Anyone who’s worked in a people-focused field knows that managing relationships is one of the most demanding aspects of this job. Some clients will be easy to work with while others will be challenging. Learning how to successfully handle tough clients while remaining successful is key to making it in real estate.
Today we brought in real estate advisor, Rachel Glazer, to provide tips on how to deal with difficult clients.
Get Buyers and Sellers On The Same Page
One of the greatest challenges is getting buyers and sellers to agree on price. Pricing is vital — the right price will dictate how long a property will remain on the market. Now that the market is rebounding, we are seeing sellers overprice their listings. While they occasionally succeed with high pricing due to an inventory shortage in some neighborhoods, this isn’t always the case. Our goal is to convince sellers to start with a reasonable number to make the deal happen.
Be Ready to Explain Market Data
It is vital to evaluate the real estate market so that you can relay accurate information to your clients and prepare them for the current environment. The market has recently boomed but is now plateauing. We don’t expect the market to skyrocket upwards, yet not go down due to the inventory crisis.
For instance, with all of the new construction, we don’t have much inventory in the $1-3M range. This has led to a pending crunch in secondary neighborhoods like Kips Bay and Murray Hill. Buyers are realizing that these areas may serve their interests as they are “close enough” to downtown and deliver relative value.
Prepare buyers and sellers for The Appraisal Process
Another key to successfully managing clients is handling appraisals for properties.
Take Rachel’s situation with her TriBeCa listing. The challenge was that a similar unit one floor below had recently sold for $2.85M (These are lofts, so the configuration is slightly different). Rachel’s client wanted to sell for $3.25M — significantly more than the last one had sold for even though the unit was fully furnished and staged. It was quite a challenge to get an accepted offer given the price difference.
The question was while it may be a better unit, was it $400,000 better? If you take a look at TriBeCa properties in the $2-3M range, you’re not going to find much with this square footage. Rachel faced a lot of resistance from buyers who didn’t want to pay $400,000 more, so they had to meet somewhere in the middle to make the offer happen.
Being Prepared for Renovations
We see more buyers interested in acquiring turn-key properties. While renovations can increase the property value, it can be an expensive investment. However, with low inventory, properties that require some work are starting to get more traction. Buyers are more readily considering these properties given their lower price points.
There is and always will be gray areas in regards to the condition of properties and their pricing. Just because a property is in mint condition does not mean you can move right in without doing some work to make it function for your needs. And some renovations can be impractical or have a specific taste which mean they take longer to sell or cannot achieve peak pricing.
Managing Sellers’ Pricing Expectations
It’s important to manage your client’s expectations so that they view their property in a realistic way.
One of Rachel’s clients used the analogy: similarly to how everyone thinks their child is a genius, everyone thinks their home is perfect. People tend to look at their properties with rose-colored glasses thinking that theirs is a one-off. And no seller wants to hear otherwise because they have sentimental value attached to their property. As agents, it is up to us to help clients see their properties and subsequent valuations in a more objective way.
When it comes to pricing, everyone thinks they’re experts. Your key as an agent is to be the voice of reason. If they are showing you comparable properties for much higher prices, have them consider how long they have been on the market. And, sometimes, you have to meet your clients on their own terms to help them better understand the valuations you are suggesting.
Some Final Notes on Broker Relationships
Be nice and work together.
We know how important real-time data is to make smart decisions in business. This is where broker relationships will be key. Working in tandem to find the best possible outcome for both the seller and the buyer means communicating well with the other side of the deal. If you can’t trust the agent on the other side of the table, it only leads to more confusion and more challenges.
Cheers from all of us at MoRE to making your next transaction seamless and easy! Leave us a comment about how these tips helped you on your next deal.
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