Over the last several years I have seen more and more of my real estate agent clients become frustrated in their representation of sellers or buyers. Sometimes it’s to the point that I advise agents to quickly and professionally terminate the real estate relationship in writing.
How to Deal with a Difficult Client in a Professional Manner
Very few real estate transactions proceed 100% smoothly. Given this, emotions and tempers of a client (seller or buyer) can be heightened. When a difficult situation arises with a client, it’s important that you listen to your client’s concerns, and acknowledge their feeling that there is a problem. Remain in control of the situation by asking questions in a non-threatening, information gathering tone as a first attempt to resolve the problem. Always act in a professional manner, and never argue with your client. While you should reflect upon what caused your client to react the way he or she did, and try to resolve the situation to their satisfaction where possible, set limits in what you can and will do.
Never hide a client issue from your broker. Rather, get them involved early to assist. Sometimes the broker’s intervention into the transaction may help remedy the problem, resulting in better behavior by the client. Most often, the intervention by the broker of record does not help diffuse a bad situation. With your broker’s assistance, memorialize your client’s concerns, the solutions attempted, and the end result in writing to your client with a copy to your broker of record to be placed in the transaction file.
There are clients that are just plain difficult and no matter what you do, the client cannot be satisfied. In these situations, you will likely need to terminate the professional real estate relationship.
Termination of the Real Estate Relationship with a Difficult Client
It is not unheard of that the relationship with one’s client needs to end before the real estate transaction closes escrow.
Reasons for the termination of a client relationship with a difficult client can be:
- Verbal threats to the agent and his or her family
- Bad behavior such as profanity and harassment by the client
- Failure to respond to the agent’s written inquiries
- Unreasonable expectations by the client
- Dishonest clients who want to hide defects of their listed parcel
Before you terminate a relationship with a difficult client, make sure you have detailed written documentation that outlines the reasons for the termination of the Realtor client relationship and the actions and communication you had with your client. There should also be documentation of the issue being discussed with your broker of record.
When it is decided that the Realtor and client relationship needs to end before the transaction closes, have a face-to-face meeting with your client, if possible, to advise that the relationship is now ending. If there is a listing, have a cancellation of listing drawn up to be dated and signed by all. The cancellation document should provide a telephone number of the local association for a possible referral to another real estate brokerage or an attorney. Give copies of the signed cancellation to your now former client.
If you are the buyer’s agent, prepare an addendum form to be signed and dated by you, your buyer client, and broker of record providing a telephone number of the local association for a possible referral to another real estate brokerage or an attorney. Be very careful that you never place your client in a situation where the transaction may not close because you will be blamed. Send a copy of the signed document to the escrow company and the other real estate agent in the transaction.
The key in terminating a client relationship with minimal risk to you is to be professional but firm. Then ensure that all communication, reasons for the termination of the realtor client relationship, and signed documents are saved in writing. And always have the broker of record initial and date all termination documents.
When to Get Legal Advice
If you are a CRES member who is faced with a challenging client situation (one you think may lead to termination of the real estate relationship), contact ClaimPrevent® Legal Advisory Hotline at 877-273-7467. Experienced real estate attorneys will guide you through each step to minimize your risk of a real estate claim or lawsuit.
About the Author
B. Edward McCutchan, Jr.
Sunderland | McCutchan, LLP
Mr. McCutchan’s practice is primarily civil litigation with an emphasis in defending professionals and businesses in real estate, mortgage brokering, construction, banking and agricultural industries and all phases of dispute resolution through trial and appeal. His area of practice is also agricultural law (viticulture and wineries), trusts and estates, probate, real estate transactions, business law and elder abuse. B. Edward McCutchan, Jr. was admitted to the Bar in 1985 and is admitted and qualified to practice in all California courts and the U.S. District Court, Eastern and Northern Districts of California as well as the United States Tax Court.