You receive a request from a close friend asking for a referral to a real estate agent outside the area where you work. You send it to a trusted agent you respect and everything goes sideways. What went wrong?
Recently, I received a referral from an out-of-state friend. I referred the buyer to a top-producing team in the area where the buyer was moving. The next day I received a call from that friend saying that the deal was off — her referral was absolutely livid about the person to whom he was referred.
I asked for the referral’s phone number to see if I could clean up the mess. I was expecting to hear an ogre on the other end of the phone. Instead, the person I spoke with was a charming older man who had been in the military and was now retired from a successful management consulting practice.
During the conversation I discovered that part of the mismatch appeared to be due to a substantial age difference. The buyer’s agent was a Gen Yer, and the buyer was a traditionalist. Since the buyer was from outside the area, the agent who received the referral suggested the buyer view his company’s videos about the area.
The person on the video was a hipster type and specialized in downtown loft condos. The referral was shocked that anyone would make a real estate video representing an entire firm with an agent who looked as if he had just crawled out of bed.
I also discovered that the referral was purchasing the property with a fiancé or girlfriend — the nature of the relationship wasn’t exactly clear. He said she wanted something within 30 minutes of downtown with least 2,800 square feet, four bedrooms, three baths and priced at $225,000.
The other reason he was upset was that he felt the agent wasn’t qualified to help him in the suburbs. I offered to put him in contact with a different agent who was "more seasoned" and specifically worked that area. He accepted.
I contacted my friend who ran the team and he was mystified about what had happened. He promised to dig deeper into the situation and get back to me.
When all was said and done, a very different picture emerged. The girlfriend was moving because she wanted to be near her grandchild. A downtown loft would be perfect and she was putting up the cash (at least so she claimed). The man was the one who wanted the additional square footage — not the other way around.
Consequently, the referral to an agent who specialized in downtown condos was perfect from the woman’s perspective, but not from the man’s perspective.
When the "seasoned" agent required the couple be preapproved before she would take them to see any properties, it turned out their credit was terrible. At that point they told the agent they had a friend that would "invest" with them. It was clearly time to let this couple go.
If you have ever sat on a multiple listing service’s arbitration of a commission dispute, you definitely have had a lesson in "he said, she said." In many cases, it’s hard to believe that the two agents having the dispute are even discussing the same transaction. Here are some important lessons learned from this fiasco.
1. Have clarity about what the buyers really want
Whenever more than one person is involved in a transaction, you can usually count on some differences of opinion in terms of what each person wants. The question then becomes: Who is the decision-maker (if there is one)? And if the other party doesn’t agree with the decision, will that person hijack the process?
An excellent way to avoid being ambushed by conflicts between the buyers is to conduct a thorough buyer’s interview. Dig deep into what each person likes to do when they’re at home, where they spend most of their time, as well as information about their favorite houses from their childhood.
(The childhood information is important because many people will tell you what they think they want in a home, but will buy something that anchors what home felt like when they were young.)
2. Have all buyers preapproved
Even though this was a referral from a trusted friend, she had no way of knowing for sure that these people were poor credit risks and probably would not qualify to buy anything. Having all buyers preapproved, regardless of who generated the lead, is just smart business.
3. There are always two sides to every story
While it may be tempting to jump to conclusions (i.e., the younger agent wasn’t listening to the older client), a much better approach is to move to curiosity by asking plenty of questions.
4. What is your role if you are making the referral?
When you make a referral that comes through someone else, it’s always best to discover as much as possible about the people being referred. In this case, the issues probably wouldn’t have surfaced until the buyers had to obtain a preapproval. Consequently, telling the buyers they needed to be preapproved first would have been a smart move on my part.
5. The bottom line
Before you make any referral, do your best to ascertain who the potential clients are, what their motivation for buying or selling is, as well as whether they are in agreement about proceeding with a transaction. That’s the best way to minimize potential conflicts resulting from "he said, she said."
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named "new and notable" by iTunes, at www.RealEstateCoachRadio.com. You can contact her at [email protected] or @BRoss on Twitter.
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