Real estate agents are an easy target. When the transaction begins to go south it’s easy for the wronged party to point the finger at the agent. The agent didn’t tell them “a, b or c.” Or the agent told them “x, y or z.” When you first got your real estate license you probably had no idea how much liability was associated with being an agent.
It's Not Personal
As agents, we need to understand our role and not take it personally when a client points the finger in our direction. Instead, we need to do a better job of educating our clients and have systems in place so we are able to consistently deliver a high level of expertise and service. Although this will not prevent clients from accusing us of misinformation or wrong-doing, it will establish how we run our businesses and show that we treat every client the same with the intent of providing a high level of service.
The First Meeting
What agents also need to understand is that our job of educating the client begins at the first meeting. Whether that meeting is a buyer consultation or a listing presentation, we need to do more than smile and be polite. This is our opportunity to inform the prospective client what happens during the home buying and home selling process, what they can expect from us and what we expect from them. It’s not enough just to be “happy to be there.”
Without managing expectations from the onset, we run the risk of misunderstanding, uneducated decisions, and overall unhappiness on the part of the client. Hence, when something goes horribly wrong and the client is looking for someone to blame, they first turn to the real estate agent. If you want to minimize your risk, limit your lawsuits and build a referral based business, it’s imperative for you to educate your clients and be a resource for them. So what does this look like?
Educate Your Clients
Although your prospective client may have bought and sold numerous properties, they may or may not have worked with you or their transactions were long ago and standards of practice, laws and regulations have changed. Your job is to educate all of your prospective clients about:
- What’s in the contract
- How they will determine their offering price
- How their offer will be negotiated
- How multiple offer situations are handled
- What happens at the home inspection
- What they can ask the seller to repair or replace
- How the contingencies work
- How they can lose their Earnest Money Deposit
- How they can be in default
Present the Facts
As real estate agents we are asked on a regular basis, “How much should I offer for the house?” It’s a question we can’t or shouldn’t answer. What we can do is show the most recent comparables and help the buyer reach a decision. Many times the buyer’s decision is not based entirely on the comps. They will often factor in their “love” for the house, the location of the house or their motivation to move. We can present to them negotiating strategies that have been successful in the past, but to nail down a firm price should be left up to them.
Disclose, Disclose, Disclose
When your seller asks if something needs to be disclosed, the answer will probably be “YES.” When in doubt, disclose. In order for a buyer to make an educated offer, they need to know what is happening with the house. Providing disclosures is the first step in that process. Depending on your jurisdiction the seller may or may not be required to provide a disclosure statement, however most jurisdictions state that the seller must disclose material facts. No one likes surprises when it comes to their money and no one wants to buy a money pit. Help your seller understand of importance of the disclosure statement and review it with them after they have filled it out to ensure it is accurate.
Be a Resource
As real estate agents we naturally want to be helpful. The more we help our clients, the more they will like us. The more they like us, the more referrals they will send our way. But we need to be careful in the manner in which we give information. Remember, we are the middle men and women. When your client asks you a question about a neighborhood being safe or what the schools are like or zoning, do not do the research for them. Direct them to the appropriate web site or send them a link to the information they need so they can read and interpret the information for themselves. What’s safe to you may not be safe to them. School districts and school performance can change every year. Let them do the research to determine if the schools meet their criteria. As for questions about zoning, the permitting process or anything having to do with your local government, it is best to have them go directly to the source. The last thing you want them to say is, “You told me…” That is one of the best ways to end up in a lawsuit.
Understand Your Role
As a new agent you don't realize how much risk and liability is associated with being an agent. We often times have to step back from our natural inclination to give, give, give. Your clients need to understand your role is to navigate them through the home buying and home selling process and to give them the necessary information so they can make an educated decision to sell, purchase or move forward with a transaction.
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Inman News named Candy Miles-Crocker as one of the Top 25 Real Estate coaches in 2016. Candy, “The Real-Life Realtor”, coaches, mentors and trains new and experienced real estate agents to transform their business by mastering her proven systems for success. She is a firm believer in managing expectations and her goal is to elevate the perception of real estate agents among the general public through education so every client has an amazing real estate experience. Candy’s unique training methods have shown agents what it takes to be successful!
Learn more about her training program at www.RLRETraining.com or send her an email at Candy@RLRETraining.com.