This article is part of a larger series on How to Become a Real Estate Agent.
Unfortunately, not all real estate clients are created equal. Just as we are responsible for providing the best service to each of our real estate clients, our clients are responsible for being appropriate, honest, and appreciative of the value we bring to the table. While most clients are great, you will have clients who are less than desirable, and yes, you can fire a client when warranted.
Our step-by-step guide on how to fire a real estate client includes:
- How to identify what types of client behavior fit into the category of fireable offenses
- How to protect yourself and your credibility if you do find that it’s necessary to fire one of your real estate clients
- A free template letter for breaking up with a client to use when needed
1. Identify Fireable Client Offenses & Protect Yourself Against Them
As a real estate professional, you instinctively want to jump on any opportunity to help a client and complete a transaction. But a detrimental mistake many of us make, and one of the top reasons real estate agents fail, is to tolerate and continue working with clients who are inappropriate, take advantage of us, or treat us unkindly. In this case, the best option would be to fire that client and move onto others who will appreciate our assistance.
Need help identifying the signs? Read through the fireable client offenses below and accompanying strategies to protect yourself before firing a client becomes inevitable.
Offense #1: Unrealistic Expectations
Red Flags: Clients with unrealistic expectations come in all shapes and sizes, they could be a renter, buyer, or seller. Oftentimes, buyers are searching for a unicorn property that, like a unicorn, is perfectly beautiful and majestic, but doesn’t exist in real life. Other times, it’s sellers who want to list their house at a price that is unrealistic for the current market.
You can usually spot these clients during your first conversation as they are typically people who are not familiar with the market, people looking for a bargain, or part of the 31% of homebuyers who are unwilling to compromise on characteristics they deem necessary in a home.
How to Protect Yourself: We don’t want to fire these real estate clients from the get-go. It’s not their job to be familiar with the market, it is our job as real estate professionals. Your first line of defense to avoid an unrealistic client is to listen to their needs and wants and then educate them on whether those items are realistic within the market they’re seeking to sell, buy, or rent.
For buyers or renters, make a list of must-haves, wants, and would-be-nice characteristics to understand what they are willing, or unwilling, to compromise on. For sellers, present a comparative market analysis so they objectively understand pricing and demand in their market. These items give you a better understanding of whether a client is willing to accept your professional expertise and value your opinion, or is a client you may need to fire in the long run. After speaking, if you find that your clients are still unable to set realistic expectations, timelines, and set deadlines for finding or selling their home, breaking up could be your next step.
Offense #2: Dishonesty
Red Flags: If a client says they are looking for a three-bedroom colonial home on the north side of town and ends up loving a two-bedroom ranch with a pool on the south side of town, were they dishonest? Absolutely not. Sometimes clients don’t know what they want until they see it. When we’re speaking about dishonesty we’re referring specifically to lying and omissions, which could be about finances, aspects of the home they are selling, or their relationship with you as their agent.
For instance, a seller may be aware of a particular issue with a home, but purposefully do not disclose it to you and cover it up every time there’s an open house or showing. Or it could be a client saying they are working exclusively with you and you come to find out they are working with multiple agents. These could easily be deal-breakers that prompt you to fire a real estate client.
How to Protect Yourself: The difficult part about dishonesty is that you typically find out about it after the fact. You can avoid it by being upfront and honest with your client from the beginning and state that you would appreciate the same honesty in return.
An acronym we use to define our fiduciary duties to our real estate clients is OLD CAR: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care. Let clients know you’re on their side throughout the transaction and looking out for their best interest. If you’ve been honest and they continue not to be, breaking up with your client may be the best solution.
Offense #3: Inappropriate Behavior
Red Flags: As professionals in the real estate community we are bound to the Laws of Fair Housing, which make it illegal to discriminate against any protected classes: race, religion, sex, color, and many more. It’s necessary and important to uphold those standards with our clients not only to be good people but also to comply with laws and regulations.
Clients can get angry and frustrated throughout the process of finding or selling a home, but they should never use verbal threats, harassment, or inappropriate language and jokes towards you, other agents, or individuals who are part of the transaction. This is an extremely unacceptable and fireable offense.
How to Protect Yourself: This one is tough to avoid, as you can’t control the words or actions that come from your client at the exact moment they happen, but you can say something to them once it occurs and explain why it shouldn’t happen again. If it’s a pattern of behavior, you should think about terminating the relationship. If there is ever an instance of racism, violence, or unwelcome advances, you should immediately leave the situation and contact the appropriate authority.
Offense #4: Time Wasting
Red Flags: This is probably the most common reason real estate agents fire a client, and there are a couple of tell-tale signs that you are working with a time-wasting client. According to the National Association of Realtors (NAR), it usually takes a buyer about eight weeks to find a home, during which time they look at nine houses on average.
If you find that a client is taking you on a wild goose chase to see homes in every corner of the county, city, and state, that’s a red flag. It’s ok for clients not to know exactly what they want, but clients who are seriously dedicated to finding a home should be able to quickly narrow their search to avoid wasting your time and their own. You may also find that time wasters are over-communicative, contacting you at all hours of the day and night, which can be burdensome and interfere with your personal life and well-being.
Conversely, unresponsive clients can make your life as an agent exceedingly difficult. You can’t do your job effectively without open and consistent communication with your client. One reason some clients are not communicative is that they are working with multiple agents at the same time. Another reason this is a fireable issue is because it can derail the transaction for both you and the other agent(s), as well as the client.
An efficient way to stay in communication with a client is to utilize client relationship management tools (CRM). Top Producer CRM integrates with more than 100 different vendors, including Zillow, Trulia, and Realtor.com to have all of your client information in one place. They also have email and social media tools for marketing and for insight into your clients’ interests.
How to Protect Yourself: It is important to set your boundaries and understand your client’s timeline upfront. Understanding these two items will deter you from firing your client as well as agent burnout, which is a top reason why many real estate agents fail in this industry. In addition, knowing a client’s timeline will help you determine the seriousness of their intentions to move forward with the buying, selling, or renting process.
Set your boundaries by telling your clients when you will be available for them. Provide specific hours and a certain time frame, for instance, 9 am to 7 pm, with a promise that you will return their message within three hours. Also, let them know that you need to receive similar responsiveness from their side.
Offense #5: Unqualified Client
Red Flags: Whether a client is paying for a home entirely in cash or obtaining loan financing, it’s necessary to provide proof of funds to purchase a home. Unfortunately, some clients assume they are financially ready to purchase before checking with their lender. Even more, some clients may not check with their lender at all, and just want to drag you around to look at properties for fun without pre-qualification.
How to Protect Yourself: A mistake real estate agents tend to make is to get overly excited about a client and bypass checking with them about their finances. You should have a candid conversation about a client’s financial situation at the beginning of your relationship and require clients to produce a pre-approval letter before taking them to see properties.
This may seem a bit invasive to some clients, but you must explain that you can’t assist to the best of your ability unless you are aware of the amount of money they can spend on a home. Knowing this information can help avoid having to fire your client.
2. Speak to Your Broker of Record & Review Your Client Contract
Before immediately firing your client, speak with your broker of record to discuss the difficulties you are experiencing with them. Chances are that your broker has dealt with similar client horror stories, so it will be beneficial to get their perspective and advice on the situation. Write down all the incidences you experienced and review that information with your broker so you can discuss your best options.
An important item to review with your broker is the contract you and your client signed. Whether you’re working with a buyer, seller, or renter, you may have signed an agreement or exclusivity contract that can bind you to work with your client. Review all documents carefully to see what your obligations and legal requirements are before taking next steps.
Typically, if both agent and client mutually agree to terminate the contract, you will be able to remove yourself from responsibility and break up with your client. According to US Legal Forms, there are several ways to cancel a seller listing agreement, including property damages, bankruptcy, and time frame expiration.
Either way, you must prepare a termination agreement for both parties to sign before the “breakup” can be official. There are specific state agreements for seller/listing termination and buyer/tenant termination, so make sure you’ve prepared the correct documentation before speaking to your client.
3. Speak to Your Client & Try to Work It Out
If you and your broker have decided the relationship is salvageable, the next step is to speak with your client to see how you can remedy the situation before moving straight to firing them.
Pro tip: If you feel the behavior displayed by your client compromises your safety, you should skip directly to firing your client.
Write down and present detailed reasoning and examples of the behaviors that caused a strain on your relationship to try and work out a solution. Obviously, you want to present these reasons respectfully and remind your client you are all there for the same goal: to sell, buy, or rent their home.
After this conversation, the hope is that you and your client can continue the transaction with an amicable relationship. Unfortunately, unless you have known or worked with your client for a long time, it will be difficult to know how they will react. Have this conversation either face-to-face in a public setting or by phone or video call to avoid any unnecessary confrontation.
4. Write a Client Breakup Letter
If your efforts up until this point do not result in changed behavior, it’s time to officially fire your real estate client. You should take time to construct a formal breakup letter that details the reasons you are terminating the relationship.
Here is an example and free downloadable breakup letter template for firing a client, including what to include and how to construct your letter:
Free Client Breakup Letter Template
Although you will be having this conversation in person or over the phone, it’s important to have a formal letter to document your grievances in writing. At the end of an in-person meeting, give a copy of the signed letter to your client. Following a phone or video call, send a copy of your signed letter by mail or email.
5. Schedule a Meeting to Fire Your Client
Like a breakup in a romantic relationship, this is probably the most difficult part of the process because the conversation is a bit uncomfortable, but ultimately must be done before everyone can move on. Ideally, your meeting will occur face-to-face, but depending on the circumstances leading to the breakup or preferences to meet virtually, you may also choose to meet via phone or video call.
Pro tip: If you feel your safety is in jeopardy, you should have this conversation over the phone or ask a colleague to come with you to meet your client in a public place.
Even if you are frustrated, angry, or upset, remember to keep your cool and maintain professionalism. Do not raise your voice or argue, but be firm in expressing your issues and your intention to end the relationship. Use your letter as a script, keep emotion out of your explanation, and state the facts. Hopefully, your client will understand and you can part ways amicably.
In the event you and your client do not see eye to eye, you should speak to your broker about next steps and if you need to involve a lawyer. Your broker will also consult their errors and omissions insurance for protocol.
If a lawyer does need to be involved, you can use your brokerage’s preferred attorney or the expert real estate attorneys at RocketLawyer for legal advice. For a low one-time or monthly fee, they can provide legal documentation and direction to solve your dispute. Even more, you can schedule a free 30-minute consultation to get started.
6. Move On
After you’ve parted ways, you can breathe a sigh of relief and simply move on. It might feel like you missed an opportunity and lost money, but in reality, you saved time and money by firing that client. To be a successful real estate agent, you have to be confident in your expertise and stay away from clients that take away from your personal life and business. Although most clients will be wonderful to work with, there are, unfortunately, always a couple of bad seeds. Keeping the wonderful clients in mind is what makes the job worth it.
For more real estate agent tips to keep your business booming, check out Top 25 New Real Estate Agent Tips From the Pros.