When people are unhappy with their real estate agent, they sometimes call the California Department of Real Estate. Do you know what their number one complaint is? No, it’s not fraud or incompetence, as you might expect. The top complaint is: My agent won’t return my phone calls!
Right along those lines, the most common reason agents lose clients is because of a lack of communication. Here are some communication issues to be aware of, andi deas on how to avoid the frustration and disappointment that can arise from communication mistakes between REALTORS and clients.
Get it in writing
I often say, “Verbal agreements are worth the paper they're written on.” (Yes, that means they aren’t worth anything.) Whenever you and your REALTOR have a conversation and you expect your REALTOR to act as a result, your REALTOR should follow up with a written confirmation. This provides clarity in the moment and helps create a record to refer to later (since human memories aren’t perfect).
The written summary doesn’t have to be long--just a quick email that says something like, “I’m writing to confirm that based on our conversation this morning, you’d like me to lower the list price by $5,000. As soon as I receive your written confirmation in a reply to this email, I’ll reduce the price and update the MLS.”
Some REALTORs feel bad asking for a written confirmation, especially when they are confident that the verbal instructions were clear. I tell those who work for me to use me as the bad guy--to tell clients their broker requires them to confirm conversations in writing. It may slow things down a little, but that’s a small price to pay to avoid missteps in a transaction and potentially expensive mistakes.
Overstepping Expertise
Another communication challenge occurs when clients ask their REALTOR to interpret a specific clause in a contract or explain the tax ramifications of buying or selling or holding title in a specific way. Many REALTORS have a strong understanding of real estate law as well as some expertise around the financial impacts of real estate decisions. However, if they explain arbitration or a 1031 exchange, for example, they will be held to the same standard as a lawyer or certified public accountant.
While giving this advice is not a violation of the law, it is not wise. Although experienced REALTORs may have seen many scenarios play out, they aren’t always aware of the nuances involved in a particular situation, and they may not be up to date on the latest statutes. The wise move is to refer clients to an attorney or CPA.
The same is true when it comes to interpreting property lines; a surveyor is the only one qualified to do this—and they don’t always get it right. In fact, there’s an area along Booneville Road where surveys are off by three feet because records from more than 100 years ago, one from the north and one from the south, don’t quite line up. Also, in Calpella a surveyor once did a survey from the local bar instead of actually doing his job in the field. In the process, he assumed all crossroads on the property were the standard 60-feet wide when they were only 40-feet wide. This led to two people owning a common stretch of property.
Inconsistent Use of Disclosures
The last communication challenge I’ll share is the inconsistent use of disclosures. In 1984, a court case (Easton vs. Strasburger) highlighted the need for sellers and their agents to be more forthcoming about a property’s potential deficiencies after the buyer, Easton, discovered that he had been misled about the property he purchased. This case led to the Transfer Disclosure Statement (TDS).
A couple of years after Transfer Disclosure Statement (TDS) became a legal requirement, I was handling a transaction in Lake County where the listing agent said, “We don’t do TDS forms.” Not everyone was interested in sharing details that might make a property less appealing.
Fast forward to today when we have a ton of required disclosures. In the old days, when a real estate transaction closed, you’d have a dozen pages or so including the purchase agreement, title report, disclosures and closing documents. Now, a closed transaction folder is several inches thick (or would be if we used paper instead of digital documents).
One of the most important elements of communication during a real estate transaction is the consistent and complete use of disclosure forms—and a consistent practice of disclosing anything that might affect the buyer’s perceived value of a property. Disclosures directly from sellers are the most important, but buyers should read all disclosures. I know it’s tedious and time-consuming, but as I’ve said before, the big print giveth and the small print taketh away.
If you have questions about property management or real estate, please contact me at [email protected] or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’sBakery.
To see previous articles, visit www.selzerrealty.com and click on “How’s the Market”.
Dick Selzer is a real estate broker who has been in the business for more than45 years.
