-A-TOR or DOC-A TOR!)”

Is comment even necessary for this one?

“6. Spell-check your remarks in the remarks section of the MLS.”

How about being reminded to use spell check? We are supposed to be professionals’ people. Business 101, wait is that English 101? Check your work!

“19. A buyer’s broker was eating a sandwich while walking through my listing. I politely asked her wait until leaving my listing to finish the sandwich.”

That is just wrong. What did the brokers’ client think? How could the broker be effective at answering questions or pointing out the features of a home while her mouth was full of food? The fact that the broker had to be reminded by the listing agent is pathetic.

“27. Delete the expletives from all of your communication.”

When I was old enough to talk my mother taught me not to swear. Now, I’m human, and of course I swear on occasion. But not in writing! Common sense tells me it’s a bad idea.

“34. When showing a property and the seller is home be sure to thank the seller before leaving home. Many sellers expect this courtesy and are offended when they discover the agent and his/her client have left without saying a word.”

The last point is my favorite, or is it the least favorite? To express gratitude. Again, something I was taught as a child. Do adults really need to be reminded? Uttering the words “Thank you” is not only simple, but so effective. Again, it is called common courtesy.

What scares me the most about the article, in addition to the fact that it was even written, is how much many of the real estate agents in the industry today need to read and heed the advice.

One of the most important decisions in buying or selling a house is finding a good real estate agent. Unfortunately it’s not an easy process for one simple reason. There are a lot of really bad real estate agents out there. The following quote in the November 2007 issue of Realtor Magazine from Bert Waugh Jr., CEO of Prudential Northwest Properties in Portland, Ore., sums it up nicely “Most of the surveys you see on how people think about real estate professionals don’t paint a good picture. We as the brokers are the ones at fault, because we’re still hiring 100 percent of those who get into this business. It takes a beautician 1,700 hours to get a beauty license in Oregon; it takes a sales associate 150 for a real estate license.”

You can get a good feel for just how weak the playing field is by actually reading the direct mail pieces that come to your home or browsing through the online profiles of some real estate agents. For the most part there is nothing that distinguishes these agents from each other - there is no value proposition and in some cases… well, check out some real examples:

• Mission Statement: to assist my clients in utilizing other peoples (sic) money to aquire (sic) appreciating assets of which the profits can be 100% tax free
• I have excellent customer service skills and always put my clients first.
• My #1 priority in the course of business is my clients.
• As a __________ agent, I have a commitment to my clients to provide them with exceptional service.
• I am a client advocate…I am customer focused and work at clients’ pace.

I think you get the picture.

So let’s talk about how you should go about making this decision and, just as importantly, how not to make the decision.

Knowledge

One of the key reasons for using a real estate agent is to be able to tap into their knowledge of the market and the real estate transaction. Don’t be afraid to quiz prospective agents about information that you are looking to access through them. However, no agent can know everything so it’s also important to find an agent who has…

Intelligence

It’s critical to find an agent that is resourceful, knows how to deal with unusual situations, and knows where to go to get answers to questions. Unfortunately, determining how smart an agent is is a bit of a squishy undertaking. You can start by talking to them to see how they come across. You can also find out about what educational background they have, in what academic area, and what business experience they had prior to their real estate career.

Integrity

As you can surely appreciate, when dealing with the purchase or sale of a home integrity is a major consideration and the real estate industry has not done a great job of making people comfortable with the integrity of their agents. In the absence of direct feedback on the integrity of an agent there are a variety of questions you can ask to reveal an agent’s integrity:

• Have you ever served as a dual agent? In that case describe for me how were you able to balance the interests of both the buyer and the seller?
• Have you ever discouraged a buyer from considering a home that they liked? Tell me about it.
• Tell me about how co-operating bonuses work and how you deal with them when working with a buyer. See if you can draw them into a discussion of the possible conflict of interest in showing a buyer a home with a bonus and whether or not they disclose these bonuses to buyers. Of course, if you come right out and ask them if they do, they will answer “yes”.

Business Model

What type of business model does the agent/brokerage employ? Will you be getting full service or will you be expected to do a lot of the work yourself? Find out exactly what services and support you will be receiving. If you are selling your home find out what vehicles will be used to market it. Here is the typical list:

• MLS listing
• Professional photos
• Brochures
• Direct mail
• Newspaper
• Newspaper Web site
• Specialty magazines
• Open houses
• Broker open houses
• Email
• Craig’s list
• Other Web sites

This is a fairly standard list, yet agents will present this list as though they are the only ones that can provide it - and consumers fall for this all the time. On the other hand, the list is useful for what an agent might leave out in an effort to cut costs. The only trick is that several of these are ineffective at selling your home and are used to merely pacify you, raising their operating costs in the process. So you need to carefully consider the options being presented.

One other consideration. Find out how the agent will communicate with you and how often. During what days/hours are they reachable?

Cost

Don’t let anyone fool you. Cost does matter. Find out what the agent charges and how they justify their commission. And if you are buying find out if the agent provides a commission rebate and how much you will be getting back. At this point most agents will look at you like you are from another planet.

Skills

Find out what capabilities the agent has in key areas. There is no better way to do this than to get specific:

• Negotiation skills. Ask the agent to describe for you in detail a particularly difficult negotiation that they handled.
• Communication skills. Is the agent articulate? If they can not communicate clearly to you then not only will you have difficulty in working with them but they will not be able to communicate effectively with the agents on the other side of your transaction.
• Marketing skills. This is key if you are selling. Ask the agent to write up a description of your property for the MLS to share with you. Does it capture the essence of your home? Does it set your home apart from other properties in the area?

Avoid These Pitfalls

Friends or Relatives in the Business

Friends don’t let friends handle their real estate business - unless they are the most qualified to represent them. Many people make the mistake of using a friend or relative simply because they feel like they are expected to do so. In fact, this is a key element of the traditional real estate model: get your friends to do business with you because they won’t try to negotiate the commission down. However, this creates a serious problem when the friend or relative is not really qualified. In fact, from our observation of the characters in this industry we would guess this happens at least 50% of the time.

Getting a Referral From Another Agent

Agents love to give referrals - for a very simple, self serving reason. They get paid handsomely to do so - anywhere from 25 - 30% of the commission. They will give you a glowing recommendation of someone from the other side of the country whom they have never met - just so they can collect that fee. Often that person is just some random agent from an affiliated office. So beware of referrals and ask the referring agent specifically what their experience has been with the referral.

Getting a Referral From a Friend

There is nothing wrong with getting a referral from a friend but just make sure that your friend’s referral is based upon a rigorous examination of objective criteria. Ask them what they specifically liked about the agent. If all they can talk about is the annual wine and cheese picnic or birthday cards or pumpkins at Halloween then you should look elsewhere.

Going With the High Volume Agent

Everyone wants to work with the winner but there are a couple of problems with this approach. First, top producers don’t discount because they don’t need to. They have all the business they can handle. Second, they have so much business that they won’t have much time for your transaction. You will either have trouble getting the time of day from them or they have a team of agents working for them and you will be passed off to one of them.

Going With the Highly Visible Agent

The agent that has high name recognition usually spends a lot of money and time building up that recognition. They advertise, they belong to civic groups, and they do lots of charity work. But that says nothing about their capabilities. The only thing you will know for sure is that they are brilliant at marketing…themselves. And all their marketing activity raises their operating costs.

Going With the Big, Highly Visible Brokerage

Some people get a sense of security from going with an agent from a large, highly visible brokerage with a particularly appealing image in the marketplace. Similarly they might be impressed with a fancy office on Michigan Avenue and CMAs that are bound in leather. But it’s a false sense of security. First, all that “brand building” is really expensive. They do that to justify their high commissions and they need their high commissions to pay for their high overhead. Second, real estate agents move between brokerages like bees pollinating flowers. The agent that works today for the broker with pictures of clients in formal wear was wearing a yellow jacket yesterday. When the rubber meets the road you will be dealing with the agent, not the brokerage, and most of the time that agent is just an independent contractor.