I heard someone once say that people rarely value anything they get for free. In order to truly appreciate something you must have some skin in the game. However, the rules of the game are changing. A mentor of mine once told me that wealth can be created competitively or cooperatively. The competitive individual believes the pie is so big and the only way to get more is to take a bigger slice. The cooperative person will just make the pie bigger.
A surefire way to fail in any business is to give nothing away for free. If you worry about losing a buyer, seller, client, partner or colleague because of the information you give them, or decide to withhold from them, then chances are you are already headed in the wrong direction.
The fastest way to build trust and rapport with people is to share valuable, no strings attached, information with them. If you are a real estate investor and are dealing directly with a homeowner in foreclosure do you explain all of their options? Before I get a contract signed by a homeowner in foreclosure I make sure to educate them first. They need to know that a short sale can adversely affect their credit, that they could be eligible for a federally sponsored loan modification, and that there other investors out there like me that could offer them a better deal. Of course, these disclosures provide me some legal protection. But, that’s not my primary reason for this line of questioning.
By the time I get through with this educational session the homeowner in foreclosure is practically begging me to buy the house. I have successfully made the transition from a greedy real estate investor to a sensitive consultant because I gave them all of the information without being asked.
Will I lose a deal from time to time? Yes. But, acts of goodwill have a tendency to be rewarded in the future. Coincidentally, I learned just about everything I know about pre-foreclosure, buying at the courthouse steps, subject to deals, lease options, seller carry backs, promissory notes, hard money, title insurance, wholesaling and rehabbing, FOR FREE, from a local real estate investor who believed in paying it forward.