By Jeff Beals
Many years ago, when I first started working in commercial real estate, I learned something new about prospective-client qualification.
One day a man walked into our office. He had just moved to my city from a different part of the company, and he brought some impressive ideas with him. He wanted to interview our real estate company in order to have us represent him as he developed property and built major buildings in his new city. His ideas were downright grandiose, and he assured us he had access to unlimited capital. He told captivating stories and dropped big names.
Even though I was a newbie, an alarm went off in my head. This guy sounded too good to be true. My boss was equally skeptical. Our initial thought was to just laugh about the meeting and not waste our time with the guy. But there was something that kept pulling us back. Something about the guy seemed genuine, so we decided to do a little background research on him.
For the most, his stories actually checked out. We learned he had been involved in some significant real estate deals if not as big as what he was proposing to us. We found evidence that he had done work with a couple of the big names he mentioned. A banking reference he gave us was legitimate. We learned that a couple other companies had signed on to work with him including a widely respected business consultant and a major architecture firm.
While it still seemed too good to be true, we decided to move forward at least for a while with this guy. Though we were suspicious he could accomplish his plans, a couple questions in the back of our minds kept haunting us: What if he IS legitimate and we pass up the opportunity? What if we walk away and one of our competitors ends up doing this once-in-a-career project with him?
As we proceeded, this man ended up demanding an extraordinary amount of my time, which eventually made me feel suspicious again. But after a while, we came to a moment of truth, a chance for him to prove himself. The client decided to make an offer on a prominent piece of real estate. We wrote up the contract, and he produced a sizable cashier’s check for the earnest deposit. Finally, this strange man with the visionary ideas put up some real cash and signed a purchase agreement!
During the due diligence period following that contract, the client took even more of our time, but instead of focusing on the matter at hand – closing this deal – he was focused on other, bigger properties he wanted. His head was in the clouds. I became more and more frustrated, because the guy wouldn’t focus on first-things-first. How could we conquer the local real estate market if he couldn’t even focus long enough to close the first deal?!!?
As I pushed him, his personality changed. He got downright weird – confrontational and combative. It was frankly kind of disturbing. Some of his other advisers (architect, lender, attorney, etc.) were noticing the same thing.
At the last minute, he came up with a crazy excuse and killed the deal just as the due diligence period was about to expire. Many people had worked long and hard for absolutely nothing.
What did the mysterious client do next?
He asked us all to start working on another property he claimed to want. This one was even bigger and the plans he had for it were even more fanciful.
That’s when I finally had enough. My real estate firm cut ties with him. Some of the other companies that had been working him followed suit.
That was many years ago. The would-be, life-changing client never ended up purchasing or developing a single, solitary property in my city. He moved away many years ago presumably to pull the same charade somewhere else. I haven’t heard from him at all in that time. Just out of curiosity, I have Googled him a few times over the years and very little shows up.
I can remember him once telling me that he preferred “to fly under the radar.” I’ve heard that from other prospective clients and vendors over the years. Without exception, every person who has said those words to me has turned out to be illegitimate in some way. If you ever want me to run away from you and never ask to do business with you ever again, simply tell me you like “to fly under the radar”
Other than avoiding people who fly under the radar, what did I learn from this time-sucking client?
Another thing to look for when qualifying prospects!
I had always thought qualification was about discovering their motives and determining their ability to perform financially. In reality, qualification is about more than that. Some people are dreamers. Some people are wannabes. Perhaps for some psychological reason I don’t understand, some people want to play fantasy business instead of accomplishing real things.
If you are willing to allow them, people will happily usurp your time even for things that don’t necessarily make sense for you. I try to remind myself that the qualification process is all about elimination. We need to eliminate posers, pretenders and usurpers before they can steal your most precious resource: time.
I’m glad the strange man came into my professional life all those years ago. The time I wasted with him back then turned out to be quite valuable. I’m much more efficient today and my eyes are more keenly aware because of what I learned back then.
Jeff Beals is a professional speaker and award-winning author, who helps professionals enjoy greater success through effective sales, marketing and personal branding techniques. He delivers energetic and humorous keynote speeches and workshops to audiences worldwide. To discuss booking a presentation, go to JeffBeals.com or email at email@example.com or call us at (402) 637-9300.