Buying a home is one of the most substantial purchases an individual makes during his or her lifetime, from both a financial and emotional standpoint. It’s no wonder real estate agents are faced with some tough client conversations — especially when buyers have high expectations throughout the process.
If anyone understands how to best navigate difficult client conversations, it’s Steve Thayer, Denver Metro Association of Realtors’ (DMAR) chairman of the board, and Heather Heuer, DMAR’s chair-elect and 2018 Managing Broker of the Year.
The real estate market they work in is one of steadily increasing price points, record-breaking low inventory and an influx of homebuying and selling hopefuls. Plus, on top of the stressful market, both Thayer and Heuer have countless transactions under their belts both on the buyer and seller side.
Needless to say, these two have extensive experience dealing with tough client conversations, and below they’ll share insights and tips on how to navigate challenging homebuyer and seller conversations.
What questions can real estate professionals expect, and how should they handle them?
Much like in any client-oriented business, Thayer and Heuer must manage expectations in their day-to-day careers as real estate professionals.
“I often encounter the question from sellers and buyers surrounding how much my commission is and what they should expect from that,” Thayer said. “It is important to set expectations up front and follow through. Make sure clients know what you are doing for them in every step of the process, so they are aware that you are keeping up your end of the deal.”
Real estate is a highly interactive process, so it’s always beneficial to let clients know what is next and when they can expect to hear from you again.
“It is a good idea to provide a checklist and timeline for clients, so there is no guesswork or doubts,” he adds. “Never end an interaction or phone call without telling clients what the next step is.”
Heuer said many sellers are concerned with the amount of money they can get for their homes, and they can be discontented to discover their home might not be worth what they thought.
“It will benefit you to do your homework on the neighborhood beforehand,” Heuer said. “Bring examples of what homes comparable to theirs are selling for, and point to facts and figures. Coming up with a price collaboratively is also a good idea.”
Heuer and Thayer agree that many clients are curious about the true importance of using a local, full-service lender or real estate agent. The real estate industry is constantly changing, and if clients try to cut corners by taking on the homebuying or selling process on their own, there can be a big cost to pay if something goes wrong.
“Local lenders and Realtors understand the current marketplace, have a proven track record and unmatchable relationships within the industry,” Heuer said. “In addition, a real estate professional or lender who works full-time and is dedicated to the entire listing or searching process, will net the seller more money in less time, have access to the best listings, and in turn, alleviate much of the stress and uncertainly that goes into the entire process.”
When a market is as quick moving as Denver, New York, Seattle, Portland and others, many clients want to know what it will take for them to beat out the competition and get their dream home.
“This varies by location, but in a competitive market, when there are multiple offers, it can be tough to navigate,” Heuer said. “Having discussions about what other buyers have done in the past to secure properties is a good idea.
“There are some crazy examples like offering to contribute to a college fund or offering $50,000 over list price to get a seller to choose an offer. Being a knowledgeable professional who can present offers that generate rapport with listing agents is a great way to start out on the right foot.”
“This depends on the situation,” Thayer explained. “While inspections are certainly important, if you are the buyer and there are six people waiting in the wings, it may be a good idea to be strategic about requests to the seller.”
What are the dos and don’ts of advising clients?
While there are certainly best practices to manage client expectations, there are also bad ones of which to be wary. Thayer said that real estate professionals should avoid being presumptuous; ask questions to align with the client’s goal instead.
“Oftentimes, when asking the right questions, you can uncover the real needs and objectives of a homebuyer or seller,” Thayer said. “Be careful about not getting on the defense, instead be inquisitive. Furthermore, be cautious not to take the my-way-or-the-highway approach. Ultimately, the end goal from any relationship is to help a client meet their goal.”
Heuer advises avoiding actively dismissing unrealistic expectations. Some buyers and sellers are just not prepared for the market, but positive level-setting conversations will help establish more realistic expectations.
“In a hot market, where a home can come on the market and have five offers by the end of the first day, it can be very hard for a buyer to imagine writing an offer on five to eight different properties,” Heuer said.
“Expectations will change during the process, but the buyers themselves need to come to that realization, otherwise, they may feel that the agent is trying to get them to do something that they are not yet comfortable doing, or worse yet, they may not feel is within their best interest.”
On the other side, sellers may think they can list their home for whatever they want in a competitive market, Heuer continued. A good agent will show them that buyers remain savvy and aren’t willing to overpay without cause.
“Pricing is still important,” she said.
Communication is key
The process of purchasing a home does not follow a linear path — there are multiple entities and individuals that have a portion of the transaction. Each of the stakeholders plays an important role that ultimately gets the buyer to the closing table.
Communication with the client is critical, and it’s imperative for real estate agents to explain the roles of each stakeholder involved and how they work together to get to the common goal.
It’s safe to say — given the financial stake and emotions involved in real estate transactions — tough conversations come with the territory. Through active listening, reflection and transparent communication with clients, challenging situations can become much easier.
In addition, coaching classes, continuing education and years of experience serve to help professionals learn to better navigate these conversations. Check out your local Realtor Association to get involved or perhaps connect with a mentor or offer to mentor others.
Ann Turner is the chief executive officer at the Denver Metro Association of Realtors (DMAR). You can follow DMAR on Twitter at @DMARealtors.