Cuss 'em Under Your Breath - Then Do The Deal

Cuss 'em Under Your Breath - Then Do The Deal
by David Elmore

I drove 151 miles yesterday from Middle Tennessee to Atlanta, Georgia, to sign a purchase contract and get earnest money from a man buying one of my company's homes.

The man didn't show. He didn't call me. I tried calling him three times. He didn't answer. I went to lunch -- steamed.

This isn't the first time this has happened. It occurs about one out of 10 times in my business (buying homes, fixing them up and selling them). People just don't show for important appointments that they have scheduled. They don't even have the dignity to call and let you know that they are bowing out. Sometimes they call back later and want to do business with you on the same property or another property.

And so it went with this guy. Halfway through my lunch, he calls and says, "Hey, David, I was wondering if we could meet in a little bit and talk about that house on Tara Road."

Me: "We were supposed to meet 45 minutes ago and sign a contract on the house."

Him: "Oh, what, huh, I thought we were just gonna talk about it and you had something else planned for this morning."

Me: "You agreed last night to put down $1,500 nonrefundable earnest money and to sign two contracts at 11:30 this morning and to then close on the property in less than 30 days."

Him: "Oh, well, I'm in McDonough right now (30 miles away), and I gotta pick up my boy at 3 o'clock. But I'd like to buy Tara Road. But, uh, could we make the earnest money $1,000?"

Me: "No, because you didn't show up, the earnest money is now $2,000 in certified funds. You also must use my broker to get the loan, so that I can keep track of the progress, and you must close in 3 weeks or less. If those terms are acceptable to you, then you can meet me later this week."

Him: "Oh, man, David, you don't have to be that way! I'm a professional, man! It was just a misunderstanding. Come on, man! I'll wanna buy it. ..."

To make a long story short, he said he'd buy the property on his terms, and that he'd think about mine. In other words, he probably won't buy it and may have been baiting me originally to make me salivate, and then setting his own terms once he's caught me. (This is a bait-and-switch "strategy" some real estate pond-scummers teach in seminars to get the best deal from hard-up homeowners.)

The two points I want to make with this post are that business is not a Roarkian Universe, and we can't always mete out justice (sometimes inaction against the unjust person is the moral thing to do). We can't always get the ideal. We have to talk (and deal) with scumbags sometimes -- at the corporate and/or consumer level in order to achieve our long-term objectives. Other companies sometimes dictate the way we do business. Bosses sometimes have different visions and MOs than we do -- and that may restrict the extent to which we can use our creativity. If we want to put food on the table or have another legitimate goal in mind, we'll have to abide others to some degree. And we shouldn't feel guilty about being in those situations and dealing with reality -- as long as we do our best and as long as the work itself is a proper value.

I don't mean that we have to do something immoral. We don't. We shouldn't. But we can't always live out the optimum of our creativity and wishes, as Rand shows her archetypal Roark doing (by going to the quarry instead of struggling within the system). If you own your own business, as I do, then you can do so to a greater extent probably, but I still often am at the mercy of lenders, brokers, Realtors, homeowners, renovators, buyers, etc. Sometimes they are rational; sometimes they are not. I have to deal with it. I can't do as I think Roark would do and tell these folks absolutely that my rules are the only rules, that business will be conducted on only my terms -- without a context of this being a business world with others' values to take into consideration to achieve your values. (It is only the ultra-rich who can do that -- and not even they can stay in business for very long if a competitor comes along who tells the same clients that they will work within their rule structure, too.) An example in my business is that homeowners (usually in foreclosure) in my transactions will actually attempt to blackmail my company just hours before going to the closing table to sell their homes to me. They will demand that I pay them an extra $2,000 under the table or they will not sign on the dotted line, and they will allegedly let their home go into foreclosure (because they say they don't give a shit anyway). If I say "no" to them, my company loses anywhere from $15,000 to $35,000. Roark, I think, would walk away. If the deal is good enough and I can't get around it, I pay the blackmail money -- and I take the profits. I don't sacrifice my values to the blackmailers any more than I tell the thief where my jewels are.

When dealing with unjust people in business, I can always say no, but I can't always mete out justice. In the particular case above I had to ask myself if it would be more satisfying (and rational) to tell the guy to go fuck himself or if it would be better to make my money and get an albatross house off my neck. In that scenario, I decided to work with the guy if he abided by my new stipulations because the property in question has been my toughest to sell. I felt it was still possible that he may be a serious buyer -- but just a loser. It could save me $2,000 to $5,000 by going with him. Before he called me back, I thought about how I would handle any potential phone call. Briefly, here's what went through my head (after I cussed under my breath for several minutes):

I decided that I did want him to be my bird-in-the-hand if I determined from a conversation that he was truly serious about buying the property. But if I was to keep him, he would have to meet me someplace where I already had an appointment, so I would not waste my time (btw, I had 3 other appts later the afternoon of our first meeting, having been through this kind of thing before), and I would have to ensure that I was financially covered with higher earnest money -- which would also indicate his seriousness. I also wanted to be sure that I had more control over his actions afterward, which meant keeping the loan process with my broker. I also told him that I would keep the For Sale sign in the yard so that I could get back-up offers in case he bowed out of the deal at any point.

I felt some satisfaction knowing that he was squirming on the other end of the phone because of the new stips, but it wasn't as satisfying as having a check in the hand! (One thing I do do with lowlifes like this, if the deal gets done, is I don't shake hands with them to seal the deal or at the closing table, as I would with people who act morally. I'll find a way to avoid the situation in which the traditional hand-shake would occur.) Ethically, what I do in situations like this is make a clear judgment on the individual in my head and put their action into a values perspective that dictates how I will respond to him. Then, every time I talk with the person, I think "bastard liar" but maintain a diplomatic approach as long as necessary -- until he's outworn his use. That's really no different than how we must act with individuals we meet in the daily interactions of our life whom we can't be blunt with without sacrificing our higher values.

Btw, I get lots of "offers" by investors in the Atlanta real estate market to do immoral things concerning my homes in which I could make an extra $5,000 or more if I did as the investors wish. I always turn them down, but there are hundreds of guys down there who don't; that's why that market has the worst reputation in the lending industry -- and government, of course, has stepped in with laws "to protect the home buyer." And that makes it harder for me to make money in the business. But it's still lots of fun and most folks are nice. And sometimes I DO get to tell the bastards to take a hike. Then, it's even more fun! :-)

Discuss this Article (42 messages)