Last week I received a phone call from a family friend. He is a well-known real estate investor and a very savvy one at that. He is also really cheap.
Now, I don’t mean "sorta cheap" or "kinda cheap." Heck, I can admit to being sorta cheap myself; I am no stranger to a good sample tray and a free coffee. And kinda cheap people are like my grandparents: they tip with whatever change they find in the bottom of their coat pockets. But really cheap people involve you in their cheapness. So I wasn’t too surprised to hear the request on the other end of the line.
REALLY CHEAP: Alisha, I need you to drive by (123 Address St.) and check it out for me. Do a walk-through, a (comparative market analysis), and let me know what you think I could flip it for.
ME: Well, I …
REALLY CHEAP: And don’t talk to the seller’s Realtors. I don’t want them to know I’m interested.
ME: Do you …
REALLY CHEAP: And I’m already working with another Realtor. I don’t want them to know you’re involved, ‘kay?
ME: But, the thing is …
REALLY CHEAP: Just your gut level instinct will be enough for me. Thanks for the favor, hon’. (Click.)
Hmmm …maybe I should mention that this is my husband’s family’s friend.
I didn’t even know what to say, really. Who does that? Expecting me to just drop everything and offer free real estate advice for nothing! Who does he think I am, a Realtor? Hmpf …
I decided there were only three ways to play this.
No.1: Pretend to be really, really sick. "Oh, I can’t even pick up the phone, let alone drive out to that address. I’m so sorry. If only I didn’t feel like the living dead. Blaahhhhhh!"
No. 2: Give bad advice. "Flip that? Of course! Why, I see you making three times any other conservative estimate. It doesn’t need any updating. It’s perfect just the way it is. Honestly, what a piece of cr … creativity, oh so cute! I think you should buy all the surrounding real estate, too."
No. 3: Play it straight. "Well, based on the current sales trends in the area and the existing competitive properties I’d say you should offer no more than X. And if you can get it for that, well then, that’s a lucrative deal."
Option No. 1 really appeals to me the most. I can do a very realistic impression of the flu. However, word of my true health would no doubt get back to Mr. Really Cheap, aka Mr. Savvy Investor. In scenario No. 2, I could guffaw to myself in secret, but if he actually took my advice and bombed, well then, where would I be? Ugh.
Down to the third option. Sure, I would end up telling the truth, but also end up feeling just a little used in the process. I decided the problem was that most, if not all, real estate clients do not truly know how we get paid. How much we get paid is a different issue altogether. But I’d argue that unless you are a Realtor yourself, you don’t really know how all the splits, referral commissions and brokerage fees work. So I decided to type it all out and send Mr. Savvy Investor an invoice with an explanation of fees. Lawyers and doctors do this, right?
After printing out my handiwork and spritzing it with expensive perfume, I thought I’d better let a broker friend read it. Another set of eyes, you know.
BROKER FRIEND: You are seriously going to send this out, Alisha? What are you thinking?
ME: Well, I was thinking that I’d let him know I value my own time, and that I treat real estate like my own business because it is my business!
BROKER FRIEND: But don’t you think this letter is a little ‘in your face’?
BROKER FRIEND: So, this business is all about relationships. This is not a relationship letter. I’d say give him the information he desires and file this letter under "How to Lose a Client."
ME: But he’s not my client! He’s just really cheap!
BROKER FRIEND: Really bad idea, Alisha. Really bad. But hey, it’s your call.
Fine. So I round-filed my explanation of fees. Pooh. I’m in a relationship business. But I’m curious, anyone know a better, more elegant solution to really cheap people? Sigh.
"Blaaaaaahhhhhh! Oh no! I just got the flu!" Darn it. I hate being sick.