Michelle Farber Ross | Crain's Miami

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Michelle Farber Ross

Background:  

Michelle Farber Ross co-founded MMD Realty along with ex-Miami Dolphins quarterback and NFL Hall of Famer Dan Marino. MMD Realty has offices in Fort Lauderdale, Fla.,  and Toronto, Ont., and represents properties in the Bahamas.

The Mistake:

I didn't trust my gut, and let the desire to close a deal get in the way of doing due diligence. 

When I started 11 years ago, it was just the beginning of leads that were coming through the internet, so it was a brand-new structure in how to work with and qualify them. I was new to the business and a bit green out of the gate; I had several experiences where I should have trusted my gut, but didn't. 

One experience was with someone who turned out to be a known con man. He was looking at about a $5 million property, and I did actually ask for information to pre-qualify him, as I was told to do when you first start.

So I received what turned out to be a phony bank statement with his name on it. I conferred with an attorney that he said he had done business with, and they validated that yes, they had written a contract with him several years earlier. But this guy was into stolen identities and fraudulent bank statements, and he was wanted in New York and Palm Beach. The Palm Beach police visited me because they saw my name on a contract once they raided his house. That was my first experience with this sort of thing.

If it doesn't feel right, chances are it's not right. 

The Lesson: 

I don't care what kind of business you're in, common sense and trusting your gut go very far. Sometimes you get burned, but overall, if it doesn't feel right, chances are it's not right. 

What I took away from that first one was what an enormous waste of time, money and resources it was. But even more important than those things is your reputation in the broker world. You want to make sure that your clients are qualified, and that the other brokers are comfortable showing you properties. You don't want to have the reputation where you don't go to the extreme and make sure that clients can pay for the property. My takeaway was to make sure that we verify every piece of information. 

Today I have about 10 agents. When I have meetings, one of the big things I hone in on is that when people first start out, if they get a call on even a $1 million property, they're over the moon. They want to show it, they want to get this deal done. A lot of times, they'll overlook the real due diligence that needs to be done, because they almost don't want to learn that this person isn't legitimate.

I've gone from learning the hard way in the beginning, to sharing my examples. And I'm not proud of some of them, like when you get the police knocking on your door. But it's good for the newer agents to really understand the dangers. So in my sales meetings, I really harp on pre-qualifying, verifying, and making sure, because you can not only waste your time, but you can damage your reputation.

I know that feeling the new agents get, because you just want to believe, but truly, if it walks like a duck and quacks like a duck, it's a duck. If it doesn't feel right, and there are red flags, then it's not right. 

So I tell my agents to never feel they're going to alienate a possible client by telling them they need a letter of financial capacity before they can see these properties, because 10 out of 10 times, if they can afford it, they're used to it. When they buy a car, when they buy a boat, anything they're going to purchase that are high-priced items, they're being asked the same thing. 

A big red flag is when they'll say, 'Oh, I want to see properties of $10 million to $20 million, and price is no object.' And they won't negotiate, they say they'll take it as is, at the asking price. Legitimate people want to negotiate and want to get the best deal. If they don't want to negotiate, then there's no question, they're full of it.

Follow Michelle Farber Ross on Twitter at @Michelle_F_Ross.

Pictured: Michelle Farber Ross. | Photo courtesy of MMD Realty.

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