That's right, you heard me correctly... FIRE THEM, cut them loose ! Sayonara, 厄払い , 참 속 시원 할거야, Bon Débarras, Buon Viaggio, Selamat Jalan, ¡Que Se Vayan..... or as Donald Trump would say, "YOU'RE FIRED!"
As Realtors and business owners, we might feel that we have to or should take on every client who comes calling with that "cha-ching" in our heads about the possibility of making a commission. But that cha-ching can and does sometimes turn into "cha-chump" on us leaving us not only having made nothing, but now in the red or in the hole because of all the time, energy and resources that we've advanced [un-reimbursed] out of our own pocket on a bad prospect, client or customer. Watch out for the ones who have totally unreasonable expectations or are just set on "picking your brain" consuming you, then running off to do it their own way... or try it all over again with Realtor #2, 3, etc. (see some of my other blog articles concerning Buyer Agency Agreements for ways to mitigate or avoid these pitfalls)
As Realtors, we take every case on a contingency basis; advancing costs incurred on the "client's" behalf from our own pockets until such time as the buyer goes to settlement/closing, or the house is sold if we are the listing agent. Neither event always or is guaranteed to occur for a variety of reasons. An attorney or lawyer will take a case (personal injury, tort, or civil litigation) on a contingency basis; but the big difference is their client is receiving money (if they have a good case) and large sums of it; whereas our clients are SPENDING money - so it's a completely different dynamic with regard to any type of working relationship or commitment with each other involved.
Here are 6 types of prospects or "clients" to avoid like the plague:
1) Focus Hogs:
These are the type of prospects, "clients" or customers who constantly need to be massaged or have attention. They can be highly indecisive and are analysis to paralysis type of people who will suck you dry of energy, time and resources that could be used on more income producing activities or clients.
2) Time Wasters:
Similar to #1 above and could be merged in with this category, but time wasters can never make a decision and aren't ready and willing to listen to your professional advice and counsel. These will be the ones who consume great amounts of your time, energy and resources without ever providing anything in return. They may question all or some of your advise and counsel and you could find yourself being consumed or having to "take them on" on every little issue or concern to prove yourself right or their assumptions and opinions wrong.
If you have a client or customer who questions everything you do or say, run like hell ! They'll never be happy and you'll end up aggravated and loosing valuable time, energy and resources that you could have otherwise spent on a more productive client or customer.
3) Low Profitability Clients:
Sometimes you still be able to salvage or work with types 1 & 2 above by re-focusing or re-directing your activities or finally getting them to listen to you; but by this time it's too late and they have now become low profitability clients or customers. Unless they're likely to give you at least a couple referrals or do business with you again; you may want to really assess the situation with these clients or customers. If you're not generating much income, or some income, from your clients or customers then you are on the loosing end of a bad relationship. Only work with those clients who are likely to give you a good return on your investment in them.
Remember, typically as a buyer's agent until such time as the buyer does find a suitable home and goes to settlement on it; you'll be advancing out-of-pocket expenses on their behalf. In some cases that could be quite some time, a LONG road to travel on, and alot of expenses advanced on their behalf. Particularly if they are a relocation client or are new to the area and feel they need to see EVERY single listing on the market in various towns or cities before finally making up their mind on a specific location, subdivision, type of property, features, etc.
I have had clients in this category who finally did select and go to settlement on a property but from whom I never got a referral -- and it wasn't because of the quality of service and representation they received. I have some wonderful client testimonials and accolades from clients in this category; but since I never got a referral from them, in the final analysis they were very low to zero profitability clients. I suppose those testimonials are quite valuable in securing other business, however.
As Realtors we have a business to run and operate, however, and we cannot keep a roof over our heads or food on the table by mere testimonials alone or by carrying no-profitability or low-profitability clients on our backs or from our bank accounts. A buying client in particular must be carefully analyzed (before AND DURING the course of working with them) to determine if you're going to be left with the short end of the stick, or worse yet, in the hole directly because of them.
4) Something For Nothing Clients:
Dump those prospects or clients who want to milk or rob you of your professional services for everything they can possibly get, pick your brain clean; all for either totally for free, or at deep discount. Only work with those prospects or clients who understand, value and RESPECT your professional knowledge, experience and abilities. If they don't value and respect you now, they never will and you'll find yourself having to justify your work, your efforts and your professional service fees.
This is particularly true of a seller who wants to lower your commission so much so that it actually leaves you broke; e.g. 4% total listing commission, less 3% or more to be buyer broker/agent in order to bring an able, ready, willing AND represented buyer to get the the property under contract and sold -- leaving your broker/you with 1% or less for all your efforts in marketing the home and representing the seller throughout the course of negotiations and managing the transaction to settlement process. Or a seller (or buyer) who opts for the "Limited Services Agency Agreement" but then wants or expects the full services of a "Standard Agent." If you have a prospect or client who's constantly working you over or trying to get something (or everything) for nothing, you're better off cutting these ones loose too as they'll never be happy and probably wont give you any referrals either even if you were able to close a deal with them.
5) Unreasonable Expectations:
If you find yourself working with a prospect or client who is overly demanding or who has unreasonable expectations about either your professional services, the market conditions, or both; run like hell and cut these ones loose.
To illustrate the living, walking, breathing personification and epitome of this category take this true anecdote. I had a "client" once I had been showing houses to for quite some time who was only qualified for $450K. In the DC Metro area this is on the low end of single family detached homes and could be in the mid to high category of townhouses. So when I say "only $450K" that has to be taken into relative context. The family composition was he and his wife and 2 girls. They wanted a property on a 1/2 acre lot and with a decent house, or possibly a lot with a tear down for a rebuild inside the beltway close to Metro transportation and other conveniences. With only $450K this was really really pushing or stretching things.
Instead of being shown properties that fit his basic parameters and within his budget, he insisted on being shown houses in the $650K range, telling me that I should just write a low-ball offer for them and see if it would work. This was a grossly unrealistic expectation given that it was still a seller's market AND he was not paying anything for buyer agency representation. I told him that he would have to alter or change his must have list by either increasing his purchasing power to get within the location, size, amenities he wanted; or compromise and move further out. He still wanted to be shown properties and try writing contracts on properties that were out of his league. It would be analogous to trying to buy a Porsche, Lamborghini or Maserati (in very good to excellent condition - with low mileage) on a Volkswagen budget!
I told him if he wanted to pay me per outing and writing contracts (fully refundable in the event his insane low-ball offers were accepted) that would be fine and I would be happy to do that until he either ran out of money, changed his expectations or parameters, or gave up trying; but that I was not about to do that all at MY EXPENSE and also compromise my professional reputation with local listing agents.
This guy was trying to do "short sale" offers when "short sales" where not even "invented" yet and it was still a strong seller's market and properties were being sold for at or just slightly under list price. The story gets worse; "But wait... there's more" LOL. On top of his insane low-ball offer expectation, he also wanted $10-15K back in closing costs when the market was only bearing $6-7K in this price range. I showed him the MLS market area data and sales statistics to unequivocally support this; but he didn't want to have anything to do with that.
His strategy might have worked if he was targeting only distress properties or foreclosures; tax sales, FSBO's, (for sale by owner - unrepresented) etc in the strong seller's market; or perhaps even today in the bubble burst and economic recession we are in today. But he would have had to pay for buyer agency representation in this type of scenario rather than using a buyer agent who was being paid by the seller in a more traditional MLS type of market and sales transaction scenario. I gave him this option as well, but he did not want to have to pay a buyer broker/agent or pay a retainer. This also fits within #4 above (something-for-nothings). These are the types with unrealistic expectations that you just need to walk away from and let them run less experienced agents into the ground, which is exactly what I did in this case. I was wise enough to cut or minimize my losses with this guy by dropping him like a hot potato before my investment of time, energy and personal resources mushroomed out of control, got out of hand or became a colossal loss on my balance sheet. Haile this one was for you! You were the inspiration and poster child for this entire blog article.
6) Know-It-Alls:
These are the ones who think they are experts in real estate or know the market better than you do. They will not want to listen or be receptive to your professional advise and counsel and will expect you to pretty much just shut up and be their taxi driver and locksmith to show them properties; indefinitely or even ones they do not even qualified for to buy. A seller can also fall into this category as well and not be receptive to doing things you suggest or propose in getting the property "curb-appeal" ready to sell, or in your pricing and marketing plan. I often wonder with these types; if they are such experts in the field, then why are they coming to a licensed professional to help them? Because they either don't have MLS access, a lockbox key, a yard sign, or the contract forms -- but they just want to use you for your "tools" but do everything their own way.
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