By Linford Good, Senior Vice President - Brokerage Services, High Associates Ltd.
This is the eleventh in an 11-part series of understanding the key ingredients in all successful real estate transactions.
At closing, the final stage of a real estate transaction, missing even the smallest detail can have a critical impact on the overall success or failure of the deal, as well as client satisfaction. It is the responsibility of the broker to carefully coordinate and manage these final steps to ensure a successful transaction. In order to do that, one must learn to “predict the future.”
In their book Superforecasting: The Art and Science of Prediction, authors Philip E. Tetlock and Daniel Gardner provide valuable advice regarding the decision-making process. Their insight can be applied to the closing of a real estate transaction, causing one to think through and “predict” these all-important final steps in order to achieve the goal of closing the deal.
Tetlock and Gardner present many helpful points in the book, but one to keep Superforecasting: How to Ensure a Successful Closing particularly close in mind is to “unpack problems to expose assumptions, catch mistakes, and correct biases.” All of the discussions, negotiations, and decisions occurring throughout the transaction process must be examined with a diligent eye in order to catch even the smallest of errors that could affect the overall success of the deal. Further, they write, “We have all been too quick to make up our minds and too slow to change them. And if we don’t examine how we make these mistakes, we will keep making them” (p. 25). This piece of advice is valuable for brokers of all levels of experience. One must continuously reflect on past decisions in order to move forward with the knowledge of prior outcomes guiding their actions. In this way, by engaging in constant self-evaluation, one can create the best possible outcome for the future.
Another piece of advice provided by Gardner and Tetlock is to “learn from experience, whether success or failure.” We have all heard these words of wisdom in some shape or form, but one must learn to take a step back and ask, “What is it that I learned from this particular experience?” “In what ways can I improve in the future?” It is in asking these concrete questions—and reaching definitive answers—that one can turn this advice into action.
Superforecasting discusses two decision-making mindsets: the fixed mindset, and the growth mindset. The fixed mindset believes that “abilities can only be revealed, not created and developed,” while the growth mindset believes that “abilities are largely the product of effort, that you can ‘grow’ to the extent that you are willing to work hard and learn.” The authors maintain that only those working within a growth mindset “pay close attention to information that could stretch their knowledge; only for them is learning a priority” (p. 176).
A growth mindset is crucial in reaching a successful closing to a real estate transaction, as well as ensuring success for future deals. Using tools such as a customer satisfaction survey to collect tangible facts and feedback, a broker can investigate areas for improvement and enhancement of the overall experience. A successful broker will use all of these decision-making tools to predict—and create—the future of a successful closing for both the present transaction and future negotiations.
Tetlock, Philip E. and Daniel Gardner. Superforecasting: The Art and Science of Prediction, New York: Crown, 2015.
Linford L. Good is responsible for managing the brokerage activities of the sales/leasing team. The brokerage activities include selling or leasing industrial/ commercial properties for corporations, private industries, and individual investors.
This article is intended to be an overview of commercial and residential financing. It does not purport to give either legal or financial advice. Before taking any action, you should consult with with your attorney or real estate adviser.