If you’re in the real estate business long enough, you’re eventually going to encounter conflict. It’s simply a matter of numbers: The more you sell or the more agents you manage, the higher the likelihood that you’re going to butt heads with someone.
These conflicts can take many forms:
- Consumer complaints to the firm
- Consumer complaints to the Department of Licensing
- National Association of Realtors Code of Ethics complaints
- Procuring cause complaints
- Demand letters and/or lawsuits
- Conflicts between team leaders and members
So, what’s the best way to get through them? I recommend a rational, informed, fair approach to conflict resolution.
1. Breathe before responding
The natural first reaction to being on the receiving end of these complaints is an emotional one.
It’s critical that you keep that response to yourself. Responding with anger or attitude will only inflame the other parties. Instead, confirm that you understand the nature of the request, complaint or demand, and then let them know that you’ve received the complaint.
Don’t offer a response when you don’t have all the information and you haven’t had time to digest the situation.
2. Gather all the information available
It’s not just about collecting proof that you’re right and they’re wrong.
Learn everything you can about the situation. Talk to any agents involved. Get copies of texts, emails, voicemails and documents used in the transaction. Build a timeline of events preceding and leading up the issue.
You need to know everything you can know about the who, what, when, where, why and how to determine the best way to proceed.
In addition, as a manager, you need to gather some details on how you supervised the agents involved, how you run your operation to try to prevent these issues, and what you can or will do moving forward to prevent a repeat issue.
This includes office policies, meetings and trainings discussing the topics involved, communications sent to agents and anything else you’ve got.
3. Assess your position with the knowledge you have
You might have every detail or you might be missing key information — maybe conversations were all verbal and not in writing, or maybe the other party is holding some information hostage as an advantage.
Once you’ve gathered all the information available to you, you need to figure out where you stand. Do they have a decent argument to make? Are you equipped to defend yourself? Is someone else to blame who is not yet involved in the situation?
Who is right, and who is wrong, if there is such a thing?
4. Notify your E&O company of the issue (if applicable)
This is a commonly-skipped step. Nobody wants to report an issue to their E&O carrier because they’re afraid it’ll make them look irresponsible — as if they’re not used to handling these issues all day, every day.
The problem is this: If you don’t report the issue, and try to solve it yourself, there’s a good chance your E&O provider won’t cover you on it later. Most policies require notification as soon as you’re aware of a potential legal issue.
Of course, if the issue at hand is completely outside the scope of errors and omissions, or would not be covered by E&O based on your policy, this step can be skipped.
5. Speak to a lawyer
You’ve probably got a pretty good idea where you stand, but you’re not the expert.
Talk to a good real estate attorney who knows the pertinent laws and rules like the back of his or her hand. Make sure you haven’t missed key information or potential liabilities.
Your lawyer will make sure you’ve got your head nicely wrapped around Steps 2 and 3 above.
6. Choose a course of action
These complaints and demands are typically like offers in real estate. You can accept, decline, counter, or not respond at all.
If you’re in a disadvantageous position (because, of course, you’d never admit you were wrong), it’s probably worthwhile to try to settle the issue in a way that’s fair to all sides. Going to court and bringing a lawyer is probably more expensive than settling, and it would be the preferred option if you’re likely to lose in court.
If you’re in a strong position (the claim has little merit, or you have proof that you covered your bases and handled everything correctly, for instance), then you’ve got more options, and your attorney can help advise on the best way to handle the issue.
7. Keep these pointers in mind
- Don’t talk about your guilt or innocence: You can’t win. If you “deny, deny, deny,” you come across as though you’re hiding something, or at a minimum behaving irrationally. If you admit fault, you’re inviting more trouble and liability. You can go all the way through settlement without acknowledging who was right or wrong.
- Don’t blindly defend: You should defend yourself, your agents and your company — but not blindly. Gather the facts first. If you were wrong, make it right. Defending your agent might not mean telling the complainer to go pound sand. Sometimes, the best way you can defend your agent might be to settle the demand quickly and get them out of harm’s way.
- It’s not just about legal right and wrong: There’s the publicity angle to consider as well. Do you want to be named in a public lawsuit? If you refuse to settle an issue, are you willing to let it turn into a department of licensing complaint, an ethics complaint and poor reviews on social media sites? Some people are prepared to continue the fight. Some just want it all to go away.
Matthew Szalecki is the director of brokerage operations for Fathom Realty in Raleigh, North Carolina. Connect with him via Facebook or LinkedIn.
