Say “leverage” these days and who doesn’t picture Wall Street, failed banks or greedy CEOs? Seems like the folks who got all excited when they heard the definition of the word a few years back forgot to read the caveat in the brackets:
FINANCIAL LEVERAGE - investing with borrowed money as a way to amplify potential gains (at the risk of greater losses)
But should we remove the word from our vocabularies because a few bad apples have co-opted it? I’ve always like the word, personally. When I was a kid I learned that ‘leverage’ was the big advantage you had when trying to move something huge by simply being in position to use a lever. When I was in college I was pleased to realize that ‘leverage’ had intellectual value as well; how much more we could accomplish in a study group than trying to cram all alone into the night. When I began volunteering in my community I learned that altruism can be leveraged. Just because doing something for someone else makes you, personally, feel good doesn’t mean you can’t do it in such a way as to influence others to give more of themselves…all to the benefit of your recipient. Once I was out working in my chosen profession as a residential real estate broker, I learned quickly that in a negotiation, leverage is a measure of which side, at any given moment, has a greater ability to influence the other side. What better value for my clients…I wanted to BE that word.
And what a great word it is…with lots of nuanced meanings, most good, but all applicable to real estate.
Normative leverage is the application of general norms or the other party's standards and norms to advance one's own arguments for one's own good. There is huge advantage in having a complete understanding of the terms, conditions and applications of a real estate contract and all the ancillary addenda as well as being versed in the ‘standard practice’ for a specific area.
Positive leverage is a negotiator's ability to provide things that his opponent wants. Understanding that there are real people on both sides of a real estate contract and knowing how to present options in such a way as to provide a winning experience for each side is a skill I have knowingly cultivated and employ always on behalf of my clients.
Buyer leverage is the amount of bargaining power that buyers have when purchasing goods and services. I haven’t met a buyer lately who didn’t know s/he had this kind of leverage…but knowing exactly how and when to use it is my specialty.
Negative leverage is a negotiator's ability to make his opponent suffer. I wish I could say I never saw this kind of leverage in real estate transactions but it takes all kinds to make a world…knowing how to AVOID falling victim to this kind of manipulation is equally important for my clients. My experience allows me to serve as a buffer against the problems caused by this kind of leverage.
Leverage, for me, is any influence which is compounded or used to gain an advantage. Unfortunately, there are a few folks in this world who seem to forget that just because you CAN doesn’t mean you SHOULD. Operating with integrity is a decision.
I have spent 30 years doing what I love to do…help buyers and sellers accomplish their goals and the combined experience of all that work gives me a huge amount of leverage which I exert on behalf of my clients. When you decide to position yourself to make one of the largest financial decisions that you may ever make in your life, why would you choose NOT to leverage my knowledge and experience in your own best interest?
