Client trust should be the first priority in your real estate business, because once it is lost, there isno getting it back. Everystep of the way the consumer is judging you and your actions, but they can’t see what you do behind closed doors.
With business being slow for so many in this business, I’ve been getting more and more calls requesting a partnership of sorts with mortgage brokers,insurance agents, heck even warranty companies.
But, how do our clients knowthat we are on the up and up with our referrals of these companies? Well,one form of protection is RESPA. (Real Estate Settlement Procedures Act) This act was put in place so that the consumer would be shown on the HUD statement all compensation paid and they could then knowthat a referral was based on legit reasons and not a kick back of sorts.
The problem is, when times are thin, some like to blur this line and try toavoid this law by saying, “Oh, no one needs to know”. I’ve been getting more and more calls from warranty companies offering me a kickback if I use their services. Mortgage brokers offering free services to use them, but all these are RESPA violations no matter how small they seem.
How is the consumer to really know that we are really doing everything we do with their best interest in mind? Well, to tell you the truth, the consumer has to have a little faith, but when that faith is broken, it doesn’t just affectthat agent, it affects us all as an industry.
I had an agent tell me yesterday of a mortgage broker offering to pay for her website and her flyers if she used his services, as long as he can advertise on both. I advised her that this is a RESPA violation and she asked, “How would anyone know?” I said, “YOU WOULD and that should be a big enough reason not to.”
By doing things like this, even if your clients don’t find out, you are willing to sell out your fiduciary responsibility to them for your own financial gain.You have a financial responsibility to your clients and the only question that should ever enter in to your mind when working for your clients is,“Is the best thing for my client?” If you ever answer anything but “YES” than you need to give them another choice.
Remember it is all about trust, and once that trust is gone, so is your business.
Todd Clark (Principal Broker)