REALTOR® Professionalism: Rising from the Bottom

JOURNEY OF DISCOVERY
REALTOR® PROFESSIONALISM:
RISING FROM THE BOTTOM
FORCE OF INDUSTRY CHANGE 2: PROFESSIONALISM
SLIDE DECK
6 June 2014

“How can we expect to create a strong
trusting relationship with the public when
we knowingly allow those with a lack of
integrity to continue to operate?”
Marilyn Wilson, WAV Group

Image Credit: Gallup “Honesty/Ethics in Professions”, December 5–8, 2013
Real Estate Agents

Image Credit: Gallup “Honesty/Ethics in Professions”, December 5–8, 2013
Very low /
Low
%
24
25
20
22
23
26
22
23
25
26
27
25
26
22
25
34
31
28
30
31

While many of us likely take comfort in the 50%+ of buy-
ers/sellers who are highly satisfied and would recommend
a REALTOR®, our focus should be on the other 50%; par-
ticularly sellers, who do not show high levels of satisfaction
or perceptions of value to fees paid. The main driver of dis-
satisfaction for buyers/sellers is a lack of Professionalism.
Even for those who are highly satisfied, Professionalism
often ranks far down the list of contributing factors. Data*
from both within BC and the U.S. reinforces the need to
address Professionalism head-on.
Public polling paints an underwhelming, and, in some
cases, alarming public view of the real estate agent. Real
estate agents consistently rate as one of the top five most
distrusted professions in the Reader’s Digest poll with
Canadians. Gallup provides a much more comprehensive
view of public perceptions through historic, longitudinal
data. The Gallup data shows real estate agents are un-
derperforming other professions, although perceptions
are trending slightly positive. At no time over the past
forty years have our “honesty and ethical standards” been
ranked “very high/high” by more than 20% of respondents.
In every year but one, a greater proportion rated the pro-
fession “very low/low” (currently 22%) compared to those
who rated it “very high/high.”
Poor perceptions of real estate agent honesty and ethics
is not unique to North America. Ipsos found similar results
in the UK, as did Roy Morgan, the largest research firm in
How We’re Seen
Australia. Nor are these perceptions unique to real estate
agents alone.
Even concerted efforts to change public perceptions of
REALTOR® honesty and integrity will likely be incremental
over time. We can look to other comparative professions
in the Gallup poll such as lawyers (who share our standing
for honesty and ethics at 20%) to see perceptions basi-
cally unchanged over forty years. In other words, a huge
boost in perceived REALTOR® Professionalism is only
possible through a watershed event. This is not to say that
ORE should not make every effort to improve Professional-
ism; rather the opposite is true. And given both the historic
and shared global perceptions of real estate honesty and
ethics, it is likely to be a tide only turned through dedicated
and extraordinary measures over a long period of time.
The good news is that Canadian REALTORS® seem to
recognize the importance of this issue. According to a
2013 member survey conducted by OREA, members felt
the two most important issues for their industry related
to Professionalism: “Consistent professional standards
among REALTORS®” (90% rating it very important) and
“General negative perceptions of REALTORS®” (80% rat-
ing it very important). More than seven-in-ten members felt
these issues required immediate attention.
It is clear that REALTORS® recognize and support ORE
addressing Professionalism as a first-tier priority.
* REBGV FVREB Buyers Sellers Survey, 2008
NAR Home Buyer and Seller Generational Trends, 2013

Image Credit: CREA The REALTOR® Code
THE REALTOR®
CODE OF ETHICS
The exclusive designation for a member of The Canadian Real
Estate Association is the trademark REALTOR®
. It symbolizes a
commitment to competence, service and professional conduct.
In the quest for these high standards, REALTORS®
in Canada have
been bound together by a Code of Ethics since 1959.
As REALTORS®
, we accept a personal obligation to the public and
to our profession. The Code of Ethics of The Canadian Real Estate
Association embodies these obligations.
As REALTORS®
, we are committed to:
• Professional competent service
• Absolute honesty and integrity in business dealings
• Co-operation with and fairness to all
• Personal accountability through compliance
with CREA’s Standards of Business Practice.
To meet their obligations, REALTORS®
pledge to observe the spirit
of the Code in all of their activities and conduct their business in
accordance with the Standards of Business Practice and the Golden
Rule — Do unto others as you would have them do unto you.
The technological forces changing our world have illuminated
a new path, a path leading to a whole new engineer,
an engineer appropriate to our time and the foreseeable
future, appropriate to the eager young people of our world,
appropriate to those who wish to join the excitement of our
times actively, directly, wholeheartedly, and now.
Therefore, we come together,
in the light of growing awareness and heightened urgency,
and shine a big beacon upon needed change.
The status quo will not go easily,
but go it must.
Image Credit: Big Beacon Manifesto

• Association: membership organization(s) responsible for
advancing common professional interest and supporting
practice excellence
• Recognition: excellence is rewarded and publicly ac-
knowledged
These attributes provide a myriad of opportunities for ORE
to create and implement strategies that increase industry
Professionalism. As we anticipate significant shifts in the
role of the REALTOR® and their body of knowledge over
the next five years, it is imperative that these strategies are
revisited annually.
Fortunately, a number of efforts are underway to create a
unified understanding of Professionalism across the coun-
try. Building on the efforts of the REBGV, research and
standards developed by the Ontario Real Estate
Association (OREA), together with CREA’s national con-
versation around Professionalism, the foundation is in place
for orchestrated action. . We hope the Journey of
Discovery research will strengthen the national conversa-
tion, and provide resolve and direction for BC ORE.
Professionalism
Deconstructed
ORE needs a comprehensive understanding of what is
meant by Professionalism in real estate. We need to move
beyond Professionalism as a general term with varying
meanings to a multi-faceted concept with distinct sub-com-
ponents. Only then can BC ORE create explicit initiatives
to address different facets of the Professionalism puzzle,
and define expected behaviour to REALTORS®, consum-
ers, and communities.
Combining the work of Beslin Communications Group and
the Institute of Electrical and Electronics Engineers (IEEE),
we suggest the following attributes to define the term:
• Body of Knowledge: education, knowledge, competen-
cies, skills to be acquired and maintained by practitioner
• Quality: practice increases the likelihood of desired
outcomes, are consistent with current knowledge and
deemed worthy of compensation
• Ethics: code that establishes shared values and expected
behaviours
• Public Service: practice that protects public health and
welfare through independent judgment
• Licensing: right to practice is granted, upheld and en-
forced by an authorizing body

Image Credit: Orlando Regional REALTOR® Association, The REALTOR®’s Critical Role in the Real Estate Transaction
110 Prepare and convey any counteroffers, acceptance or amendments to buyer's agent
111 Fax copies of contract and all addendums to closing attorney or title company
112 When Buy-Sell Agreement is accepted and signed by seller, deliver to buyer's agent
113 Record and promptly deposit buyer's earnest money in escrow account.
114 Disseminate Under-Contract Showing Restrictions as seller requests
115 Deliver copies of fully signed Offer to Purchase contract to seller
116 Fax/deliver copies of Buy-Sell Agreements to Selling Agent
117 Fax copies of Buy-Sell Agreement to lender
118 Provide copies of signed Buy-Sell Agreement for office file
119 Advise seller in handling additional offers to purchase submitted between contract and closing
120 Change status in MLS to Sale Pending
121 Update transaction management program to show Sale Pending
122 Review buyer's credit report results -- Advise seller of worst and best case scenarios
123 Provide credit report information to seller if property will be seller-financed
124 Assist buyer with obtaining financing, if applicable and follow-up as necessary
125 Coordinate with lender on Discount Points being locked in with dates
126 Deliver unrecorded property information to buyer
127 Order septic system inspection, if applicable
128 Receive and review septic system report and assess any possible impact on sale
129 Deliver copy of septic system inspection report lender buyer
130 Deliver Well Flow Test Report copies to lender buyer and property listing file
131 Verify mold inspection ordered, if required
Tracking the Loan Process
132 Confirm Verifications Of Deposit Buyer's Employment Have Been Returned
133 Follow Loan Processing Through To The Underwriter
134 Add lender and other vendors to transaction management program so agents, buyer and seller can
track progress of sale
135 Contact lender weekly to ensure processing is on track
136 Relay final approval of buyer's loan application to seller
Home Inspection
137 Coordinate buyer's professional home inspection with seller
138 Review home inspector's report
139 Enter completion into transaction management tracking software program
140 Explain seller's responsibilities with respect to loan limits and interpret any clauses in the contract
141 Ensure seller's compliance with Home Inspection Clause requirements
142 Recommend or assist seller with identifying and negotiating with trustworthy contractors to perform any
required repairs
143 Negotiate payment and oversee completion of all required repairs on seller's behalf, if needed

The relationship between quality and standardized out-
comes is thoroughly understood in healthcare. OREA’s
Standards of Professional Excellence similarly references
positive outcomes. However, real estate has no standard,
desired outcomes across the transaction process. A uni-
versal push for quality improvement that starts by identify-
ing service outcomes is a clear missing link to enhanced
Professionalism.
Imagine a real estate culture of continuous improvement
that ensures our processes are constantly evaluated and
improved upon in light of their efficiency and effective-
ness. Could this radically alter real estate Professionalism
through higher and more consistent quality? We looked
to CREA’s REALTOR® Code, which makes no mention
of “quality,” and OREA’s Standards only mentions it once.
Perhaps one of the missing elements of REALTOR® Pro-
fessionalism is the drive for our own quality movement?
There is a long scientific history of quality improvement
in other industries. “Efficiency” and “scientific” manage-
ment techniques have transformed how industries assess
and measure quality through new processes (Kaizen, Six
Sigma), and standards (ISO), and also in the culture of the
organization (Total Quality Management), which demands
Quest for Quality
universal commitment across the organization.
In Fourteen Points for Managers, Charles Deming empha-
sized that quality improvement should focus not on solving
the problems of individual people or parts, but on the entire
system of their interactions (aka ORE not REALTORS® or
brokers). Deming was a relentless supporter of the use of
data rather than opinions to understand outcomes.
The most dramatic quality improvement in the service
sector has been in healthcare, specifically the move to
checklists for their simplicity in cutting costs and saving
lives. Avedis Donabedian proposed a three-tiered structure
for measuring the quality of health care that we also found
instructive:
• Structure measures assess the accessibility, availability,
and quality of resources;
• Process measures assess the delivery of health care ser-
vices by clinicians and providers; and
• Outcome measures indicate the final result of health care
Without both the shared understanding and commitment
of the entire profession to quality and continuous improve-
ment, transformative efforts will fail to realize their potential
to systematically boost Professionalism.

Could compensation models be linked to improving/de-
clining quality outcomes?
Research discussed in the article, New Health Rankings:
Of 17 Nations, U.S. Is Dead Last, revealed a distressing
story of poor historic performance outcomes in healthcare.
In its quest for improvement, the American medical system
is experimenting with major shifts in the compensation
models, from increased percentages of salaried employees
to pay-for-performance (P4P) for physicians. By extension,
what started with hospitals being financially rewarded/
penalized based on their performance on patient outcome
benchmarks, has now evolved to hospitals creating the
same incentives for their doctors.
Will it work? According to Ashish Jha (Harvard), the key to
significant results from P4P is making the incentive pay-
ments big enough, which the industry failed to do by start-
ing with too small of incentives. It also needs to ensure the
performance formulas are simple and the outcome indica-
tors are kept to a few, clear measures that the industry
agrees matter.
Could P4P work in real estate? George Jackson, associate
professor of accounting at Longwood University thinks it
could. He sees the problem simply: “The buyer wants the
Rewarding Outcomes
lowest price possible, which reduces the broker’s commis-
sion. So the harder the agent works, the less the reward.”
Jackson is calling for the use of preprinted buyer contracts
that include an option for a bonus commission on top of
the negotiated fixed commission if a home sells for below a
predetermined amount.
And the point is not just academic. All Redfin employees
are salaried and compensated based on customer satisfac-
tion (a noncontroversial outcome indicator). Redfin agents
on average receive a 97% customer satisfaction rating.
Impressive. But perhaps even more impressive is that top-
performers end up earning more than commission compen-
sated agents (details here). And they have tools that likely
make them more efficient than their non-tech peers:
“Redfin agents have access to special software that ena-
bles them to recommend the right homes for their clients
to go see, and to determine the right price at which to buy
or sell a home. Redfin is also investing in routing and opti-
mization software and back-end logistics to deliver “instant
tours,” so...[it is] as easy as booking a taxi.”
With the goal of increased Professionalism, which is di-
rectly correlated with achieving desired outcomes, perhaps
new rewards systems should be part of the equation.

Image Credit: Airbnb Image Credit: Eight11 + Zurple

“This epic failure to serve the consumer actually repre-
sents the greatest outstanding opportunity for real estate
professionals.” - WAV Group
A recent WAV Group report, Agent Responsiveness Study
2013, discusses the results of one year of posing as home
buyer leads across hundreds of brokerages in eleven U.S.
states (likely no different in BC). Here is what they found:
• 48% of buyer inquiries were NEVER responded to
• Average number of call back attempts after initial contacts
was 1.5
• Average number of email contact attempts was 2.07
• Average response time was 15.29 hours
WAV Group’s response, “There is no strategy for business
effectiveness in real estate that can trump the revenue that
would be generated by firms who tackle lead responsive-
ness and fix it.” Well, yes, and we are particularly interested
in not just business effectiveness, but also its impact on
perceived industry Professionalism, particularly by Millenni-
als who will likely be floored by those response times.
Since we don’t have correlating data between Profes-
sionalism and response time in real estate, let’s draw a
parallel with the aid of a recent blog post by Rob Hahn.
Are You There?
Airbnb, the peer-to-peer rental networking site worth $10
billion, demands accountability from its sellers, and also
sets expectations of its buyers with fields for “Response
Rate”, “Response Time”, and “Calendar Updated”. He then
goes on to imagine a scenario where REALTOR® portals
include these fields. Perhaps they will follow Airbnb’s lead.
Regardless, sites like Airbnb set expectations on what
response time should be for any online inquiry. And, given
the numbers shared by WAV Group, home buyers are likely
to be sorely disappointed. In Rob’s words, “a part-time
landlord on Airbnb cannot have a better response rate than
a professional agent.”
Well, perhaps technology is here to save the day again. In
a great profile by Tracy Weir, it sounds like Zurple might
have cracked the lead generation code through analytics.
However, one comment was of particular interest, “Zurple
treats its automated emails like gold — and you can’t edit
or personalize them.” On the one hand, response rates and
the quality of those responses should dramatically increase
for Zurple customers. A plus for Professionalism. On the
other, REALTORS® have outsourced the very thing they
are supposed to be best at: identifying the needs of their
clients and catering offerings and communications to them.

Image Credit: Dmetric “Engg Ringing CU.jpg”, Wayne State University, under Creative Commons Attribution-ShareAlike 3.0 LicenseImage Credit: Gallup

summed up the role of the ceremony:
“The Ritual of the Calling of an Engineer has been insti-
tuted with the simple end of directing the young engineer
towards a consciousness of his profession and its signifi-
cance, and indicating to the older engineer his responsi-
bilities in receiving, welcoming and supporting the young
engineers in their beginnings.”
The Professionalism of engineering has recently taken a
new twist, despite the continued significance of the century
old ceremonies. The not-for-profit, Big Beacon, has been
on a campaign to ignite “a movement to transform engi-
neering education.” The Big Beacon Manifesto is a thirty-
one point document describing the attributes needed for
the future, “whole engineer.” Perhaps it is this unrelenting
drive towards excellence that is at least partially responsi-
ble for the forty-year climb.
While these efforts at increased Professionalism started
nearly a century ago, perhaps that is the time horizon ORE
needs to be considering as it looks out to its own sea
change in perceptions of honesty and ethics. Let us hope
we don’t need a watershed moment equivalent to a bridge
collapse in order to inspire action.
Our Bridges Will Stand:
A Case Study
The previous slide discussed the potential of a watershed
moment that would set in motion radical change to industry
Professionalism. We were inspired to look more deeply into
one profession based on their Gallup poll results–engi-
neers. Unlike most other professions in the poll, engineers
have experienced a huge upward swing. Over the past
two decades, engineer honesty and ethics increased 25%
points from a low of 45% to a high of 70%. While we don’t
have the complete picture of the transformation, we did
find instructive lessons for increasing Professionalism.
Engineering experienced a watershed moment in 1907
and again in 1917. The Quebec Bridge collapsed on two
occasions, killing nearly 100 people in total. These events
inspired the creation of the organization of professional
engineers and the Ritual of the Calling of the Engineer. All
graduating engineers go through a ceremony where they
subscribe to “The Obligation,” which states the duties and
responsibilities of the engineer as a solemn expression of
intention. Following “The Obligation”, an iron ring is placed
on the little finger of the working hand as a symbol and
continuous reminder.
The creator of the Ritual, Rupyard Kipling, perfectly

Image Credit: realtor.ca based on random search results for “realtor.ca designations”; note most
REALTOR® profiles have no listed Designations

“It is important to signal to others what makes you a cred-
ible, knowledgeable authority before you make your influ-
ence attempt” - Robert Cialdini, Arizona State University
Low levels of perceived Professionalism place unique
strains on personal expertise being sought and trusted. Yet
REALTORS® have a number of distinct credibility
advantages:
• Requirements to acquire a body of knowledge in order to
be licensed;
• Authorizing bodies collecting and enforcing infractions;
• An authorizing organization that ensures continual ad-
vancement in that body of knowledge; and
• EO insurance to protect consumers from fraud or
breach of trust
While many REALTORS® know this, consumers are al-
most entirely in the dark about all four points. Consumers
don’t understand the distinction between a REALTOR®
and licensee; they do not know about infractions generally,
or specifically how to report them; they know little to noth-
ing about ORE; and don’t know about EO protections.
Influence researcher, Robert Cialdini, has led a myriad of
experiments on authority and why people defer to experts.
In his Harvard Business Review article, Cialdini tried to
Credibility on Display
understand why stroke patients would follow the advice
of their physicians, but ignore the advice of their physical
therapists (to great frustration). By just having the therapy
director display all the awards, diplomas, and certifica-
tions of her staff on the walls of the therapy rooms, they
increased at home compliance 34%. It turned out patients
were familiar with the background and training of physi-
cians, but not those of the physical therapists who were
urging them to exercise.
And, as it turns out, he led a similar experiment with a
real estate broker. By having the receptionist mention the
credentials of the REALTOR® before routing a call, the
brokerage was able to increase appointments by 20% and
contracts by 15%.
And while displays of authority can lead to REALTORS®
being more trusted, the power lies not just in display, but
also in the significance of the credential. Could “raising
the bar” on entrance requirements to be a REALTOR®
increase perceptions of Professionalism? What role could
specialty certifications (e.g. REBAC’s ABR® or NAR’s
e-PRO®) play? Higher expectations in the shared body
of knowledge, service quality expectations, competencies,
ethical behaviour, and public service are likely to raise
Professionalism across the board.

Image Credit: Ushahidi-Haiti Tufts University Image Courtesy of REBGV

How do we know that the majority of infractions are being
reported? How can we eliminate obstacles to reporting?
A self-regulated industry establishes its own rules for eth-
ics, conflicts, disciplinary action and accreditation. Effective
self-regulation also relies on professionals and customers
to report ethical and legal violations in conduct. However,
the reporting process in B.C. is cumbersome and opaque
for both consumers and REALTORS®.
Reporting. Let’s start by looking at baseline BC data. How
to make a complaint is clear on most board websites, as is
where the complaint should be filed. However, we identi-
fied numerous obstacles to report a complaint:
• Three boards have no complaint forms on their websites;
• Of the eight Boards with forms, most need to be filled in
by hand, and all need to be mailed;
• While some forms are one-page, half the forms are three
or four pages long; and
• No forms provide the option for anonymous filing. As
Marilyn Wilson described in her blog post, “Agents are
reticent to report their fellow practitioners. They are afraid
of negative repercussions for their own business. They tell
us that if I report unethical behaviours, other agents may
target me unfairly. In most cases they remain silent.”
Collective Enforcement
In our path to increase Professionalism, one goal could be
to ensure that all suspected conduct breaches are re-
ported across British Columbia. What can ORE learn from
others in how to achieve this?
• Pioneering organization, Ushahidi built an open-source
platform that uses SMS/MMS to collect incident reports
in locations around the world, from reporting violence
during elections in Kenya to civic outages from Hurricane
Sandy. Anyone can deploy the Ushahidi platform for free.
• 3-1-1 is used by communities across North America to
allow citizens to quickly report civic concerns. City of Van-
couver 3-1-1 consolidated 550 different telephone num-
bers into a Contact Center that handles 45,000 inquiries
per month. Almost all requests have a tracking number.
Transparency. The next step to increasing Professionalism
is enabling transparency so that the data becomes vis-
ible and potentially actionable by other REALTORS® and
consumers. RECBC posts its disciplinary decisions and
industry withdrawals. However, it is in examples like Usha-
hidi where we can see an even more powerful model where
incident reports could become easily navigable visual
information to guide selection of a REALTOR®. These inci-
dent clusters and their segments could become important
indicators for Professionalism as measured by BC ORE,
and as education tools for consumers.

Image Credit: Canadian REALTORS® Care Foundation Image Credit: REBGV REALTORS® Care

“As part of our jobs, we are educators, negotiators, tour guides, advisors,
facilitators and friends. Sometimes we clean homes, rearrange furniture, water
plants and occasionally mow lawns or shovel snow and with every deal we
apply our knowledge and experience to the paperwork. We lobby government
and seek political changes that help our communities because we see the
bigger picture and feel a responsibility for our Canadian quality of life.”
Beth Crosbie, 2014–2015 President, CREA
The topic of Professionalism clearly sits near and dear to the hearts of all of us
in real estate. As a profession, we clearly care a great deal about how
REALTORS® are perceived by our clients, our communities and the general
public. The general perceptions of the profession are all the more dishearten-
ing when we have so many reputable members who do anything and every-
thing for their clients and their communities. The majority of REALTORS®
take great pride in the profession. In a recent survey, CREA found 84.1% of
members agree with the statement, “I am proud to be a REALTOR®.” We find
similar results at the provincial and regional levels.
We consistently rank Professionalism as one of the most urgent issues for
organized real estate to address. Incremental changes are unlikely to result in
the sweeping change we would all like to see in perceptions of REALTOR®
Professionalism. To measurably improve, we need an industry transformation
in our commitment to Professionalism. The opportunity is immense if we can
collectively rise to the challenge and grab it. REALTORS® certainly have the
professional pride to make it happen.
REALTOR® Pride

REALTOR® Professionalism: Rising from the Bottom

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REALTOR® Professionalism: Rising from the Bottom