I’ve got lots of great stories, but first some background. When we were deeply in debt, we could only dream about the value of FI, but after we turned around the ocean-going vessel that was our financial situation and started steering everything in the right direction, all kinds of things changed.
When were still going in the wrong direction, things like this happened. We were in the construction business, and I would find good building lots and build upscale homes on a spec basis. I always tried to have happy customers and did all kinds of things to help them. One lot had a drainage swale, and in big storms, water rushed down the hill beside the driveway. The customer didn’t like that, so I installed big culverts that partially crossed the adjacent lot and covered it up. Because I owned the adjacent lot, I deeded a ten foot strip of land to the buyer for free so that the entire culvert was under his control and was part of his property. When the home was complete and we went to the closing, his banker had typed up an agreement for me to sign guaranteeing that I would be responsible for any problems with the culvert for TEN YEARS! This wasn’t the buyer’s idea; this was his banker’s idea. If I had been FI, I would have laughed, suggested that his banker sign the agreement, walked out of the closing, and taken my chances with selling the home to someone else. Unfortunately, we so deeply in debt, and needed the proceeds from the sale so badly, that I stuffed my anger at the banker and signed the damned thing. (FWIW, I never had anything to do with that particular banker again.)
Shortly after this happened, I had my financial epiphany, and we began madly paying off debts and working toward FI. Fast forward four years to another closing at which we were re-financing some commercial property. I had been quoted all of the closing costs, interest rates, etc, but when we went to the closing, the banker tried to do a bait and switch. The interest rate on all the documents was a point higher than what we had been quoted, and several other aspects of the agreement had been changed in ways that benefited the bank. After reading the first page, I said, “This isn’t what we agreed to.” The banker started trying to explain why this was the best they could do, and why their loan committee had insisted that the changes were necessary. The guy had a huge pile of documents on the table, and I knew that the bank had paid for the appraisal and had incurred other expenses associated with preparing the closing. I replied, “You may want to go talk to your loan committee, because we’re only willing to close the agreement that we made initially, and if the committee doesn’t want to honor that agreement, then I’m sure we can find another bank that will. " At that point, my wife and I stood up and prepared to walk out of his office.” We could see the panic on his face, and he said, “Wait, sit down, and let me go talk to my supervisor. Would you like a cup of coffee?” It was all that we could do to keep from laughing, but our financial condition was so much stronger than in the past that we both felt confident that we had the upper hand rather than the bank. Sure enough, within 5 minutes the guy came back, told us that it was against all of their policies (it wasn’t), but they would re-do the paperwork to conform to the numbers that we insisted upon. Within an hour, we closed the deal.
FI occurred a few years later, and after that, things just got better and better. Our attitude, whether as buyers or sellers, became “This is the deal we’re willing to make, and you can take it or leave it.” These days we only pay cash for anything we buy, and cash allows us to make offers that sellers find hard to turn down. When we find a piece of property that seems like a good deal, we tell the sellers, “This is our offer, we’re cash buyers, and we can close immediately.”
On the other side of the transaction the same thing holds true. Our attitude is, “This is the price we want, and if you don’t want to pay us what we think this property is worth, that’s okay. We don’t have to sell it, and we’re willing to wait for the right buyer.”
Bottom line? FI, or even the proximity of FI, changes everything.