We talk all the time about a win-win scenario. It’s part of our core business philosophy, and it’s just plain good business. One of the key factors in securing a deal, any kind of deal, is understanding the other person’s needs. In short, empathy.
This story comes from our friend Brent Mott. I think it originates with one of his mentors in the real estate business. I’ve taken a couple of liberties in retelling it.
The story goes like this:
An older gentleman needed to sell his house quickly. He may have been in foreclosure, or there may have been some other reason. But he ended up receiving a lot of main from investors.
Now the thing about investors is we have certain formulas that help us establish the present value and after repair value (ARV) of a house, and those formulas are pretty standard. They are taught by numerous “schools of investment.” There is some margin of error in the formulas, but if you get seven rehabbers looking at the same property, we’re all going to come up with a number that’s within a small percentage of each other. Landlords will also arrive similar valuation to each other, even if it’s different than the valuation from rehabbers.
That’s what our older gentleman—let’s call him Dave—found out. He set up a day to meet his potential buyers and scheduled them to come one after the other. He’d already emptied his house, so he took a seat on the fireplace mantle with his dog, Sam, beside him.
The first buyer came in, nodded at Sam and Dave, and walked through the house. He said, “I can offer you $120,000.” Dave nodded, said thanks, and put the written offer on the mantle. “I’ll get back to you,” he said.
The next buyer came in. After looking through the house, she offered $122,000. Dave said thanks, and put the offer on top of the first one on the mantle.
This process repeated throughout the day until Dave had a stack of offers ranging between $115- $130,000. Then Brett’s friend, Tom, walked in. When he finished evaluating the house, he went into the living room to talk to Dave. He patted Sam on the head and said, “But what about your dog? What’s going to happen to him?”
Dave, sobbed. “That’s what I’m worried about. That old dog has been with me more than 10 years. We’ve save each other’s lives more than once. I don’t know what’s going to happen to him when I go into assisted living.”
Tom thought for a minute. “I’ve got some friends with a small ranch out near Bandera. I bet I could get them to take care of your friend, and you could still visit him sometimes.”
Dave nodded, “You do that and you just bought a house.”
Notice that Dave and Tom hadn’t even talked about money. The money wasn’t what mattered. Sam was what mattered. By solving Dave’s dog problem, Tom was able to succeed in buying a house that other investors had made higher offers on.
Winning at business is more than pointing decisively with the arm of your glasses or dictating terms to people in a weaker negotiating position than you. Sustainable winning requires understanding how people work and what’s important to them.