Real estate professionals have specific credentials that make them valuable to people trying to purchase or sell real property. From a knowledge of state laws to an understanding of how to place an appropriate value on a property, a real estate professionals offer important services to those engaging in a transaction that could involve a six- or seven-figure price tag.
For many people, buying or selling a home will be the largest transaction of their adult life. People who hire real estate professionals have to trust those professionals, which is one reason why the state of California requires licensing for real estate professionals. What are behaviors that could cost a real estate professional their licensing and professional practice?
Real estate professionals should not misrepresent a property
Earning a commission when the seller they represent successfully sells their home or when a buyer closes on a newly purchased property is the most common form of compensation for real estate professionals.
Although they do have a profit incentive to help their clients make a purchase or close a sale, they also have an obligation to put the client’s needs and the law above their own preferences and desires. A real estate agent should never intentionally misrepresent a property either to their clients or to someone else’s client. Lying about a property’s condition, its zoning or known defects are all common examples of misrepresentation that could cost a real estate agent their state licensing.
Real estate professionals should not take part in any kind of pricing scheme
Real estate is a highly competitive market. Agents compete with one another to sign clients. Supporting professionals like appraisers and surveyors compete for the business of homeowners and real estate agents. Agents should recommend professionals based on their experience, not on some informal and inappropriate agreement.
Sadly, some agents will do questionable things to promise their clients a higher selling price or a guarantee that the appraisal will qualify the buyers for a mortgage. For example, agreeing to send a specific inspector or appraiser all of your business provided that they allow you to give them input on the final value desired for the property is not only potentially mortgage fraud but also an ethical violation that could cost someone their license.
Anyone accused of behavior that could cost their professional license has the right to defend themselves in front of the licensing board. Investing in your license defense could help you continue your career in real estate.