Thus far, I have spent 32 awesome years in residential real estate. I love it, as I am sure you do — or will, if you are new to the profession. As stimulating and gratifying as the work is, there are several things to be wary of.
Real estate agents face three distinct types of risk: financial, physical and legal. Financial risk arises from our compensation structure, which is based on results only, not invested time.
It’s important for us to avoid free-spirited consumers and instead seek out motivated clients likely to be as committed to us as we are to them. This requires a sixth sense that is well-worth taking the time to cultivate. Once you have, it will be easy not to engage with prospects that don’t pass the smell test.
Buyers who refuse to get their financials properly verified at the outset of a house search, for example, or sellers who demand a discounted commission are not respectful of the amazing job you are prepared to do for them. Find others who are, or it could hurt your bottom line.
There are so many mistakes that can hurt you financially. Here are a few how-to’s to help avoid the drama:
- Remote Or Not, These 10 Mistakes Are Costing You The Listing
- 10 Credit Mistakes That Could Cost Buyers Their Dream Home
- Your branding is costing you money: Here’s how to fix it
- Is your inability to say ‘no’ costing you thousands?
- 9 Stupid Mistakes Agents Make — And How To Avoid Them
As for physical risk, we all hear of the tragic incidents where real estate professionals are hurt or murdered on the job. In 2014, for example, Arkansas agent Beverly Carter was murdered while showing a home to a killer posing as a potential homebuyer. In 2018, real estate sales rep Steven Bernard Wilson was found dead outside a model home. And there are countless other stories we could sadly add here.
Given these headlines, it’s understandable if we often find ourselves feeling uneasy in suspicious situations.
Once, I met two men deep in the woods, whose petite new construction home was located only a stone’s throw away from a deep ravine — the perfect place to throw a dead body, right? Fortunately, they proved to be a builder and his partner, not opportunistic killers posing as homesellers. But that risk is very real.
As real estate professionals, at some point, we’ve all arranged to meet a total stranger somewhere. In situations like that, it’s so important to always inform a spouse or colleague where you are going before you dash off into the unknown. (In fact, the National Association of Realtors has a nifty list of other crucial safety tips to follow, and it’s Realtor Safety Month, so it’s a great time to refresh.)
While we are still on the subject of physical risk, I urge you always be on alert at public open houses you host, especially if you’re alone.
When two young men arrived to tour an expensive listing of mine, I was sufficiently suspicious that I declined to accompany them to either the basement or the second floor because no one else was in the house.
The duo were urging me to come upstairs, claiming they had found a dead bird in the master bathtub. Because the house had been vacated and all its windows were closed, this seemed unlikely to me, unless the visitors had brought a carcass in themselves.
Surreptitiously, I called an officemate and asked her to stay on the phone with me until the oddball guests departed. “Yes, Marilyn, thanks,” I said, as the pair came back downstairs, carrying a decent-sized dead bird! “I’ll just hold while you look that up for me,” I told Marilyn.
Who knows whether the youthful avian pallbearers really wanted to harm a Realtor, but I brandished my cellphone in their faces because I didn’t want to find out. Trust your gut first and foremost.
Also, it’s not advisable to rush into a vacant house whose security you are responsible for when someone has clearly broken in, turned on lights and is playing loud music. I’ve done that, but you should not. Call the cops instead.
Finally, real estate agents face legal risk. Ensuring that clients do not sue anyone or get sued by anyone post-settlement requires a professional fastidiousness that helps to keep Realtors out of legal trouble, too.
For example, a buyer’s agent needs to make certain that her clients discover all significant issues with their prospective new castle during the all-important home inspection period. A seller’s agent needs to oblige her clients fully to disclose all known conditions at their property, whether present or past.
These protocols work admirably as lawsuit-avoidance mechanisms. However, there are other ways agents can get themselves into legal trouble. Here are a few resources you should read:
- 10 scenarios that can get new agents ethics violations, lawsuits or worse
- Don’t let it happen to you: 10 things that get agents into legal trouble
- 22 common agent practices that violate the Realtor Code of Ethics
- See you in court! 10 ways agents typically get slapped with lawsuits
There is also one catch, which occurs when you are the knowledgeable listing agent and the selling agent goofs up, harming her own clients. It turns out that aggrieved buyers typically do not blame their own Realtor for the disaster that’s befallen them; they blame the innocent listing agent. Beware of that pitfall.
Joey Sheehan is the author of “OPEN HOUSE! An Insider’s Tour of the Secret World of Residential Real Estate for Agents, Sellers, and Buyers” and a real estate agent affiliated with Berkshire Hathaway HomeServices Fox & Roach, Realtors in Main Line, Pennsylvania.