I recently received an email with questions from a new real estate agent in Singapore, we'll call him Ken.  I would normally just send a reply email with my opinions, but this seemed like a great opportunity to address these questions for the benefit of other new entrants into the real estate business.  They cross geographical boundaries, so will help others around the globe.  From Ken:

-------"I recently interacted with some experienced agents. Most of them taught me to use various sales and closing tactics to make money in this industry. Some of them advised me to lie and exaggerate about my services, experience, and knowledge in order to build “confidence” with potential clients.

My questions are:

1. Do we really need to use such tactics in this industry?

2. Is this a common practice in your country? It seems that such practice is extremely common in Singapore. I am curious if it is common elsewhere.

3. Do we really need to “sell” a home when representing a buyer? Most agents taught me to “sell” the house to buyers in order to make them buy, so we can make our money early. But isn’t buyer representation about helping buyers see more homes and helping them decide in making a good purchase? What should be the ethical way?

I hope to make it in this industry but I do not wish to use sales tactics to pressure people into closing. Right now I am starting to wonder if this industry is suitable for me."  ----------

Exaggeration of Qualifications and Experience

The easy answer to every question in this email would be:  "Ken, ethics is simple, and the fact that you're asking the questions indicates that you're not comfortable with the ethics of your peers and their methods."  That's the quick answer, and it's true.

 However, let's elaborate a bit on the exaggeration of experience and knowledge.

I consider this a service business, not a sales job.  My value to my clients is my knowledge of the real estate industry, real estate expertise in my local area, helping them to navigate the process and documentation, and negotiation expertise on their behalf.  If I over-state my experience or knowledge in any of these areas, it's probably going to come back and bite me when we're working together.  Experience and knowledge aren't the same things either.

I can gain a lot of knowledge through study, and this will give me a head start in providing quality service to my clients.  Experience will come as I do the work.  I can tap the experience of my broker early in my career, and there's nothing wrong with telling a client that you have a highly experienced managing broker working with you on their behalf.

As to the questions about whether this is common in the U.S., and are they necessary, that's a YES and a NO.  I personally have dealt with some very poorly trained agents telling the world how great they are and getting clients through exaggeration of their abilities and experience.  However, it rarely served them well over the long haul, as they probably rarely realized how many referrals they did not get because of dissatisfaction with their services.

Unfortunately for our industry, and despite licensing and education requirements, we tend to attract some who see the commissions as "easy money."  They skate through the exams and licensing and then spend all of their energy in marketing and as little as possible in honing their skills and keeping up with changes in the business.  Luckily, this small group tends to be the first to fall out of the business when times get tough, and many did disappear from 2008 through 2012.

Selling Pressure as a Buyer Agent

I have never considered myself a "salesman."  I consider this a service business, though "marketing" is a large part of it.  Marketing and sales are very different.  Marketing our listings and our business is about growing our business and getting our clients' homes sold.  Sales is more about motivating a prospect to make the decision we require for income.  I have a specific example that illustrates the damage a "hard sales" approach can do in your business.

I had a friend, no longer in the business, who came to real estate with a background as a used car salesman.  We were talking one day about our deals in progress when he complained that he seems to have a high percentage of failed deals, with buyers backing out or becoming too hard to deal with during negotiations and killing deals.  He asked about my experience with this, and I realized I had only two such cases in a dozen years in the business.

Sure, I've had deals collapse for disclosure and repair reasons, and for other more technical and title-related reasons.  However, only two resulted from buyers backing out.  One was a buyer who decided while in a rent-before-buying deal that she didn't want to live in the area.  The other was to start a new job and he heard that the company was in financial trouble.  He feared his new job would not last, so left the area, killing a deal before closing.

My friend was a really good car salesman, and he brought some of those skills to real estate.  He was very good at "overcoming objections," and "getting a signature."  If one of my buyers has an objection, I consider it a problem with our process and how we arrived at this point.  If I've pushed them to sign a contract and they object to something, then I haven't done my job well enough in helping them to do their due diligence and find the right property.

Sure, objections during the transaction are common, as they are about property characteristics, inspections and title matters, not basic desires and needs of the client.  If I am extremely thorough in helping them to discover suitable properties and investigate their characteristics and how they'll meet their needs, they will not have "objections" to signing a purchase contract.  I've never pushed one across a table or in any way pushed a client toward signing.

So Ken, you've asked these questions because you really already know the answers from an ethics perspective.  It may be more difficult to get a foothold in the business doing it ethically, and it may take longer, but you'll be rewarded for it in the long run.