Why what is best for you isn't best for you (example)

It was a chilling day.  Facebook and Instagram constantly flow with pictures of happy homes in the making and, as a real estate agent, Bill has mixed emotions when it's a friend of his, in his market and he did not have the pleasure of representing them.

Most of them are in different submarkets than Bill is most known in, so he can rationalize it.  Or others are not people Bill hasn't spoken with in the last 5 years, so that's on him.

Then comes the one. . . .

The friend that Bill sees twice a week and speak with every.single.time on his niche that he leverages tremendous understanding and experience in . . . investment homes (and in particular in the urban core of our city). 

Posed.  In front of their shiny new (actually very old) duplex . . . with wife, kids, and golden retriever just beaming with that joy of house-hacking. 

"Wait . . . Tim . . . who did you use as your agent?"

"Well, you see . . . we knew this one was going to move fast and we needed every advantage, so we let the listing agent represent us on this one." Tim explains.

"Well played."

"Bill, we're buying.  You're our guy for the rest of them man." Tim shares.

"Yeah" Bill says.

The Effect

. . .  Months later Bill has seen the same thing play out time and time again with agents in his office and others and the resounding truth that has come to light as the dust settles is this:

Yes, you may have gotten your desired goal NOW, but you also hurt your partnerships for much longer.

At the same time as Tim used the "double-your-commission" lever to massage the situation on his dreamy duplex, Bill had a flow of deals that needed buyers.  How many of those deals do you think Bill took to Tim compared to the people who have shown loyalty?

To put it specifically, it looked about like this over the next 6 months:

-Tim = 0 deals

- 3 other people = 12 deals.

Why do you bring this up?

The reality is that this happens every day all around us, but when we don't consider the holistic effect of the actions then we might inadvertently shoot ourselves in the foot for a temporary gain.  This reminds me of the illustrative aphorism "cutting off your nose to spare your face."  

Tim's logic may have been true.  Perhaps creating a conflict of interest in the listing agent made them ignore other offers so that they could earn double commissions on the deal, or maybe it simply meant that Tim forfeited his ability to have equal representation in the deal in order to feel like he "won."  Either way, the net affect is that Tim communicated to a service provider with whom he had a great relationship that the deal is more valuable that the relationship.  For better and for worse.  

What could have happened differently?

For the sake of seeing a powerfully simple solution let's consider that Tim was correct and massaging the deal by offering the listing agent double the commission was the ONLY way the deal could happen.  In that case, is there a way that Tim could snag the dreamy duplex AND maintain the relationship?

I would posit that there is a way.  That way is:  proactive communication.

What is proactive communication?

Pro-active is in constrast to re-active.  Pro-action occurs earlier than re-action and seeks to be "ahead of" something.  In this case if Tim would have considered the affect of the action and thought, "hmm . . . I bet this will suck for Bill . . . I better be sure he hears this from me and knows why I feel this has to be the approach" and would have made a 3-minute phone call to me before he . . . . signed the offer that the listing agent sent over?  Called the listing agent?  Right before inspections?  Just sometime before Bill sees it on social media or gets the "we've moved' postcard, haha), what would have happened?  

Agent buddy Bill would have thought, "dude that sucks" or "that's probably not true" or "man, that's kinda shady" or something altogether different, but . . . and this is the MOST IMPORTANT POINT . . . agent buddy Bill would have known, because Tim took the time to reach out and tell Bill.  Bill would have been HONORED even in the process of being "cut out of a deal", and the relationship would have had a chance to continue.  

Or, Tim might have found out that there is a 3rd path, that Tim had not yet considered, that achieved more than the either/or paths he could see.  Like when you call a lender pro-actively to tell them THAT you're using a different bank for a loan BECAUSE on this one a commercial bank offered to do it amortized over 5 more years, fixed at a better rate for the first 5 years, and THAT you value your relationship with the lender and wanted to make sure they heard it from you.  You do this only to find out that your lender has access to a different type of loan that offers you the same setup and is able to price-match the other bank and offer a mutual win. You wouldn't have known this without pro-action .  . . possibly ever.

Bringing it home

What're we to do with all of this touchy-feely talk?  

Just this . . . consider the most strategic moves you can make in your real estate investing process, and then go one step further and consider the people affected by those moves and thing of how you can honor them in the process.  Reach out BEFORE the time for damage control and PRO-actively communicate to them WHAT you're doing, WHY your doing it, and THAT you value them and their relationship.  That, even though it doesn't change the WHAT, honors them and gives you the best opportunity to continue and even grow the relationship.

You'll never go broke doing right by people.  In fact, you'll always stand out when you are committed to honoring the valuable members of your team, regardless of whether your current moves are great for them or not.

Peace on the path,