I love the smell of poker analogies in the morning …
This article originally posted September 14, 2006:
The provocative headline is solely for the benefit of my wife, as there’s virtually no other way I would be able to get her to read this post. And since she loves me primarily for my writing, I need to keep her entertained.
I’ve been debating this topic for a while, not so much whether to write about it but how to write about it. The final catalyst was a conversation with a friend of mine regarding a non-real estate related matter … I had used my negotiating skills to resolve a dispute. As she put it, “this is why you’re such a good poker player.”
Oh, if only I was. I wouldn’t need real estate anymore and instead could head to Las Vegas and become a poker pro – or at the very least move my daytime “office” to Casino Arizona.
Still, while I’ll never turn pro, some of the skills I use (or not use depending on the session) in poker have come in handy in real estate – keeping my composure, remaining neutral and negotiating.
Negotiating? Absolutely. A hand of poker is nothing more than a negotiation, albeit one between two or more parties all of whom have incomplete information. To make up for the lack of information, players rely on other signals – tells (unconscious mannerisms in certain circumstances) are the most commonly cited, but betting patterns are equally as, well, telling.
I’m not going to go into detail of something I have only cursory knowledge of, but suffice it to say there are some general rules poker betting follows. Likewise, there are some general patterns that appear in most real estate transactions.
The buyer will make an offer below list price, most often with the hopes that the seller will meet them in the middle. They are attempting to initiate a reaction based on their action. The same takes place at a poker table over and over again.
At the same time, both buyer and seller are making their decisions knowing only what they hold and what common cards they share. In real-estate terms, the buyer has his loan and his motivation, the seller has their price and their motivation, and the common cards could be viewed as the house.
Where a poker hand diverges significantly from a real-estate transaction is in most cases, win-win is an optimum situation in real estate. Both clients walk away happy – their goals have been achieved and they are moving on with their life with a smile on their face. There is no win-win in poker – even a chopped or shared pot is viewed more as lose-lose.
Poker players routinely deal with adversity – poor cards, recovery from unlucky situations. And likewise, a real-estate professional needs to deal with adversity in a calm manner. We don’t have the luxury of going off the deep end if termites are found or an inspection repair request in longer than expected. We have a job to do … and in many cases, we have the opportunity to alter the outcome through our actions.
I’m not suggesting you start your agent interviews at the local casino when you’re buying or selling. Nor would I suggest you be concerned the commission earned is all being donated at an area poker table.
But it might be worth asking an agent you’re thinking to sell your home whether they’re willing to go “all in” and risk everything to make that sale happen. Better that than someone who will “fold” at the first sign of trouble.