*Understanding Why Your Clients Do Things

One of KJF Partners’ Core Values is:

“We are driven by our personal commitment to create value for our investors, tenants, teammates and brokers.”

To serve our broker partners, we send occasional emails that focus on things that I have learned through my brokerage history or that I notice from my current role on the principal side of the business.

Brokerage is a very challenging business and understanding the reason behind your clients’ actions will help you develop great relationships and increase your chances of making deals.

Question(s) and listening:
Your clients and prospects are individuals and, as such, they have a lot going on in their lives and many reasons that cause them to do, (or not do), things. Asking questions to learn what your client wants/needs to achieve is critical but, understanding why they want those things, is an essential part of being a successful broker. The most productive method to learn about a client/prospect is to ask questions and, listen closely to the answers. If you’re unclear about the client’s view or opinion, ask more questions until you have a clear understanding of the “what and the “why.” Knowing that a prospect may want to sell a property is good but truly understanding why they want to sell is best. Is your prospect selling because they are motivated by an aggressive pricing market? Is your client worried that their tenant may not be positioned well for the future? Do they need the money to fund a personal circumstance? Do they have a deadline when they need the money and why? Do they have another source of funding to eliminate their issue? Is it a partnership they would like to be out of and why? Are they afraid the property may need a capital infusion or rehabilitation, and they don’t have the money or expertise? Is it too far away to manage effectively? Did they inherit it from a family member that was real estate savvy, and they don’t have the expertise to be an effective owner? Do they want to buy a house, car, jet…..?

Clearly, there are many reasons that may cause people to do things, want things, ask for things, and asking enough questions to understand will help you and your clients achieve their goals.

Don’t let fear stop you from learning:
Fear is a frequent reason that we fail to ask enough questions. Fear that we may be annoying? Fear that the client may feel we’re pushy. Fear that the answer isn’t something that we care to hear. Fear that the client may feel threatened. Fear that the client will feel it’s none of our business. Fear that we’re not strong enough, good enough or deserving enough to ask? If we want to succeed, we must learn to acknowledge the fear and then proceed to ask the questions that help gain clarity. I don’t know anyone that is completely free from fear so, we all have the choice of joining one of two groups: 1) those that allow the fear to prevent them from doing what’s required to succeed or 2) those that press through fear and take the necessary actions even though they are afraid. Clearly, the latter approach will lead to the best results.

A Case Study:
John is a broker that is selling a single tenant property with 3 years left on a Taco Bell lease. Because John asked the right questions, he knows that his clients father built the property and, upon his death, left the property to his two adult children (Mary and Rob), both of whom are employed full time in non-real estate industries. John has learned that upon the sale, Mary plans to use the money to put her daughter through school, and Rob would like to pay off his home mortgage so he can enter retirement debt free. John, through his questions understands that neither Mary nor John has the knowledge, desire or the money to redevelop or re-tenant the property if Taco Bell leaves in three years. In fact, both are worried that it would be damaging to their lives and goals if that happened.

John marketed the property extensively and found a ready, willing and able buyer whose price and terms were exceptional, and Mary and Rob gratefully proceeded to escrow. The buyer’s due diligence uncovered a real concern that will require Rob and Mary to accept a lower price for the property. The issue is real, and the buyer’s request is reasonable. Rob, however, is angry about the price reduction and is on the verge of withdrawing from the transaction. Because John did a great job understanding Rob and Mary’s situations, he is able to help him achieve his goals by asking the following: “Rob, I know it’s hard to accept a price reduction for any reason but, let’s discuss the impact of this price reduction as it relates to your goal of paying off your mortgage and entering retirement without the worry of having to pay a monthly mortgage. The decision to make at this time is, if rejecting this price reduction is worth sacrificing your goal of entering retirement debt free?

What’s the moral of this story? To be most helpful in serving others, one must understand fully the person that is being served.

Ask great questions and grow.

If you would like to read a few of our past newsletters, please click on the links at the end of this email.

Happy Hunting!

Joe

PS: If you have subjects that you’d like to see become future topics for This Principal’s Perspective, hit reply and let me know what your thoughts are.

Joe Faris
KJF Partners, Inc.
Cell Phone: 949-275-5038