Sn1 Ep 03: The Good, The Bad and The Ugly – Part 1 – The Good

In today’s episode, The Good, The Bad and The Ugly – Part 1 – The Good – I discover that there is always unprecedented goodness in humanity when I make connections that lead to enduring relationships in an industry fraught with human corruption, on both the divides of a real estate transaction.

The role of a property agent is to get two parties safely across a bridge that is often founded on conflicting personalities, competing interests and tugs of war between emotions that often run counter to each other. It expends a lot of mental energy trying to work through people’s backgrounds, perceptions, opinions, attitudes, you name it!

Only on rare occasions do you find a way to smooth things over as if none of it had anything to do with you. When everything falls into place at the right time, when the characters are all focused on the goal and nothing else, it is easy to get across that rickety bridge with little to no friction!

They say that lightning doesn’t strike twice in the same place. However, navigating through two transactions that were both somehow intertwined by the same characters and managing to do so at a time when the market was tepid felt like a win. Indeed, it was a win for all involved. Which is also an infrequent outcome. It’s always good to share positive stories and to feel like even in adversity, good can come out.

I also share some of the lessons that this experience taught me – not just lessons I gleaned from the characters in the story, but also about myself. Hopefully, it is an encouragement to keep pressing forward, to keep a positive attitude even in the face of many discouragements, and to be found doing our best work.

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Arm’s length, prejudice and conflict of interest often feature as critical legal principles in real estate transactions.

An understanding of their importance is very relevant to achieving success in real estate transactions.

Any investor would need to know how to navigate their engagement with prospective sellers and buyers of property by having at least a basic understanding of armslength, prejudice and conflict of interest.

It is often presumed that these legal principles should remain within the purview of the legal representatives of the parties to the transaction.

However, in this conversation, one shall be able to see how these principles interact. Our legal expert, Ms Monica Mwangi, fields various scenarios in an attempt to provide a basic understanding of these principles. We look especially at scenarios that occur with regular frequency in the real estate industry.

Definitions

Arm’s Length Transactions

Investopedia defines an arm’s length transaction as a business deal in which buyers and sellers act independently. Neither party is under any undue influence from the other. Both parties act in their own self-interest and are not subject to any external pressure from the other party. In arm’s length transactions, there is also no collusion between the buyer and seller. The principle makes the fundamental assumption that there is perfect information between both parties to the transaction. It also assumes that both will act, in the interest of fairness, based on the fact that they have access to the same information about the transaction.

Conflict of Interest & Prejudice

Situations often arise in the course of real estate transactions where the interests and objectives of the parties to the transaction may differ, become incompatible and even degenerate into an openly adversarial nature. These scenarios give rise to a conflict of interest.

In today’s conversation, we look at the situations in which these principles come into play, and why it is important for any investor to understand how to navigate their way around the scenarios that could arise when these principles are either overlooked or when the results of overlooking them come to bear in the course of a real estate transaction.

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RealEstateGuru254 Podcast seeks to advance the goal of building a hub that promotes real estate market intelligence in Kenya. Additionally, we also aim to deepen engagement between industry professionals and the marketplace, promoting collaboration between industry professionals and property investors.

Our big goal, with the RealEstateGuru254 podcast, is to create a community of knowledgeable, market-savvy property investors seeking growth through their common and diverse experiences.

The RealEstateGuru254 podcast will feature discussions on topical issues in real estate in Kenya. We welcome industry players across the entire spectrum of the industry.

The RealEstateGuru254 podcast aims to educate, inform and inspire. We want to see property investors get the most out of their investments. Real estate is time-tested, backed by tangible assets and one of the surest ways to bequeath yourself, and the generations following you, a secure future.

The RealEstateGuru254 Podcast will feature an array of various industry players spanning the entire spectrum of the industry. We will chat with legal, banking and finance professionals, to surveyors, valuers, and property developers. The podcast will also feature other traders in the industry. Among them, are agri-business practitioners ranging from farmers to exporters.

The affordable housing agenda is also of critical importance and we shall feature construction experts using low-cost technologies, as well as public policy experts in the industry.

Human interest stories are instructive in creating successful real estate investments. The podcast will be open to guests willing to share their insights with a view to learning from their successes. We want to understand how they built their fortunes, and how they are using those fortunes to create an impact beyond themselves.

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