Real estate has enough surprises and challenges -- you don't need to create your own. Self-inflicted agent damage can be solved with patience, education, and experience. Even with top producers, the occasional “snafu,” while rare, still happens! What follows are some of the biggest mistakes my coaching clients and I have made during my last twenty-eight years of selling real estate. It is my goal that you learn from others, because experience is a hard task-master. And, keep in mind, they don't give out Purple Hearts for self-inflicted injuries!
1. Occupancy prior to closing. I know what you're thinking. The client had to get in, the property was vacant, and the seller didn't care! Why not be a client-pleasing agent and make it happen? You can even cure the liability issue with a pre-occupancy agreement and make certain that all insurance is in place, but I guarantee you that you will only do this once in your career! If you do it a second time, then you must enjoy pain. When those new buyers move in prior to closing, they are at the height of their anxiety. Buyers’ remorse is running rampant. Mrs. Buyer is still mad at Mr. Buyer for not negotiating harder. The lender is still calling for "just one more" piece of paper! They are so grateful that you arranged that early occupancy but, as they are moving in, they notice that the front concrete porch, once hidden with a mat, has a huge crack. They didn't notice the discoloration on the walls until the pictures were removed. How about that stain that was behind the seller's couch?
You're saying, "But all of these things would have been seen during a final walk-through anyway!" True, but these things only add to the fire when they discover that, with three people taking a shower at once, the water pipes jiggle just before the hot water runs out. They also discover that there is a draft through the master bedroom window, that there is an ever-so-small leak from the skylight, and a gouge of plaster on the inside of the closet. Normal wear and tear, enhanced by the buyers’ anxiety and multiplied by the fact that they are currently living with it every minute until the close, combine with the fact that they have the power to not bring in the money and documents to close.
What this involves for the agent is hours of negotiation, repairs, and probably a commissionectomy. No house is perfect, nor can any one expect it to be; however, when you enhance the presentation of problems and combine it with the buyers’ ability to not attend the closing, you are only begging for pain. You will find that it is certainly not worth that short-lived client appreciation of early occupancy.
I have one personal experience: my buyers sold their home in another state. They came into my office and told me that they could not get the closing extended and they had no place to live. I knew it was a mistake, but I offered them my abilities to negotiate for occupancy prior to closing. After much negotiation and time spent, I negotiated a pre-occupancy agreement and obtained the keys for a Saturday move-in prior to a Thursday closing. The batteries in the garage door opener were dead. Every lock in the house had a different key! The rain that week was incredible and the little yellow stain in the corner of the living room (that everyone had noticed) now became damp. We called out the roofer who had previously made repairs and we found that, for another $250, the work could he done correctly this time. The carpet didn't go quite with the color of their living room couch, and you've never seen more ants in one house! Every day, from move-in to closing, I was negotiating price concessions, handymen visits, and warranty agreements, much to the chagrin of everyone involved. Instead of the whole experience being chalked up to "you gotta expect some problems with a used house, honey," it was "we want it perfect before we close!" It only took one time for me to learn that final walk-throughs were okay, but there will be no living with the challenges until close.
2. Not preparing for the busiest week of your career -- the week before your vacation. Yes, it's true! REG, the real estate god, guarantees that the week before your vacation will be your busiest week ever! More clients will call this week, more sellers will want to list, and more buyers will want to buy than at any time in your career! Your anxiety grows as the date your vacation approaches and you start considering postponing it or canceling it all together. Not only will this cause resentment for the real estate business, but it will also cause serious family problems! Furthermore, if you ever do cancel your vacation, REG makes sure that those newly acquired clients will soon become the nightmares that we talked about in point number one.
Therefore, understand that the time constraints will cause anxiety and that you will need help. Make sure that you have enlisted the help of your manager and your best friend in the office. They will take care of the files and do a great job. Set up your "in-house" office alliances now to make sure that you have a life! If you want to go and increase your overhead, one of the greatest uses of an assistant is to make sure that the continuity of your small business maintains an even keel during your well-deserved time away. Yes, you can have a life in real estate, but you have to plan for it.
One of my favorite clients earned enough from his success with our coaching program to consider purchasing a second home in Costa Rica. Yes, the week before his visit to Costa Rica was the busiest week of his life and caused him concern because of his well-promoted client care program. Being a highly decorated SWAT officer, he understood the sanctity of family, relaxation, and having a life. Finally, he gave up his buyers and sellers to a friend in the office for a small referral fee. Upon his return, not only was everyone happy, but everything had come to fruition -- some closed and additional new business was waiting for him when he got back. He promised that he would never be upset again about leaving for vacation, because he now knows that he can keep his "gyro" spinning.3. Agents were not put on this planet to negotiate! Early in my career, one of my mentors told me that the sellers’ highest priority may not be price. They want their hopes, goals, and aspirations realized. Buyers are not always interested in shaving off that last $3000; sometimes they're just interested in getting the home. Over the years, I have seen hundreds of transactions lost by real estate agents with highly motivated buyers who deliver less than full-price offers in the hopes of negotiating a few thousand dollars off the price. I've then seen those offers rejected in favor of better ones. I've even had buyers call me (the listing agent) directly, passing over their buyers’ agent, letting me know how badly they wanted the house. If they had known that they had a chance of losing the house, they would have offered more. I have been in the unenviable position of having to tell them that it's too late. I've even seen people cry.
When clients want to buy a home, their best chance is to make a full-price or better offer. When owners want to sell, their best chance is to accept the first offer. Any deviation from these assumptions decreases the chance of their goals being met. I'm not saying to accept ridiculous offers or make offers far above value, but take into consideration your client's needs. A $5,000 price difference on a $500,000 home may mean nothing to a client who really loves the home. A seller who wants to move closer to family in another state sometimes does not want to see the buyer purchase another home because you thought it would be a better idea if a higher “net'” could be squeezed. Real estate agents make dreams come true, and they should only become negotiators when it's in their clients’ best interest, not in the agent's ego or DNA.
4. If they are not motivated, you do not have clients. As I coach, teach, and even watch my wife (who is one of the top real estate agents in Illinois), I see them all knocking themselves out with clients who have less-than-perfect motivation. There isn't a worse mistake in the world than working for free, which we all do, for a client who has less-than-realistic motivation. "I am testing the market. I have plenty of time to look. I have seen hundreds of properties and I don't like any of them. All the sellers are crazy. I really don't have to buy." These are comments from clients who have less-than-perfect motivation.
When you deal with clients who have minimal motivation, you deal with individuals who have more time to complete a transaction -- sometimes forever! Since you work for free until closing, time is money! However, there is something even more insidious at work. If the client doesn't really need the fruits of your labor, sometimes nothing that you do is good enough. Therefore, you are in a constant state of frustration with an unhappy client trying to achieve goals that are unclear. The concept is simple. A seller has to have a real reason to sell and a buyer has to have a real reason to buy. If they cannot convince you of these things, please have your internal red flag go up and be wary about your investment of time. I believe that the lack of pre-qualifying for motivation may be the largest mistake agents make in their career.
5. It's time to under-promise and over-deliver. If the sign is going to be up in three days, tell them five. If you're going to email them three pictures, please email them four. If you are going to have them drive by six properties, give them a bonus seventh. If you're going to return the phone call in three days, make it two. All agents want to please. I know that I did; I know that my wife does (thank God!); and I know that my coaching clients do -- this sometimes leads to promoting best-case analyses. It sets up a goal and expectation that are sometimes hard to achieve. One of the top agents in Las Vegas makes sure that his affiliates, like his lender, give him a worst-case analysis. He says that if you're going to tell a client that we'll be receiving loan approval in three or four days and it takes two weeks, even though you have no control over the loan approval process, you re going to be a jerk! So, therefore, please adopt the worst-case analysis with consistently grim expectations.
I even went so for as to send all buyers and sellers, who were at the point of signing a contract to buy or sell a home, a seven-page list of every nightmare that I have encountered in my twenty-eight years of real estate experience. The reason I did this was that they would understand the amount of work that goes into closing a transaction and also to let them know that there are many ways in which a transaction might not come to fruition. This also let them know that they had chosen the Sanford Team who had great experience in heading off these potential problems. The concept was genius! It not only let them know the amount of problems that were possible, but since most of these problems never happened, they believe that their affiliation with the Sanford Team was the reason for their good fortune. You build perceived value by always outperforming your client's expectations. You'll find the frustration level of your clients, and most importantly, yourself, will be severely reduced.