Do you really care if your deals are win/win?

Question

I have heard real estate investors talk about win/win deals for years.  What do they mean by win/win? Most investors know that if we are  working with a seller, unless they are motivated to sell, we are unable  to have a win outcome for ourselves. We could create a win for the  seller, but doing business that way would doom us to failure. Now, if  the seller is motivated, many times we will be able to end with  a win for ourselves, but if it isn't also a win for the seller, how  many are satisfied with that? If a seller is "over the barrel", should  we pay all we feel we can or as little as possible? We can always talk a  good game and say that we always want win/win, but  a true win-win  negotiation is a negotiated outcome in which parties have reached an  agreement that cannot be mutually improved upon. So let me ask this  question. Do you really care if your deals are win/win?

Jeff Rabinowitz · Answer

If you gain a reputation as someone who deals fairly when buying and selling you may soon find yourself in the enviable position of having deals come to you instead of having to hunt them down all the time. It is much easier to do business this way.

Vincent Noe · Answer

Thank you everyone that responded. Here is my 2cents.

I strive to follow the "golden rule" in every aspect of my life, whether it be business or pleasure. If, in doing so, I don't make as much money on each deal, that is fine. I am not doing this for money, although "a servant is worth his hire" and the more and better that I serve, the more and greater my reward.

Have an AWEsome day everyone.

Joshua Feit · Answer

Josh here from Atlanta -- I'm a newer investor, and I am so glad to be learning from everyone on BP.

The feeling I have is that there are different types of 'wins', and a good sales price is just one of those wins. I imagine some sellers want / need to get out of a property so badly, that even if they accept a low offer, they will still walk away feeling relieved about the transaction. And that seems like win.

In my limited experience, I want everyone involved to walk away from the table feeling glad about the deal. I want everyone with whom I do business to feel as though they were treated fairly, and with respect. Though I need to make a living, I never want to make a killing, and I believe that too translates into a win for the other parties.

Good question. Thanks for getting the discussion rolling.

Larry Turowski · Answer

@Vincent Noe I think that is an excellent question and worth asking.  We need to be careful that we aren't simply trying to soothe our conscience by calling deals a win-win.

I think @Mark Brogan has a good point.  It is a win for the seller in the sense that it can give them what they need or want.  A motivated seller wants to get rid of a property.  I can help them do that.  It is not a win for them in the sense that they are getting the best deal.  I am pretty straight forward with sellers and explain that I have a profit motive, and that it has to work for me.

Mark Brogan · Answer

@Vincent Noe

in the deals i have done i tried to keep in mind what the seller needed to sell and give them what they need, it will work out good for both parties if they dont need to sell then you will end up paying to much

the key in my opinion is find motivated sellers that need to sell not want to sell

John Horner · Answer

If it wasn't a win for them they wouldn't sign the contract.  Like MQ says, we've never bought a house from someone who didn't agree to it.  Does the situation dictate the price, absolutely.  If they waited until the week before their house goes to auction then they are severely limiting the resources available to remedy that situation.

When you go to the CVS Pharmacy to pick up a prescription do you sometime pick up some laundry detergent on the way out even though it costs twice as much as at the grocery store?  Heck yeah because it saves us a trip to the grocery store for one item.  It is supply demand, we provide a service that some sellers need.

Bill Gulley · Answer

People are going to go where their ethics and moral compass lead them, what they may not understand is how their reputation is formed. Investors deal through Realtors, closing agents, appraisers, inspectors, lenders and others and they all talk to each other. Kill your reputation and kill your business! Yes, you need to deal fairly. All transactions have a winner, someone is always on top, how far on top makes a big difference and can determine how long you stay in business. Few deals in anything are done where the outcome is equal to both a buyer and seller, but that is the goal, that is where the bar really is set. :)

Account Closed · Answer

We always try to make the deal good for both sides. You see, we want people to come back and buy many houses from us.

Once I had a house for sale for 55,000, and it could have sold for over 60,000. We had so many calls! But in the end we sold it for 55,000. Guess what? The buyer has come back and bought six more homes already.

Strongly I belieeve to make deal good for both sides. I want to make money with real estate long long time, not just for this year.

Account Closed · Answer

sorry had repeated post.

Do you really care if your deals are win/win?

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