Real estate transactions are rarely stress-free.
A home purchase or sale might be the most significant financial commitment a person makes in their lifetime, and many sales are layered with complicated feelings. When you combine money and emotions, you’re bound to face some challenges.
When the inevitable occurs, here are eight crisis management tips for handling difficult situations.
1. Consider longevity
Have you heard the saying, “Tough times don’t last, but tough people do”? This holds true for many of the most challenging situations in real estate. Consider the residential client disappointed at the lack of inventory, or the commercial investor with many vacancies in a once-thriving property.
But as history has proven, although the market fluctuates in the short term, it reaches new heights in the long term. If you know and understand this to be true, you can see that amid a crisis, this will pass, and you may come out even better on the other side. Practice patience as you move forward.
2. Communicate effectively with clients
Proactive communication — answering the question before it’s asked, or offering solutions to impending problems — is key. Prompt and transparent communication can diffuse a difficult situation without avoiding the issue or offending the concerned party.
Effective communication also prevents rumors and misinformation from blowing up. It’s essential to set clear communication expectations early so you and your client are on the same page.
3. Have a crisis management plan in place
The worst time to buy a fire extinguisher is the day after your house burns down. As with establishing effective communication expectations early on, developing a crisis management plan before you need it will allow you to effectively deal with unexpected problems. This might consist of concrete steps to take in the event of:
- Financial difficulties.
- Natural disasters.
- Legal disputes.
- Public relations crises.
If you’re part of a team, each section of your plan should also specify team members and their responsibilities. Outline everything from daily operations to periodic check-ins and re-evaluations of the plan. Address other important items, including relevant contact information for support professionals, such as legal counsel, insurance providers and emergency services.
4. Embrace technology
If you still rely on paper and pen, it’s time to enter the 21st century. Technology is critical when it comes to streamlining communication, managing data, and responding to emergency situations.
Think about real estate professionals who thrived during the pandemic, compared to those who struggled. Teams with cloud-based systems could seamlessly move to remote work, but those without them were left behind. The same goes for social media platforms — some companies leveraged this tool to disseminate information quickly, while others were still trying to build a following.
And don’t forget the most convenient of tools: property management software. Tenants and clients who can access an online platform to get a rapid response are more inclined to stick with you during a crisis.
5. Do your homework
While some urgent situations are beyond your control (see: global pandemic), others can be largely pre-empted with due diligence. Many difficult situations involve legal and regulatory compliance in contract disputes, zoning violations, or tenant rights.
It’s up to you and your team to stay current on any changes to laws and regulations at local, state, and national levels. This ounce of prevention can minimize the threat of legal issues — and is just good business sense.
Plus, if you’ve thought through and planned for all possible outcomes, you can avoid surprises. And in the often volatile real estate industry, avoiding surprises can be the best type of crisis management.
6. Keep it private
Airing dirty laundry or gossiping about difficult situations can doom even the best crisis management plan. Clients can be challenging, and you may be tempted to share their terrible behavior in a public way.
But don’t kid yourself. Even the most carefully veiled mention of a dispute can be easily identified by the people involved. Changing names and locations doesn’t offer much protection, and you might find yourself in legal trouble if the person you’re talking about takes offense.
Don’t add gasoline to the fire. Keep everything private and work diligently to resolve the problem professionally.
7. Change your mind
Mindset plays a big part in the success or failure of any enterprise. Suppose you’ve got a client selling a difficult property. In that case, you can balance reality (it’s in a challenging location or needs a lot of work) with the power of a positive mindset (every pot has a lid, and someone is actively looking for a property just like this one).
The same mindset can be applied to crisis management. Yes, difficult situations will arise, but remind yourself that you are up for the challenge of finding a resolution that works for all parties. And because you are taking proactive steps to anticipate the worst before it happens, you are more prepared to meet whatever issues are thrown at you.
8. Build strong relationships
Finally, and perhaps the most important tip of them all: Build strong relationships. Chances are good you got into real estate because you have a knack for and a joy for working with people. If people skills are your strong suit, you already know how important it is to invest in building solid relationships from the very start.
This means you have built a network of industry professionals that includes attorneys, contractors, insurance agents, and fellow real estate practitioners. Each will provide invaluable support through difficult situations.
Even better? Those who know you well will better understand when you make a mistake. They know who you are and what you stand for, and they are more willing to forgive the error and help find a solution.
A robust support network built on trust and integrity can spark creative solutions to complex problems, providing the resources you need to manage and resolve a difficult situation.
Luke Babich is the CEO and co-founder of Clever Real Estate.