Agents Decoded: Rules matter — but agents should know when to break them
Real estate has plenty of rules and best practices, but many are not set in stone. The best agents learn how and when they can be bent.
The direction of your business depends on decisions you make every day. Agents Decoded can help you by presenting the perspectives of seasoned pros who have been there, made mistakes, and found success.
Agents have to follow rules, some enforced by their licensing body or local association, some imposed by their brokerage. A challenge for managers and brokers is teaching agents these rules — while also helping them understand which ones can and should be broken.
Knowing when to make that judgment call separates the good agents from the great ones.
Now, most rules exist for a reason, and new agents need to learn them. They are often a matter of common sense, ethics or the law, and those don't require much explanation. But following some rules to the letter is actually a terrible idea.
Some examples of edicts that agents are taught never to break include:
Never allow the principals to contact each other
When offering a referral for a service or resource, always provide three names
Homes must be staged and ready for primetime before the listing goes live
The seller can never be home for showings
Never lend money to a client
In fact, there are times when all of these rules can be bent, if not completely disregarded.
Principals can be connected sometimes
Brokerage exists to keep the principals insulated from each other and to ensure objectivity. But some situations almost require contact to get a deal done.
Recently, I had a client who was considering buying a property where the deck of an adjoining property was encroaching over the property line. The seller was an estate executor, and the client was an attorney. My predecessor refused to connect the client with the estate executor. She's no longer his agent. Connecting an executor with a lawyer shouldn't be verboten if it facilitates an efficient transaction.
The 'rule of three' doesn't always help the client
When referring outside resources that are relatively equal in their value, go ahead and share three. But in some instances, particularly when a resource is highly specialized, that guideline is ill-advised.
For many years, I referred my short sale listings to a specific attorney. I could have connected clients with other attorneys familiar with short sales, but no one was in her league. Dozens of clients avoided foreclosure and had successful short sales with her legal representation. I never received a complaint, and that relationship helped build my brand.
Staging is not always an option
Television has trained people to expect picture-perfect homes, but reality is a bit messier.
Sometimes there's paneling that needs to stay or dated carpeting that can't be removed. Decluttering isn't always feasible. In those cases, the home needs to be sold as-is, priced to reflect the condition — and in this market, anything priced right should sell quickly. And you're helping preserve the quality of life and sanity of the seller who can't manage the pre-sale preparation.
Some sellers can't easily vacate their homes
Like most agents, I advise my sellers to get out of the house for showings. It makes good sense, but sometimes you have to make an exception. For example, I'm not going to ask an 86-year-old grandmother who no longer drives to get out of her rocking chair. You simply advise the buyer agent that she'll be home, to not engage and to direct all questions to the listing agent.
Fronting money can win you a client
While fronting money is a more delicate matter, there are times when pulling out your wallet will leapfrog you over your competition. Not long ago, one of the most respected agents in my market lost a listing to me when he fumbled on a property management matter. The seller, an out-of-town executor of a small estate, needed someone to cover basic lawn care while the property was on the market.
My competitor initially rebuffed this idea. I pulled out my cell phone and handed it to the seller with a landscaper on the line. I got the listing not just because I had a guy, but because I was willing to front the costs until I could be paid back at settlement. I broke the rule, and I'd do it again in a heartbeat.
There are business models that offer sellers a "make ready" allowance to be repaid at closing. Those business models challenge tradition, and it's no coincidence that they are found at brands that are growing.
The better agents know when to get creative in order to win the day.
J. Philip Faranda is a manager and associate broker at Howard Hanna | Rand Realty serving Westchester and Putnam Counties, just north of New York City. He was previously a broker-owner at J. Philip Real Estate, the top independent brokerage in the two counties by transaction sides, which he founded in 2005. He also writes a real estate blog which has been cited by major media outlets. The views expressed in this column are solely those of the author.