The Person You Should Walk Away From

[Drago Stanimirovic]

We're not psychologists.

We're investors, lenders, brokers, contractors, property managers. We're here because we hope to earn money.

And that creates a problem. Money gives us a very strong incentive to ignore behavioral red flags.

The deal looks good, so the strange phone call doesn't matter. The borrower has equity, so we overlook the unreasonable demand. The client is profitable, so we explain away the seventeen messages on Sunday.

"He's under stress." "She's just difficult." "Once we get this closed, it'll be fine."

Sometimes it will. And sometimes you've just invited somebody into your life who's going to occupy considerably more of it than you expected.

Real estate is a people business, which unfortunately means that sooner or later you suffer from people.

Unreasonable requests. Threats over trivialities. Lawsuits about ********. People rewriting conversations you were both present for. People interpreting ordinary business disagreements as personal betrayals. People demanding exceptions and then becoming furious when the exception doesn't produce the outcome they wanted.

Things that, from your side of the desk, sometimes look like they could have been resolved with a couple of hours of therapy, medication or simply growing up.

But we're not psychologists. And they chose us to dance with.

Not everybody who's difficult is sick. But not everybody is an adult, either. Being 47 doesn't necessarily mean you can tolerate disappointment, accept responsibility, hear "no," negotiate a compromise or understand that another person may legitimately have interests different from yours.

Those are adult skills. Some people never acquire them. The trick is recognizing that before money connects you. Because once it does, your options become progressively worse.

And there's another asymmetry in all this. If somebody starts badmouthing you afterward, almost nobody investigates the underlying dispute. Nobody requests the emails. Nobody reconstructs the timeline. Nobody checks whether their opinion of you is actually well-founded - or merely "based," as the kids say. They hear: "Don't work with that guy." And they remember it.

So what are you supposed to do?

Sometimes you try to solve the actual problem. Difficult people occasionally have legitimate complaints expressed badly. Clarify expectations, explain the constraint and offer reasonable alternatives.

If that doesn't work - or if you sense trouble coming - start setting boundaries in writing. Make it clear what you will do, what you won't do, who's responsible for what and what happens next. Ambiguity is gasoline with difficult people. 

Then make the relationship boring. Fewer informal conversations. Fewer favors. Less improvisation. Important decisions in writing. If necessary, bring another person into the room - a partner, attorney, broker, manager or colleague. Having another adult present can change the dynamic considerably, and it means you're no longer the only person who knows what actually happened.

Sometimes the answer is simply to price the problem correctly. Change the terms. Require more money upfront. Reduce your exposure. Add protections. Shorten the commitment. If dealing with this particular person creates additional risk, there is nothing unreasonable about requiring the economics to reflect it.

And sometimes you're already too far in to leave gracefully. Then fulfill your obligation. Be professional. Finish what you promised. And quietly never work with that person again.

But there's another option we don't use often enough: walk away before you're obligated. You don't have to try every previous option first. Sometimes you should start there.

Experience helps, not because experienced businesspeople can diagnose strangers. We can't, and we shouldn't try. It helps because after enough years, you've seen patterns. The person who wants you to bend a small rule before you've even started. The person for whom every previous business partner was an idiot, crook or incompetent. The person who needs your answer immediately but takes three weeks to provide what you need. The person who turns every disagreement into a question of loyalty or respect. The person whose recollection of the agreement mysteriously changes when the outcome changes.

None of these proves somebody will be trouble. A red flag isn't a diagnosis. It's information. The problem is that when there's money on the table, we become remarkably talented at explaining that information away.

We want the commission. We want the interest. We want the rent. We want the profit. We want the deal.

So perhaps there's a useful question to ask yourself before entering an important business relationship: If there were no money attached to this person, would I still be explaining their behavior away? If the answer is no, maybe you already know something your spreadsheet doesn't. Sometimes the most profitable deal you'll ever do with somebody is the one you decline.

(What behavioral red flags have taught you to walk away from a person - even when the deal itself still looks good?)