Real Estate Agent's Café

Grand Slam!

This story was submitted by Chuck Lanyard, President, The Goldstein Group, New Jersey

We all have our favorite real estate stories and mine occurred nearly fifteen years ago.  I was contacted by two elderly brothers in their 80s who asked me to sell their dilapidated grocery store.  I explained to them that although the property was not in good shape, it had a desirable location. I convinced them to sign an exclusive listing with me for six months to lease the property, rather than sell it.

 

Thus began my first “Grand Slam” of my career. Within three months, I was able to lease the space to a national drug company who proceeded to improve the property with over $750,000 of improvements and they signed a multi-million dollar lease for 20 years. I then was able to secure for the owners a $1.5 million mortgage on the property, which of course, was tax deferred income.

 

Three years after the drug store opened, the national drug chain I put in place was bought out by an even larger national drug chain. The new drug chain decided that due to the fact they already had a successful store nearby, they did not have use for this location, and I negotiated a buy-out of the balance of the lease term for nearly ¾ of a million dollars. Within three months of finalizing the buy-out, I then sold the property to a medical group for nearly $1 million.  As a result of these transactions, my two elderly landlords reaped multi-million dollar profits.

 

Upon completion of all the transactions, my landlords asked me to come to their offices because they wanted to show their appreciation one last time. Although I had received commissions for the transactions, they wanted to do a little bit more for me. I had already alerted my Broker that I would probably receive additional compensation, so that everything would be on the up and up prior to my meeting with them, and not put my license in jeopardy.

 

These two brothers owned a produce company which had large refrigerator rooms at their place of business.  When I arrived, one of the brothers asked me to follow him into one of the large coolers at the back of the facility where he wanted to “take care of me”.  All I could think of, was the irony that, I was about to receive a “cold cash bonus”

He then proceeded to reach onto the back shelf and grabbed a large flat cardboard box.  Much to my chagrin, my package ended up being a box of large strawberries! Just to keep things copacetic I gave half the box of strawberries to my Broker.

To this day, I still laugh at this thoughtful gift because, otherwise, I would not have such a great story to tell.

An Answer For Everything!

I'm Not Your Partner

 

Commentary:

Before I begin, I just want to let you know that this topic is directed towards the commercial leasing brokers. I'm giving the selling brokers with no interest in leasing a chance to click out before they go any further. However,  If you're curious about one of the many special issues leasing brokers face continue reading.   

In my post Observations I listed "Somehow the broker is magically transformed into the landlord's partner when the landlord asks what happens if the tenant stops paying the rent, as it relates to paying the broker's commission".

It amazes me how often I'm asked by the landlord; What happens if the tenant goes bad? We all have choices in life including on how we conduct business. As leasing professionals we have the choice to work with good tenants or crappy tenants.

Me, I choose to work with good tenants. I highly value my reputation and I don't want to be known in the market as the broker that only cares about "making a commission". The, I'm here to jam this tenant down your throat, now pay me mentality my sub-par competitors practice. The ones whom I affectionately refer to as "The Village Idiots".

Now on-the-other-hand, the landlord has made his choice to accept all of the problems, risks and benefits that are associated with owning income producing properties. This also includes the leasing risk. When the landlord starts suggesting that somehow my commission is tied in with the stability of the tenant, he's looking to lay some of that risk off onto me. 

This presents itself in a couple of ways. Occasionally, the landlord just blatantly says that he wants to be reimbursed for the un-amortized commission from the time the tenant defaults, but most of the time they choose to use the more subtle approach of wanting to pay my commission out over the lease term either monthly or annually, setting me up not to be paid should the tenant skip in the middle of the night.

By accepting these terms I've, in essence, become a partner in the downside with no upside benefits.

When I'm confronted by the landlord with this question, my answer is always; "I'm not your partner". And I'm blunt about it. I go on to say that you as the landlord have a choice to accept this tenant, or if you're not comfortable, don't go forward leasing them the space. No hard feelings. I understand.

But once you've accepted them as a tenant I've "provided a service" and as the owner of the property, the risk is yours. I also go on to say that I expect to be compensated in a timely manner for that service. At this point I usually hear some blah, blah, blah whining, crying and complaining about how some broker stuck him with a crappy tenant. I sit and listen patiently, but the truth is that it's not my problem. He's the one who chose to be a landlord.

If I'm not getting through I'll say something like; I'll tell you what, go to your lawyer, your architect and to your contractors and suppliers that will be involved in this transaction and constructing the space for the tenant, and get them all to agree to take their fees on a monthly basis too. Who, buy-the-way are receiving those fees directly brought about through my efforts.

The reply is usually; Uh, I can't do that. (No shit Sherlock! They'll all tell you to go F... yourself! So why then should I agree to it?).

Another response I use if things start getting testy is; Ok, but I want a percentage of the building's cash flow. A percentage of any tax deferred cash you pull out when you refinance, and a percentage of the gain should you sell the building. After all, you're inviting me to be your partner. Shouldn't I have a share of the benefits too? (with a smile) Oh, I almost forgot, I want to be a limited partner so I don't have the lay out any cash for repairs or improvements. (Hey, what's good for the goose and all of that.) Then I sit back and watch him pop his eyeballs back into their sockets and pick his jaw up off of the floor as the vein in his neck pulsates.

Believe me, if the conversation has deteriorated to this point the meeting has gone sideways anyway, and I'm just having some fun or maybe inflicting just a little sadistic torture.

I love this business.

 

 

 

 

 

Not One Of My Better Days

 

Suffice it to say, I hate flies. HATE em! Not to be confused with pteronarcophobia (fear of flies). I have a fundamental rule; Stay outside, you live. Come inside my house, you die. And when one is dumb enough to enter my domain, I will hunt it down like Dog the Bounty Hunter. I have even pursued these flying feces to the point of causing them to die from exhaustion.

My Wife and Child are so conditioned, that when they see me dashing for a magazine, they dive for cover behind the nearest piece of furniture to avoid becoming collateral damage.

I feel no remorse.

Even when I dine out I try to avoid sitting by the window in the restaurant because I can't stand them buzzing about, banging their tiny little fly heads against the glass, too stupid to figure out why they can't get outside.

And, I'm in good company. President Barack Obama is a ruthless fly killer. Don't believe me? Check out the clip.

Yeah! Now that's what I'm talkin about! Did you notice that for a split second his eyes glazed over like a sadistic cold-blooded serial fly killer. He even had the camera man zoom in on the winged devil as it was convulsing its last breath. My kind of Leader. Now only if he would do that to the lobbyists and special interest groups our voices might be heard.

But, that's not the story. This is: 

After finishing up a long morning showing office space to a client, we stopped to have lunch. My Branch Manager was also along for the ride. It was a welcome respite. All of our eyeballs were rolling around in our heads from the continual starting-and-stopping, and in-and-out of the car that goes with a long tour.

The hostess brought us to our table, seating us in the corner of the solarium section of the restaurant. After we settled in and our drinks were served my Branch Manager, who without deviation projected a board-up-the-ass personality, decided to become animated, as if someone had flipped a switch.

As he's talking and gesturing with his hands, he smacked his beer bottle and spilled the contents in my lap. As the ice cold liquid soaked through my pants, my underwear, and onto my crotch, the temperature from my neck up was reaching the  intensity of a nuclear reactor. Somehow, I managed to maintain my composure, and after I cleaned myself up, everyone had a good laugh at my expense.

We continued with our lunch, as my Branch Manager droned on, and on, and on to the point that my pants were starting to dry. As this was going on I began to notice a buzzing sound around me. I looked up and saw a number of (you guessed it) congregating on the solarium glass. Evidently, flies like beer! Who knew?

As my focus now shifted to watching this build-up of Biblical proportions, I could swear that the light in the room started to dim from the growing black mass blocking out the Sun's rays. Being a believer in Karma, I was beginning to think that I was about to face pay-back time.

When we finally finished I couldn't get out of there fast enough. I got home and shared my experience with my Wife, and had a good laugh over it.

The next morning I left to go to work and as I was driving down the street I could hear that dreaded buzzing again. I looked in my rear view mirror and what did I see banging their tiny little heads in my rear window? You guessed it again! They had followed me into my car.

You'll have to excuse me. I just saw something whiz by through the corner of my eye.

Click below for the final outcome.

A Case For "The Ghost Hunters"

OK, So What's With The Pictures?

 

Commentary:

Let me start by saying that I am one of the least photogenic people on the planet. I'm amazed at how some people can apply just the right amount of muscle tension to form the perfect smile every-time. For me, I can't hold it together for more that two seconds. And it never fails, the person taking my picture invariably takes a second too long to snap the shutter, just as I feel my face distort under the pressure.

Then there's the reality check of actually having to see myself in the photo. A point in time that shows me what I actually look like to the world. I prefer to look a myself in the mirror and allow my mind to delude me into thinking that I look much better than I actually do.

This is on my mind because I need to have a professional photo taken for a project that I'm working on. So with this looming, I can't help but notice the photos my competitors are using.

I find that most are very well done. Some are very natural and obviously are the ones that are lucky enough to have the right gene switched on in their DNA that I referred to earlier. And then there are the ones that had professional photos taken that look good and work very well.

Then there's the other category.  

I know that this has been addressed numerous times, but I can't help it. I have to ask; What's the deal with the props?

Showing off one's prowess using the telephone doesn't impress anyone. We all know how to use one. I recall one local broker in particular that I'd see in those home magazines posing with a french phone. Although, I haven't seen her around in a while. Maybe she moved to France?

With the advancement in telephone technology it was inevitable that the cell phone would be the next bright idea. Pictures of agents (mostly the younger Guys) holding their cell phones up to their heads looking busy. On the run. A new and improved model over those agents still in the dark ages using desk phones. A Real Estate Agent Action Figure. Collect them all. (cell phone, blue tooth headsets for each ear, push-to-talk walkie-talkies, satellite uplink sold separately. Batteries not included)

This next group I just can't figure out. The "through the haze glamor shot". It's as if someone smeared petroleum jelly over the lens of the camera. When they meet with their prospect in person do they hand them a pair of glasses with the same substance smeared on the lens, or do they apply it directly to the prospect's eyes to create the same effect?

Then there's the photos that fall into the category of; What the hell are you thinking? You're suppose to attract business, not scare it away!

Some of you (mostly Guys) look like you stumbled in from pulling an all-nighter at the neighborhood pub. And good Lord there was one poor woman; deer-in-the-headlights eyes bugged out, wound so tight that you could see her bobby pins popping out of her hair. There's no way I'm getting into a car with someone that close to the brink for fear that the first stop on the property tour would be the Bates Motel!

For the full effect click the play button.

In all fairness, photographic faux pas aren't exclusive to real estate agents. The business world, in general, has their share of "pompous posers".

Anyway, I called a professional photographer that I know to see if he can work some magic. He told me that he was "taught the proper techniques for posing and lighting so I was going to get the best of the best". He also said that he wasn't a miracle worker. (Oh well.)

 

Observations

  

Add your Observations in the Comments section below.

• The ones who feel that they are constantly being screwed are the ones that usually do the screwing.
• The difference between what the buyer will pay and what the seller will accept is the amount of the commission.
• The length of time a deal takes to close is in direct proportion to the amount of times the file can be churned and fees booked.
• For some people, it's easy being sleazy.
• The ones who produce the least cry the most.
• When you think you've reached a fair and equitable negotiated conclusion to a transaction, the "real" negotiations are just getting started.
• For leasing brokers, it's a love/hate relationship. The Landlord's love you when you bring them a tenant and they hate to pay you.
• Business is hard. If it were easy everyone would be doing it. 
• Even a broken clock is right twice a day. (An argument for the walking dead)
• Paranoia increases proportionately with the amount of un-returned messages that you've left.
• The statement "You better hurry because there's a lot of interest" or "Someone's about to make an offer" has been overused to the point of having absolutely no meaning.
• Developers are like sharks. Sharks have to keep swimming or die. Developers have to develop or the same thing happens.
• The one with the least experience always expects compensation that is far more than the value they've added.
• Each and every developer will tell you that his property is the "best".
• Expect to hear when your intentionally shut-out of a transaction by the property owner "What work did you do?" when it comes time to pay your commission.
• There are always two negotiations in a lease transaction. Negotiating the lease and negotiating your commission agreement.
• Somehow the broker is magically transformed into the landlord's partner when the landlord asks what happens if the tenant stops paying the rent, as it relates to paying the broker's commission.
• What's it called when you're negotiating your commission agreement with the landlord's rep., and you're told by the rep that he's done everything he could, but his "Boss" won't let him agree to your terms? "The Oz Defense".
• The Oz Defense is also used when you're negotiating with the landlord's Rep. on behalf of your client. 
• The Oz Defense originated and was mastered by car dealers and is used when you go to buy a car, except the salesperson doesn't go back to see the "man behind the curtain". He goes back and has coffee and a donut.
• The more people on the selling team, the more inequity there is between the team members.
• If something happens completely out of the broker's control, the broker still gets blamed.
• The lawyers who resent brokers engage in highest form of denial as to how they got the work in the first place.

Great Glass! Not For the Faint-Hearted

I wonder if you look up you'll see up the person's dress standing on the balcony above you?

Have Some Consideration, Please!

Commentary:

What is it with some people?  Anyone who uses a cell phone knows that when you call someone while they're talking with someone else, both sides get a beep to let the recipient know that you're trying to reach them, and to let you know that the recipient is having a conversation with someone else.

When I call someone and and I hear the beep, I immediately hang up knowing that they're on another call. I don't understand why some people insist on letting that beeping go on. As we all know each beep cuts out words in the conversation.

For me, it usually happens when I'm negotiating a deal or making an important sales call. Each beep seems be perfectly timed to block out the most critical information. It's really a high tech way of interrupting someone while they're talking. You wouldn't act rudely in a face-to-face conversation. Well anyway most of you wouldn't. Why then do some practice bad manners with the phone?

I know what you're thinking. Why doesn't he just press the ignore button? Because, I'm focused on my conversation and by the time I have a chance to break and press it, a couple of three beeps have messed up the call. And besides, I shouldn't have to program myself like Pavlov's Dog. 

Hang up when you hear the frist beep! The call log on the phone will let the person know that you've called. Unless of course you have Block Caller ID. Which brings us down another road.

Block Caller ID is a form of high tech anti-social behavior. What is your problem? Who are you hiding from? America's Most Wanted?

When I receive a business call and I see Block Caller ID on my phone, I get the creeps. I feel like the call is coming from the deepest region of Hell and the Prince of Darkness is on the line. Come to think of it, only the Prince of Darkness has the right to harass someone with that infernal beeping. That's his job.

Again, when you hear the first beep, hang up. Call me back later. And creep me out a second time.

     

 

Pushy Real Estate Agent