This web log is a collection of real estate related subject matter that I have found interesting and amusing on the Web, along with some of my thoughts and more bizarre experiences that I've encountered working for over thirty years as a commercial real estate broker.
If you happen across something that you would like share on the Real Estate Agent's Café, please send it over to stories@realestateagentscafe.com.
Thanks,
I had an interesting encounter with a real estate investor a few years back. Most of his holdings were in the market area that I serviced, so I thought that it would be a good idea to meet with him to introduce myself and my company. Upon entering his office I couldn't help be taken aback not only by the shear size and opulence of his office, but also by the huge crystal ball collection he had amassed.
I don't know if this has ever happened to you, but every once in a while something just doesn't click and the meeting labors on in an odd, awkward kind of way. This was one of those times. I found him to be a bit strange. Especially when he boasted to me that the building we were in, which he owned, was the tallest building in town. Although this happened to be true, the building was only three stories tall.
As his Secretary escorted me out I mentioned to her that her Boss had quite an impressive collection of crystal balls. Oh yes, she said, and every so often he will bring in a fortune teller and we all have our fortunes told.
I'm not a believer in mysticism. However, what you chose to do in the privacy of your home (or office) is your business.
I wasn't surprised to later learn that his empire had crumbled and he had lost all of his holdings, including his home, through foreclosure, which also included the "tallest building in town". Maybe having all of those crystal balls gave him too many conflicting messages? So much for fortune telling.
Not long after, I visited the now vacant space on a tour with the new owner. Gone were all of the sparkling crystal balls, shiny array of trinkets and other objects, executive desk and chair and the toilet in the private bathroom. Wait a minute. The toilet! I have heard of cases like this before, where people have absconded with their beloved commodes, but I have never visited an actual crime scene.
How did he pull this off? Did he dress up like a Ninja and on a moonless night, make his way with flashlight and wrench in hand, and ever so quietly unbolt the porcelain beauty from the floor? I can picture this blackened egg shaped figure hugging his loot, stealing down the stairwell, leaving a trail of water and jumping into his get-a-way car, burning rubber out of the parking lot.
And what was the motive? Could it be that he refused to abdicate his Throne? Or was it something more sinister? Was he holding poor Johnnie hostage to be used as a bargaining chip as he negotiated with his lender? Was Bidet involved as an accomplice? It was all speculation.
As time went on I had forgotten all about this crime until one day when I was at a business luncheon the alleged perpetrator's name came up in conversation. From the other side of the table a residential broker chimed in saying that she had the listing on his house and the lender kept asking her; what happened to the toilet? Whoa! A double hostage situation. I kept silent choosing not to compare notes with her for I was determined to solve this case on my own. And I didn't want to share any of the credit.
From time-to-time I would ask; what ever happened to so-and-so? I would hear rumors that he was residing with a woman in one of our seedier urban neighborhoods near the pawn shop and bail bond section. However, most of the information usually lead to a dead end. Until one day I caught a break. A trusted informant told me that he had seen a flyer advertising how the alleged perpetrator had reinvented himself into (and I'm not making this up people)
a "Healer".
The pieces finally came together. It was a clear case of Porcelain God Worship! Now I know some of you (not me of course), perhaps during your college years, knelt down at least once before the Porcelain God and thanked it profusely for its presence.
As he stood before his flock dressed in Monk like attire or perhaps a Snuggie (which would do in a pinch), sporting a toilet seat around his neck, with the lid up behind his head to give him that "Halo" effect, he said unto them, (click to hear what he said unto them)
In the words of McGarrett; (click to hear the words of McGarrett)
Case closed.
Note: For additional viewing pleasure click the Snuggie link above for the Snuggie Parody.
Here in New Jersey we have the pervasive Deer Tick that spreads the dreaded Lyme Disease. I had a family member contract this debilitating disease after being bitten, and after a long painful illness she finally was able to overcome it. The strange thing is that she isn't the outdoor type. We couldn't figure out how she picked up the tick in the first place.
Me on the other hand, I've spent more times searching the woods for my golf ball than I care to count. I've played entire rounds, using my patented Slice-O-Matic, without having the ball land on the fairway.
I have taken the game to a new level that I've trademarked "Xtreme Golf". And, I'm planning to launch it as a franchise. Hitting the ball from the middle of the fairway is for wimps.
These days, for the sake of my sanity, you can find me hiking down a trail and through the brush to get to a secluded fishing spot. Yet, with all of this, I've never been bit. (knock wood)
But, I'm here to warn you about the Salestick. Some people may refer to it as a leech, but "leech" is not quite accurate. A leech has some medical benefits.
The Salestick is an insidious predatory parasite I've seen lurking in most sales offices that I've worked in. It can manifest itself into many forms. A friend, confidant, mentor, or even as a newcomer or naive trainee. It may be close. Sitting at the desk right next to you. Waiting, watching, listening, probing, smiling.
Perhaps you've encountered the Salestick and brushed it away as it came over to take a taste, then backing away because the stakes weren't high enough or the timing wasn't right. Always looking for an opportunity to bite into your lead, your deal and into the ultimate prize, all or a portion of your commission. Always planning for a portion of its annual income to come out of what it can suck out of its host victims.
And once it has plunged its hypostome into you, no matter how much you struggle to free yourself, it's to no avail. The Salestick then begins spin its lies about how you've stolen its lead. Its deal!
As you try to get your mind around it, you realize that you're having difficulty defending yourself. You're incapable of thinking this way. You don't have the mentality for it. You've crossed over into the Salestick's realm. The realm of Narcissism. The Salestick's argument is so convincing because it believes it to be true.
So you go to your Manager and you find that the Company doesn't want to get in the middle. It's a dispute between two salespeople and no mater what the outcome, the Company will still get its share. You're forced to settle, taking the Salestick as a partner in your deal and giving it a significant portion of your commission.
Now satiated, the Salestick drops off and crawls back to its desk, or it leaves the company to move on to another sensing everyone's defenses are a little too high.
And you? You're not the same. You're damaged on a few levels. Psychologically, you're suspicious of everyone. Your new motto is, "Trust No One".
As you stare at the plastic sales awards hanging on the the wall above your desk, you feel betrayed. The Company didn't have your back. You come to the, all too real, conclusion that in the Company's eyes you're just a commodity.
Then there's the monetary loss. Perhaps you were planning to use it for a vacation, or to buy clothes for your kids, or to pay the mortgage because your spouse has lost their job.
The Salestick doesn't care. It's driven by narcissistic greed.
You take little solace in the Salestick leaving the company adding credibility to your "version" of the story.
The Salestick settles into its new desk and tells everyone the story about how at the last company it was screwed by you. As it sits;
Waiting, watching, listening, probing, smiling.
When I was starting my career in real estate and interviewing around seeking a home, these words were imparted to me by one particularly interesting and colorful individual. As we were chatting during my interview he said to me;
"Kid, let me tell ya the business in a nutshell. All you have to know is if it's a buyer's market or a seller's market. If it's a seller's market you stick it up the buyer's poop. If it's a buyer's market you stick it up the seller's poop. All you have to know is who's poop to stick it up and when!"
He also informed me that the hardest thing that I would have to do in this business would be to "suppress my brains".
I left with quite an impression.
Do you remember your first deal as a real estate agent? I do. Still after all of these years.
I was in the business for about six months. At the company I worked, every Monday night the entire sales force filed into a stadium size conference room, where on the wall, for the world to see, hung an enormous blackboard with everyone's name and production for the week written on it. Each sales person had to stand and verbally give their production report in front of the entire group and be praised or berated accordingly by the company's president. I've also talked about these infamous sales meetings in my Post The Sales Contest.
Of course, with only six months in the biz, my stats looked pretty sad save for one pending lease deal. When it was my turn to speak, I announced my one saving grace and delivered to me from the President with a cold icy stare were the words; "You're due!" Which really translated into; You better have that deal closed by the next Monday's meeting!
All that week with, panicked single-mindedness, I pushed for the lease to be finalized and signed. The training method at this company was basically Baptism by Fire. So as far a the process was concerned, I was clueless. Just like going from one dark room into the next.
Finally, by Friday the lease was signed by the tenant and I arranged to go to their Headquarters in Manhattan that Monday to pick up the lease. (no email in those days) With any luck I thought, I'll be able to announce my first closed deal to the group at that Monday night's sales meeting.
On Monday I headed into the City and picked up the signed lease. Then headed over to the Landlord's office in New Jersey to get this puppy wrapped up. I'm sitting nervously in front of the Landlord watching him go through the lease page-by-page when all of a sudden he bursts out with "I'm not signing this lease!", "They didn't affix their corporate seal!". (What the hell is a corporate seal? I'm thinking.)
In a panic, I call the guys in New York and arrange to go back into the City to get the seal affixed. I managed to get back to the Landlord's office late that afternoon and delivered the lease with the corporate seal properly affixed. He signed the lease and handed me my commission check.
I made it to the Monday night sales meeting, where I proudly announced my first closed deal. I received my applause, and no sooner than I sat down a sinking feeling came over me, and a little voice in my head said "Now what?" My triumph was already ancient history.
A footnote to this story: Yes, it was raining (pouring) that day. There's nothing more miserable than having to travel the NJ Turnpike into Manhattan in a downpour. And the total commission? $1,000.
I'm meeting with a client and through the coarse of conversation she mentions to me that they're planning to add three energy efficient units to each of their seven facilities.
I informed her that I knew of a company that manufactures and installs these types of units, and if she was interested, I could have them contact her to submit a bid. "Absolutely", she said.
It just so happened that I had met the President of this particular company about a month before and knew that his product was a natural fit for what my client was looking for. A few days later as I was traveling past his facility, I decided to stop in to see if he had the time to meet with me to learn about this opportunity.
As I walked into the reception area, I noticed that his office was located just off to the side, and there he was, near his office door shooting the breeze with what appeared to be a sales rep. Pretty good luck, I thought. I introduced myself to the receptionists, explaining to her that I would appreciate a few minutesof Mr. So-and-so's time to inform him of a potential new business referral for his company.
She asked me to take a seat, which was in clear line of site to where the President was standing. Finally, he finished his conversation with the sales rep and walked back to his desk facing his computer on his credenza with his back to the door. The receptionist called in and said that I was here and would like a few minutes with you about referring you a new business opportunity.
Without even a hint of interest or curiosity to hear what I had to say, He replies "Tell him to make an appointment" I couldn't believe it! He couldn't give me a couple of minutes! It's not like I haven't met this guy. I wasn't looking for anything in return. I was just interested in adding some value for my client. If he happened to remember me down the road when he was planning something with his real estate, fine. But that's not why I was there.
It really blew my mind. I was seeing red! As I was leaving, I couldn't help myself, I passed his door and loudly said "I was about to refer you 21 units!"
I wonder if I sent him this story he would recognize himself. Probably not. It's really dark up there.
In my Post Mini-Madoff I ended it with "the one thing Mini-Madoff has over Bernie is that he is still walking around free". The reason became apparent over the Summer. M-M is a snitch. An informant for the FBI. He took down forty-four politicians and religious leaders in New Jersey and New York in yet another New Jersey corruption scandal that is painfully and obviously ingrained in our State's political culture.
One greedy bastard was even selling human organs! No wonder the world views New Jersey as it was portrayed on the Sopranos. Although I never saw Tony Soprano selling kidneys.
You would think that these forty-four Morons would say to themselves; Hmmm, Let's see, M-M got busted ripping off $25 million. He's walking around free. He's talking about kickbacks. He's waring a wire! Run away!
Nope. These knuckleheads go ahead doing business as usual. I'm sure there are more that haven't been caught. You know what they say about roaches? You see one, there are a hundred more in the wall.
To paraphrase Groucho: They may look like idiots. They may talk like idiots. But don't let that fool you they really are idiots.
Yes indeed here we are. We've reached the end of another Summer and the beginning of the selling season. Time now races to the Holidays, so make hay while you can. Sales meetings also start to take on a more serious tone. It's time to get down to business. And to light a fire under everyone's asses, it's also time for the sales contest.
Many salespeople revel in the competition and the opportunity to receive recognition and perhaps an award for being Top Gun. A natural food source to feed the competitive personalities and egos that are required to be successful in sales.
Me however, I've never been particularly motivated by these contests, although I've won my share. There's something about receiving a plaque or certificate that just doesn't do it for me. I'd prefer to win something tangible like cash (cash is good), lunch for two, a preferred parking space, or even a ham sandwich in the building's cafeteria. Anything that I can actually use.
I've also been around long enough to know that these awards have a double edge. The winner gets the glory and the company gets to apply continual subtle pressure as the plaque hangs on the winner's wall for all to see. The alpha dogs lick their chops waiting for a chance to win the next contest and the winner thinks; Like hell you are. You're not going to create a gap in my collection. Hanging a ham sandwich on the wall just doesn't convey the same message.
None of this has any affect on the walking-dead whatsoever.
At one huge residential and commercial company I worked at, we would have a Broker-of-the-Month award. The winner would receive a mass produced plastic plaque to prominently display above his or her desk. I received several of them. When the meeting was over I would discreetly discard them into the trash upon my exit. My Wife and Partner for over twenty five years would scold me saying: "Can't you wait until you get home before you throw it (plastic plaque) away!" I have to admit, the first time I did it was for me. Subsequent disposals were to watch my Wife's reaction. She's so cute when she's glaring at me.
This company also had an annual grand prize. If you hit a certain income level you won a trip to some island in the Caribbean. The problem was that all of the salespeople in the organization who qualified went there too. In the five years that I was at this company I won the trip three times. I never went. It blew Management's mind. I've witnessed too much during the 70s and 80s broker reception era. (For more on the ridiculous excesses of this period see my post Thick as a Brick) The thought of being on an island with a hundred and fifty or so half crocked real estate brokers and watching them charge the buffet table is more than I could stand.
The top producer in the commercial division once complained to me about how he had himself all set up on the beach with chairs and an umbrella that the hotel provided, and two women residential brokers came along and took it from him when his back was turned. Judging by the violated look on his face I think they may have also kicked sand in his face.
The real kicker was that at the end of the year you would receive an additional three to five thousand dollars added to your taxable income for the cost of the trip. That's just what I need. Pushed into another tax bracket. Thanks, but no thanks. If I'm going to go through all of the anxiety and stress that it takes to go away on vacation, I'm heading 180 degrees in the opposite direction.
I know I sound cynical. Perhaps part of my attitude stems from what old Sam use to say to me at the first company I worked at, during my formative in-training years, when my brain could still be molded like Silly Putty. Every once in a while old Sam would grab me, look me in the eye and say; "Kid, you're nothing but a commodity".
And I'm sure the major contributor to my lack of enthusiasm for these games is that while I was at my first company, I competed in the "ultra" sales contests, where everyone was a winner, or else.
Every Monday evening the entire sales organization, usually 50-60 salespeople strong would file into a stadium size conference room. Mounted on one wall was a blackboard around six feet high and thirty feet long. Upon it was written every salesperson's name and their entire production for the week, month and year. This included exclusive listings, open listings, leads, signs, pending deals, closed deals, and income. Everyone was fully exposed, naked for all to see. Literally the handwriting on the wall.
The first thing that became evident to me was that you don't have to be good looking to make a lot of money in this business. Some of the homeliest individuals on the Planet were consistently earning a fortune in commissions.
The procedure was that everyone had to take their turn, stand before the President and Senior Vice Presidents and report on their weekly production or lack thereof. If things were good you got an applause. If your production was off you were torn a new you know what by the President.
A good friend and I use to pass the time at these meetings playing a little memory game of trying to recall the names of all of the salespeople that passed through the perpetual revolving door.
We all knew that a "contest" was imminent when the overall production was down for that week. Take signs for example. If the count was down the President would announce that we were going to have a "sign contest". Whomever didn't get a sign by the next meeting was fined $250.00. That's right! FINED! It was credited against your next commission.
I called it "motivation through intimidation", or "fear" if you prefer.
I'm sure by today's standards this would be considered cruel and unusual punishment. But the company got fifty signs erected that week. Who cared if no one worked on anything else. The leads generated off of the fifty signs for the company would more than make up for it.
At the end of every meeting the President would bellow out; "And stay out of the office!".
To add insult to injury we were each charged $45.00 to erect the sign. We were also charged $35.00 a month for phone charges for the desk phone that we weren't allowed to come in and use.
Maybe old Sam was right after all.
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.
The Tenant Went Bad. And It's Your Fault!
About five years ago I was the leasing agent for a building owner and leased his building to a transportation company through a co-broker. I don't know how it works in your neck of the woods, but here in New Jersey if the tenant renews their lease we're paid a commission on the renewal. Close to time of the tenant's renewal the co-broker contacted me and asked me to follow up with the property owner regarding collecting the renewal commission. He thought the tenant was in the process of renewing the lease. So, I emailed the property owner saying that I understood the tenant was staying and asked him for a copy of the new lease terms so I could prepare an invoice.
I was taken aback when I received his reply:
"The man is into us for $120K in back rent. I think that you and the co-broker should make good for getting us this stiff. How about those apples. When can I expect the co-broker's and your first checks to compensate our losses?"
Geez, what a crybaby! This person wasn't what I would consider a professional landlord, but he was a prominent businessman and, I thought, sophisticated.
Shaking my head I politely responded with that although I was sorry he felt that way I successfully provided a service, and made no guarantees as to the tenant's ability to pay the rent. I also asked him that if he had invested in AIG or Lehman would he call his stockbroker and ask him to return his commission. I also said that owning real estate was just like any other investment meaning that there's risk. To make a long story short, I ended my message by inviting him to read my post I'm Not Your Partner.
But what really irked me about this whole thing was how did he come to this conclusion in the first place? That somehow it's the broker's responsibility as to the tenant's ability to pay the rent.
If you think it through rationally, how does the broker have any control over the way the tenant conducts business? Is the broker suppose to pay a monthly visit to the tenant's office to manage his books, making sure that there's enough cash in the account and that the rent gets paid first? If the tenant's business starts to slip is the broker suppose to insert themself into a management position and effect a turnaround? Get real!
I'll tell you how he and a lot of other landlords came to this conclusion. The brokers have allowed them to come to it! The "Village Idiots", part timers, dabblers and the ones that don't know what business their in. If your reading this and don't know what I'm talking about then maybe your one of them.
Allow me to clue you in. We're in the service business! We provide a service by finding a tenant and negotiating the business terms of the lease. It's the landlord's choice to accept the tenant and if he does, he assumes the leasing risk that's associated with the tenant. The broker is not a partner with the landlord in the downside risk.
Now that you understand your role, some of you still won't be able to help yourselves. You'll go out tomorrow and in desperation to "get that listing", let the landlord bully or intimidate you into accepting some ridiculous commission payout and terms. Guess what? Your being set-up not to receive your full compensation just in case the tenant stops paying the rent. Nice hedge for the landlord if you allow it.
So the next time you're confronted with your commission being tied to the tenant's performance, ask the landlord how does he expect you to enforce it?
I never did hear back from that property owner, and I doubt that he took the time to visit this blog to read the post I referred him to. After all it wasn't what he wanted to hear.
I did take a ride by his property and saw a broker's sign on the front lawn. One of those aforementioned brokers . I could only imagine what listing terms the broker had to agree to, but hey, they "got the listing".
Posted by Gary Lowe at 12:25 PM in Commentary, Commercial, Gary's Stories, Leasing, Listing | Permalink | Comments (0) | TrackBack (0)
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