When we work in an industry, a service industry, and we work on commission, that potentially puts us in a directly adversarial role with our client. So if you sell a product and you have a product built they can see the product and know what its value is, and so whatever price you charge, they can decide to pay it or not. That’s easy to calculate. I’m providing a product, they decide to pay for the product for a certain amount of money, easy. There’s no ethical question there really at all, unless you start getting into the details of what’s said and what’s not said.
At Odds with the Client
But in the case of an earning commission, a personal service industry such as real estate, I’m working to earn a living for myself, I’m earning money, if I work in commission I only earn my money if a certain event occurs. And according to the law, I’m supposed to do what’s best for my client. Now, if my client wants that same thing to occur, good. We’re in alignment. That’ll be great. But if anything happens that prevents that from occurring, now suddenly we’re at odds. I want to close this transaction in order to get paid, but because of circumstance, it might not be best for them to close that transaction, or not to close it at the price specified or for the terms specified. And now that puts me in a position where as a representative, a real estate professional representing a client, I have to give up my own needs in order to serve my client.
Putting the Client First
Now, psychologically, that’s difficult for most of us. It’s not easy to do something that’s against my interest in order to help someone else. If it was not money related that’s a little easier, but when there’s money on the line it changes that relationship. We try to clarify this in our agency agreement, to say these are the exact things that I’m going to do and these are the things you can expect from us, but why do we have to do that? Precisely for this reason. Because our internal motivations are going to be in conflict with our client. So that’s a tough thing to navigate for all professionals, but especially when you have a fiduciary relationship where you are representing somebody else in a personal service way, that’s where that can really be a conflict.
So we really need to check ourselves, make sure that we’re constantly asking ourselves, “Is this in their best interest? Or am I doing this for myself?” whenever that question comes up of, “Are our goals aligned?” As long as our goals are still aligned, we’re golden. But if we’re not then we need to make sure to check and see if we’re doing the right thing for our client.