Principals and agents are coming unstuck when they do not keep a written record of verbal conversations, said a leading practice, compliance and risk management trainer.
According to Stacey Holt, director at real estate industry-focused education and professional development firm Real Estate Excellence, agents must get into the habit of recording and confirming verbal conversations with clients in order to minimise the risk to their business.
“A key area of risk for property managers, sales people and their licensees is in not putting things in writing,” Ms Holt told Real Estate Business at the recent PPM National Property Management Conference on the Gold Coast.
“When you are having conversations verbally you must back them up in writing and keep file notes.
“Real estate is a people business so we talk for a living. We need to get in a habit of keeping diary notes or file notes, and as I say, confirm things in writing.”
One mistake agents make is writing the information on post-it notes or loose pieces of paper that are easily misplaced, said Ms Holt.
“If I had my way in this world, sticky notes would be banned. Every office that I have any input in, I ban loose leaflets of paper straight away,” she said.
“Input the information into your software or database, or at the very least in a hard cover diary.”
In order to ensure you business is at minimal risk, agents and principals must educate themselves with real estate law.
“My biggest passion in this industry is people knowing the relevant legislation before they practice,” she said.
“A lot of people have systems and procedures but don’t understand the foundation first so one key thing to be successful as a communicator, negotiator and educator in this industry is to know your stuff.”
Similarly Dorothy Hamilton, principal and property management trainer at First National Palm Beach, also urged property managers and principals to build a strong understanding of litigation.
“I am passionate about risk management and the occurrence of litigation is increasing,” she told Real Estate Business.
“Tenants are becoming much more savvy with the internet and becoming much more savvy about their rights and responsibilities.
“While landlords are time and money poor at the moment, so they are cutting corners.”
In order to prevent your business being at risk you should implement risk management tools, said Ms Hamilton.
“How you get the risk management tools in your office right is by implementing great systems and great procedures,” she said. Moreover, you need "great training of your staff, from the front receptionist all the way to the principal, no excuses.”