More Education for Realtors® - Not at Wharton Please

What this post is not: An argument for or against placing some of the blame for the mortgage situation onto real estate agents and brokers.

What this post is: A cry for due diligence in education and a statement that I won't be taking on any agents who have taken real estate courses at Wharton & the University of Pennsylvania.

From their website: "Founded in 1881 as the world's first collegiate school of business, Wharton continues to pioneer innovations in education...."

From their blog on Oct 17: "Others say it's not that simple. "The broker, 99% of the time, is the agent of the seller, so the broker doesn't have any duty to the buyer," said Wharton real estate professor Georgette Chapman Phillips." And this: "Legally, the agent's obligations to buyer and seller are generally governed by state laws, and most of those emphasize the agent's fiduciary responsibility to the seller, said real estate expert Jack M. Guttentag, emeritus finance professor at Wharton."

Did some real estate agents let buyers get into mortgage problems because they only cared about getting the deal done? - You bet.

Did some real estate agents push buyers to higher priced homes for higher commissions? - I'm sure they did.

Does this type of behavior reflect poorly on our profession? - Yes, and it's embarrassing.

Is this the norm for our business? - Far from it.

Are the two statements about agency quoted from their blog accurate in today's real estate markets? - A huge NO for most of the country.

Is the 99% "agent of the seller" statement accurate? - It's only off by about 80% to 90%. An informal poll done here a few months ago had 11% of respondents indicating that they still practice sub-agency.

It's been a tough year for real estate, with my area of practice not immune. My year has been a bit leaner though, as I have had the majority of contracts written die before acceptance. In some of those cases, I was representing the buyer and helped them to determine that there were access, easement or condition issues that made a purchase a poor decision.

Though a check would have eventually come to me out of seller proceeds, that's a far cry from "they pay me, so I work for the seller." The seller proceeds come from the buyer's funds. None of the sellers in these failed deals were happy about losing the buyer. Some would have been very pleased if I had kept certain information quiet, which might have been legal if I had been their "agent", as these professors seem to believe was the case. I certainly would have made more money.

We would all wish for every real estate professional to work diligently in the best interests of their buyer, unless they're in that small percentage of sub-agency situations. Might we also wish for the same concern for their student clients from Wharton? Perhaps a look at changes in the last dozen or so years would be in order. During that time the vast majority of us ceased the practice of sub-agency.