Communication in all types of circumstances can help to set your services apart. Here’s how to approach four common bad-news scenarios and keep your client relationship moving forward.

This article was last updated on Aug. 23, 2023.

In part one of this two-part series, we learned about how to communicate upfront to get ahead of bad news. In this part, we’ll learn about some frequent scenarios you’ll encounter, and how to communicate about them.

Bad news is inevitable in real estate but the good news is there are common scenarios for which you prepare in advance (link to article 1).This includes, with every presentation of bad news,  presenting all solutions and options, and making recommendations around the different courses of actions. 

Sometimes, there’s a clearcut solution. More often than not, there are two or more options from which to choose, each with pros and cons. When you present these clearly, your clients will appreciate your guidance and you will reassure them that you’re still the expert. This reduces stress and lowers the volume on the problem. Below are ways to be prepared for the most common bad-news scenarios your clients will face:

‘The home inspection was horrible’

Buyers are excited to put a home under contract, but that often turns to anxiety during the inspection process. It’s critical to set as early as possible in the process. As soon as you’ve established a client relationship, it’s time to talk inspections. We present a list of common repairs for homes by age so that buyers know what to expect while they’re shopping, and can prepare themselves mentally for whatever the inspection report might find. 

When it comes time for the inspection report findings, never sugarcoat them to your clients. Remind them that they are in control of next steps and their future. If the house inspects badly, they can terminate the contract and find another property, or they can submit a repairs request. Explain how you’ll present any repairs request so they feel comfortable with next steps. Once they are reassured of their control and that you have a plan, they’ll be able to better navigate this roadbump and impending decisions. 

‘You didn’t win the offer’

If you worked as a buyers’ agent any time from 2020 through early 2022, you likely have plenty of experience delivering this bad news. Most agents dread multiple-offer situations because they know there’s a lower likelihood of getting the home under contract and their clients being disappointed. This is the wrong perspective. Multiple-offer situations are phenomenal opportunities to show your clients your real estate prowess and commitment to their success.  

You can do this by educating your clients on contract considerations (beyond price) before submitting their offer. Explain to them that it’s impossible to guarantee they’ll win their offer, but that each contract term will help, though there are pros and cons. Discuss with them that the offer is their decision and guide them through the pros and cons of each term. When you have to deliver the bad news that they didn’t win the offer, they will take it better because everything was ultimately in their control.

‘The buyers are backing out’

Expectations setting is just as important for sellers. When their home goes under contract, let them know that there is a 5 percent to 10 percent chance that any contract terminates, usually during the inspection period. If you get the bad news that buyers are terminating, they will be mentally prepared. 

As well, in this case presenting a plan of action and next steps is even more crucial. For instance, we generally re-list a property on Wednesday or Thursday,  schedule open houses for the upcoming weekend, mail every interested buyer that the house is coming back on the market and do another social media push. Your fast and decisive action will assure the sellers that they’re in good hands.

‘The closing is delayed’

Most closings are delayed by lenders and they usually show red flags prior to delivering you the bad news that you have to pass on to your clients. Lenders will dodge phone calls, fail to deliver documents leading up to the closing, and give vague non-deadlines when they know they will likely close late. When you spot these red flags with a lender, it’s best to let your clients know as soon as possible to set their expectations around what you are seeing. 

Commonly, a lender will say “the closing might get delayed” (because they hate delivering bad news, too). As soon as you hear that, let your clients know that the closing will very likely be delayed. This gives them plenty of time to make contingency plans. When the lender invariably lets them know the day before (or of) closing that it will be delayed, they’re not surprised and can act. 

Show your value by navigating tough conversations

While uncomfortable, stressful and disappointing, there’s no greater opportunity to prove your value to clients than how you deal with bad news. If you approach it with empathy, a positive attitude and solid strategy, you can show your clients they made the right decision working with you. As well, by righting the ship for your clients, you’ll win them for life and elevate your own professionalism to another level.

Eric Bramlett is the owner of Bramlett Residential, a mid-sized real estate brokerage in Austin, Texas. Connect with him on Instagram and LinkedIn.

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