I shall now therefore humbly propose my own thoughts, which I hope will not be liable to the least objection.
Yes, I know, everyone who shoves forward a big, paradigm-changing idea always calls it “a modest proposal” and thinks he’s showing off his Swiftian irony. I’ve read Swift’s “modest proposal” and know that not only is it anything but modest, of course, but that it was also anything but do-able, at least without setting back society several thousand years—like many a “modest proposal”. (I also know that it’s the only Swiftian satire the average reader like myself would understand.)
But my proposal has no irony. No, this time I’m onto something big.
A recent editorial in daily online real estate magazine Inman News, outlining ten things the Obama administration must do to restore the state of real estate, suggests that one key fix is to hold agents to the same standard of accountability as stockbrokers, this standard not specified. Never mind that, as fiduciaries, agents already are held to the highest standard of responsibility for their clients’ interests, a standard that regularly lands the industry in court whether it screwed up or not. And, sure, the editorial admits, this even higher standard will weed out many agents (“the bad ones”) but assures us that the “good ones” will survive and, presumably, prosper. Social Darwinism hits real estate.
Two things about the editorial struck me. First, it appeared in Inman News, whose main readership, judging from typical responses to its articles, appears to be almost entirely the real estate industry. So Inman is what might be called a “specialist press”, presumably with a better understanding of what the real estate agent can and can’t do than the average media outlet, which throws its real estate coverage against the wall and hopes it sticks.
Second, the editorial is unsigned. Which is a real shame. Because we need to know who this advanced thinker is.
I’ll admit this isn’t the first time a supposed insider has implicitly laid responsibility for the financing meltdown at the door of the real estate industry. In a recent editorial in “Real Estate Bulletin”, the official publication of California’s Department of Real Estate, no less distinguished a personage than real estate commissioner Jeff Davi implied that agents should get with the program and start policing their clients’ financing decisions. Not surprisingly, the California Association of Realtors® noticed this shot from the lip and quickly published a “clarification” from the commish assuring agents that they aren’t suddenly responsible for the self-destructive financing choices of their clients.
Not yet, at any rate.
I should also disclose that this isn’t the first pronouncement the commissioner has made since the subprime crisis hit that might indicate that Davi, an East Bay real estate broker, is either a) the last honest man in real estate, or b) entertaining a run for office. For instance, there was that extraordinary editorial in the Bulletin griping that he was tired of having to apologize for the real estate industry. Not for the mistakes made by a few bad apples in the industry, mind you, but for the entire real estate industry. And then there was Davi’s unrelenting and ultimately unsuccessful campaign to revoke the license of an agent convicted of a crime that, while despicable and highly charged, was not, at the time, sufficient grounds for revoking his license. But the effort, which cost taxpayers a few bucks and almost certainly cost the agent his career if not his license, was certainly an “accomplishment” someone running on “he cleaned up real estate” could point to.
But I’m lapsing into my usual skepticism and, seriously, I think it’s a fine idea to hold agents accountable for the financing decisions of their clients. So herewith my own “modest proposal”:
First, I ask, why should we stop at merely requiring agents to rein in their clients whenever the later edge close to the financing precipice, even if that precipice is often subjective and poorly demarcated and the buffer zone big enough for a plaintiff’s attorney to drive a truck through? Why, I ask, should we stop at merely expecting real estate agents to be thoroughly competent and up-to-date in what has until now been acknowledged a separate, arcane and highly specialized field, demanding both years of experience and daily attention, I mean, of course, lending?
No, I insist, this stops short of the goal, the nanny state, the society in which no one is to blame except the service provider. No, I protest, this is merely the kind of spineless compromise that keeps us perpetually one step short of earthly paradise, the expedient half-measure brokered by bought-and-paid-for politicians with “input” from the very industry that’s to blame, the industry that by consensus must serve as scapegoat for the errors of all.
With these plain facts in mind, I propose that every agent also be:
•a licensed general contractor, to keep clients from buying bad houses
•a certified financial planner, since a client’s home is most likely his or her biggest investment
•a licensed real estate broker, since harder test questions will guarantee a higher degree of integrity
•a licensed commercial driver, with mandatory annual refresher course in defensive driving, since agents often drive their clients around
•proficient in first-aid, with particular emphasis in CPR to resuscitate clients temporarily stunned by local home prices
•a B.A. in Advertising or Marketing, so that clients can be assured their homes will be properly marketed, and
•an M.A. in Psychology, since a B.A. isn’t considered adequate to provide professional therapy
I also propose that, since agents are to be held accountable for the unprofitable decisions of their clients, they also be rewarded for their profitable ones. Yes, five percent of any future home equity my clients gain is eminently fair, due and payable upon my retirement.
Well, I’m sure I’ve left something out, some other punitive cure-all, some other mastery of a demanding yet irrelevant discipline that transforms the real estate agent from the contemptible, conflict-of-interest-riddled, under-qualified jack-of-all-trades-and-master-of-none facilitator the marketplace in its ignorance clearly demands (since that’s what it gets) into a superhuman straight out of the social engineer’s workshop, real estate’s Renaissance man, uber-agent and sacrificial lamb who absorbs all responsibility (and liability) into his mystical body.
Oh yeah, and he needs to be willing to cut his commission.
I’ll shake the hand of the one person qualified for this job and I might even kiss his feet. And I’ll cheer him every day from the back of the courtroom.
copyright © John Fyten 2009