There is a simple rule for any real estate agent to follow that will minimize mistakes, assumptions and lawsuits.
This simple rule applies to any agent – a brand new agent that has never sold even one house, all the way to those top-producing agents who perform hundreds of transactions annually. Also, and all experienced agents understand this – that the respective responsibilities of working as a buyer’s representative compared with those of working as a listing agent, are completely different. Furthermore, the dynamics of relationships between buyers and sellers is wholly different as well, from the agent perspective.
But the foundation of practice for a Realtor to avoid trouble is this: NEVER, I mean NEVER, tell a buyer or seller what to do. Unfortunately, once agents become successful, they feel more confident in their abilites to manage and negotiate transactions. Very often that experience begins to entice agents into this trap that can get any real estate agent in big trouble.
That doesn’t mean an agent’s experience is not valuable to a client, but it’s just a matter of the agent positioning that information.
As I said, a Realtor should NEVER tell a client what to do.
Rather, use that knowledge and experience in this manner:
Super fact finder! An agent’s job is to get all the pertinent information and facts that relate to his/her clients transaction. Once the information is gathered (and this a continual process) it is important for the agent to present that information to the client in a way that there is an understanding of how it affects or applies to the transaction. Although the agent may have an opinion about that information, it is critical that they refrain from instructing the client what to do.
Most home buyers and sellers are smart enough to make decisions on their own. Let the agent get the facts, present them in a clear manner, then let the client decide what to do. If a client is bashful, insecure or unsure of a decision, the agent may offer certain scenarios or suggestions, but make it clear that the client is making the decision on their own.
Once the agent begins to instruct a client on what to do, the problems can escalate all the way to the courtroom.
Like I said, it’s all about positioning, as illustrated in the example below.
An agent represents a buyer wanting to make an offer on a condo, and the buyer’s agent has recent comparable sales that have closed within the last 6 months. The buyer wants to write an offer but is unsure what the initial offer price should be. Below are two responses.
Agent: “Now that we have this information on the comparables, we can see what the average market value of the the condo is. With this information before us, what amount would you like to make your initial offer?”
Agent: “Now that we have this information on the comparables, we can see what the average market value of the the condo is. With this information before us, I think you should begin your offer at X amount.”
Imagine the client does not get the condo for whatever reason. In the first example, it will be the client that makes the decision and that
decision was made by the buyer. In the second example, the agent has told the client what offer to make and now the client is wondering why the agent told him to offer that particular amount. Now, the buyer probably blames the agent for not offering enough, thus damaging the agent’s credibility.