Why Communication is So Important in Real Estate—Especially When Things Go Sideways

What is the most likely reason a doctor is sued for malpractice (other than screwing up a procedure, of course)? 

One might think it had something to do with not being thorough enough, so a good number of doctors have gotten in the habit of ordering extra tests and procedures and the like (known as defensive medicine). The bias toward “doing something” isn’t a good thing for our society overall, especially given how out-of-control healthcare costs are, but it does make sense for practitioners to do so as a defensive mechanism in our litigious society. 

Studies have shown, however, that such preemptive actions have no effect on whether doctors are sued for malpractice. The main reason patients sue doctors (aside from a procedure leaving someone dead or injured) is that the doctor hadn’t talked to the patient enough, communicated about the situation effectively, and built rapport. As Aaron Carroll notes,

“To understand why patients file claims, we have to talk to them. Many researchers have. A study in 1992 found that about a quarter of mothers who had sued physicians because of deaths or permanent injuries in their newborn infants ‘needed money.’ But there were answers given more frequently that had nothing to do with remuneration. A third of respondents said that their doctor would not talk openly to them, half said their doctor had tried to mislead them, and 70% said that they were not warned about long-term neurodevelopmental problems in their children.”

It, therefore, shouldn’t be surprising that another study for The New England Journal of Medicine found that 1%  of physicians accounted for a full 32% of paid claims. An analysis of four studies for PubMed found that for malpractice claims, “Overwhelmingly, the dominant theme in these studies’ findings was a breakdown in the patient-physician relationship, most often manifested as unsatisfactory patient-physician communication.”

(In other words, if Doctor House were a real person, he would have been sued just about all the time.)

The various aspects of real estate don’t generally involve life and death, but the same principle applies. Communication can make problems go away, and a lack of it can make problems get much, much worse. Even what should be innocuous or irrelevant can become an enormous issue if left ignored.

The Importance of Communication, No Matter What

In pretty much every walk of life, communication is essential. And it’s not just the part where you make sure to tell someone something—it’s also the part where you listen empathetically. Surveys have repeatedly shown that employees are more likely to leave jobs when they don’t feel listened to by management. They’re also less likely to be productive, even if they don’t leave, which we’re seeing more and more of these days with the phenomenon of “quiet quitting.”

The same goes for any relationship, particularly for marriages. Indeed, a lack of or bad communication is one of the biggest causes of marital breakdown. The clinical psychologist John Gottman notes that silence is absolutely deadly for relationships. The key is to communicate effectively, which includes NOT criticizing NOR being defensive (contempt and stonewalling are even worse). 

In other words, communicate problems kindly and also listen to those problems when communicated, instead of just defending oneself. Not doing so will wreak havoc in any marriage.

In business, I have been amazed by how much someone can tolerate if you show them you actually care about that person and communicate the status of whatever is going on. On the other hand, it’s amazing how fast minor issues deteriorate into full-blown blow-ups when something is left unaddressed.

Being ignored is effectively a lesser version of being ostracized. And for our ancestors, being ostracized from the tribe and forced to go it alone meant almost certain death. Indeed, the word ostracism comes from a procedure in ancient Athens where a citizen could be expelled from Athens for 10 years. This punishment was considered quite severe, and many other societies have used ostracism as a punishment for a variety of (usually serious) crimes, like Japan in the Edo period or Medieval Iceland. 

Being ignored triggers a sense of rejection and feelings of being unworthy of attention. Further, it can bring on a mild paranoia. (“Has something horrible happened, or does this person hate me—why else would they not communicate?”) None of this bodes well for an amicable resolution. 

Neurologically, being ignored causes the anterior cingulate cortex in our brain—the part most responsible for processing pain—to activate and the body to be flooded with stress hormones like cortisol and norepinephrine. 

Does this sound like what we want to have happen to someone we are either actively letting down or having a dispute with? Will that make resolving the dispute easier or harder?

Communication in Real Estate and Business

Regarding real estate, one of the most important areas for communication is in property management. One survey of 372,000 tenants found that almost one-third chose not to renew their lease because they had a problem with the property manager. The article says:

“Tenants hoped their next landlord would better handle gripes ranging from package theft to slow responses to maintenance requests, the report said. Only lower rent was cited more often as a reason to leave.”

All these issues involve communication. For maintenance in particular, communication is critical, especially when there is an issue that has gone sideways or is taking longer than expected. Remember, maintenance is your No. 1 form of tenant retention, so it’s essential to get right. 

My brother Phillip used to oversee our property management, and when he had such an issue, he would tell the tenant that he would call them back on so-and-so date, even if there was nothing new to report. Just letting the tenant know management takes their issue seriously and hasn’t forgotten about them goes a very long way. In fact, I would argue it’s more important than resolving the issue—or at least equally so. 

Recently, we had a house catch fire due in no fault to the tenant (or us). We offered to let her out of her lease and return her deposit in full, but she preferred to move back in (she could live with her family for a short while). 

The repairs, however, were delayed because of a dispute we had regarding the insurance. Needless to say, it’s not pleasant to be left in limbo like that. But we never so much as had one argument about it, nor did she ever get upset, because we kept in constant communication with her. If there was an update, we told her. And if there hadn’t been one in a while, we would let her know every week or two that we were still working on it.

I should note that this is even more critical with short-term rentals, as the success of your business is all but contingent on your rating on Airbnb or Vrbo. Negative ratings can kill the desirability (and visibility) of your STR. I once had to wait several hours trying to get in touch with an Airbnb host because the key she left us didn’t work. Needless to say, we didn’t give her a particularly good rating.

This importance of communication goes for just about every facet of a business. We had one small dispute over about 3% of a $5,000 bill that almost got us sent to collections. One part had not been installed (and we proved it wasn’t), so we asked for an amended invoice and then waited for it, but it never came. Eventually, we heard from a collections agency that the bill was going to collections. 

We did nothing wrong, but we didn’t do it right either. We should have stayed on top of this and continued to communicate, even as the party that owed money, in order to make sure it was resolved before being escalated.

We’ve all had contractors or buyers or sellers ghost us, and we all know how frustrating that can be. Indeed, we are almost certainly never going to use that contractor again. One such disappearing act can lose you a client forever.

While communicating won’t fix a bad performance by itself, it will help take the edge off and maybe at least give you a second chance. Of course, you need to be apologetic when communicating (if you did something wrong), empathetic, and not get defensive. Remember social proof: People tend to calm down if you are calm, and get angrier and talk louder if you are angry and talk loudly.

Even if you have performed terribly, just having the guts to call and apologize is something most people deeply respect. It’s much easier to be angry at someone who becomes an abstraction—“that person who ghosted me”—than the flesh-and-blood person telling you they are sorry things took longer, or they couldn’t perform as expected, or it will cost more than they thought, or whatever.

And indeed, that’s the reason most people avoid such communication: It’s embarrassing or even scary. It’s embarrassing to tell a tenant that the heater that was supposed to be fixed three days ago won’t be fixed until early next week. It’s embarrassing to tell a seller the property you said you would make an offer on for  $200,000 is something you can only go up to $175,000 on because you made a mistake in your analysis. It’s embarrassing to tell someone that you let them down or didn’t live up to their expectations.

But people respect you much more when you own your mistake (or your company’s). Studies have routinely shown people respect you more when you apologize for wrongdoing or mistakes. And that respect goes a long way in resolving such conflicts and mending relationships. 

What About When You Are Being Ignored?

When it comes to contractors, agents, wholesalers, vendors, and the like, if they won’t communicate, I just move on. Communication is a critical skill, and if someone doesn’t have it, they can’t be an effective part of your team. I would note that the same goes for employees.

With tenants, clients, and sellers who are reluctant to communicate, you want to make it as easy as possible for them. This is particularly true with tenants who fall behind on their rent. Often, they will, understandably, cease communicating as they are embarrassed. 

Offer straightforward solutions that they can simply say yes to (like cash for keys) and don’t need to offer much elaboration on. Also, make sure they can communicate in impersonal ways, such as email or text. It’s much easier to type out a message and press send than to actually talk to someone. 

And don’t be too pushy. It’s important to understand they are embarrassed and don’t want to communicate, so empathy and a soft touch are key here. 

But if nothing else, being ignored or poorly communicated with is a good reminder about how it feels and how much trouble it can cause to be ignored. That should help you remember how much of a competitive advantage you can have by taking communication seriously, especially when it is difficult, embarrassing, or uncomfortable to do so.