Dear Patty - Setting Expectations
Monday, June 24, 2013
I often run into challenges with owners. We sometimes don’t see eye to eye on how to effectively manage their properties. I am trying to look out for their best interest, but for some reason they don’t understand that. How can I overcome these challenges?
That is an excellent question, and is not that uncommon in the property management industry. It all comes down to setting expectations. By taking the time to set expectations you will find that these challenges will drastically decrease. Your owners will also see you as the expert, and will have more confidence in your abilities.
Setting expectations should be done prior to listing and managing the property. First, you should have a strong, well-written management agreement. It should address a multitude of items including — but not limited to — commission, handling maintenance, account reserves, time-frame for releasing owner proceeds, who is entitled to keep certain fees, and more.
One of the biggest mistakes that property managers make is that they assume the owner actually reads the contract thoroughly. Unfortunately, this is not always the case. Because we are the experts, it is our duty to make sure the owners understand what they are signing. (Caution! There are things that real estate licensees can and cannot do in regards to contracts! Read the sidebar at the bottom of this page to avoid engaging in the unlicensed practice of law.)
If you do not set expectations, then the owner will set them for you. Often an owner’s expectations are not aligned with the property management company’s procedures or policy. Therefore, it is crucial to determine that your broker and the owner are compatible.
Once expectations are set it is important to maintain them. Hold true to what was promised to your owners, and expect them to do the same. Do not make any exceptions, or at least keep them to a minimum. Doing so will allow for an effective working relationship between the two parties.
"Patty the Property Manager” appears courtesy of the ORRA Property Management Subcommittee. Readers are invited to submit property management related questions to Patty by sending an e-mail to email@example.com.
The ORRA Property Management Subcommittee provides this property-management advice column as a service to ORRA members. The column is intended to provide a general understanding, not as a substitute for individual legal consultation. The column should not be relied upon in specific situations without consulting a real estate attorney.