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Saturday, May 11, 2013

Ignorant is OK if you know it


 “Everybody is ignorant, only on different subjects.” (Will Rogers) from my favorite source for pithy quotes the Jack’s Winning Words Blog.

Will Rogers certainly hit the nail on the heads when it comes to explaining why there is value in working with a Realtor® on your real estate transactions. I get quite a few customers who can’t wait to tell me that they’ve bought and sold numerous houses, so they understand the real estate process. That’s somewhat true. They’ve been through a process that was similar to today’s process; however, if they haven’t bought and sold several houses in the last 12 months, they probably don’t understand the process as it works today.

The fact is that the process is constantly changing and evolving, due to influences like the Dodd-Frank Wall Street Reform and Consumer Protection Act and the many other wonderful laws and regulations that have been passed or promulgated in the last few years. Add to that the recent financial crisis and the extremely volatile local real estate market conditions and you have a very dynamic environment that even we Realtors have a tough time keeping up with. The dynamics are constantly changing. One month we may be in a buyers’ market and next have flipped over to a sellers’ market. For a while the banks weren’t lending to any but the absolute best credit risks and then they relaxed the rules. Sometimes there are zero down programs and sometimes not. Down payment assistance programs come and go or get funded and then run out of funds.

It can all be very confusing for someone whose job doesn’t involve keeping up with all of this stuff. Even the most seasoned veteran of many real estate transactions doesn’t normally have the time or inclination to keep up with all of the changes that are going on in real estate. Then there are court cases being decided all the time that impact how the whole system works. Realtors get legal updates on a regular basis to help them keep up with real estate laws.

So, I guess it’s OK to admit that real estate is one subject about which much of the general public might be ignorant. There’s nothing wrong with that. That’s what you have us Realtors for. It is part of our job to keep up with all of that stuff and to keep you from making mistakes based upon your own ignorance about the process as it exists today. We are your fiduciaries . The Legal Dictionary has this to say about fiduciaries –

An individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another's benefit.

A fiduciary relationship encompasses the idea of faith and confidence and is generally established only when the confidence given by one person is actually accepted by the other person. Mere respect for another individual's judgment or general trust in his or her character is ordinarily insufficient for the creation of a fiduciary relationship. The duties of a fiduciary include loyalty and reasonable care of the assets within custody. All of the fiduciary's actions are performed for the advantage of the beneficiary.

The relationship between a Realtor and his clients – sellers or buyers – is a fiduciary relationship. The clients put their trust in us to understand the real estate system - its rules and regulations and laws – and to not only keep them out of trouble with those rules and laws, but to also always represent their best interests as we negotiate on their behalf during a transaction; and that’s what we do. It’s OK to be a little ignorant about real estate, so long as you have a good agent acting on your behalf who isn’t ignorant about it. It’s also OK for a good agent to not know everything (that’s impossible), but to be honest with themselves and with you about what they don’t know and knowledgeable about how to find out what he/she doesn’t know. So, don’t panic if your agent says to you “I don’t know” in answer to a question or issue, so long as they follow up with “But, I know how to find out.” A saying by Georage Bernard Shaw probably covers that best - Beware of false knowledge; it is more dangerous than ignorance.

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