In 2006, a group of title agents at a sporting event sat in a luxury suite sipping on their drinks and discussing the state of the industry. They were sharing war stories, highlighting real estate transactions coming through their closing rooms that were astonishing, from houses they knew were overpriced for the neighborhood, to buyers’ financials that didn’t line up with their ability to meet their mortgage obligation, to inflated appraisals.

“This is not sustainable,” one title agent said dolefully.

That turned out to be prophetic, of course, as one year later the house of cards came tumbling down, launching the Great Recession.

Today, we have strict laws that have eliminated the most egregious violations of the past, but there are still situations that arise that call for ethical consideration and a true soul searching to determine if an action you want to take is an action you should take.

Here is a look at the excuses we use to absolve ourselves of ethical guilt and what we should take into consideration when weighing our involvement in a questionable matter.

Making excuses

We are all guilty at one time or another in our lives of coming up with a great excuse for doing something we know is questionable. Here are a few favorites:

• Everyone else is doing it, so I have to in order to stay competitive.
• It may not be right, but I am doing it this one time to help out a friend.
• If I say no, my customer will never bring me another deal.
• Other agents have done far worse things than this!
• I didn’t really DO anything, but I did look the other way.
• My boss made me do it.

Instead of making excuses that could ultimately damage your reputation, it’s important to stop and thoroughly analyze the situation to determine what the ethical ramifications are, and vet the situation with someone you trust and respect to see if you are making the best decision. Here are some situations that could arise.

Special favors

Your real estate agent wants you to leap-frog their transaction ahead of others that have been in the queue for weeks. There may be very legitimate reasons for this request, but you have to make sure you are doing it for the right reasons and in alignment with your own company policies.

Neutrality

An investor wants you to keep the details of a transaction from some other participant “to avoid difficulties.” Run away from this one! A transaction is designed to be transparent to all participants and keeping information away from other parties destroys the very foundation of what it means to be a neutral third party in the transaction.

Conflict of interest

You want the deal for your agency, but you are suspicious about the seller and the “special” requirements. You look the other way because you are getting a lot of business from the seller’s agent, putting your interests ahead of your ethical and contractual duty to all parties to the transaction.

Customer harm

A property is being sold on behalf of an elderly parent and you sense all is not as it should be. Your role is to protect the interests of everyone in the transaction, so it’s critical that you investigate further to ensure the proper steps have been taken to protect the rights of the owner.

In all cases, the best way to ensure that ethical decisions are being made is to have written company protocols that elevate questionable circumstances to a higher authority and to engage in open and honest communication internally and as needed with the buyer, seller, lender and real estate agent.

At FAN, we pride ourselves on providing expert, compliant, and professional services to all of our clients. Contact our experienced team today to see how we can help with all your business needs.