“It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place.”
H L Mencken
Lies (or perceived lies), half-truths, bluffs, and omissions are necessary evils in the property market. How many dinner conversations have you been part of that painted all real estate agents with the same Pinocchio brush? It is almost irrelevant these days whether the person sitting at the other side of the negotiation table is in fact a liar, as you probably already perceive him/her to be.
Be that as it may, property investment is a game that is built on deals. From financing to purchasing, from remedial work to full on construction, from tenanting to dispute resolution, all aspects of a property investor’s life are driven by negotiated deals. Successful investors do not let a lie (or a liar) get in the way of a great deal. So ask yourself this, are you prepared to embrace the moral high ground wholeheartedly at the cost of sitting on the sideline and passing up on great deals?
Deals come about once parties establish a connection of some kind. Connection is why many negotiators tell lies/half-truths. Because they believe lying is the only way to build a connection in the first place. So how do you build connections in order to seal a great deal? By looking at lies differently, dealing with them cleverly, and leveraging them to your advantage. Here are some tips
- Know the immoral from the illegal – Have a good general understand of the laws relating to real estate agents, contracts, disclosures and representations. These laws outline the boundary within which all property players must operate. Once the playing field is levelled, it really is about your preferred shade of grey.
- Know your end goal – Understand that you are in negotiation to get yourself a great deal. You are not there to make friends. Let go of your emotion and the moral high ground you would normally judge yourself against.
- Look at lies differently – Why do people lie during negotiation? Because they believe this is their way of establishing that connection with you. Instead of fixating on the lies, focus on their motivators – a willingness to do business/strike a deal with you. Would you rather negotiate with a willing vendor who tells the occasional porky or a truth telling cold fish who is not at all motivated to sell?
- Prepare, prepare, prepare – Before you head into a negotiation, find out as much as you can about the other party and try to work out their motivators. When all is said and done, your own well-informed judgement is intrinsically more reliable and comforting than what someone else tells you to be true.
- Ask for proof – For big ticket items such as leaky homes, insist on citing official documentations such as the LIM report.
- Learn to ask questions in different ways – People who set out to deceive generally do not resort to outright lies. Instead they dive and duck and bluff their ways through the entire conversation in the hope that you will forget about your question in the first place. Well, don’t. If you do not get a satisfactory answer, ask the question again in another way.
- Take notes during negotiation – Make a habit of jotting down what was said during negotiation and send it to the other party afterwards as confirmation.
- Ask the other party a catch-all question – Questions such as ‘Is there anything else you know about this deal that you haven’t already told me?’ not only give the other party the opportunity to come clean but also signals that you take full and frank disclosure seriously.
One of the enduring nature of mankind is that we lie – frequently and sometimes quite casually. It is not surprising then that commercial (property) negotiations are often clouded with falsehoods and deceptions. This is by no means an endorsement for untruthful behaviour, but rather an acceptance that lies are a reality in the commercial sphere within which all property investors operate. Learn to look beyond the right and wrong of a lie and understand that it is our reactions to it, rather than the initial lie itself that ultimately determines the degree of damage it does to us.