Trust is a key element in any relationship, and that includes business. In real estate transactions buyers and sellers need to be able to trust their agent, as agents not only tell their clients what documents are required to complete transactions, but also negotiate on their clients’ behalf. The role of an agent is to represent and protect clients’ interests in real estate transactions and provide information clients need to make smart choices, and trust is the most important aspect of that role.
There are four main areas in which trust must exist in real estate agency relationships:
1. Communication: This is quintessentially THE key element of trust. There are many agents who do not strive to communicate effectively with clients, other agents, lenders, escrow and title officers, and other parties who play key roles in the real estate transaction. Property sales require strong communications with all parties involved to assure the transaction progresses smoothly and closes, and that all responsibilities are met and paperwork completed. An agent should think of it like a tax audit – she needs to be able to show that she did everything correctly and provide proof. But at the end of the day the most important element is that the clients trust you and feel protected by your role in the transaction.
2. Contractual Language: An agent must be able to generally explain the contract terms to the clients. If the clients have any deeper questions or do not understand certain terms an agent must refer the client to an attorney. An agent must not act in the role of attorney (unless she is an attorney) and provide legal advice. Part of trust is being able to refer issues beyond one’s knowledge to appropriate sources (attorneys, accountants, etc.).
3. Process: An agent must be able to explain the process of the sale or purchase to the clients, including time frames, contingencies, and deadlines. She must be able to explain the consequences of not meeting deadlines or contingencies, and assure the clients understand their duties under the contract. For example, listing agents need to be able to convey the importance of filling out seller disclosures. One of the biggest causes of lawsuits in real estate is negligence, so the sellers need to understand the importance of disclosing any known issues or repairs related to the home.
4. Negotiations: Agents must be able to negotiate on behalf of their clients. This involves not only speaking with the other agent and filling our paperwork, but actively listening to the clients’ needs and formulating the best way to proceed with negotiations. The agent garners trust when she is able to work in conjunction with the client to make a negotiation plan. Then the agent can go forward to support her client’s wishes.
Trust involves not just being truthful, but also being reliable, knowledgeable, and in possession of inner strength. It means advising clients about situations based on experience, so they can have all the knowledge needed to make informed decisions. It also means that if an agent does not have an answer she will state so and tell the clients she will get the answer from an expert (or a broker, etc.) A real estate sale or purchase is a big financial step, involving a great deal of money and legal liability. Every agent needs to strive to be trustworthy. This often involves putting in overtime and using creative thinking to come up with solutions, help stalled negotiations and other problems that may occur during the course of a transaction. I would rather my clients trust me and make no money on a sale, than get a paycheck and know they did not.
[This post will appear in a book soon to be released by a third party]