If you’ve read even one of my articles here on the Propdocs site, you’ll know I am obsessed with efficiency. And that I believe we should always be on the lookout for inefficiencies in the way we do things, particularly in CRE. We should question everything, including what we think is “just the way things are done because that’s how we’ve always done them” and ask whether there is a better way to do things.
As a founder of multiple tech companies, it’s no surprise that I think technology can help us. But this doesn’t have to be a massive seismic shift for your organization. You can use technology to augment and improve what you are doing, because let’s face it, you’re probably doing more than OK today. But it is worth considering how technology can help mitigate some of the payoffs for current inefficiencies, especially when it comes to deal flow.
In this article, I want to change lanes slightly and think about a topic that certainly relates to efficiency, but probably isn’t often thought about in that context: trust. And specifically, I want to think about how trust can drive, or impede our deals.
Practically, trust implies that you do not have to ‘check’ work to ensure it was done properly. Of course, any work done by a person is open to human error, which is why proofreading contracts is so important. But every additional review, fact check or reconciliation means more time is added before the deal can be closed. The result is that every time trust is questioned, a deal is delayed.
Lack of trust can be caused by intended or unintended actions, but both have the same outcome of delaying the deal. Trust is a primary factor in getting sales closed quickly and, at the same time, contributes to a good relationship being built. Transparency in CRE deals from day one builds trust and the stronger the relationship the quicker and more mutually beneficial a deal can be agreed upon.
Adam Showalter, managing director at Stream Realty Partners agrees:
“There is an age-old saying that ‘people like to do business with people they like’, which for me is a metaphor for trust. In major markets, brokers transact 99% of leases and advise their clients, the tenants, based on their trust in the landlord and landlord representatives. If there is a lack of trust between any party, then naturally people will focus their efforts on more trustworthy opportunities. Conversely though, if there is trust between parties then the likelihood of a transaction or future transactions will significantly increase.”
The aspects of trust
In any deal, trust has multiple vectors, each offering an opportunity for trust to be established and the deal to run smoothly, or for trust to break down.
Your negotiation counterpart
Any mistake, intentional or unintentional, will raise a red flag with the other side of the deal. This weakened trust will result in additional work as your counterpart starts combing through every version of the contract they receive for inconsistencies and changes that are detrimental to the deal for them. Usually, there are dozens of points within a CRE deal that can be negotiated, from something as simple as a price to more nuanced issues such as how language is legally structured to protect implicitly or explicitly one, both or neither party. Ultimately, the most successful deals are mutually beneficial and have the best long-term effects.
Even though you are on the same side of the deal, challenges around trust exist in teams of any size. The larger the team, the more chances there are for miscommunications. The smaller the team, the easier it is to simply run out of resources and bandwidth resulting in mistakes. Any mistakes along the way can be costly in terms of time and money, and brokers need to be able to rely on their team members and be certain that they will carry their weight and contribute to the most efficient deal process. Another consideration is that recovering from internal trust issues is extremely difficult and takes a lot of work, so the fallout extends beyond a single deal.
Yes, you are one of the trust vectors too. If you don’t trust yourself, it becomes very difficult for others to trust you. This lack of trust can manifest as duplicated work, micromanaging your team and a stream of miscommunication.
You’re probably being pitched with new technology that will “change your life” every week. You could spend all your time trialing and testing the latest CRE tech to see if 1) it really does what it says it does, and 2) you can trust it with your most valuable deals. Given how buoyant the industry currently is, it’s unsurprising that many people trust the old ways of doing things over new technology. But, while it might be happening more slowly in the CRE industry than in other industries, a shift to digitally-enabled processes and systems is inevitable. Take, for instance, the requirement for detailed, granular, accurate data in real-time. This is not possible without technology. So how do you choose the technology that does what it says and that you can trust to deliver value?
I prefer solutions that are easy to learn, easy to implement and most importantly can easily be used consistently. It’s near impossible to trust a technology that you rarely use, While there’s always a learning curve with any new technology solution, the faster you can ramp up to using and relying on it daily, the more trust you’ll gain that the results are what you expect.
There is only so much that is in your control when it comes to building trust with your negotiation counterpart. You can put in place the best processes and systems to foster trust, but then it is up to them to determine if they trust you. However, you have more control over how your team works, the culture you build, and the ability to streamline deals by optimizing all the trust factors you have direct access to.
To get this right, start to critically analyze and question your deal process. Question how your internal team operates, how you can gain the trust of your colleagues and counter-parties, plus build trust in the processes and technology you use. Then put resources into improving trust in your organization, and start implementing changes to do just that.
One of the changes you might be considering implementing is how you create, negotiate and sign deals with a Propdocs trial – get started for free now.