Money for morals

Here's an intriguing story and lesson from the week...

Paul, the real estate agent, has a client named Sam. Six or seven years ago, Paul helped Sam buy a house for $1,800,000. Sam calls Paul and says, “Hey, we are thinking of buying a new home, can you help us?” Sure. 

Sam says we have this house in mind…$8 million. They go look at it, it doesn’t work out. Then they start talking about other homes. They find another one, listed at 9.xx million. 

A little background: Sam is an attorney and holds a real estate license. Paul does not talk about fee or any of the other “tough and awkward” conversations that need to be had. So right before they get ready to put an offer together, Sam asks Paul about his commission. Paul replies that his fee is X. Sam says, “Well, I was thinking your fee was X – 20%. By the way, I was thinking that since I am licensed, I could represent myself and we would split the fee 60/40.” Paul says he needs to think about it and get back to him.

Paul calls me with the situation to determine a reply.

The first thing I told him was that Sam got you! Sam knew what he was doing, and he brought this up right before you went to write the offer - counting on you to cave.  This is why you deal with all the hard stuff up front!

We practiced the situation where I was the agent, and Paul was the client. I suggested that he, the seller, represent himself and pay me a “referral fee” of 25%. 

Paul says to me, “But I would make more money the other way.”

Ahhhhhhhh….isn’t that the question!

I said to him, “What’s more important, making more money on this one transaction, or the integrity of who you are as a professional for the rest of your career?”

Because if he takes on this client at a reduced fee, then his fee doesn’t stand for anything other than a negotiating item. Worse, when he gives one client a special deal, how does that impact all the other clients who didn’t get a discount? Isn’t that dishonoring those clients? How does any client know they are getting a “fair” deal if every client is negotiating something different?

More to come on what happened with Paul.

A question to ask yourself, “What would I do in a situation like that?” What can I look to that will help me make good decisions?

The 13 Virtues are a beacon. They are the lighthouse keeping you from crashing on the rocks.

The more I dig into this, the more I distinguish what it means to create real, authentic trust, the more I see that there really is no other way to operate in your business.  When you are committed to getting things out in the open, when you aren't afraid to have any conversation that needs to be had, then you have the opportunity to create relationships that really work.

Unless, of course, you want to be committed to dissatisfaction and suffering. When you have no standards, you have no satisfaction. Lack of satisfaction often is accompanied by suffering.

My assessment is that many people are suffering and don’t know that they are suffering. Life and business have been that way for so long that they don’t even remember a time when it wasn’t the case.

It takes a moment of awareness, or waking up, or some shock to say, “Hey, wait a minute, what’s going on here?"

This might end up being a real turning point for Paul. 

What about you?