Broker's Positive Thinking Equals Positive Results
Judy Hatfield, CCIM, prides herself on being a very optimistic person. “If I think a deal is a win-win for everyone, I always think positively of how we can make the deal work,” explains Hatfield, president of Equity Realty in Norman, Okla. “I am a very positive thinker and believe that things will happen when they are right for all involved.”
Bolstered by her optimistic attitude, Hatfield never hesitated when faced with a demanding transaction last year. Despite two sellers who wouldn't speak to each other and a listing broker dealing with his wife's major health problems, Hatfield managed to close the deal with satisfactory results for all involved.
“I approached the transaction with a can-do attitude,” she says. “I believed we could make it happen.”
Hatfield represents Jim Kelly, owner of Kelly Auction, who specializes in used-car, farm equipment, and other large auctions. The property in Norman on which Kelly ran his business was not large enough to accommodate his farm auctions, so Hatfield helped him sell it. However, Kelly needed to find a new location that had convenient access to a major highway or road and was large enough for his auction business.
In May 2000, Kelly discovered an 86-acre tract of land for sale on Interstate 240 in Oklahoma City. As with any other deal, Hatfield contacted the listing broker about the property. What followed, however, was unlike any deal she had encountered before.
In her initial conversation with the listing broker, Hatfield learned that two owners held title to the property. Each owner had an undivided one-half interest in the land, but their ownership of specific areas was not clearly identified. One of the owners was based in the Netherlands and the other was based in Phoenix.
To make matters more complicated, the owners would not speak to each other due to a squabble over expenses. The land had been for sale for several years and over this time, one of the owners had not contributed his share of the taxes and upkeep of the land. The listing broker represented both parties, but they refused to negotiate with each other.
The listing price of the property was $500,000. An offer was submitted and the Phoenix-based owner agreed to the price and signed the contract almost immediately; however, the European owner balked at selling the property for that price. It was then that Hatfield learned that the listing broker no longer had a signed listing on the property.
“The other broker had this property listed for several years and probably just didn't continue to get a signed listing, since he was the only person working the property,” Hatfield explains. Although the listing broker's signed listing had expired, his sign still was posted on the property.
However, “Dealing in [the Oklahoma City] market, which is somewhat smaller than many,” Hatfield explains, “[the brokers] have a great deal of respect for each other.” Because Hatfield previously had worked with the broker on successful deals, she agreed to honor his commission in the transaction, even though he no longer had a signed listing for the property.
The situation then turned even more complicated when the listing broker's wife was diagnosed with a major health problem.
“I know this caused a great deal of stress for him in working on the transaction,” Hatfield says. The listing broker almost gave up on the deal several times due to the sellers' refusal to work with each other, but Hatfield kept encouraging him to stick with it.
“I supported him in every way I could,” she says, “just like I would expect he would do for me.” Hatfield offered to deal directly with the property owners when the listing broker needed to be with his wife, so they could keep the transaction moving in the right direction.
“I am most proud of the transaction because I worked with the other broker from an ethical perspective,” Hatfield says.
Getting the Job Done
Due to the difficult relationship between the sellers, Hatfield decided that the best way to close the deal would be to negotiate with them separately. However, this meant drawing up two separate contracts.
“Having two different contracts was very touchy,” Hatfield says. “It was obvious the person from Europe didn't need the money and the person from Phoenix did. That was how we negotiated.”
The lack of a signed listing caused negotiation problems. The sellers were free to ask for as much money as they wanted, because the $500,000 price was not the listing price at the time, Hatfield explains.
Luckily, because the Phoenix-based owner already had signed the original contract and wanted the money as quickly as possible, Hatfield was able to negotiate a lower price with him. This actually resulted in two contracts with different prices for each seller's one-half undivided interest.
To successfully complete the contracts, Hatfield was required to utilize a lot of “out-of-the-box thinking tactics.” Fortunately, Kelly also is a very entrepreneurial and innovative person who doesn't mind that Hatfield sometimes employs unorthodox strategies, she says.
For example, the European owner was hesitant to pay any out-of-pocket costs, such as for abstracting and surveying the property, in case the deal didn't go through. Hatfield convinced Kelly to agree that he would pay for these services upfront, but if the deal was closed, the sellers would have to pay their share. Luckily, the deal ended up working, so the sellers eventually paid their portion of the costs.
“I just kept encouraging the other broker to try my crazy ideas,” Hatfield explains, “because usually we can get them to work in the long run if they are positive for everyone.”
Hatfield eventually was able to negotiate two contracts totaling $465,000: $260,000 for the European owner and $205,000 for the Phoenix-based owner.
After successfully completing the two contracts, Hatfield ran into another roadblock during the appraisal of the land. She believed the initial appraisal was too low, which meant that Kelly was going to have to raise a higher down payment.
Hatfield's quick thinking again helped out in this situation. “We were able to get the appraiser to agree that if the land was cleaned up, it would be worth more immediately,” Hatfield says.
Also, Quadgraphics, a large national printing company, bought a 160-acre parcel of land across the interstate, which helped strengthen the value of the property. The appraiser eventually agreed to raise the appraisal amount.
Finally, in December 2000, after more than six months of strategy and hard negotiation, Hatfield closed the deal. “Positive mental attitude, perseverance, and teamwork made the deal work,” she says.
From her experience, Hatfield believes that other brokers “can learn to always approach a transaction with a win-win attitude.”
She encourages her colleagues to look for innovative approaches to seemingly impossible situations. “Don't be afraid to ask questions about solutions that may not have been tried before, because they may just result in the deal happening,” Hatfield advises.
Most importantly, however, Hatfield says that if the deal is right for all parties involved, “Just do it!”