There’s A Time To Walk Away From A Deal.
In this very fast moving, competitive and inventory light Real Estate environment we’re living in today it’s easy to get caught up in and consumed by GREED.
Wanting to close that next deal usually seems to take precedence over our moral and ethical judgement so much of the time and we all need to make a living.
So sometimes we just sweep our conscience under the rug and move forward with closing that deal knowing that something just doesn’t feel right.
We all get so driven by the desire for success and to be looked up to as a top producing RE professional by our contemporaries that we sometimes lose our grip on sound moral and ethical judgement.
This past week I had an epiphany. I was working a deal with a young recently divorced lady who was still seemingly distraught over her plight. She contacted me about the purchase of a Manufactured Home in a rent/lease park.
She disclosed that she only had 100k cash and could only pay 50k for a very small singlewide MH near the beach. The rest would have to go towards paying her rent while she started to rebuild her business as a dog walker in a new neighborhood which has been her passion in life and something she’d been doing for years.
Because the Manufactured Home Industry has been one of my specialties for almost 3 decades and owning several MH properties in the very beach city she wanted to live in I knew I wouldn’t have any problem finding her a suitable place at that price point which I did so in short order.
She seemed to like the cute little beachy cottage which was only a 5 minute walk from the beach and I was already to submit the offer which I know would have been accepted because it had been on the market for two years.
It has been very difficult in the Manufactured Home Market today competing against a recovering housing market with prices so affordable that a MH has not been a viable option in our market.
But after sleeping on it for the night I contacted her the next day and told her that I had a legal obligation to submit any/all offers I get but that she had the right to back out before I submitted it.
I just didn’t feel comfortable about her spending half of her entire life’s savings on a MH that she would still have to pay space rent on and not realize any favorable ROI as MH’s in rent/lease park/communities tend to depreciate as the rent increases which it seems to be doing every year in most rent/lease MH communities everywhere.
I went on to advise her to put her money in an interest bearing money market account or a CD that would at least be gaining her a modest return while she was re establishing her business.
No, I’m not a financial advisor. I'm a real estate broker, manufactured home dealer and general and manufactured home contractor. But at 67 years old with 5 children all raising families of their own and trying to pay for housing and all the other costs of life I just felt that putting 50k into a depreciating asset as opposed to gaining at least a modest return was a more sensible option.
She can rent an apartment or room in the same beach community for just a bit more than it would cost her for space rent in a MH community and still have cash in the bank instead of tied up in a chattel that has proven difficult to quickly liquidate in such a competitive RE market.
Commissions on MH’s in rent/lease park/communities in my geographic sphere of influence tend to have a $3500 minimum regardless of sales price or a percentage that can be as high as 10%. So I could have made a quick 5 grand and been done with it and not even had to use my RE brokers license as I’m also a MH dealer and the paper work is a lot less arduous.
Maybe it’s my age getting the best of my conscience. Or maybe it’s those 5 children and almost a baker’s dozen Grandkiddies of mine that continue to permeate the inner cortex of my cerebrum and heart.
But I think in today’s fast paced, put the blinders on, slam dunk, getem while they’re hot and/or anyway you can mentality we all just need to pause for a moment and inhale and think about what’s really right.
Perhaps I didn’t get that deal that day. But then perhaps I made a friend that will one day come back when she is truly in a better place in her life. It’s not always about today.
Good Day!
Comments(10)