I love that title.
It’s also the title to Robert Ringer’s 1973 classic about selling commercial real estate. It’s the first book that I found to discuss the realities of being a commercial broker. However, the book deals with much more than that subject.
First, it can be applied to any product sold whether that’s residential real estate, cars or movie scripts. Basically, if it’s a commission-based industry than this book applies. People are essentially the same when a commission is involved, regardless of the side of the table they are on.
Second, it deals with life. Especially, his “theories” which are sprinkled throughout the book. These theories can be applied to any aspect of life, regardless of whether you’re involved in a commission-based industry or not.
Third, Ringer describes the types of people you will negotiate with throughout your career. These people are also outside the brokerage field. I’ve run into the same type when I worked in the government sector as well as a salaried employee. Once you start to see these personality types in the world, you can prepare for them in different ways.
Before we get to far away from the title, let me address it. Some folks get hung up on it, focusing specifically on the last word. That’s exactly why Ringer chose it. His intention was to set the tone early that this self-help book was going to deal in reality, not fantasy. When you work in commission sales, the world is very competitive due to its opportunities and you can get pushed around easily if you let it happen. The idea is how to push through the intimidation of others and not let yourself be a victim.
Working Without a Net
If you’ve never worked in a commission sales position it might sound scary. I was fearful when I made the leap from a salaried position to full commission six years ago. However, I will never go back now.
First, the freedom I experience is like none in any salaried job. I do not have to punch a clock nor report daily to a supervisor. I can come and go as I please. I can work whatever schedule I like. My life has evolved through this career and I’m now beginning to work from my home office a couple days a week. I didn’t ask for permission or beg for forgiveness to do it. I just did it. The restrictions on time and location were self-imposed (all in my head). The commission sales position allowed me to do this.
Second, I can out earn my previous careers – by a lot. My income potential is only limited by how creative I am and how hard/smart I want to work. That’s completely different than getting compensated by an hourly rate for hours worked. There is a cap on how much you can earn as an employee.
Third, I can fire my clients. Can an employee fire his boss? I have, occasionally, terminated a relationship with a client that is not productive for many reasons.
With this freedom and opportunity comes peril, though.
First, I can go stretches without receiving a commission. I’ve learned to budget and not live above my means. Therefore, when periods of not earning a fee happen (and they do happen), I’m prepared.
Second, with the amount of potential money out there, other brokers can behave in a less than friendly manner. Think sharks when blood is in the water. They will snatch a client from you if they see weakness. Is it a mean and dirty game? It depends upon how you look at it. If you’re not serving your client, you deserve to lose them. In other words, if you’re not doing your job, you deserve to be fired.
The Cornerstone Theories
Ringer built Winning Through Intimidation on four cornerstone theories. I really liked them as they dove-tailed into other things I’ve heard through the years.
The Theory of Relativity
This one might be the toughest to grasp. I once heard that there’s three sides to every problem – your side, their side and then reality. The problem in any negotiation is understanding how everyone is looking at a problem, including yourself.
This is often hard as we tend to look at the world through our own lens which distorts almost everything. The closer we can get to understanding reality the clearer the problem will get. When we can understand how the other side is viewing the problem, we will be in a better position to negotiate. If we only see the problem through our lens, then our chances of success will be seriously diminished.
This theory could be renamed, “See Things for What They Really Are.”
The Theory of Relevance
How relevant is something to helping you make money or to achieving your goals? This has been on my mind a lot lately after reading Tim Ferriss’ The 4-Hour Workweek. I’m focused on the idea of defining busy versus productive activities. Filling out weekly cold-call spreadsheets for various clients isn’t productive. I’m done doing that. Each client may want their own spreadsheet, but that “busy work” stops me from doing the thing that makes both of us money – contacting prospects.
Also, when listing a property, it isn’t relevant when a seller repeatedly focuses on how much it cost them to build their property. No one cares that it cost $1,000,000 to build it if the market is only going to pay $800,000 for it.
This theory could be renamed, “Focus on What Matters.”
The Thirty-Year Theory
This one really should be renamed the 100-Year Theory as it concerns death. However, it was the early 70's when the book was written and life expectancy was shorter.
Regardless, here’s the lesson: Life is short so go after what you want while you can.
Ringer writes, “when my participation in the game of life ends, I don’t want to be caught begging for an extra inning.”
Don’t mess around. Set your goals and get after it. Do you want to retire early? Then darn well do it. Want to make a million dollars? Get going! Sitting around and dreaming about it isn’t going to get you what you want. Hustle and determination is what you need.
This theory could be renamed, “Don’t Waste Time.”
The Ice Ball Theory
Ringer developed this theory after reading a science book which said the sun was slowly burning out and in 50 billion years there wouldn’t be any sun at all. The result would be an “ice ball.” His first instinct was fear which was soon replaced with laughter. It was ridiculous to worry about something 50 billion years away.
Have you done something much the same? I know I have. I’ve worried that some people might not like a blog post, or worse the actual blog. So what? I can’t worry about everyone’s feelings or I’ll get nowhere in this life. I need to take action and move forward to accomplish some things.
This theory could be renamed, “Don’t Take Yourself Too Seriously.”
The People We Negotiate With …
Ringer identifies the three types of people we negotiate with in commercial real estate. As mentioned earlier, these people are everywhere in life.
Right up front, this one lets you know that he’s out to get your chips. He then follows through with his promise in words and actions. He’s the guy who will reach for your chips during the opening negotiation or perhaps as early as the listing. His reputation proceeds him throughout the market. The Type One isn’t nice and doesn’t care to be nice.
Treat this one like a cornered rattlesnake.
He’s a sneaky turd. This is the guy who says I don’t want your chips and pretends he wants you to succeed. However, when the moment is right, he reaches into your pocket just like the Type One would.
This guy will get the deal done, keeping an eye on the loophole you forgot to close. Perhaps your commission wasn’t listed in the deal or was listed lower than a verbally agreed to amount. He’s not going to correct it. He’s going to let you make the mistake and capitalize on it when the moment is right.
He’ll smile the whole time and say, “You should have known better” when you ask him to do the right thing.
Treat this one like a cornered hyena.
This is a nice guy but a bit of a ding-dong. He says he doesn’t want your chips and he sincerely means it. However, this is the guy that will reach for your chips out of necessity to get the deal done. He’ll see cutting your commission as the only way for the deal to make sense. He’ll apologize profusely that he got you both into the situation, but he’ll look for you to make it right by cutting your fee. He’ll say that you’re already getting more than your fair share so you should take one for the team.
Treat this one like a cornered raccoon.
Ringer does qualify a fourth type who is supportive of you because they stand to directly gain through your receiving of income, but he doesn’t spend much time talking about them. I believe that’s because it doesn’t make for a good story, but I’m going to create the category for my own sake of fairness.
Type Four (according to Colin):
There are clients who understand how brokers are compensated and how the world works. They are not jerks and are not inept. They’re good, decent folks who understand brokers can help them achieve their goals.
Some of these clients have been former brokers who have grown into developers or investors. They often state, “I want to pay a commission.” What that means is they’re paying for something that has occurred – a new lease or the sale of a property. Brokers only get paid when something is sold or leased. Therefore, the Type Four understands the value a broker brings to the table.
Treasure this client as they are the most valuable ones you’ll come across.
Additional Theories for Winning
Throughout the book, Ringer sprinkles additional theories in with his stories about real estate deals. I’m sure we’ve all encountered some of these in our lives in one form or fashion. These theories include:
Sustenance of a Positive Attitude Through Assumption of a Negative Result – Plan for the worse but expect the best;
Uncle George Theory – Hard work and long hours only guarantee you old age;
Theory of Reality – It is what it is. Acknowledge reality or it will work against you;
Tortoise and Hare Theory – it’s not how fast you start, it’s if you finish that counts;
Organic Chemistry Theory – the bigger the braggart, the less successful they really are;
Leapfrog Theory – you don’t have to follow the pack to get to the front;
Theory of Intimidation – your results are inversely proportionate to how much you’re intimidated;
Posture Theory – Your posture (literally and figuratively) is as important as your words;
Makeable Deal Theory – Only work those deals with a high chance of success;
Fiddle Theory – Time kills all deals;
Boy-Girl Theory – People want what they can’t have;
Better Deal Theory – The fear of missing out;
Bluff Theory – Never bluff. Develop some guts.
If you’re like me and enjoy reading stories of real estate transactions, then this book is for you. Even though it’s dated by the lack of cell phones, email or even fax machines, the concepts of deal making are timeless. It’s a fun and interesting read and one that helped me build a foundation for negotiating in real estate.
I’ve read it several times now and each time I grab something new to use in my daily life. That’s the value of a great book.
Do you do a lot of negotiation, especially in real estate? Winning Through Intimidation can give you the edge you're looking for.