How should you choose among imperfect options? How should you deal with the flawed people on the other side of the transaction?
Common Situations
In six recent property negotiations, smart, affluent buyer clients have told me what they thought was fair. Sometimes they repeatedly explained why their solution was best.
In truth, I’ve not yet been able to bludgeon millionaire sellers into what my buyers sincerely wanted. Millionaire sellers have an inconvenient tendency to do what they think is in their best interest, even though it’s not in my buyer client’s best interest. Who knew?
Several clients were disappointed that my magic, my persuasive skills, or my power were insufficient to get the “right” answer they wanted. More than once buyers were amazed that I was so ineffective that their wish was not the seller’s command.
Often, I’ve suggested that the buyer’s main problem is not the seller. It’s the unseen buyers who seek the best deal in the market, even though it is also my client’s favorite choice. Some other buyers will pay a bit more. Sellers are sometimes incompetent, lazy, mean, neglectful, or sloppy.
Other people will not magically see things your way and you may think they’re being unfair. You must choose whether to deal with them, even if the outcome may be less than perfect.
Let’s consider a longer perspective.
A few years ago, our firm had an anniversary celebration party. I asked about 50 millionaire clients about their biggest investment regret. None of them said they were sorry that they overpaid the scoundrel seller 1% to buy a property. The vast majority did share a common regret, and that regret was that they stopped one half of 1% below what it took to close the deal.
In many states apartment prices go up and down, often down by a lot, over the course of a generation. In 25 of the last 35 years San Diego apartments have sold for the highest price ever. The following year the prices were even higher.
Through no fault of yours or mine, there is a 100,000-unit rental shortage in San Diego County. Government policies have created the rental housing shortage and no owner or developer can fix that in a decade. That truth is tough for renters, but it creates exceptional returns for rental owners.
On Another Level
Let me tell you another true story. This truth jumps a scale in importance. A few years ago, I was serving a research doctor who paused his apartment acquisitions. He was rescuing his sister-in-law, three nephews, and other family from a Middle East dictator who seemed to have declared war on his own people.
Dr. A is nationally recognized for his scientific and medical integrity. He chose to bribe minor officials to get his loved ones across the border. He was completely aware that all his dealings were with corrupt people.
Dr. A did not telegraph the dictator. He did not write a letter to the editor of the capital’s newspaper. He did not post a notice about decency in the border guards’ barracks. Dr. A hated the disgusting reality but did what he could for the people he cared about.
We recognize that human life is more important than wealth. Despite horrible options, Dr. A, accomplished what was in his family’s best interest, even though he was rewarding people with bad behavior.
When you’re faced with dreadful truths which you hate, how do you deal with imperfect people who are the gateway to your desired objectives?
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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.”