Greg Swann in his interview with Real Estate Radio today reminded me about something that I hadn’t thought about it in a while: The firing clause. I believe the firing clause is an essential practice for any agent who desires to be consumer friendly. Essentially, the firing clause is just that, a clause that allows a client to fire their agent/broker if their not doing their job. I verbally gave this commitment to all my clients when I worked at John L Scott. Now that I am at Redfin, we insert it into all of our buyer’s agency agreements. We use this terminology:

Buyer may cancel this Agreement at any time by submitting an e-mail to support@redfin.com or a signed request in writing. Faxed notices can be sent to (877) 733-3469.

Simple enough, huh? So, why would someone not want to use a firing clause? Here are some common objections I have heard. I have written my responses in italics. If I am missing some other objections, please let me know. 

• “I don’t want to be taken advantage of by the sly buyer’s agent or listing agent who is offering a commission reduction.”

This is a free market economy. If someone is offering a lower commission, you must either 1.) recognize that your commission is too high or 2.) demonstrate the tangible things you are doing better to justify your higher commission.

• “I want to be able to lock in clients so I can have a reasonable idea of what my income stream might be…”

….and understandably so. Real estate income can be terribly unpredictable. Even still, is it worth forcibly hanging on to an angry client in order to close one deal? Wouldn’t it be better to get at the crux of your client’s problem so you can improve your business model and avoid the same pitfall in the future?

• “My Broker won’t let me”

It sounds like Greg had this same issue. Eventually you have to make a decision to either confront your Broker about their policy or switch brokerages.

• “I’m not confident in my ability to deliver outstanding service, marketing, etc, and therefore I need a safeguard for a dissatisfied clients.”

This is a tough place to be in, and is most common in new agents. Even still, its better to take your lickings from your clients, learn your lessons and do better next time.  Don’t look at failure as failure. Look at it as an invitation to grow. (….my self help book is coming out Fall 2009)

Redfin takes the firing clause to the next level by offering a 100% money back satisfaction guarantee. You would think that this guarantee, like the firing clause, would be abused by clients, and perhaps sometimes it is. Nonetheless, you would be surprised by how many people choose to do the right thing in our society, and pay you what you deserve for your services. You would also be surprised how comfortable it makes people feel that they have the option to fire you at anytime and get their money back. It’s not that they want to use the clause - they just want to know it’s there.