Words of Wisdom From a Real Estate Legend
Last week I learned of the death of Stan Ross, the former chairman of the USC real estate program whom I looked up to. We were not close and did not even know each other well, but we met briefly a few times during my year getting my masters degree in real estate development and I listened to him speak a few other times. He was a smart, incredibly accomplished man and his speeches very thought provoking and motivating. Mr. Ross made a name for himself as a visionary of the Resolution Trust Corporation, which was the bailout to the savings and loan crisis of the late 1980’s. He was eulogized by Dr. Richard Green, the current chair of the Lusk Center for Real Estate at USC. I was impressed by a few points that Green made regarding the philosophy of Mr. Ross.
“One’s ability to make a deal that leaves all participants better off is the key to surviving through real estate’s inevitable cycles.” I have often said that being a decent person is one of my competitive advantages. This is crucial in the often cutthroat real estate business as it really is a business built on relationships. If one is going to make a career in this business, one that is inherently geographically-focused, you are going to come across the same people over and over again: other brokers, neighbors, past clients, financiers, and other referral partners. If not for good relationships, which are formed through positive experiences, opportunities will not be given, either as referrals, favors, or information, which creates opportunities to put together deals. The ability to “vouch” for one of your peers to create confidence that the next experience is likely to be just as positive is incredibly valuable.
Another point he made is that “if you make a deal that leaves your counterparty worse off, you have not made a good deal.” In the high stakes, high ego real estate business, it is often seen as a success to get a “good deal” or to get the best of a counterparty in a negotiation. Sometimes this can be true as long as interests are aligned, but if you are unethical or take advantage of a situation where you have maximum leverage to benefit at the other’s expense, you may become “toxic” to deal with, which may lead to a negative long-term consequences, possibly a short career.
In the spirit of living by this philosphy, it is important to behave as if you will be encountering that party many times in the future. If you do this, put yourself in the other party’s shoes, and think about how you can achieve a win-win in every transaction, you will grow your reputation, which will not only allow you to get what you want out of a deal, it will create opportunities for more deals in the future.