Often when I ask other real estate agents this question “Your standard of practice is?” I receive a quizzical look to blank response. Then the next question by the asked real estate agent is:
“What do you mean by standard of practice?”
The recent copycat lawsuits have shown the vulnerability by not having a standard of practice.
There are many definitions for standard of practice within each industry. However, if we accept each word with its original definition this is probably the best definition for us within the real estate industry.
The word Standard is from Middle English, Old French and Old Frankish meaning “stand firm stand hard.” Fast forward to the 21st century and standard is defined as “something established by authority, customer or general consent as a model or example: Criterion.” (Merriam-Webster online dictionary)
Looking at the word “Practice” the roots are Latin and Greek meaning “to do, perform.” In the late 14th century practice the definition included “to follow or employ” and then also “to do, put into action.” Current definition of “the customary habitual, or expected procedure or way of doing of something” has not change much from the earlier definitions. (Online Etymology Dictionary)
For me, a standard of practice means a habitual procedure of doing something that I have created as a model. The standard of practice includes specific processes and procedures for real estate activities such as listing a property or acting as a buyer’s agent. Then there is the standard of practice specific to documentation required by my brokerage.
A standard of practice can and should change as circumstances warrant it. For example, the copycat lawsuits revealed that sellers and buyers did not understand how the real estate agents were compensated for their efforts.
In my standard of practice within listing employment agreements and buyer broker employment agreements, I now have the respective parties initial by the compensation lines including minimum fees to be charged.
Additionally, I send a review copy of all listing employment agreements, buyer broker employment agreements and real estate purchase contracts with the request to acknowledge receipt and advise me if the attached documents are satisfactory. Then I send the actual documents for electronic signature. This standard or practice started when I entered the real estate industry.
Another change I have made is to construct email scripts respective to AGENCY. Given most of my sales leads are from emails and the prospective clients want the "facts" and do not have time for any additional discussion, I now send a second email explaining AGENCY. Again, this change has been due to the copycat lawsuits.
When we know that verbal conversations cannot be documented unless we record them, having acknowledgment in writing that the client understands what is happening is just plain common sense. In this instance, technology is our friend.
Your real estate standard of practice is one of your real estate best small business practices. And the added benefits are:
You gain clarity.
You increase sales.
You differentiate yourself from all those other real estate agents.
You showcase you are indeed a licensed real estate professional.
Feature Photo Courtesy of Pixabay.com
Any reproduction of Leanne M Smith’s blog for use by any AI or GAI, distribution or reproduction including but not limited to electronic newsletters e.g. PDF’s Internet sites or physical products e.g. newspapers, CDs without prior written permission and consent by me, Leanne M. Smith (Leanne Hoagland-Smith) is strictly prohibited.
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