I recently had the privilege of hearing
a talk about trust that Stephen M R Covey gave to the students at
Liberty University. He is ths son of the man who has given us books
like 7 Habits of Highly Effective People. The apple did not fall
from the tree with this fellow. He spoke of trust as being a
business virtue in addition to being a human virtue. He talked about
activities and organizations where trust is present operating with
more efficiency and speed along with being more satisfying to work
with.
I got to thinking about how this
applies to the real estate business, whether it is working with agent
buying a home or as an investor rehabbing a house. I thought back to
some of my experiences with and without the quality of trust. While
I didn't see it that way at the time, it turns out life proves his
theory.
Hardly anything can be done in this
field without a team of people. Trust is the lubricant that smooths
the rough edges and fills in the bumps in the road. When I first
moved to the Sunshine State I knew no one and had no connections. My
first deal here was wholesaling a small house in northern Pinellas
County. It so happened that the investor who bought it connected me
with a title company that just makes things work.
I didn't know them or the investor, and
we worked through several issues. Over time I developed a degree of
trust with the investor and I believe he, with me as we have done
other deals smoothed out with familiarity and trust. This is even
more so with the title company as we have done multiple deals and they
have come through every time. I just have to email them the
paperwork and I know things will be handled professionally and
legally. I don't waste time with worry or excessive follow up.
When working on houses, the same holds
true with the tradesmen involved. They can make your profit or kill
it. You need to have people you can trust, not just to do the job,
but do it on time for the quoted price. When you start out you have
to go by recommendations if you can get them. Learning this by
experience can be quite expensive, but sometimes it is necessary.
For the investor, it involves forming relationships with other
investors who may have come across your situation before. For the
new home owner getting to know they neighbors is a good place to
start.
I had a water leak in a second floor
condo that had to be fixed NOW! I did not have a plumber at the time
so I relied on one recommended by a lady at the local REIA. It
turned out to be a good choice. Even as a new client, the guy showed
up within the hour and the situation was resolved... and he didn't
take advantage of the situation with the bill. From that one
experience he earned my trust and I have used him on multiple jobs
satisfactorily.
As time went on and he developed some
health issues he recommended another plumber to do the work he was no
longer doing. I didn't hesitate to call the new guy because I had
confidence in the man who recommended him. He turned out to be just
as good. This saved me a lot of time and aggravation looking for
replacement.
The reverse of this situation is also
true. When you depend on someone who promises to get the job done
and they bail on you, you lose time and have to pay more to get
another tradesman to finish the job... if you can find one who is
willing to pick it up in the middle.
I had this situation on another job
where my electrician that I had used for small jobs in the past
started the job but was not qualified to finish it. He disappeared
without a word. I wasted time trying to find someone to finish the
job. Then I got another recommendation. It was a young Vietmanese
guy. It seemed he had just gone out on his own. He pulled the
permits got the job done and he will be called next time I need an
electrician.
So what do we get from all this? What
happens when your trust is misplaced? Yes you learn, but you don't
stop trusting. If things look good at the beginning you have reason
to trust until you see a reason not to... but you don't go looking
for reasons not to. If someone is untrustworthy they will reveal it
themselves.
Of course it is better to deal with
people you know and trust. But how do you find them? Where are
they?
The place to start is to be trustworthy
yourself. In my case, no investor would risk their relationship with
someone important to their business if they thought you were a jerk
and going to treat their guy badly. Then you need to, using common
sense and wisdom, show some trust in the people you are dealing with.
If they sense you don't trust them, it will be hard for them to
trust you and become dependably trustworthy. You have to do a cost
benefit analysis. Build trust on smaller efforts and let it work
it's way up. When it does you will spend far less time and get more
done.
I go to meeting with a group of
investors. There is a certain trust built into that group. You are
expected to treat each other fairly. If someone talks about a rental
property they want to sell, it is understood that you will not bother
the tenant. If it is a contract to be assigned, it is expected that
you will not go around them to the owner and try to cut them out.
People that can't work with this way are banned from the group. Her
lack of trust not only slows things down, it brings it to a halt.
You only cheat someone once.
Most people will live up to your
expectations. There are those who will try to take advantage of you,
but its kind of like the old adage – if you want a friend, be a
friend. It also helps to pick your friends wisely. Don't hang out
with shysters.
You can find out more about this
concept of trust being a business virtue as well as a personal one in
Covey's book Speed of Trust. Living that kind of life will make
things work better and you will feel better than if you are trying to
hustle everyone.. Better to have people trust you than have them
count their fingers after they shake your hand – like I do with
most lawyers.
