Editor’s note: This is the second of a two-part series. Read Part 1.
Eric Berne’s "The Games People Play" has powerful implications for how you conduct your real estate business, especially when it comes to the issue of resolving conflict. The question is, "Which games are you playing?"
Berne identified three different styles in which you can approach a "transaction" (i.e., a communication between two different people.) The three different approaches are "Adult," "Parent" and "Child."
Challenges are most easily resolved when both parties in the communication/negotiation approach it from an "Adult-Adult" approach. Part 1 identified what happens when the seller elects to respond to an "Adult" communication from his agent with a "Child" response. The example below illustrates what happens when the Agent acts as the "Adult" and the client acts as the "Parent."
Sally Agent: "John, properties with amenities similar to yours in this area have closed and qualified for a loan at $124 to $158 per square foot. The properties that have closed for more than $150 per square foot were all built in the last five years. Properties built 15 years ago have been selling for $135 to $145 per square foot."
John: "So that comes to $290,000. No way that his property isn’t worth at least $350,000! We did all these upgrades and this property is built better than that crummy new construction over in that other subdivision. Also, look at all this beautiful landscaping. They’re lucky if they have one single tree on those lots in that area."
Sally Agent: "John, I would like nothing better than to help you obtain a price of $350,000. Do you have any comparable sales or additional data that supports the purchase price?"
John: "I know what you are trying to do. If you can list this property really low, then you can make a quick commission. This property is worth at least $350,000."
Sally Agent: "John, even though the market is strong, the comparable sales support a price no higher than $290,000. If you want to list your home for $350,000, I’m not the right agent to represent you. Thank you for the opportunity to discuss the marketing of your property. I wish you the best in obtaining the price you hope to achieve."
In the example above, when Sally elects to walk away from the listing, she does so using an "Adult" approach. John is using a "Parent" approach. First, he tells her that he knows more about the prices than she does. At this point, he is treating Sally as a child.
Sally then stays with the "Adult" approach when she asks about other sales that might support John’s position. John’s next response is to once again move to the "Parent" approach and scold Sally as if she is a child who is lying about the situation. The "Adult" response is to walk away from this listing because John will probably continue to treat her as a child and may even become emotionally abusive as well.
Where the greatest likelihood of a serious conflict occurs is when both parties decide to go into Parent mode. Here’s another example.
Sally Agent: "John, properties with amenities similar to yours in this area have closed and qualified for a loan at $124 to $158 per square foot. The properties that have closed for more than $150 per square foot were all built in the last five years. Properties built 15 years ago, have been selling for $135 to $145 per square foot."
John: "That comes to $290,000? You have got to be kidding me. This property is worth way more than those crummy shacks they’re building up the road. The area is devoid of character, no one has any trees, the developer didn’t even use insulation, and the cabinets and other fixtures are really cheap."
Sally Agent: "I’ve been in the business here for 20 years and have sold plenty of those houses in that other subdivision. You have absolutely no idea what you are talking about. The developer used top-grade insulation in every house. The fixtures are all a top name brand and the cabinets are all hardwood rather than the paint-grade cabinets you have in this place. With the condition this house is in, you’ll be lucky to see $275,000!"
John: "You’re wrong. I’m calling your manager to tell him you are totally rude and incompetent!"
Sally Agent: "Be my guest. There’s no way you’re selling for more than $275,000. I’m out of here."
John: "Good riddance!"
Parent-Parent interactions often escalate into full-blown conflicts. The challenge here is that John will not only call Sally’s manager, chances are he will post negative information about Sally online, on social media websites, as well as telling virtually everyone he knows about his experience with Sally.
The bottom line here is that as the "Adult" in the transaction, avoid making your clients wrong about their choices — that puts you in a Parent-Child interaction. The moment you find yourself proclaiming that you’re the expert or that you know more than your clients do, remember that you are creating a Parent-Child transaction that will most likely create a poor outcome.
A better approach is to ask questions, provide alternatives, and if the client is being unreasonable, thank him for the opportunity to discuss doing business with him and then very politely walk away. Always remember, let the "Adult" stay in control no matter which version of the "Parent" or "Child" you may encounter.