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The REALTOR® Code

 

In my role as a Managing Broker, it is not unusual to hear complaints from agents about other agents acting “unethically”. On occasion I have to deal with members of the public expressing concerns about one of our associates acting in a manner which was considered unethical in their eyes. These allegations tend to stem from the complainant imputing motives on the actions of the agent. They interpret what they have experienced as unethical when the results of a transaction, or negotiation do not conform with their expectations nor provide for their well-being. The insinuation is that the agent manipulated circumstances into their own interest, rather than the interest of the client or customer. What comes into play is the subjective nature of our understanding of the ethical boundaries of our business.

Ethical behavior is described in the Dictionary as follows:

 eth·ics

1. ( used with a singular or plural verb ) a system of moral principles: the ethics of a culture.

2. the rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc.: medical ethics; Christian ethics.

3. moral principles, as of an individual: His ethics forbade betrayal of a confidence.

4. ( usually used with a singular verb ) that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.

 

Ethics are, in a nutshell, the often unwritten, but internalized, rules of conduct that allow for the well-being of others. While many maintain that it is the religious imprint of our current or past affiliations of faith that give us a moral compass, there is a growing understanding that we all have an innate sense of fairness and communal responsibility. This inborn awareness of what is fair has even been demonstrated in studies with primates that associate in groups.

 

We all have slightly different points of reference when it comes to acting fairly. Although the “golden rule” is a universal axiom, we are also influenced in what our ethical boundaries are through our upbringing, (including where we are in birth order comparative to our siblings), our cultural background, and our religious influences. Due to these variants in one’s personal experience, it is important to set an objective guideline to overcome the elastic nature of moral and ethical boundaries. The statement that there is “honour among thieves”, suggests that even within groups that might be seen as lacking in moral fibre, a certain ethical standard is upheld. One might be tempted to respond to an accusation of unethical behavior with a question of which standard is being referred to!

CREA developed a code of ethics in 1913 for the real estate industry with the specific reason of ensuring that a standard of conduct be adhered to. They created 28 guiding principles help to determine when someone is acting unethically. This code has a higher standard than the existing legal requirements in many cases. The local real estate boards have taken these guiding principles and applied them to their professional standards doctrines. Boards also appoint professional standards committees to police the actions of agents based on the rules of conduct built around the code of ethics.

CREA describes the code this way:

CREA’s REALTOR® Code has been the measure of professionalism in organized real estate for over 40 years.

A REALTOR’s® ethical obligations are based on moral integrity, competent service to clients and customers, and dedication to the interest and welfare of the public.

The REALTOR® Code, by setting high standards of professional conduct for REALTORS®, helps to protect Canadians' rights and interests. It also creates a level of trust between REALTORS® and their clients.
 
There have been instances where a member of the public contacts me with a complaint, and it becomes evident that the designated agent they were dealing with did not instill a level of trust in their relationship with their client. As a result, as soon as something did not go as planned, the agent was seen as acting outside of the standards and values of the client. Even if nothing was done wrong in a technical sense, the client is left with a bad taste regarding their dealings with the agent.
 

When someone complains about unethical behavior to me, I will step back and picture the scenario from every angle possible. In most cases, after getting the details, it becomes clear that the agent was not acting unethically but rather, outside circumstances conspired to create that impression to someone that didn’t have the full details. As the saying goes, “There is always at least two sides to every story”. It is a rare occasion that I have found a REALTOR® acting intentionally against the well-being of others. It is for those occasions that the REALTOR® Code becomes a valuable tool in organized real estate.

Understanding the 28 articles in the CREA Code of Ethics is invaluable toward building a solid reputation as a REALTOR®. It is the ethical standard that sets us apart.

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As I write this, word has been released that Steven Covey has passed away. I am sure a lot will be written and remembered about this key figure in the world of self-help and motivation.

 While Dale Carnegie may have been the God Father of the motivational book, Steven Covey was certainly this generation’s leading prophet, and one of the most influential writers in the genre. I can’t count the number of times that I have listened to “motivational” speakers and realize that they are simply regurgitating Covey’s concepts.

The great thing about Covey was his ability to take ideas and apply stories and thought pictures to help his audience understand how the idea is implemented into daily life. His seminal book, The 7 Habits of Highly Effective People, detailed a process with which to improve one’s business, attitude, and life in general. It was named the #1 most influential business book of the twentieth century.

Covey’s 7 habits of Highly Effective People are:

1.     Be Proactive

2.     Start with the end in mind

3.     Put first things first

4.     Think Win-Win

5.     Seek first the understand, then to be understood

6.     Synergize

7.     Sharpen the saw

These habits have been often mistakenly referred to as “Success Habits”. Covey was very careful to establish that these habits are meant for living a life that has an effective impact, not necessarily one that is traditionally measured as successful. Roles models that Covey felt reflected an effective life were people like Mother Theresa and Gandhi. Canadian heroes that embody his principles would include the likes of Terry Fox or Rick Hansen.

The principles that Covey outlined in his books were not original, but the way that he compiled examples and process was. He introduced scores of readers to people whose writings helped to shape his principles of life. People like Viktor Frankl were Covey favorites because they provided  key insights based on overcoming dramatic trials in real life.

Steven Covey’s website outlined his bio this way…

Recognized as one of Time magazine's 25 most influential Americans, Stephen R. Covey has dedicated his life to demonstrating how every person can truly control their destiny with profound, yet straightforward guidance. As an internationally respected leadership authority, family expert, teacher, organizational consultant, and author, his advice has given insight to millions.

Some of Stephen R. Covey's milestones:

  • Over 20 million books sold (in 38 languages)
  • The 7 Habits of Highly Effective People was named the #1 Most Influential Business Book of the Twentieth Century
  • Authored four titles with sales exceeding one million copies each: First Things First , Principle-Centered Leadership, The 7 Habits of Highly Effective Families, and The 7 Habits of Highly Effective People
  • Latest book, The 8th Habit , has sold nearly 400,000 copies
  • International Man of Peace Award
  • National Fatherhood Award (father of 9, grandfather of 44)
  • Author of the best-selling nonfiction audio in history (The 7 Habits of Highly Effective People)
  • No. 1 best-selling hardcover book on family (The 7 Habits of Highly Effective Families)
  • MBA from Harvard, doctorate degree from Brigham Young University
  • Board of directors for the Points of Light Foundations
  • Co-founder and vice chairman of FranklinCovey, the leading global professional services firm with offices in 123 countries
  • International Entrepreneur of the Year Award
  • Awarded eight honorary doctorate degrees

 

In my career as a Broker, Steven Covey has been a compass to help steer decisions in the right direction, and navigate through difficult interactions. I haven’t always been diligent enough to follow his advice or to prioritize my life in the way that he advised in his time management books, but at least knowing what needs to be done takes one part of the way there.

Steven Covey may now be gone in the sense of the material world, but his writings and insights will remain. His works will continue to be my recommendation to anyone looking to better their life.

Ari Lahdekorpi

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What is home ownership in Canada? We speak of the bundle of rights that comes with ownership, we detail different types of rights to a described piece of land, even the air above a piece of land, and the depth to which ownership rights sink into the soil and minerals below. What does it really mean to own real estate in this country? Why is it important to us as a culture and a society to be able to claim ownership on real property? What are REALTORS® really selling?

It is fascinating to ponder what ownership of property really is. What I have seen is this; the homeless on Hastings Street in Vancouver, clutching their cardboard, garbage bags, and shopping carts. Their sense of security and shelter differs greatly from the general population that surrounds them. Looking up from Hastings Street one can see the condominiums looking down. These monolithic structures contain layers of strata owners claiming ownership to what is essentially a piece of air for over half a million dollars or more. The condos hang over a mere footprint on a piece of land. It’s a far cry from what property owners a few generations back would have considered ownership of real property. Seeing this dichotomy raises the question: who has a more defined de facto ownership of property, the street person with their nomadic and unfettered existence on their stake of a piece of public property or the de jure property owners in the apartments above?

If the aforementioned strata owners don’t pay the mortgage, they could lose their right of ownership. If any property owner in Canada doesn’t pay their taxes to the crown, or the local governing body, they could lose their rights of ownership as well. The fact that the sovereignty can come and reclaim property ownership due to unpaid taxes is a throwback to the feudal system of ownership in practice. Despite the words, paper trail, and legal constructs, in many respects ownership of land is really just a fabrication of our society. One could argue that despite the protection of modern terms and conditions, the average Canadian can only rely on the security of ownership as long as regular dues are paid to the sovereignty. That in addition to the concept of Government appropriation, does lead to the question of what we really purchase when we claim title to real property. If home or property ownership in our Canadian cultural context is nothing more than a legal construct based on Medieval foundations, what are the rights that one “buys” when a name is printed onto a deed of land?

Ownership in a property can take a number of forms, such as sole ownership, joint ownership, communal property, or leasehold. These different types of ownership may complicate an owner's ability to exercise their bundle of property rights. For example, if two people own a single piece of land as joint tenants then, each may have limited recourse for the actions of the other. This is often the problem in divorce settlements. Traditional principles of property rights include: the control of the use of the subject property; the right to any benefit from the property; a right to transfer or sell the property; and a right to exclude others from the property.

 

In his book, The Common Law, Oliver Wendell Holmes describes property as having two fundamental aspects. The first is possession, or de facto property, and the second is title, or de jure property. In Manitoba a buyer will first claim possession of a subject property, and then a few weeks later, the title will finally be registered. In BC it is not uncommon to see different dates, usually just a few days apart between possession and completion of the transfer of title.

In every culture ownership and possession are built upon custom and regulation, both legal and social. Many tribal cultures balance individual ownership with the laws of the specific collective be it tribal, family, associate, or national. For example the 1839 Cherokee Constitution frames the issue in these terms: “The lands of the Cherokee Nation shall remain common property; but the improvements made thereon, and in the possession of the citizens respectively who made, or may rightfully be in possession of them, (shall be respected)”.

Different societies have different theories of property for differing types of ownership. It does appear universal that property ownership is not a relationship between people and things, but a relationship between people with regard to things. What someone purchases in Canada when they “buy a home” is not the physical property, but rather a bundle of rights. It is the legal permission from society and the crown, to have the prescribed usage of a defined “place” for whatever the set term is.

Despite the abstract notion of modern ownership and the ubiquitous tax bills and operating expenses, we are driven by the hunger to have something that we can truly call our own. This desire to own real property is not a universal need, as the nomadic tribes in the arctic or the desert demonstrate.  However, the need for safety and shelter is a primal and instinctive motivator.

In his 1943 paper entitled, A Theory of Human Motivation, Abraham Maslow introduced the conceptual model for the importance of certain basic needs that a person is instinctively driven to obtain. In the mid-fifties, he expanded on his theory in his book, Motivation and Personality. It has become a well received and respected theory that has had a substantial impact on many other theories of human developmental psychology. Abraham Maslow’s theories focus on describing what the drivers are in our motivation in various stages of our development.

It’s interesting that Maslow studied well adjusted and exemplary people to arrive at his concept of a Hierarchy of Needs, rather than people that were psychologically damaged. In some respects this fact helps to cement the universal nature of the motivational strata that he envisioned.

Maslow’s Hierachy of Needs is usually depicted as a pyramid, with a human’s most basic needs on the bottom platform, and as the pyramid narrows the needs become more esoteric. He placed self realization needs at the top of the pyramid, while physiological needs were foundational. Some have criticized his placing self realization as a “top tier need” as being ethnocentric, or possessing some cultural bias; but no one argues that needs such as food, shelter, and safety are basic motivations in life.

So according to Maslow’s Hierarchy of Needs, the need for shelter is a foundational driver. It is a fundamental motivation in life along with food and safety. These are the ingredients that fuel the hunger for real estate. One could postulate that this primal need accounts for the wars over borders, and the arguments over hedges and fence posts. Countless neighbours have done each other harm over a few inches of lawn, alongside with countries arguing over rocky islands that are inhabited primarily by gulls and clams. History is full of unfortunate battles over real estate. It’s no wonder that dealing with competing offers in a real estate transaction can be so volatile.

The indigenous peoples that had the embarrassment of riches in their unfettered use of large tracts of land seemed to take its availability for granted. The nomads and the gypsies also had an abundance mentality that saw the countryside not as a series of parcels of separate ownership rights, but rather as a shared resource. For these social groups the need for safety and shelter did not tie itself to a quantified lot or acreage, but was shared in a larger global sense. Maslow in studying the elite Europeans and Americans in his theory did not delve into how the pyramid of needs may motivate responses based on cultural elements.

The need for safety and shelter, while it can claim its roots inside the development of the legal constructs of real estate is not the only motivational driver in building a real estate industry. Canadian culture and social convention have added to the primary need for shelter with the notion of self-esteem associated with property ownership. As most Canadians find their primary needs of food, safety and shelter satisfied, they climb Maslow’s Hierarchy of Needs to the upper tier motivational level of self-esteem. As we place our sense of self-worth into the equation, the desire for ownership of property increases. There is no greater flag of conspicuous consumption than the deed to a piece of property in a desirable location.

Considering all of this makes one appreciate that this business is a complex one, built from a primal need to claim a nest,(and then possibly a castle for our self-esteem needs), but it is all for something that can be called “home”. Our cultural and societal motivators drive the real estate industry. This industry will remain strong for years to come because its foundations are primal motivators. The REALTOR ® that appreciates and responds to this will always find a livelihood and a deep satisfaction in knowing that they are fulfilling a deep rooted hunger.

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