Problems Don’t Kill Deals. Surprises Do.

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Most deals do not die because of a problem. They die because a problem shows up too late.

Anyone who has closed more than a handful of commercial real estate transactions has seen it happen. The deal looks clean. Escrow is open. The deposit is in. Due diligence is delivered. Everyone feels good.

Then something comes up.

• A minor lease provision nobody flagged comes into play
• A tenant right that seemed meaningless is now in the spotlight
• An estoppel surprise
• A title issue that now requires an indemnity or a new survey

The issues themselves are usually manageable. The timing is what kills the deal.

There is a massive difference between a problem and a surprise. Problems can be solved when there is time. Surprises show up at the worst time and when deadlines are looming.

That is when panic sets in.

Hidden risk creates three things instantly:
• Broken trust
• An immediate shift in leverage
• A sense of emergency that incites panic

Most “hard” deals are not hard because they are complicated. They are hard because something important was discovered too late to handle calmly or strategically.

Give a good broker 60 days and he/she can work through almost anything. Give that same broker 6 hours and they’re not working to solve a problem in a thoughtful and strategic manner; they’re in full-blown crisis management mode.

The best brokers and investors understand this in every deal they start. The job is to eliminate surprises.

This means digging in early, asking uncomfortable questions, surfacing issues before they become emotional, and delivering bad news first, not last.

Certainty is what keeps deals moving forward.

If you want a detailed breakdown of where deal-killing surprises actually come from and how to eliminate them before they surface at the worst possible moment, read the full article here: 👉 [Problems Don’t Kill Deals. Surprises Do.]

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Happy hunting. LFG!

The DealGround Team