oc | Thursday 23rd January

Negotiating with Liars

Lies or perceived lies are endemic within the Melbourne market. Many dinner party conversations include the “fact” that some real estate buying and selling agents are liars and whether that is true or not is irrelevant, as many people believe it to be so.

Lies can be very hurtful and we all want to avoid pain if we can; but lies and perceived lies are also part of buying Melbourne property, part of doing business in general and in fact part of living.

If you can deal with lies effectively, then you will have

  • More of homes
  • Buy some homes a lot cheaper
  • Make a lot better decisions

You can buy a home at $2,500,000 and you like the agent. Why is that an easier decision to make than when you don’t like the agent because he lied to you and the same home is for sale at say $2,300,000?

Lies chemically affect your conscious and subconscious mind?

When a lie is recognised by you and it emotionally (physically) affects you

  • The conscious part of your mind pumps in self-protection hormones and
  • The unconscious part of body starts to put in place defence mechanisms or
  • Both happen

As the defence mechanisms arrive we become wary (natural human protection instinct) and we are biologically programmed to say ‘no’ rather than ‘yes’.

Our bodies have evolved to react to a lie as a danger. Our bodies feel that the person who is lying to us is trying to gain some advantage over us and this may hurt us and therefore we need to be protected from it.

It’s a natural human survival instinct to avoid first and ask questions later. He who runs away lives to fight another day!

And herein lies the real damage a lie can do to a buyer.

Lies create emotion, which if not managed correctly can lead to poor decision-making.

Recently a well known agent liar was marketing a property over $4m in the area and the underbidder in these negotiations was incredibly upset with not buying the home he really wanted to buy.

The buyer could afford it, in the end he felt the price was OK, but couldn’t bring himself to say yes to the agent.

Why not?

Because his fear of being lied to was greater than his fear of missing out? His body was so chock full of conscious and sub conscious protective mechanisms, due to the process that the agent had put him through, that his mind became “clouded” and ultimately he made a bad decision.

He became frozen by the lie, as a kangaroo is immobilised by headlights. He so regrets his decision now and no court case will ever bring back that one-off lost opportunity.

He ran away instead of seeing it through.

As we said at the outset lies are perceived as endemic in the Melbourne Property Market. Whether agents are liars or not is, in many instances irrelevant, as they are perceived to be liars.

What happens when a perceived liar is telling the truth?

Truths when perceived as lies affect your body exactly the same as actual lies. You have the same chemical reactions.

  • How many times has a buyer missed out on a home they really wanted but didn’t act, when they were told there was another buyer and perceived the agent was lying, when in fact he wasn’t.
  • How many times has a seller missed a great deal when the buyer walked on a perceived lie and the next buyer, a few months later, paid a lot less.

This is the one of the real buyer problems when dealing with perceived liars. Most people can recognise a bald-faced lie on its own; but many inexperienced buyers cannot recognise a bald-faced truth, especially in amongst a number of bald-faced lies.

In a battle situation a student of Sun Tzu would consider a deceitful move on the enemy a bluff, more so than a lie. That action would be seen as a good thing if it resulted in victory.

Yet the loser may see the same action as a bad thing.

Modern Day Example: An agent says to you “make an offer and you will be rewarded”, but then takes your offer and pressures another buyer who offers $20,000 more, which then delivers a higher result to the seller – but you miss out.

A battle strategist would say well done, the seller probably the same; but you the buyer would not think that? And the agent – has he met his ‘moral and ethical and legal’ guidelines by maximising the seller’s position?

Does he think he lied? Should he? Maybe he sees it as poker and it was nothing more than a bluff. In poker is a bluff a lie or is it just a bluff?

On the other hand you have been negotiating with a seller for months and you are down to the last $20,000 on a $5,000,000 deal. The seller asks have you any more money. If you say yes then you know it will mean more negotiations. So you say absolutely no and the deal is done.

Did you lie or was yours a bluff?

They were both $20,000 negotiations – just different long term outcomes for you.

So are all lies bad?

Is the beauty of a lie in the eye of the beholder?

It is the level of self-interest connection to the lie that determines your emotion, which is turn determines your body’s conscious and sub conscious reaction. If the perception is, no danger to you, then the chemical reaction is minimised.

From our experience the level of perceived self-interest determines emotion.

When an agent lies to me (a professional buyer advocate) it is a very different emotional response and therefore very different mind/body response to when an agent lies to you (the buyer) and you recognise it.

The altered state of a competent professional negotiator’s mind would be far less than yours.

As a buying or selling agent we have some skin in the game (our fees) but that is only a minute fraction of emotion compared to you, the seller or the buyer.

As well we have the added advantage of having the experience of being able to deal with our mind/body change in this instance. At the Augusta Masters every year the leaders on Sunday’s back nine all have their bodies pumping in the adrenalin. But some cope better than others – much of it due to golf tournament experience, which allows some to manage their changing mind/body states better and make better decisions.

Tip: If possible separate the lie or statement from the liar it reduces the emotion.

At those dinner parties we’ve all been regaled with how the speaker is going to deal with the agent liar. First he’s going to sue him, then take him to the CAV and have him stripped of his license, then he’s going to make sure that the lying agent never works in this town again. It’s the principle you know!!

Mmmmm – None of this work for us, not because it is a wrong or right thing to do, but because if your focus is on payback, then your focus is on the personalities of the deal rather than your best long term home outcome.

We have found the more you focus on your desired outcomes, the more likely you are to achieve them. So is your primary focus payback to the agent or buying the home?

Lets not deal with liars then, lets work with decent honourable agents only!

If this is your thought then your main focus is not the home itself, but an agent who doesn’t lie. You don’t want to buy the best home for you – you want to buy the most pleasant deal.

In this scenario it’s all about how you temporarily feel about the deal and not how you permanently feel about your home. The word “short-sighted” comes into my mind about now.

If a liar is marketing your dream home then to actively not can be triply bad for you.

  • You are not buying the home you really want.
  • The liar is bullying you emotionally
  • You could be missing a better deal than you think. Most buyers can recognise a liar and many buyers don’t like to deal with liars. So a reasonable stretch of this argument is that the “lying” agent may actually remove a number of your competing buyers on the home you want.

To buy the dream home that achieves your best financial and emotional and physical outcomes you may have to deal with a liar in order to be the buyer.

Don’t get mad or get even, get the outcomes you really want

Stay focused on your longer term emotional, financial and physical outcomes above all else.

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