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Betting the House

Michael Flack

ONE THING THAT BILL Gates, Warren Buffett and I have in common is a keen appreciation for the book Business Adventures. Issued in 1969 by The New Yorker business writer John Brooks, this collection of articles is still as interesting, funny and relevant today as it must have been then. The author doesn’t assault the reader with paradigm shifts, rubrics or lessons learned. He simply presents engaging business stories to be enjoyed.

In homage to this great book, I would like to relate a business adventure of my own. I previously wrote about selling my home in Texas. The following story is a prequel, though please be forewarned—it’s no Godfather II.

In 2015, the company I worked for, Exxon Mobil, was moving its Northern Virginia operations to Texas. I thought this was a sign from God to take early retirement and follow my lifelong dream to travel the world. My wife, though, thought it was a sign from God to take the generous Exxon relocation package.

This included paying all closing costs on our home and moving our possessions to Texas. I would need to work for two more years. Then I could retire and follow my lifelong dream of traveling the world while the resident of an income-tax-free state. I contacted my relocation advisor and told her the good news—about my wife’s plan.

The most important part of this process would be selling our home. We bought it 18 years before for $399,900. Due to some artful renovations and superb landscaping (oh, and the market), it was now worth about $800,000. The relocation process required us to do all the work to sell our home. But once the contract was about to be signed, the relocation company would step in. They would buy our house from us and then resell it to the contracted buyers. This would allow me to focus on my job, while the relocation company paid all the closing costs.

We interviewed two Exxon-approved real estate agents. The first gave us a detailed punch list of items to be repaired and issues we needed to review. She was detail-oriented and full of energy. The second, Mark, was a little too laid-back. But then, late in our interview, he exhibited a New Yorker’s sense of humor, hustle and—most important—an instinct for the jugular. This appealed to us, and we hired him almost immediately. We did use the first agent’s punch list, though, to make our house sparkle like the real-estate gem it needed to be.

Mark worked with my wife to generate the list price of $765,000, which I thought way too low. I knew he did this to prime our house for a bidding war, but I thought, “Really?” He calmly laid out his plan with confidence. And he was right. A four-party bidding war erupted, with the price finally settling out at $820,000. Then he went back to the highest bidder and got an extra five grand out of him, for a total of $825,000. The relocation company was duly informed. Mark, my wife and I were delighted.

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A few days later came one of the most memorable phone conversations of my life. My relocation advisor informed me that I needed to drop the contract price. It took me a few seconds to recover from my fit of apoplexy. I thought, “Drop the price, what are you $%^&*% high?”

The relocation advisor explained that her company wouldn’t approve the sale because the contract price was $60,000 over the list price. They were afraid our house wouldn’t appraise for that much, so they’d get stuck with it.

Then the call became even more memorable. Words came out of my mouth that were previously unimaginable: “How much do I need to lower it?” She couldn’t say. She said I needed to drop the price, get agreement from the buyer and then come back to them to receive approval for the new price. If it wasn’t low enough… well, rinse and repeat.

I kept trying to visualize the look on the buyer’s face when I informed him that the deal was off—unless he could accept a lower price. When I came out of my apoplectic fog, I asked if there was any other option. She reluctantly replied that there was. I could take on the risk of selling the house myself, and then be reimbursed for all expenses on the back end. I immediately breathed a sigh of relief and said, “Yes, please.”

My real estate adventure ended a month later when the sale closed at $825,000. I’m convinced this success was due to my determination, elan and unerring business sense. The fact that the house appraised for exactly $825,000 might also have helped.

If you Google Business Adventures, you’ll see such items as “7 Key Lessons of Business Adventures” or “Summary of Business Adventures.” Please don’t click on them. Sometimes a book needs to be read for the story rather than the lessons that it may provide.

Note: If you would like to read a sample chapter of Business Adventures, please click on this link—courtesy of me (and Bill Gates).

Michael Flack blogs at AfterActionReport.info. He’s a former naval officer and 20-year veteran of the oil and gas industry. Now retired, Mike enjoys traveling, blogging and spreadsheets. Check out his earlier articles.

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Scott Schnipper
Scott Schnipper
12 days ago

Need to acquaint myself with Brooks’ Business Adventures but, until then, I unreservedly endorse his Go-Go Years. (Without mentioning him), it recounts the market that a young Mike Bloomberg (and a host of other, now aging characters) came of age in.

Xerox, Polaroid and anything with “Data” in its name.

https://www.amazon.com/Go-Go-Years-Crashing-Streets-Bullish/dp/0471357545

Andrew Forsythe
Andrew Forsythe
14 days ago

Michael, I always enjoy your articles—the information and experiences are useful, and the grins just ice the cake.

mjflack
mjflack
14 days ago

Andrew Forsythe, thanks for the kind words.

Skateroll
Skateroll
14 days ago

For the “relocation advisor” not to be aware that homes selling today don’t appraise for sale price is a little odd. In fact, flat out ignorant. Seller’s agent and Buyer’s agent should be discussing this “possibility” (i.e. certainty) and buyer should be fully aware they will need to make up the difference.

mjflack
mjflack
14 days ago
Reply to  Skateroll

Skateroll, I agree. At the time the Washington, DC market was possibly the hottest in the country, so the relocation advisor might not have been prepared for the magnitude of the issue.

J Cp
J Cp
14 days ago

The article at link says the book is out of print. Maybe. But, I just borrowed the ebook at a library.

mjflack
mjflack
14 days ago
Reply to  J Cp

J Cp, I like the way you think my friend, as I read a library copy myself.

Rick Connor
Rick Connor
14 days ago

BTW – I just bought Business Adventures off Amazon. Kindle and Paperback editions are available for about $12.

mjflack
mjflack
14 days ago
Reply to  Rick Connor

Rick Connor, I hope you enjoy it as much as I did.

Rick Connor
Rick Connor
14 days ago

Michael, thanks for the recommendation – I look forward to reading it. I’m pretty sure I would have made the same decision. Real estate in the NOVA area went through some large swings in the 2000s. My company was HQ’s there, and we had a large contingent outside Philadelphia. We tried to get folks to relocate to NOVA, but it was tough.

I have experienced a number of relocation efforts over my career. The packages sound great, but the details matter a lot. I once negotiated to have one of my senior engineers mover from NOVA to Denver. He wanted to go, his wife and family wanted to go, and Denver wanted him badly. We worked the repo package for weeks to get everyone to agree. When it came time to move, the whole deal collapsed because corporate would not pay to move his hot tub. For some reason, that became the breaking point for both sides. It was totally irrational form a financial perspective – his new deal was far better and in a lower cost of living area. He could have afforded a better new hot tub.

mjflack
mjflack
14 days ago
Reply to  Rick Connor

Rick Connor, it must have been a magic hot tub.

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