The ups and downs of real estate can cause mood swings similar to someone who is bipolar.  I commonly refer to this business as an emotional roller coaster.  One thing is for sure, the real estate business is an exciting one. No two days are exactly alike just as no two deals are exactly alike, and even if you have been in this business for many years, you always see or learn something new.

I like to hear when some older investors tell stories about deals they’ve done with a simple handshake back in the day.  That must be something, you know, when a man’s (or woman’s) word actually meant something. Recently I was involved in a transaction which reminded me of the shark-like, underhanded, devious actions that occur in this industry.  Here’s a quick summary of the details:

-I contracted with a motivated seller to purchase her property
-This contract was very open ended (ie/ she could still shop around for a buyer willing to pay more. if she found a buyer willing to pay more, she could go under contract with that buyer)
-Property was marketed heavily through various forms of advertising
-A very interested buyer was found within 1 week
-After setting up an appointment with various interested parties, the interested buyer showed interest and wanted to proceed forward with the purchase

After showing the house, we were discussing details of how to proceed forward.  The buyer had never done an assignment before and felt uneasy about giving the $1,000 nonrefundable deposit.  His lawyer was not a real estate attorney, and was also unfamiliar with an assignment.  [For those of you unfamiliar with a contract assignment, it's one of the most simple transactions in creative real estate.  It involves selling your contract to a third party.] Due to lack of knowledge and experience, the buyer was hesitant to provide the deposit money and lock in his interest at the agreed upon price (this is understandable).

After a few minutes passed, the other interested investors began showing up to view the property.  The buyer, who was eager to lock up the deal, turns to me and says “I’m okay with the purchase price and what you’re making on this deal.  I want to buy it and give you my word.  I just want to go over details with my attorney”.  (He’s saying this as he’s shaking my hand and looking me dead in the eye). I gave him a discount of $5,000 since he seemed serious and ready to move forward immediately.  At this point my inner humanity is kicking in, and despite my business sense telling me otherwise, I say “okay, you seem like a good guy.  It’s a deal.”

This is where the story gets interesting.  During my conversations with the buyer, I was going above and beyond trying to assist him in this transaction since it was his first assignment.  I offered to have his attorney contact me with certain addendum’s that I could add to the contract so we could save time during attorney review (he was in a rush to buy the property).

A few days pass and I have yet to hear from his attorney, nor have I received a deposit. At this point, I only have an option contract on the property that has a close approaching expiration date. The seller is an elderly lady, so I didn’t want to confuse her with too much paperwork. By going out of my way for the buyer and trying to hold his hand through the transaction, I was actually shooting myself in the foot. Another day passes and I start to get the feeling that something was up.  After a few non-answered voicemails and emails, my assistant managed to get the buyer on the phone.  I was assured that I wasn’t going to get “screwed” and how he was a “Catholic church goer”, believes in hell, karma, etc.  I was also questioned about my agreement with the seller regarding signatures and the date.  Apparently the seller showed an unsigned option (the signed copy was mailed to me) to the buyer. Red flags go up at this point and I see a major problem, however, I give the buyer the benefit of the doubt (big mistake).

The following day my option officially expired and I was in the same position as the previous days.  When I get the buyer on the phone, I was no longer greeted with the nice “Christian”, karma believing, “man of god”. This time I was being yelled at with hostility and attacked that it was my fault for the option expiring. As the conversation progressed, I was threatened with “I don’t have to give you anything”, “I’ll have someone else buy it”, “My buddy says to go directly to the buyer and cut you out of the deal”.  These are words you don’t want to hear when you have orchestrated this entire deal and now you’re about to be circumvented by the same person you were trying to be a team player with.

At this very moment, thoughts that would get you 30 years in prison were going through my mind.  Letting my guard down, and trying to be human in this business allowed for an unscrupulous person to make a fool of me.  How could I make such an amateur move?  And then it dawned on me. Feelings of anger and failure were quickly replaced by those of triumph (if you could believe it).  Although still freshly wounded from this low blow action, I did my weekly jog that night with an extremely high level of self-pride. Knowing that I could look myself in the mirror and say that I do as I say.  That I am truly a man of my word.  That my business is an ethical one. I wish I could say the same for other people/companies, but the sad truth is, there aren’t many.  I think there’s something to be said about those old timers who did deals on hand shakes. It also brings great pleasure when working with other partners/companies who share the same work ethic.  This was a very important learning experience, but also solidified the business models that RESP and associates provides.  The experience of this transaction even carried beyond business and into spiritual growth.

…And for those who are curious, I did make a last minute Jedi move to keep my position in the deal.  You didn’t think the Jedi would get under handed that easily did yah?