August 7, 2017
From: Chip Hickman, Las Vegas
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Our 2017 has seen an increase in lawsuit-minded complaints that take up a lot of time and create the kinds of disruption, stress, and disillusionment. I may be wrong but I fear it is a harbinger of what's to come, which scares us enough that we have been making sure agents understand there is a P & L deductible that they are responsible for paying if they make a big enough mistake....
Agents have a fight/flee reaction to all the issues & allegations below: They want to get in an argument, or go to their happy place and pretend it's all just a bad dream. Both of these options suck, with management left holding the bag.
Here are some of the mistakes we made so far this year and our attempt to correct the issues going forward.
Lease Backs
Up markets always come with buyer concessions - waiving inspection/appraisal contingencies, refusals to repair/as-is conditions, etc. One buyer concession that in the past has not been problematic but has become a constant headache has been sellers requiring our buyers to lease back the house for 1-2 weeks after close so they can stay in the home while they finish closing on their next home.
We were not prepared for the problems that have shown up from this previously-innocuous practice. It has cost our office weeks of lost/checked out agent work hours, thousands of dollars in direct commission losses, 2 bad Zillow reviews, multiple legal entanglements, and caused at least one good agents to quit due to frustration over the outcome of having to give up his commission to fix a problem he felt was not his fault. Going forward here are some steps we are taking to reduce/eliminate the issues we have encountered:
- Insist On Deposit + Post-Lease Walk-Thru: Whether you rely on your Association's lease addendum or a separate lease contract, this is where all the problems resolving these issues ran aground - the language in the contract we wrote. Our agents did not take writing a tight agreement seriously, often treating this post-commission-check activity as an afterthought and not part of their purview. Sellers who become tenants w/o deposit have no skin in the game, are prone to leave a mess behind, and often take things after the lease they weren't supposed to take BECAUSE THEY ALREADY HAVE ALL THEIR MONEY AND YOU HAVE ZERO LEVERAGE.
- Insist Your Client Takes Pictures/Video At Sale's Final Walk-Thru, Before Lease Begins: This is huge. The deal where we had video of what the home looked like at the closing's final walk-thru and there were damages during the lease was fast & easy to solve. The other 15 times it's come up? We have no video/pics and it's He said/She said about every issue. We will require a video or pics be made at time of closing for these deals going forward.
Giving Advice
- Tell a story instead of giving advice: Easy to blame someone for advice given, but hard to blame someone for telling you a story... It is our fiduciary responsibility to share what knowledge we have - including rumors - relevant to protecting their interests during their transaction. Stories an agent has honestly experienced first-hand or heard about clients facing similar situations and their solutions are one way to deliver hard advice.
Trusting Outsiders
- Don't print/give blank Association documents to anyone - Including RE Professionals: One of the best agents I know is in danger of losing her license because she printed docs for her client's property manager as a favor. The property manager - who has 40 properties under management - ended up not being licensed, screwed over a tenant, tenant complained to division, division sees my agent on docs, she is involved in a huge mess and is the only licensee associated with a major infraction. Don't do this - ever.
Defending Against Complaints
- Whenever & However Possible, Show Performance: So the client is angry with an agent, complains in some way about non-performance. Agents universally balk at charges of non-performance by wanting to scream aloud all the things they have done. Agent never called me! vs. I called them for a week and they didn't answer! Agent didn't explain this! vs. I told them 100x times! What sucks: stories aside, the burden of proof falls on us to prove we performed. We are guilty till proven otherwise.
- We can apologize, which works well and is always the best place to start.
- We can offer a rebate, but only as a last resort.
- You need proof that you work as hard as you do. The moment a client complains, we have learned by loss to tell the agents to do the following:
- We need to begin SHOWING performance - redundant, timestamped, and in writing.
- Ex A: If you have a call, take a quick minute and write a text or email thanking them, writing a bit about what you covered on the call + when you will be circling back with the next step. CC the broker.
- Ex B: Have a meeting? Send the an email after, stating what happened, what questions they had + day & time when you will be circling back w/next step. CC the broker.
It won't necessarily make every complaint disappear, but it solves a lot of issues. Additionally it will be the exact proof needed when you have to defend yourself at the Real Estate Division in a way your "story" or your phone records of how many calls you have made cannot.
If It's Their First Time, Show You Were There: When buyers/sellers make claims that "they did not understand" as an excuse to back out, file a complaint, or sue, the agent and broker are on trial. This has earned us days and weeks of lost productivity (agents will partially-to-completely check out of everything business-related when this happens), angry calls, lawsuit threats, and at least 1 poor Zillow review for a good agent this year.
We are now forced to train that it is a requirement when they hear the words "I don't understand" Aside from the obvious benefit of helping answer any questions first-time users have as they go through their e-doc signature, having a 5-minute webinar or phone call when they have it in front of them accompanied by an email or text immediately after it has served as evidence in a are all proof of performance.