Possible Pitfalls of Real Estate Partnerships and How to Avoid Them
Partnerships are a great way of boosting a real estate broker’s career. Early on in their career, brokers and agents are encouraged to join networks to find potential partners. Through this merging together of talents, they not only form a refined team but also boost efficiency and productivity. A good partnership will ultimately lead to closing more deals together.
Although there are many benefits to it, no partnership will ever be perfect. There are many challenges that may arise and cause it to fall apart. In fact, finding the right partner is a challenge in itself. It takes time, because no one wants to go into business with the wrong person much less face challenges together.
Then there’s the actual work that comes with being in the partnership. Whether it’s co-brokering a deal or promoting each other’s listings, all partners need to put in effort to make the collaboration succeed. But, obstacles are unavoidable, and it’s natural to expect to encounter one or two every so often.
There are 3 common problems that cause real estate partnership splits: personality conflicts, delayed decision making, and unmet expectations. Thankfully, there are ways to avoid them — and everything begins with transparent communication.
Partnerships can be difficult because of the vast personality differences of those involved. When you rely on each other to get things done and personalities don’t mesh, it could result in conflict.
Everyone has their own way of dealing with a problem. Sometimes, because everyone has different approaches to work, each person can play to their strengths. But conflicting outlooks call for a solution – and fast.
The simplest way to avoid this small issue from getting worse is verbalizing what you need to be able to deliver your best. The same should be for everyone else in the partnership. When it comes to coming up with a solution, it’s important to put the partnership above any personal interests and remember that the success of one is the success of the other.
Delayed Decision Making
When you are working on your own, you have the liberty to make decisions based on how you want things to go. In a partnership, you need to discuss every decision — no matter how trivial — with your partner. Whether you disagree on something or not, decisions often take longer when two or more are involved.
In an industry like real estate where quick decisions are necessary in landing a deal, a practical system needs to be in place to avoid delays.
There are a couple of solutions around this. One way is to give a member of the partnership a decision-making power. Partners can still outline their opinions, but when the need arises, one will make on-the-spot decisions for everyone. This might not work for all partnerships, unless those in the partnership mutually agree on who to give this power to.
Another way to avoid delayed decisions is to set a deadline to make a decision. It plants an urgency that requires the partnership to come up with a solution immediately.
For either of these two solutions to work, strong lines of communication is key to come to the right conclusion without causing any more delays.
Most brokers look at a real estate partnership as a way of giving their business a competitive edge. To achieve this, you need partners who are fully on-board and willing to put in the effort to succeed. When you engage in a partnership, you need to find an individual you can trust. When you can find someone you can share the same goals with, setting expectations should be an easy task.
However, when your partner doesn’t live up to expectations, it’s easy to grow bitter and blame him or her. But this could only aggravate the situation! When expectations are not met, it’s a setup for negative feelings.
At the onset of the collaboration, it’s important to agree in a real estate partnership agreement the tasks of each person involved. This aligns every person involved with what to expect from the rest of the team.
The likelihood of challenges should not dissuade brokers from entering a partnership. By knowing how to face the common challenges, they can go into a partnership with confidence.