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Mentioned in this Article:
Stephen G. Kliegerman

Stephen G. Kliegerman
President of Development Marketing

Brokers Weekly

Lying Cheating And Stealing

By Maggie Hawryluk

They lie, they cheat, they steal — some brokers will do just about anything to reel in a customer and close a deal. And although a number of firms and industry boards are cracking down on unethical behavior, some bad apples are still spoiling the industry’s name.

"It’s one industry where we’re all competitors, but we’re all responsible for keeping the perceptions of our industry positive,” Doug Bowen, vice president at CORE Group Marketing, said. “In many people’s minds, we’re one step-up from used car sales men.”

And what’s causing such perceptions? Oftentimes, brokers themselves who’ll stoop to poaching customers, posting bait-and switch ads and refusing to show properties. According to Esther Muller, co-founder and master teacher at the Academy for Continuing Education, the root of all the evil is money.” Having been in the industry for as long as I have, I’ve noticed that it’s becoming tougher.

Unfortunately, the ethical approach in our business is in danger,” she said. “And it’s in danger because of the value placed on money. When companies award brokers for being the top earners, it creates a demand for a high volume of sales regardless of how they get them.” As brokers establish themselves as big earners and essential parts of their firm’s success, their bad behavior is only perpetuated, according to Muller, who added, “Oftentimes, the managers make the decision to promote the unethical behavior because they don’t want to offend the top producing broker.” Amanda Jhones, vice president at Prudential Douglas Elliman agreed.” There are a lot of honorable people in this industry,” she said. “But a lot of star brokers have that star to protect them.”

But it’s not just uber brokers who are prone to posturing and, according to Stephen G. Kliegerman, executive director of development marketing at Halstead Property; it’s a poor skill set that’s to blame.”

"If you don’t have a good solid business plan and marketing plan, you will try to work off of other people’s hard work,” he said. “If you walk into a store and the store doesn’t have any inventory, you’d go somewhere else. Brokers with no listings will make up listings or steal listings.” Kliegerman said that although he’s seen a general improvement of ethics during the 20 year she’s been in the industry, he’s still seeing some brokers employing the same tricks — and they are learning these cavalier methods from the higher-ups at certain firms.”

"It’s a widespread problem that they’re taught the wrong way. Agents become the sacrificial lambs,” Kliegerman said, adding,” They will advertise other people’s listings and steal buyers at open houses by waiting in the lobbies.” It’s not a ton of brokers, but there are a number that will take the pictures, floor plan and information from another broker to make a listing. I’ve found people advertising open houses on Craigslist. Other problems include not returning calls and not granting appointments.”

Kliegerman said that the biggest problem right now is agents and brokers stealing others’ photos. Halstead has already tried to put a stop to the practice by adding digital watermarks to their property photos, but even that hasn’t been enough to stop the practice. Some brokers have gone so far as to take pictures of others’ listings themselves.

Denise Rosner, senior vice president at Halstead, recounted a recent experience where a broker used photos of her exclusive at “one of the most talked about luxury properties on the market.” Rosner said, “I’ve been having a lot of showings. I got a call from a broker [from one of the city’s major firms], who wanted to bring their client to see the unit. Then the broker asked to take some pictures, since it was such an extraordinary property.”

"I would never allow anyone to take pictures of an apartment that is resided in, but this property was vacant. Never in a million years would I have thought the pictures would be used.” A few weeks later, Rosner wanted to follow up with the client and searched for the broker’s phone number on their firm’s Web site, only to find photos of her exclusive. Though the listing didn’t specifically name the building, the description provided enough details to point to the building, and described a very similar apartment.

“I demanded that he take the photos down, but he kept the description up, and I just checked back recently and one or two photos are back up,” she said.” That is an egregious example of poor broker ethics.” Nine times out of ten, if you don’t have a specific ad, it’s an open listing, which is completely fine, or they’re advertising something they’re not supposed to. Unfortunately, a lot of brokers think they can get away with it in a very ballsy manner. They think they would never be sanctioned, or sometimes if they’re big earners, their managers look the other way.”

The Real Estate Board of New York has stepped into act as an unbiased party in these types of disputes, doling out ethics courses or sanctions to set unethical brokers straight. The Fair Housing Justice Center will also step in to stamp down on unethical behavior.

Most recently, the FHJC announced it was investigating allegations that agents from Brown Harris Stevens have discriminated against house-hunters with children. According to Muller, fair housing and discrimination is an industry-wide ethical concern which all brokers should take into consideration when working with their clients.” Are you selling all of what is available to you buyer based on non-discriminatory reasons?” Muller asked. She added that some brokers don’t intentionally discriminate, as they assume buyers won’t make it past some co-op board standards and will deter them from a certain building. “Legally, it is wrong.” And some boards, as Catherine and Tom Holmes of Barak Realty learned, are impenetrable no matter how hard they work for their clients — because of unethical brokers.

The pair recently represented, what Tom called, an overqualified buyer for a co-op that was being sold by the owner. After having the buyer’s application turned down by the board president, who asked that the buyer— a 10-year employee of Goldman Sachs — have a guarantor for the $780,000 unit, the Holmes’ went digging for a better explanation.” It turned out that the president of the board is a real estate agent who had sold a half a dozen units in her building,” Holmes said. “Because the board president was not the broker [for our client], she wouldn’t see the commission and so she turned this applicant down, even though the applicant was over-qualified.”

Although it is a nearly unanimous opinion that broker ethics have improved immensely over the years, that small bunch of rotten apples is still making a big impression.

“Who could understand the pathology of people who think that they’re above the rules? Back in the late ‘80sand early ‘90s, real estate was like the Wild, Wild West. When I started, I made it a goal to be the anti-broker,” said Rosner. “Thankfully, I realized that behavior was not of the majority.” This behavior is definitely not the norm these days, maybe that’s why it stings so much.”

Wednesday, May 07, 2008

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