Many real estate agents, brokers, and managers could profit from reading the book, "Checklist Manifesto", by Atul Gawande (Metropolitan Books, 209 pages). Gawande, a surgeon and already a best-selling author, addresses a problem that is common throughout a myriad of human endeavors ranging from surgery to flying to businesses and government. The problem is this: "the volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, or reliably." The solution, he argues, is frequently a very simple one. It is a checklist.
Gawande notes that many problems are complicated and, though they can sometimes "be broken down into a series of simple problems … there is no straightforward recipe. Success frequently requires multiple people, often multiple teams, and specialized expertise. Unanticipated difficulties are frequent. Timing and coordination become serious concerns." All this should sound familiar to anyone who has spent some time in the real estate business.
Problems of this sort require judgment and expertise. Checklists don't change that. What they do is to keep us from overlooking things that, indeed, might be simple. "You want people to make sure to get the stupid stuff right" so that room is left for "craft and judgment and the ability to respond to unexpected difficulties that arise along the way." A checklist is not a set of step-by-step instructions. Rather, "they are quick and simple tools aimed to buttress the skills of expert professionals."
Depending on where and with whom you practice, the business of real estate is a checklist-driven activity. In California, the standard eight-page residential purchase agreement – frequently accompanied by various pre-printed addenda – is, in great part, a checklist. It has its blank spaces to be filled, to be sure, but much of it is constructed in such a way as to provide agents and principals with a checklist of items that should not be forgotten. Many of them require decisions: Who is going to pay the homeowner association transfer fee? Will the buyer get occupancy on the day of closing, or some days after? How many days does the buyer have to obtain loan approval? The checklist style contract does not determine the answers to such questions (although sometimes it provides a default option), but it does insure that the questions get asked.
When a property goes under contract, that event then generates (or should generate) more checklists: inspections to be ordered, disclosures to be made, title report to be inspected, etc.
For many companies a transaction checklist may not be reviewed until after closing, but before an agent receives his or her commission check. Typically, this is too late. The barn door is shut. If a disclosure is not made in a timely manner, obtaining it after closing may make a file checker feel good, but it is certainly of no risk-management value.
In a standard real estate transaction it may make sense to have three or more checklists, each to be reviewed at predetermined dates after the execution of a contract and prior to closing.
The use of checklists in marketing activities is probably less common, but that is not to say that it wouldn't be useful. An outstanding agent I know once told me that a seller told him that they had listed with a competitor, rather than him, because they were impressed with the fact that the competitor would make a nice-looking flyer. Of course my friend routinely makes listing flyers also. He just neglected to mention it. A checklist might have helped.
Gawande notes that "We don't like checklists. They can be painstaking. They're not much fun. But I don't think the issue here is mere laziness … . It somehow feels beneath us to use a checklist, an embarrassment." He then goes on to recount how Captain Chesley "Sully" Sullenberger, about as close to a heroic figure as we get these days, insisted over and over again that the "miracle on the Hudson" could only be attributed to a team of people following procedures and doing what checklists had told them to do. Not a bad model for the real estate business.