Tag Archives: speed of trust

Talking Straight in Real Estate

No_Bullshit

 

The first of the 13 behaviors of trustworthy people and organizations is “Straight Talk.” As described in the book “Speed of Trust” by Stephen MR Covey:

“Straight talk is honesty in action. It’s based on the principles of integrity, honesty, and straightforwardness…it means to tell the truth and to leave the right impression” (Covey 2008, p. 137).

What it Means to Talk Straight in Real Estate

This means being transparent in all dealings. Ideally, when something is wrong with a loan or real estate transaction, the people involved will communicate in the spirit of mutual respect and consideration instead of dodging phone calls, and ignoring emails. It means talking through the issues in search of a solution, if one is available. If a solution cannot be found, then an honest discussion of the circumstances is in order, as well as a discussion of the steps required to resolve the situation.

Too often businesses throw clients and customers away when they do not fit the “perfect mold” of an ideal business situation. Uncovering and discussing obstacles and challenges in a straightforward way shows that a business cares about the success of its people. How else can a person succeed if they are kept ignorant to the things that are holding them back?

To break through the challenges, customers need to know what they are up against. Talking straight is the only way to make these problems known, so that customers can become aware of the issues, tackle the challenges head on, and ultimately overcome them. Honorable professionals are not afraid of talking straight, because they know it is the right thing to do and they recognize the power it has to help a customer discover the source of their problems and succeed. The value of talking straight is the trust that binds and builds over time. It happens naturally when people begin to realize results, as they work through the challenges with mentors and coaches who truly care about them, and value their business.

The Opposite of Talking Straight

“The opposite of straight talk is to lie or to deceive. Such behavior creates a huge tax on interactions—either immediately or at some later time when the deception is discovered” (Covey 2008, p. 138).

Nothing kills trust faster than a liar. These are the people who would say and do anything to extract the next dollar from customers. They make promises that they can’t–or never intend–to keep. They hide behind the legal jargon of their contracts to get away with not providing the value they promised. They are very time-focused and not results-oriented. When the going gets tough, they tend to fall silent and hide instead of rolling up their sleeves to play an assertive role in helping customers get at the core of the issues that are in the way. Instead, these so-called “professionals” believe their time is worth paying for regardless of whether—or not—they are successful in bringing about the results needed; such as, a “mentor for life” who goes missing in action at the first sign of a challenge, or a lease option “guru” who traps people into expensive contractual obligations, but who fails to create accountability or deliver real value; which is to solve the problem they were supposed to help solve.

Instead, they will sit on the phone and bull-shit with the customer for the allotted time without providing any real value to run the clock and bill against time wasted. By the end of the contract period, the customer is no better off than before. It is hard to understand how such a person can live with themselves after conducting business this way; because to someone who is a real and honest professional, nothing is more satisfying than the feeling of helping customers get the results they want and need.

The Counterfeits of Talking Straight; More Trust-Destroying Behaviors

The counterfeit of talking straight includes “beating around the bush, withholding information, double-talk (speaking with a ‘forked tongue’), flattery, positioning, posturing, and the granddaddy of them all: ‘spinning’ communications to manipulate the thoughts, feelings, or actions of others” (Covey 2008, p. 139). These are all telltale signs of untrustworthy people and organizations. They are so scared of being pinned down or caught in a lie that they start to dance around the hard questions. They cannot be straightforward about the issues at hand; because the truth is as ugly as it seems. Take for example; a lender who crams junk fees into its compensation structure, and who creates convoluted reasons for justifying them.

One such lender asserted that a borrower would have to pay a $1,600.00 “risk fee” in addition to 5 points plus customary closing fees for every loan they would fund, if the borrower did not pay a one-time fee of $1,700.00 to join it’s so called “exclusive” 100% loan program. The lender told this borrower that they would not be allowed to use gap funding (even from their own credit lines) if they did not pay the $1,700.00 to join its 100% funding program. It was a slimy manipulative tactic to extract fees from the borrower knowing that the borrower was under contract and had a time-sensitive obligation to close on a property within 30 days.

As with any industry, there are good and bad players on the field; however, there is a way to discern the difference between the two, and it begins with straight talk.

The Speed of Trust in Real Estate

 

Image courtesy Franklin Covey (2007)
Image courtesy Franklin Covey (2007)

 

Real estate is a team sport. How well a team performs as a whole depends on the quality of contributions made by each individual member, as well as how each key player functions within the context of delivering results for a successful outcome; on time and under budget. The cost and speed of success depends heavily on a key ingredient that can make or break the efficiency of a team and–in turn–the success of a project. That ingredient is trust. More specifically, that ingredient is smart trust.

In a book entitled The Speed of Trust (2006), Stephen MR Covey points out that although trust is largely misunderstood, it is critically important to learn the “how” and “why” of building trust to increase good will and efficiency of the team. A compelling excerpt from Covey’s book reads as follows (Covey, 2006, p.1):

 The One Thing that Changes Everything

“There is one thing that is common to every individual, relationship,  team, family, organization,  nation, economy,  and civilization throughout the world–one thing which,  if removed, will destroy the most powerful government,  the most successful business, the most thriving economy,  the most influential leadership, the greatest friendship,  the strongest character,  the deepest love.

On the other hand,  if developed and leveraged, that one thing has the potential to create unparalleled success and prosperity in every dimension of life. Yet it’s the least understood,  most neglected,  and most underestimated possibility of our time.
   That one thing is trust.” 

When placing this idea within the context of the real estate industry, it is apparent that trust is rare; if not altogether missing.  Covey explains how trust can be established, developed, and nurtured by constantly getting better at what we do, and aligning our actions with behaviors that embody trustworthy character and competence.

Trustworthiness and credibility become self-evident. When combined with the energies of people who can see and focus on the same vision, team synergy can produce results better than the sum of all parts.

The High Cost of Low Trust

Trust has an economic impact on all areas of life and business; a trust “tax” when trust is low, and a “dividend” when trust is high (Covey, 2006, p.13). It directly affects the speed and cost of making things happen.   To illustrate the point, Mr. Covey dedcribes how the events of 911 impacted the speed and cost of the check-in and boarding process at airports worldwide, as well as the effects of the Sarbanes-Oxley Act that was passed in response to scandals such as WorldCom and Enron. (Covey, 2006, p. 13-14).

When trust is broken, it significantly raises costs and adversely impacts the speed of getting things done.  Low trust slows down the pace of accomplishing things, while increasing the cost of accomplishing those things significantly (Covey, 2006, p.13). This applies to all areas of life and business; including the real estate business.

The Process of Rebuilding Trust

Building or rebuilding trust boils down to consistently demonstrating 13 trustworthy behaviors within the context of four categories,  also called the “4 Cores of Credibility” (Covey, 2006); namely Integrity,  Intent, Capabilities, and Results (p. 43):

These 13 trustworthy behaviors (Covey, 2006, p. 136-222) include:

1. Talking straight
2. Demonstrating respect
3. Creating transparency
4. Righting wrongs
5. Showing loyalty
6. Delivering results
7. Getting better
8. Confronting reality
9. Clarifying expectations
10. Practicing accountability
11. Listening first
12. Keeping commitments
13. Extending trust (smart trust)

Relating the 13 Behaviors to Real Estate

Overall,  these 13 behaviors can be used as benchmarks to measure all kinds of situations; whether it means evaluating a contractor, a coach, or any other member of the investment team. In fact, after benchmarking against these 13 behaviors,  stark realizations may come to light. You may discover and realize that you don’t have the right people filling key roles in your organization; or on your team. When such a discovery has been made, it becomes imperative to replace untrustworthy people as soon as possible with people who strive to be trustworthy, reliable, and dependable. If not, the dynamics common to low trust cultures will adversely affect performance; increasing operating costs, decreasing the pace of progress, and ultimately devastating the outcome of the best laid plans.

In the coming weeks, I will be featuring a blog post about each of the 13 behaviors as they relate to real estate investing, as well as building a high-performance team of trusted advisors and professionals.  It is a way of educating the market in an effort to raise the bar in an industry that typically functions in a toxic low trust culture; where most are in it for themselves at the expense of others. In this respect,  educating the market is key.

As the market becomes more educated about trust and its 13 behaviors, the more power there will be to use benchmarking tools that will facilitate the process of building highly effective teams in the real estate sector. People will finally understand how to consciously nurture and build effective teams upon a foundation of high trust, mutual respect, and consideration starting with ourselves.