Cutting off a client can seem counterintuitive, but certain circumstances can make it seem like the only option. Here are some red flags that may warrant firing a client and a few ways to go about it.

“Breaking up” is never easy to do, but sometimes, it’s necessary. 

One of the most exciting parts about being a real estate agent is landing a new client. Unfortunately, the fact of the matter is that you probably will not get along with everyone, and a dream client can end up turning into a nightmare. 

There are a number of reasons why a client relationship might crumble, including unrealistic expectations, high demands, disrespect or lack of proper communication. If working with a particular client has become too cumbersome to handle, it might be best to just cut them loose. This article will cover what warrants “firing” a client and how to do so in a way that saves face.

What warrants ‘firing’ a client?

Firing a client should be your last resort, but there are instances that warrant such drastic action.

1. Their expectations are out of control

In the current seller’s market, both homeowners and buyers may have outrageous expectations. Sellers might expect a full-blown bidding war and $50,000 above asking price. First-time homebuyers may want a number of home features in a neighborhood that’s completely out of their budget, or you may have an investor with unrealistic goals for a 1031 exchange deal.

Frankly, it’s quite common for clients to have expectations above and beyond the reality of the situation. If you’ve already taken steps to manage their expectations and have already given them a number of options but the client just isn’t getting it, you may have to let them go.

2. Lack of communication

If you can never get a hold of your client, or if they do not properly communicate their needs and then get angry with you, it could spell disaster for your relationship. 

Make sure to get a client’s communication preferences before you begin working together, and also try to understand their full scope of needs before diving in. Ultimately, getting a timely response can make or break a sale, so it’s important to have open channels of communication.

3. Monopolizing your time

One of the biggest reasons to let a client go is if they are disrespecting your time. If someone is taking more energy than they are worth (for example, calling at all hours, constantly pinging you, taking up large chunks of your staff’s time, etc.), it might actually save you money to end the relationship.

What steps should you take to let a client go?

Once you’ve decided that it’s time to fire your client, there are certain steps you should take to avoid getting into trouble.

1. Review your contract

Before letting a client go, make sure you actually can within the bounds of your contract. Typically, a contract will have built-in clauses to let either party terminate the agreement, otherwise known as an opt-out clause. 

If you are contractually bound to your client, however, it might be worth it to have a discussion with them before abruptly ending the relationship or letting the contract run its course and not renewing. Otherwise, they might be able to come after you and say you violated the terms of your agreement.

2. Raise your rates

If you cannot get out of an agreement because of your contract, then you may be able to get rid of an unwanted client by raising your rates — though this is only as a last resort.

The trick here is to increase your rate to something you think the client cannot afford. When adjusting your rate, remember that Realtors earn an average of 5 to 6 percent of a home’s sale price, split between the buyer’s and seller’s agents. 

In this scenario, if you raise your rates and the client still wants to stay on, the new price might make working with them worth it.

3. Be honest

Sometimes, honesty is the best policy. Having an open conversation with your client about how you feel and setting boundaries could save you from an ugly falling out. If you’ve already been honest about your feelings and they are still not respecting you, then politely telling them you want to end the relationship could work in your favor. 

Perhaps the client isn’t the problem, but something else like their property or credit score is. For example, if a client has a credit score under 640 but will need a mortgage, it could be nearly impossible for them to find a lender. After letting them know this, they will likely have to stop their house hunt to find proper funding.

Or perhaps a client’s home is in very poor condition but they are unwilling to make repairs to get it ready for market. In this case, you can tell them that they might only be able to work with a cash buyer, who could offer as little as 50 percent below fair market price, and they could decide to not move forward after knowing that.

How do you end a client relationship while still keeping your reputation intact?

After you’ve done all of the above steps, you can end the relationship confidently knowing that you did all you could to salvage the relationship.

If a client decides to bad mouth you after the fact, use social proof in the form of reviews, testimonials and social media to show new clients your true value. Real estate agents who are good at their jobs will not be taken down by one bad apple.

Cutting off a client can seem counterintuitive, but certain circumstances can make it seem like the only option. If there are multiple red flags going up at once and you have done everything in your power to satisfy your client’s needs, do not feel guilty about letting them go. Sometimes, you need to get rid of the old to make way for new and better opportunities.

Luke Babich is the CSO of Clever Real Estate in St. Louis. Connect with him on Facebook or Twitter.

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