"Gadfly," 1) a person who upsets the status quo by stimulating innovation by proving an irritant. 2) any of various flies, like a horsefly, that bite or annoy livestock.
First JetBlue left customers on the runway for 10 hours, and followed with a JetBlue Bill of Rights.
Then a class action lawsuit was brought against C0ldwell Banker (Article) for violating RESPA-type laws for steering clients to profit-sharing "partners."
Before there is a further disastrous...out lash from consumers against Realtors, we must adopt a new standard. All shadiness needs to be removed from the industry and excellence should come standard.
FranklyRealty.com will start in Virginia, DC, MD and I envision shortly other firms will subscribe to the "Frankly Client Bill of Rights" throughout the country. This is not trademarked, go ahead copy me. You'd be an idiot not to.
Who will join us? Who runs a real estate firm that is willing to follow our lead and offer a new elite level of service and disclosure?
While I'm honored to be the first to come out with this, I'm also embarrassed at the same time that this isn't already the default. Consumers might read this and say "d'uh, seems obvious," I agree! But why is it that not one real estate firm in America subscribe to this? YET!
Introducing the Frankly Client Bill of Rights:
#1 No ABA's, Affiliated Business Arrangements
We make our money on the commission, we don't need to make a few hundred bucks steering you. No "One Stop Shopping" filled with partners filling our pockets. (blog on ABAs)
#2 No Admin Fees
These are $200-400 fees invented by many large companies, supposedly for "administrative" costs. They are charged mainly on the sell side, but sometimes on the buy side. The trick is to bury the fee within the already confusing 20 pages of paperwork required for every deal. This charge is simply a JUNK FEE. Don't stand for it. No more having clients sign confusing disclosures unknowingly or leading them to think that it is "normal." We don't charge them, never have. (blog on Admin Fees)
#3 No Dual Agency
Dual Agency is ILLEGAL in some states. I wonder why? Dual Agency is when there is only one Realtor between a buyer and seller. A Dual Agency Realtor can not help both sides. So legally they are not allowed to represent EITHER SIDE, and instead "represent the contract" only. That makes the agent a mere worthless paper pusher. We don't do that. We will only represent our client, the buyer OR seller. In the case where a buyer comes without an agent, they will be an "unrepresented buyer" (like a FSBO) and will sign a disclosure saying who we w
ork for. (new blog soon)
#4 No TELLING you what to pay
We won't tell you what to pay for a place. Ever! We won't even answer the "What if you were me" question, since... We aren't you! It is your money, and your risk tolerance. Instead of telling you a price, we will go over a ton of data to consider and conclude with our "VEGAS ODDS SYSTEM" on what the other side MIGHT do and separate it into three categories: Accept, Counter or Walk. Ultimately you decide how aggressive you want to be. (No "selling" blog)
#5 No Home Warranty Insurance Kickbacks
Even though it is illegal to receive a commission for selling insurance (unless you are a licensed insurance dealer), the Home Warranty companies have figured out a way to give agents and firms an "admin fee" of $60 to sell their goods. Why bother? We won't accept that commission as we feel that is illegal. Instead we will pass that "admin fee" to the buyer/seller. This might seem like a small amount, but the principle is what matters. Again we make our money on the commission, we don't need to upsell you a $400 policy just to make another $60.
#6 No Buyer Agent Bonuses/Bribes
We outline our compensation up front in our Exclusive Buyer Agency Agreement (Don't Sign Them Yet blog). If there is a bonus to the buyer agent, the buyer gets that in a form of a rebate on the HUD1. We can't be bribed to push you into a particular listing. (blog on 10% agent bribes)
#7 20 Photos & Custom Domain Name Website Per Listing
It boggles my mind when a $900,000 listing posts 3 photos taken with a camera phone (see Sucky Agents) and then wonders why it didn't sell for 2
00 days. And this is from a "Top 3" large company, not a "discounter." They even allow agents to check a default button to allow the MLS to dispatch a high school photographer to take a free exterior shot. I call this the free drive-by shooting option. If they checked this option, you have a sucky agent.
Interesting stats: I just looked up a nice bright "Top 3" leading firm. They have 22 listings active. 9 picked the free MLS drive-by option, 8 had only 1 photo and no tours (some overlapped) and only 1* had 20 photos (there were 12 tours which I personally hate). Here is a secret, it only costs Realtors $20 to put 20 photos, so why isn't that mandatory? (every buyer is now saying "Yeah I hate places without multiple photos... well blame them!)
Simple new standard requirement:
- Each listing must have 20 photos.
- Photos must be taken with
a 15/22mm wide angle camera (like the v570) or from a professional photographer (see Frank's former photo life). - The photos will be online within 1 HOUR of the listing.
- Listings will never have "Photo Coming Soon" or "No Photo Available." Otherwise 1,000+ buyer receiving daily email alerts for new listings won't have a photo, and the listing will have missed the single most important first impression. This is a pet peeve of mine. If your agent has a "No Photo" image the first day after your listing, you have a sucky agent. Tell them to read this and get their act together!
Each listing will also have their own domain name. No need to point prospects to "HugeRealEstateCompany.com" just to get lost looking at another 10,000 homes. Instead prospects can go directly to the photos of the listing with their own domain like: www.2001Odyssey815.com
We won't list a house unless we can make it look better than a model home. Why? It works. It gets you more money and the house sells faster. (See Bidding War blog). Just yesterday we got 3 offers in 3 days for $20k over what another Realtors said would be the seller's top price (referrals available).
#9 You're High Tech, We're High Tech
How about 100% paperless transactions from start to close? No unnecessary "meeting to sign" papers or trips to Kinkos. We also use instant messaging (myim=FrankLLosa) , cell text messaging and of course email... from our phone. Prefer 
paper? We can do that too.
#10 Profit Guarantee
Bubble fears? Scared your agent will talk you into something bad to make a buck? There are few things more painful than losing money on a transaction. We want to lower your risk if you buy from us. If you need to sell your house within the next 5 days or 5 years, and we can't make you a profit, we will sell it for no listing commission. We make money when you make money. If you lose money on a deal, we'll help you out for free. (details coming soon)
Thank you for following Blog.FranklyRealty.com as we recalibrate the real estate industry! Sign up via for updates or email this to a friend.
Are you a buyer or seller? Print this out, have your Realtor sign the Frankly Client Bill of Rights? (Tell me how it goes)
Are you a Realtor with another firm that can't promise the above? Then switch or start your own, maybe I'll even help you!
Thanks for all the comments, keep em coming. And if you like this blog, please pass it on! Oh and tell me if you find typos, I don't like looking dumb.
Written by Frank Borges LLosa- The Real Estate Gadfly
Virginia Broker/ Owner FranklyRealty.com
Blog.FranklyRealty.com Featured in BusinessWeek, CNBC, WSJ etc.
p.s. #11 As with JetBlue, we also promise not to leave you on the runway for 10 hours.
* Wow, I just got goose bumps! Without even knowing it, I was going to email the 1 and only agent from that firm with 20 photos (I give props if an agent rocks, even in a competing firm). Nobody is going to believe me, but that agent... just switched over to FranklyRealty.com and is our newest elite agent! Cathy Poungmalai! Welcome Cathy!
48 COMMENTS SO FAR. ADD YOUR COMMENTS.:
Do other Realtors hate you?
Bonus's, Bribes & Kickbacks? What goes on in the real estate business in Virginia? OMG
I signed up to follow this thread as this is going to be an interesting discussion...
Bravo! This is the kind of transparency and integrity more Realtors should strive towards!!!
Not all ABA's pay-out referrals or offer kickbacks. Some offer legitimate and valued services. We have an affiliated mortgage group. There are times when I may recommend our affiliate mortgage officer, along with several other choices, but I do not 'steer' them deliberately and solely.
I refuse to be involved with any company who violates RESPA. I can't believe there are companies and agents willing to put their licenses at risk.
Frank,
Just curious, how do you handle an offer to purchase or listing contract, seller's property disclosure, lead-based paint disclosure, HUD statement, loan docs, mortgage, note, warranty deed, etc. with "100% paperless transactions from start to close"? It would seem to me that it would be as good as the paper it's not written on.
I like your thinking on the other ideas.
Lucky :)
Frank,
Your guidelines very closely match those of our company, the Avalar Home Team.
Way to go!
Frank when are you opening an office here in Vegas?
Well I'm all for it. I'm disgusted at the Realtors who use a Title Company because of an ABA , not because the Title Co. best fits the client needs.
Good for you Frank. I hope that more offices/agents follow your model. It is not just about the money -- it is about properly representing our clients and being upfront and honest with customers. Conflicts of interests should be minimized whenever possible. See blog on disclosed dual agency.
I applaud you for this article. Thanks.
Hey Frank. Its a pleasure to not only see the bar raised, but to publicly announce it.. and expound on each point with its own post. way to go!! :)
I hope the Realtors using ABA's chime in. I'd like to hear their side - and would have to believe quite a few on AR have associations and get % shares.
Hey Rob,
I have NO problem with reliable partners that can help you get the job done. Such as lenders and Title companies. I only have a problem when they give you back money directly or indirectly. It isn't worth it, even if as one local company put it "we found a legal way around RESPA." Yeah legal until a class action lawsuit is filed against your ass!
Also a Realtor that is part of one of these ABA scams where the title company forms a new LLC every year to allow agents to have a few shares, he got a total of $50 last quarter. I said: "Is it worth it to get dragged into a class action lawsuit for $50?" His answer was "I can prove that my clients had a choice and many went elsewhere." And to this person that has never been in a legal battle, I said "Great, you can spend $10,000 defending yourself for a $50 bonus, or you can drop the bonuses." He said "Oh, yeah"
I agree Frank. By reliable partners I assume you mean people that you are comfortable and use them to refer business. In my wildest dreams do I think the typical consumer has a clue as to what Title company best fits their needs (Price, location, time of closing, timeframe of the close itself, etc..).
I would hope (again - dreaming?) that Realtors would look out for their clients interests and provide such choices.
Since I do a bit of cold calling to Realtors - I've heard more than once "What , are you crazy, I get a check each year from my Title Company."
I was so pissed (oops) once, I sent off a letter to a LARGE Re/Max office manager. He apologized and said there is no pressure on his agents to use XYZ Title. Yeah, right. I got him on the phone and he stumbled through the same answer as I brought up fees and offerings provided by various companies...yet 99.9% of his agents used company XYZ.
I agree with you Frank. As long as everything is kept both legal and ethical, I have absolutely no problem with reliable partners getting the job done for our clients. AS you point out, even if one weren't inclined to be honest in the transaction, there is so little to be gained that that alone should dissuade people from such illegal and unethical behavior
Rob,
You need to IMMEDIATELY start a campaign targeting those large companies. Perhaps call it, "Stay in compliance with RESPA, Recommend Rob"
Or "Recommend Bertrum, Beat RESPA"
The large companies are sh*tting in their pants. NOW is the time to hit them up and challenge them.
Frank
Hey Roger,
When you say "As long as it is kept legal," what about the companies that boast that they found a "legal" way around RESPA? I'm saying to just cut it out, regardless of the law. The law is the minimum standard, why be "barely legal?"
Frank: You are right on as usual!
Hey Frank,
You and I have discussed Point #4 and I'd like to comment for all the other readers. From my understanding, you will not tell buyers what to pay, but you at least give them a ballpark starting point. Eg, instead of, "I'd offer $355k", you might say something along the lines of "I can't tell you what to pay, an offer somewhere in the $345-365k range would be realistic". Am I correct?
I ask because so often buyers have no idea where to start and while you don't want to pidgeon-hole yourself, you don't want to leave them hanging either.
- Tchaka Owen
http://tchakaowen.blogspot.com/
Frank-
I am right there with you. The only thing that I would disagree with is personal websites for each listing. I have not found them to be cost effective. Maybe I am wrong, who knows. I like the upfront approach. Good work
ABAs... ugh...
I hate even hearing them...
The scam down here is when you have a LEGAL referral fee between licensees and the referring agent gets an extra small check because "Taxes were taken out"... what kind of work around is that?? Double Taxation dilemmas!
I like the client bill of rights... it should be a good selling feature for you
Frank- If it smacks of conflict of interest it is WRONG and we all know it.. this applies to escrow companies, lenders, title companies.. etc .. Your Client Bill of Rights is simply the right way to conduct business, I believe that ethical REALTORS® treat evey client this way.
Hey Kaye,
So are you able to follow all 10?
If so awesome. If not, just curious, which one?
Frank
Elizabeth, That is Dual Representation (another agent in your office representing the other side). Dual Agency is when YOU are the Realtor for both sides.
As for the domain, ok, to each his own. What I heard was a benefit to YOU and not to your client. I'll stick with the option that benefits my client.
Thanks for your comment!
Frank
Frank,
The pictures thing kills me! For our local MLS, you can load up to 10 pictures for free! We have agents that do the drive by photos (you can usually see the side view mirror in the picture), agents that don't take a photo, agents that use cell phone photos, the list goes on and on. We take 20-30 pictures with a 6 megapixel camera with a wide angle lens and use the 10 best. We put all the good pictures on our website. I agree that virtual tours can be distracting; we use a virtual tour that is more of a slideshow that allows us to get more pictures in. We do flyers and floorplans that some agents don't do. Marketing the listing is one of the key things realtors do.
If we fail to market our listings then what do we do for the seller other than fill out forms and take phone calls?
Rita
Frank: We don't use the Buyer Broker agreements in our area... I like the concept and suspect they will eventually make their way to the South Bay..
Love the bill of rights!
One issue you seemed to have missed, or maybe the statues are different in VA. But, in common law and in many states if the buyer is in your office and the seller is in your office it is still dual agency.
Here is a way to thing about it:
The contract is between the consumer and the brokerage, not between the consumer and the individual licensee. The agency is determined by that relationship.
Just like in a law office.
To avoid dual agency and those conflicts of interest many brokers who feel like you do just offer single agency. They don't ever have the buyer and the seller on one property in their office.
Another thing that some purists do is exclusive buyer agency, (EBA). An EBA office never takes listings and only works for buyers.
We are like that in Michigan at http://hbaaa.com
Our national association is http://naeba.org
Our code of ethics requires disclosure of fees and any kickbacks.
Frank,
how about "not pretending to be a financial advisor by making comments like: it's a good investment, instant equity, etc"?
Thanks!
The Vegas Odds system is wonderful. Simple, clear, meaningful and for what it;s worth, kinda fun sounding.
i LOVE it! it shows that you are really taking care of the clients and with their best interests in mind.
cheers,
cindy@staged4more
I am with you Frank. The client best interest should and will be serve. Fifty bucks does not do much for me to begin with.
I fully agree with Client Bill of Rights. The picture thing should be a no brainier.
Best regards,
Frank Rubi, e-PRO
One more lame realtor trying to convince us that he's one of the good guys. Where were you 2,3,4 years ago. I guess a 2007 that will "suck, all 12 months will suck", brings out that integrity you've had under wraps.
It's time for all you clowns to head back to the used car lot, or Walmart. Call me, if you become employed and I'll help you with a payday loan...
realtors...what a joke
Hey Anonymous!
Thanks for your post. Wow, looks like somebody was burned by a Realtor. I grew up with a mother getting burned, so I know what it is like.
Where was I 2,3,4 years ago? Well 4 years ago I didn't have my license, but after that I was giving Tshirts out that said it was a bubble: www.tinyurl.com/2w3uhs , and the WSJ said that I was the first Realtor in the country that he spoke to that questioned the run up.
I didn't quite follow your "12 month sucks" example, but as per Walmart, that would be an upgrade since the Average Realtor makes $17,000 a year and the Average Walmart employee made $17,114 as per: www.tinyurl.com/2rufc2
As for calling you, I'll just call you bitter. Is that better?
;-)
Have a nice day, but regardless, thanks for posting. And you probably thought I'd remove your comment. (heck maybe I posted it secretly to garner debate)
Frank
Posting anonymously is akin to wearing a sign around your neck that says "I'm a big [synomnym for cat]". At least have the nerve to stand behind what you write.
And I'm surprised you'd even waste your time responding to this obvious flame, Frank. Although I now know that if I don't make it as a realtor, Walmart's a better paying fallback!
- Tchaka Owen
http://tchakaowen.blogspot.com/
i have another good one...
how about not posting ads on Craigslist about "North Arlington's premiere NEW condom, The Odyssey."
condom? c'mon Frank. put the camera down and edit.
http://washingtondc.craigslist.org/nva/rfs/288229568.html
Hey Million!
Too funny. Somebody is going to get fired for that one, and it isn't me.
Thank God that place is now under contract.
See that was the secret hidden 12th rule of subliminal advertising. Everyone know that sex sells, so using condom to sell a condo makes sense!
Thanks for doing a background check on me. I'm fatter, I mean flattered.
;-)
How about not blacklisting FSBOs and listings by discount brokers? How about not lobbying to remove public access to sale transaction info? How about genuine price competition?
Hey Form Filler,
There is a ton of competition. If it were a big boy monopoly I wouldn't be able to conduct business. The MLS being open to everyone is the key.
Baloney
http://www.rd.com/content/real-estate-ripoff/
I've had RE agents admit openly that they blacklist. And I guess the 6% commission happened by magic all across the country.
BTW, I forgot to add -- don't manipulate the DOM for a house by relisting.
Actually NAR published that the national average is actually 5%.
As for DOMP manipulation, did you read about it in BusinessWeek? That was from (in part) my blog and the information that I exposed to him.
Also I just had a listing with 356 days on the market (long and blogworthy). I didn't adjust my DOMP or DOMM once!
And once I took over a listing from another agent that had it for 250+ DOM, the system accidentally reset everything to zero. I emailed the MRIS to tell them to INCREASE the DOMP back to 251, show me one agent that does that!
the thing i really really dislike above all else but realtors still publish it on every single flyer that arrives in my mailbox...
"the seller pays my commission"
that's probably the line i hate the most. even worse than the "priced out forever" and "it's a great investment" taglines.
Please, please recommend someone like-minded in CT. The agents I have met are uniformly slimy BS artists who quote Lereah (aka Mr sees-more-bottoms-than an OB-GYN) and have the IQ of oatmeal.
Hey Anonymous,
Email me directly and I can find you one.
What I'd do is go to ActiveRain and find a home stager and work backwards. A good home stager will know of a great agent that "gets it."
Good luck!
Frank
Frank,
What's up w/ condos in north Arlington?
Zoso is a rental now.
1800 Wilson and Hawthorn had 25 and 35 units, respectively, returned at delivery.
What's next? Corus et al cut off financing to Palatine or any one of the several still-under-construction buildings?
Frank, a little birdie told that you've had nine transactions yourself in the past 2 years (most recent was Sept 2006, I hear) where you appear to have represented both the buyer AND the seller...hmmm. Sounds like "dual agency" to me...do you see it diff?
Hey "Anonymous",
I love it when people use "Anonymous" and "little birdy."
Are you a jealous agent or a non-agent with an agent friend?
To answer your questions, YES!
You got me!
I did 6 Dual Agency deals in the past.
But not since I implemented a new policy forbidding it!
They suck and I vow to no longer do them, as it doesn't help my client who expects me to represent THEM. Think about it. As the middle man, each side wants to ask you questions and you have to say "I am here to only shuffle papers back and forth and I can't give you any opinions."
Meanwhile the buyer thinks you are secretly telling the seller things and they don't trust you. Hell I wouldn't trust an agent doing dual agency either.
Again, in some states it is illegal... I wonder why??
Frank
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