When it comes to dealing with a broker, we can find articles that tell us what to look for. We are told to look for people with a track record, who are experts in working with investors and who are experts in the area we are interested in, but for some reason we rarely look beneath the surface . What I want to encourage you to do is examine the moral compass of these team members.
I don’t expect you to search for criminal records of potential agents, but you can at least determine whether they are operating a sound business as determined by the licensing body. What most of you may already know is that we can often search state records online for active licensees and see if they were ever disciplined. However, we can take it a step further and look at the monthly reports that are published by many states that include more details on when fines or other punishments are given.
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what you should Know
What you need to know is that violations often do not result in license revocation, but rather a temporary suspension or reprimand. However, when it comes to my operations, I would prefer not to be associated with individuals with questionable practices, and given the amount of quality agents out there, I don’t feel I need to compromise. You might not mind working with someone who missed a deadline for continuing education credits, but do you feel the same way for someone who has done any of the following work done?
- Failed to account for escrow money, failed to maintain escrow records, failed to exercise reasonable care/skill in services, engaged in dishonest dealings, and failed in his supervisory responsibilities as a managing broker
- Cancellation of license and fine on agent
- Sexual assault conviction and failure to provide documents when requested
- Conducted business as a “broker” with an expired license
- Failure to recover dishonored check
- Criminal Conviction/Mail Fraud
- probation or suspension for those involved
This is a very small sample (5/224) of the charges I found in only one year, but the point is that this is the information we want to know. In the last three cases there have been individuals who are still able to practice, and it’s not like you’d know by looking at them. They don’t have a scarlet letter next to their designation, which gives us the responsibility to protect ourselves.
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conclusion
It’s our responsibility to know who we’re partnering with, and since we can do more investigation without raising any red flags, the real question is why don’t you take the time to make sure your partners has a moral direction. like you? The initial search is far less demanding than the costs associated with working with a potential crook.
Have you ever looked into your brokers history? Will you implement it in future?
Leave a comment, and let’s talk!
Note by BigPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
