The story you are about to read is true, just like the old Dragnet shows. But it’s not historically true. It’s a business fable about a sharp young man named Chuck.
Chuck Charm was a rising star, a bright young Turk, funded by an older money partner. He was one of the first to spot the high potential of a relatively new market niche.
Ed Expert was well-known broker in the business. After decades of above-average performance, he developed a reputation for honesty and excellence. Ed was approached by more principals than he could serve. So, he attempted to work with the few who are most likely to be honest, capable, and willing too close. Ed, like the rest of us, often got it right, but occasionally wasted time and money with people who were not what he thought they were.
Chuck looked promising. When he approached Ed about a property he was interested in, Ed drafted an offer for Chuck. Chuck never signed it. That was odd, but since another investor bought the property, it didn’t seem to matter.
Sometime later, Ed discovered another property he thought would be a good investment for Chuck. Chuck investigated the property and decided to submit an offer.
Ed wrote and submitted the offer, but the listing broker was an odd duck. He had wooed Ed for years and solicited an ongoing business relationship. Among other things that made him odd was that he insisted on meeting Ed’s client, the buyer, face-to-face, and shaking hands before he considered the offer “valid.”
Chuck met with the listing broker, without Ed. The broker never countered the offer Ed wrote. That was odd, indeed. Odd turned to suspicious when Chuck replaced Ed with Rick Rookie, a novice agent in this niche. They closed on the asset. Ed did not get paid.
Ed had warned Chuck about an easement that reduced what could be built on the property. Ed knew there was an easement and expected to research the detail during escrow. In escrow, the title report detailed the easement. Rick and Chuck accepted its limitation but apparently didn’t grasp that the easement cut the value by more than 20%.
Later Chuck asked Ed to help acquire the property next door because Ed had multiple contacts with that owner about selling her property. Astoundingly, Ed agreed to pursue that effort. He has since acknowledged that lapse.
The owner of the neighboring property met with Chuck and Ed, then left on a long trip. Ed reached out to the owner multiple times. She never contacted Ed but did contact Chuck. That was odd. The odd things were beginning to stack up. Ed prepared a contract for Chuck to sign agreeing to pay Ed when the transaction closed. Chuck never signed.
Because Ed was a major player in his market, the money partner, Mike Money, contacted Ed, not realizing that Ed had served Chuck. Mike Money and Ed figured out that they had both been doing business with Chuck.
Ed provided documentation of the offers, research about the properties, and the history of the relationships and conversations. Mike concluded that Chuck had lied and claimed credit for work products and relationships that Ed produced.
Mike was furious that Chuck had not mentioned Ed to Mike. He was appalled at the dishonesty and misrepresentations and concluded it matched other deceit and misrepresentation in Chuck’s other venture with Mike. Mike moved forward with his legal action against Chuck for earlier acts.
Chuck was a bright young man who set out to conquer the market. For a while, it looked like he might succeed. But he opted for slick and quick instead of doing the work of honest dealing and providing value to clients and colleagues.
The years that followed weren’t fun for Chuck. There were civil actions, criminal actions, and bankruptcy proceedings. He became a pariah in the market he expected to conquer.
There were consequences for Ed and Mike, too. Mike looks harder at every deal now. Ed still does well, only now he works with fewer and much better-vetted clients. Mike and Ed have done several transactions together. All of them were more substantial than what Chuck started.
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What about you? Have you run across any characters like Chuck?
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Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.”