S.E.C. Real Estate Observer

• Tweet

• Tweet

There are two approaches to brokerage as I know it. Dick Reno’s way is problem solving. The other is using numbers. Both ways are right but a broker needs to know the difference as the solutions are different. No one way is the only right way, but many of us think it is. None of us needs to have a preconceived judgment here.

Start first with the truth. One truth is that the sun always rises at a certain time and that apples always come from apple trees. No man can change that. Another truth is that 2 x 2 is always 4. No man can change that. But these truths lead in different directions.

The client that sits in front of you with a problem that is not based on truth is dealing with a man made problem of some nature, not truth. This client is dealing with an illusion and is in some way hypnotized. The client is seeing water in the desert, a mirage. If the broker jumps in and tries to help remove this water, the broker is caught up in the client’s belief system which happens in many cases.

Never ever believe this client. Don’t get hooked by his/her belief system. Never present this problem from the podium as though it were the truth. Always present it as the client’s perception of the truth. The broker’s job in this case is three-fold:

1. Never tell the client that his/her problem is an illusion as it would be a mockery. The problem is real to him/her as is the water in the desert.
2. Counsel with the client until the client has enough understanding to know how you operate. This is the time consuming part of this type of brokerage. If you, the broker, know in ten minutes the solution to this client’s problem don’t voice it. If the client can’t see the solution through your eyes he/she won’t move when the solution is brought to the table. Don’t take this client to the marketplace until he or she will recognize the solution when it is delivered. Then you will also not be wasting the time of all the other brokers in your fraternity.
3. Solve the problem. Move the client out of their illusionary set of circumstances to one that is more tolerable or comfortable to them. Product, price and geography are of minor importance.

The client that sits in front of you who is number-oriented is usually estate building or going to cash and is a totally different breed.

1. They are the ones following 2 x 2 = 4. A truth going in another direction.
2. Here then come the phrases of leverage, cap rates, prime rates, inflation, devaluation, starker, tax benefits, opportunities, etc. All of these are words that should never be used with the problem solving client.
3. The counseling for these types of clients, for the broker, is often much easier as many of them already know at least the basics and are more sophisticated.
4. These are different people or companies. They are much harder to control than the problem solving client but often the more rewarding on the financial level for the broker as they never stop coming. You can work with this client for many years as they continue to go onward and upward. In the first instance, when you have solved a problem for a client you don’t necessarily see that client again right away unless they get in trouble again – and there are many that do.

Stick with, and know, the truth yourself. Don’t try to solve the problem on the level of the problem and don’t force a client into a framework that doesn’t fit. If it is a problem situation don’t treat it like a numbers situation and visa versa.

Dick Reno knew nothing of numbers. The only time he used them was to placate the IRS. He said that only one out of ten clients fit his modus operandi and he never took the other clients.

That of course was 30/40 years ago. Real truth however never changes. Today we have some brokers who can do both. With the right education and belief, perhaps we all should be able to do both, if we wish. Some brokers only want to work one way but the clients’ needs should be paramount. If we are not happy working with one philosophy, we should pass off those clients that don’t fit us to someone else as other professionals do.

The exciting part is that we can mix these clients in the same marketplace which is very healthy as that is the way life is.

As brokers who know the truth, we really have a unique opportunity to change the world in a positive way.