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March 3, 2019

Part Two: Risk and Real Estate Sales - Recognizing Risk

(In the first installment of this article we discovered that risk is always the result of making decisions, and making decisions is a large part of the job of real estate salespersons.)

Technique 1: Recognizing Risk

Risk isn’t usually hidden, it is instead a right-in-your-face part of every decision we make.  Those of us blessed with a more than a normally active gift for denial can pretend it isn’t there, but we all come head-to-head with reality at some point in time. So, if an offer is so laughably low that you decide to reject it on behalf of the seller, and, instead of using valuable time to present it you go to your child’s Christmas play, you might not choose to dwell on risk associated with that action.  

If the seller accidentally comes into contact with the buyer’s representative whose clients made the offer, the risk suddenly zips right into focus. The point here is that the risk did not arise when the seller met the buyer’s representative; it was there as soon as you made the decision to act for the seller; it could have been mitigated by employing a simple risk management technique of presenting the offer to the seller.

The risks of crossing the street are mastered by most of us by the time we are in first grade, yet many adults are seriously hurt or killed each year crossing streets. A round of golf may seem risk-free, but many adults are struck by lightning (or a golf ball), fall into water hazards or struck by golf carts every single year. 

Relative Risk

We all agree, though, that the risk levels associated with adults crossing streets and playing golf are relatively small. Telling a caller a property has been withdrawn from the market when you choose not to drive across town to show it may also seem to be a tiny risk, but that decision can also be the basis for fair housing complaints and/or withdrawn listings.

Educators have a name for decisions we’ve made so many times that we forget a decision is being made; those decisions are called overlearned responses. Overlearned responses are at work when we suddenly find ourselves in the office parking lot with no idea the route we took to get there, or, when we sing the alphabet song with no effort to remember which letter comes next.

Certain business acts attain the level of overlearned response, for example, saying to a prospective buyer “Would you like to see the property after work today or would Saturday be better for you?”  Overlearned responses are the reason that professional athletes and accomplished actors still practice. Both must be able to perform superbly with little or no opportunity to think about which foot leads or how to respond to a cue. But, even though overlearned responses seem to be decision-free, they are not; we’ve simply made them so often that another part of our brain controls the decision-making process for our conscious brain.

All voluntary acts (those not performed under duress) are the result of decisions, and decision making can be the sharpest tool in the real estate licensees toolbox. It is easy to see that our lives are shaped by the decisions we make and the quality of our lives is a direct result of the way those decisions fit within our personal tolerance for risk. This is true of every single autonomous human on this planet. Real estate licensees have an additional risk in decision making; it can have a decision-by-decision effect on our income.

Relevant Link: Part One: Risk and Real Estate 

Carmel Streater is no stranger to risk. She listed and sold real estate for over thirty years and has been a real estate instructor for the past twenty years.  Finding herself a simultaneous victim of real estate sales burnout and empty nest syndrome, she completed a Ph.D. in Adult Education with an area of specialization in Training and Human Resource Development.  Streater’s work now is exclusively in teaching, course development and assorted writing projects.  Her hobbies are her six grandchildren and attempting to keep up with changes in the real estate business.)

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