At the recent Inman Connect, Craig Wilburn described how he had both sides of a $700,000 transaction and lost it over a dispute about the couch. There are a plethora of reasons deals fall through. Some, like in Wilburn’s case, aren’t in the agent’s control.
One thing you can always control is your own behavior and your reactions to bad behavior. If you want to close more transactions, avoid this list of seven deadly behaviors that can definitely make your deal flop.
1. The chatty agent
One of the most important principles in real estate negotiation is: Shut up, and sell. In other words, zip your lips, and keep your opinions to yourself. The only opinion that matters is the seller’s opinion.
The two following examples illustrate how being a motormouth can cost you the transaction:
- The buyers looking at your open house clearly love it and seem ready to write an offer. Then their agent points out the “beautiful crystal dining room chandelier” or some other feature the buyers hate. Their excitement instantly vanishes as they decide to keep looking.
- You’re showing your buyers a midcentury that hasn’t been updated — exactly what they had hoped to find. You can tell they’re ready to write an offer until the listing agent butts in and waxes on about how great the house would be if only someone could “bring the property up to today’s standards.”
2. The know-it-all
The know-it-all agent has an answer for everything, regardless of the topic. One of the most egregious examples of this deal-killing behavior occurs when an agent advises their clients in a multiple-offer situation: “If you want the house, you will have to waive the inspection and the loan contingencies.”
These deals can easily fall apart when the appraisal doesn’t come in at the price the buyers offered or if they fail to qualify with their lender. The result is the agent not only ends up losing the deal, but also the buyers could lose their earnest money deposit, and they could also be sued for specific performance. When that happens, the agent and brokerage will undoubtedly be sued as well.
3. The gladiator complex
The “gladiator” approaches negotiations as a win-lose battle. Greg McDaniel was on a multimillion-dollar listing appointment with another agent. Rather than listening to the sellers’ wants and needs, the agent went to battle with the sellers over the price. His combative attitude and need to be the winner of the negotiation cost them a $3.5 million deal.
4. Seldom right, never in doubt
My mother-in-law was a very successful broker-owner. My father-in-law used to describe her approach to her business and personal life as being “seldom right, never in doubt.” Clients would tell her what type of house they wanted, and she would take them to see “the house they were actually going to buy.”
The family joke was they always bought the house she told them they would buy. What no one ever discussed, however, was how many clients she lost because she was never in doubt about the fact she was always right.
“Seldom right, never in doubt” behavior often shows up on listing appointments when agents tell the seller, “I’m the expert, and this is what your house is worth.”
Your role is to be a conduit of information and assist your buyers in achieving the best possible outcome from their sale. Always remember: It’s their house, it’s their mortgage, and it’s their decision. Otherwise, you run the risk of losing your client’s trust, the transaction, plus any future referrals or business.
5. Hide the ball
The following situation is the worst case of “hide the ball” I’ve ever heard, and it was much more than a deal-killer. One of our competitors had a hillside listing where the house was built on stilts over a canyon. The buyers ordered a geological inspection. The report warned the house could collapse in a major earthquake. The buyers cancelled the transaction.
A second offer came in on the property, but the listing agent and the seller failed to disclose the original inspection report or any of the issues on the transfer disclosure statement. The property closed.
When the 1994 Northridge earthquake struck, the property collapsed, killing two of the occupants. The agent lost his license plus the judgment against the brokerage was $2 million.
6. ‘White knight’ syndrome
A “white knight” is an agent who tries to control the decision-making process for their client. You know you’re dealing with a white knight when the other agent says, “I would never let my clients take an offer that low!” or “There’s no way I would ever let my buyers agree to that contingency.”
My favorite white knight story was about an agent who had a strong need to control and was notorious for being a deal-killer. When my buyers decided to put an offer in on one of his listings, I had them include the following letter with their offer:
We would like to know what the sellers’ exact feedback is about our offer. Consequently, we are asking that both our agent and the listing agent allow the sellers to look over the offer and wait for the sellers to share their comments first.
The agent reluctantly agreed, and the sellers accepted our offer as written. For years after this transaction closed, every time I would see this agent he would remind me, “I never thought the sellers would accept a price that low.”
To avoid having your clients victimized by a white knight, present your offers in person or via Zoom. The white knight (and many competent agents) will fight you on this. If you’re not present, however, you’ll never know who is undermining your deal or what you can do to combat their deal-killing behavior.
7. Chop-chop! Get it done
Based on the DiSC research and numerous other studies, there’s one thing that is clear about most top producers — most of them are high drive, get-it-done types who don’t pay attention to the details. This translates into mistakes that can kill their deals.
This next case caused the agent to lose the deal after the transaction had closed. When the agent wrote the offer on the property, she transposed the numbers in the address. Her manager, the other agent, the escrow and the title company did not pick up the error, and the wrong property was conveyed.
When this type of mistake occurs, the title insurance policy kicks in and unwinds the deal. Needless to say, the agents and their respective brokerages not only were sued, but they also had to return their commission as well.
If you want to close more transactions, avoid these seven common deal-killing behaviors that can definitely make your deal flop. When one of your deals does flop, look for what went wrong and what you can do to prevent it — and avoid making that same mistake in the future.
Bernice Ross, President and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.