« | Home | »

A Commercial Broker Who Fell from Grace in Our Industry

By Jim Gillespie | April 7, 2008

I don’t know if it’s just me who’s thinking this, but it seems that it’s a lot harder to find modern-day heroes these days. I look at what just recently happened to Elliot Spitzer, a man who was greatly admired for taking on some of the most corrupt people in the business world, and as it turns out Spitzer himself was indulging in activities that were in direct conflict with what he had been fighting to eliminate. And when it was announced on the trading floor of the stock exchange that Spitzer had been accused of wrongdoing himself, many people on the floor erupted into cheers and applause. Apparently they didn’t like the fact that this man took a stand for eliminating corruption within their industry, and that he wanted to hold people accountable for defrauding the public.

And when I heard about this response from the people on the trading floor several weeks ago I found myself wondering, “Would commercial brokers cheer and applaud if the same thing had happened to someone who successfully prosecuted corrupt commercial brokers within our industry? Would commercial brokers really be angry at someone who had fined or removed people from our industry who were defrauding investors out of large sums of their money?” I don’t think so. Which makes me wonder about what kind of people we’re really dealing with there on the trading floor of the stock exchange.

Your reputation is everything in your commercial real estate brokerage career, so make sure you do everything you can to maintain it. Brokers will definitely talk about you with other brokers, and if you do anything out of line to try and take advantage of another broker, the story will spread like wildfire within your brokerage community. People will talk about what you did and they’ll avoid doing business with you, and this will end up costing you a lot of money.

And you just never know when the story will fall into the hands of someone who may write an article about it, too. With this in mind, here’s a story about someone I’ve known for decades as a commercial broker, who we’ll call Bill (which is not really his name).

Bill and I have both been prominent figures in the Southern California commercial real estate brokerage community, both having risen to prominent positions within the major real estate association for commercial brokers in the area. In addition, Bill also received a prestigious award from one of the two most respected national commercial real estate brokerage associations.

A number of years ago I introduced Bill to one of my best friends, let’s call him Dave, because Dave invested in industrial real estate in the geographical area that Bill works in. And when my friend Dave told me what Bill had done to him while working on a real estate transaction last year, something that could have cost Bill his real estate license, or at the minimum a suspension of the license, my stomach began to really tighten-up. After all, Bill is someone I used to play golf with on a regular basis before I had to give up the game for health reasons…mental health reasons…because the game used to drive me crazy!

Here’s the scenario of what happened between Bill and Dave:

1) Bill obtained a sublease listing from a tenant who was occupying one of Dave’s buildings.

2) Bill located a potential subtenant for the building, but Dave wouldn’t approve the sublease. The potential subtenant was financially weaker than the current tenant in Dave’s building, and was engaged in a business that Dave thought could be damaging to his building.

3) When the tenant found out that Dave wouldn’t approve the sublease, the tenant called Dave directly to have a conversation with him.

4) Several minutes into the conversation, after explaining his reasons for not approving the sublease, Dave asked the tenant the following question:

“As soon as you knew that you didn’t need the building anymore, why didn’t you just call me and ask me if the two of us could work something out?” The tenant then responded with, “That’s the very first thing I asked Bill to do as my broker. I told him to call you and ask you that exact same question, and he told me that you had completely refused to work anything out with me.”

5) Dave then responded with, “I can tell you that conversation never happened.”

Then immediately afterward Dave and the tenant agreed to cancel the remaining portion of the lease, letting the tenant walk away with no further obligations.

In looking at this, all I’m left to believe is that Bill as the broker might have thought that he wouldn’t collect a commission, or as much of a commission, if the lease had been cancelled, leading him down an entirely different path of action.

And as you’re reading this recognize that there are thousands and thousands of readers reading this along with you. I’ve chosen to not mention Bill by his real first name, but other brokers who may do something similar might not be as fortunate when people find out the real story about what they did. It used to be that stories like these would spread primarily through telephone conversations, but now everyone is just one click away from everyone else knowing about it. And I’m wondering how many people who know Bill already know about it.

So you’ll want to take the high road in your commercial real estate brokerage business, and make sure you treat both your principals and the brokers you cooperate with in a manner you’ll be proud of.

——————————————————-

Join Me for My Live Teleseminar Wednesday Night When I’ll Reveal
The 12 Important Secrets of Top Commercial Brokers

As you’re a subscriber to my real estate E-newsletter, I’m inviting you to join me for an exciting free telephone seminar this Wednesday, April 9th, at 8:00 p.m. Eastern Time, when I’ll reveal the 12 important secrets that have top-producing commercial real estate brokers consistently make amazing amounts of money every year, and I’ll interview four special guest experts in these arenas!

For more information on this FREE teleseminar and how you can signup for it, please click here.


Topics: Uncategorized | No Comments »

Comments are closed.