I always believe the relationship that exists between my clients and me is a partnership. We’re working together to find their new home or sell the one they currently live in. Our partnership is founded on mutual trust, honesty, respect, loyalty and commitment. These five basic principles should be at the foundation of your real estate business, and they should always stay at the forefront of the client-agent relationship.
Early on in my real estate career, I learned a few hard lessons from situations where clients behaved in a way that was incongruent with the expectations of the relationship I had with them.
For example, one buyer, who I felt connected to, decided to go behind my back and use another agent to purchase a home. On another occasion, a seller received an offer from a buyer without notifying me and asking me to be present during the negotiations. The house sold, and I was left out of the transaction.
I believe I could have prevented both situations from occurring if I had clearly explained the importance of the “partnership” aspect of the client-agent relationship.
I finally reached a point where I decided I needed to do a better job of communicating my relationship expectations to my clients. I had to be more open and honest with buyers and sellers on how I managed my business and how I saw the relationship between us.
I decided that, at the initial buyer conference or seller listing presentation, I would explain the various expectations of the partnership created by an agency relationship. I reviewed how I earn a living, my business philosophy and what I asked of them as we worked together.
Soon, I discovered clients became more dependent on me for assistance. They rarely viewed a home without me being present and always told other agents they were working with me as their exclusive buyer representative or listing agent.
Explaining how I operate my business
You earn your living selling real estate, and your real estate practice operates as a small business. Your business does not provide you with a regular wage or salary — you’re paid a commission when your client’s home closes.
We’re one of the few business professionals who receive their pay at the end of the process — even though we must pay all of our business expenses in advance. The commission you earn reimburses you for your time and expenses.
It’s important that your clients truly understand how your business works. Clients who aren’t familiar with real estate or commissioned sales may believe you draw a monthly salary from the company name on the yard sign. So, that’s why it’s time to educate your clients on this important point.
You’ll also want to communicate your business philosophy with your clients at the beginning of your relationship with them. It should be based on your particular beliefs and principles that you work toward every day. They may be reflected in your mission or vision statement. It’s the operational blueprint of your real estate practice. Your business philosophy explains your overall goals and purpose.
What you need to ask your client
Since you will be working for your client and your client only, you should ask them to agree to the following.
If you are representing a seller, ask them:
1. To work with you as their exclusive real estate agent
Remind them that you’ll both have to sign an exclusive listing agreement designating you as their agent. This agreement ensures they’re properly represented in a real estate transaction and afforded all the protection under the agency laws in your state. My advice? Always be a designated agent in all real estate transactions.
2. To contact you immediately
… if another real estate agent or prospective buyer approaches them with an interest in their property (i.e., the agent wants to tour their home or make an offer to purchase).
3. To be cooperative in allowing their home to be shown during the listing period
All showings will be scheduled ahead of time under the terms the seller agrees to in the listing agreement.
4. To disclose anything that would impact your ability to effectively market their home
This includes things like title defects, IRS or other government liens on the property, current litigation in which you are involved and family disputes, to name a few.
If you are representing a buyer, ask them:
1. To work with you as their exclusive buyer’s agent
Remind them that you’ll both sign an exclusive buyer representation agreement designating you as their agent. Like with sellers, this agreement ensures they’re properly represented in the purchase of their new home.
It’s critical that you explain that you do not work for the seller or the listing broker. Clearly present how buyer representation is a major advantage for a purchaser in a transaction. Keywords in any discussion about buyer representation should include: protection, negotiation, representation, advocacy, professionalism, etc.
2. To contact you about information
… on any property that the buyer client sees or that’s brought to their attention, including “for sale by owners” and “builder direct or new construction” properties.
3. If buyers visit open houses, they should tell the host they’re working with you
In addition, if any agent offers information on homes that may be of interest to the buyer, please ask the agent to pass the information on to you. I would encourage you to provide several of your business cards to the buyer so they can provide one to the agent at the open house.
For both seller and buyer clients:
1. The client should never negotiate with anyone without you present
Your negotiation skills are part of your value proposition and are extremely valuable to the client.
2. The client should speak with you the moment a concern arises
You’re available to answer any of their questions. Express the importance of communication in the client-agent partnership. Ask them for the best way you can communicate with them.
Many clients prefer text and email, while others favor speaking on the phone. Whatever method is used, make sure you communicate on any and all issues of importance relating to a listing or sales transaction.
Many years ago, I developed a one-page, nonbinding form that outlines the key points I previously noted. For buyers, this was titled “Home-Buying Partnership Acknowledgment,” and it explained the buyer representation side of my business, my business philosophy and the expectations I have of the client. For my seller clients, I named the form “Home-Selling Partnership Acknowledgment.”
Both of these forms are simple but straightforward documents that I always include in my buyer and listing packets. I would refer to them in my presentation during our initial meeting, as they were excellent talking points to educate the client.
I would bullet-point each one and highlight the keywords I wanted the client to understand in bold. Each bullet point set the expectations I have for the client. I always asked the buyer or seller to sign the respective form acknowledging their understanding of the contents of the document.
Again, these forms are nonbinding, but they are the best way for me to expound on what I expect from the client I represent in a real estate transaction. They helped me form a partnership with my clients.
My success in real estate has come from approaching relationships with buyer and seller clients as a partnership. Working together, side by side, is the best way to build rapport, establish mutual trust and create loyalty between the professional and client.
In today’s competitive real estate environment, buyers and sellers are looking for professionals they can trust and rely on to assist them with their real estate needs. A partnership ensures this happens — and happens successfully.
John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee. He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”