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Op/Ed

Comparing real estate in 2006 to 2016 (make sure you’re up to speed)

The practice of real estate has changed dramatically in the last decade, but the fundamentals remain the same. Are you up to date?

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Ten years passes quickly! In 2006, the real estate market seemed to be steady if not booming. Cheery messages from brokers and NAR leaders were fast and furious. Agents just knew things would be fine and sales would come.

In the background, however, the horror of the housing and financial market crashes were taking shape. Within a few short years, the salad days of hefty retail housing sales, high commissions and move-up buyers were to be changed forever. Derivatives, extensive numbers of loans to buyers who, losing their jobs during the crash, could no longer afford the payments resulted in the bursting of the housing bubble and the wave of foreclosures during 2008 – 2012.

“Retail” real estate sales suffered as foreclosure valuations drove market pricing. Investors that had purchased many properties, leveraging each to purchase more, often lost their mortgaged properties as well.

And then we struggled even more

HUD, Fannie Mae and Freddie Mac as investors of the loans being foreclosed upon sold properties at prices that stunned neighbors and investors alike. New investors descended on areas, buying hordes of properties with cash, not mortgages, and renting them without much repair. After 2012, when foreclosures slowed and prices began climbing again, investors began to exit the market and some homes sat vacant.

Until 2014, the industry continued to struggle in many areas, yet some locales saw booming real estate prices and recovery. The shadow inventory of homes still ripe for foreclosure, underwater as their homes are worth less than current market value, still exists and foreclosures have ramped up again in 2016.

However, investors today are now doing a combination of buy/hold/rent and flip, making the homes more livable and revitalizing neighborhoods. New builds are slow to recover as builders find it difficult to build homes “on spec” and wait for them to sell.

Within ten years, much has changed, and not only in the type of buyer and the status of the housing market. We’ll review some changes here and how you can navigate more steadily the practice of real estate.

The MLS is ground zero

The MLS is undergoing massive change in its status as the guardian and repository of real estate data, and the primary way to let other agents know a property is on the market.
When the MLS was held in books – yes, actual paper books – agents would photo copy pages for buyers to see very minute detail (and minute photos) of houses for sale, or if a client was selling, of comparables. The electronic MLS came about prior to 2006, however some agents continued to photocopy printouts of listings for both scenarios.

Now the MLS is electronic, available (by subscription) to agents and brokers every day. However, the MLS is now not the only repository for home data on houses for sale, pending sale, or sold.

Zillow.com pulls MLS data from brokerages with whom they have agreement so the world can now see both active, pending (off market) and sold listings. The sold listings are simply noted as “off market” and carry the sold date and price. Now, consumers can check to see what has sold on their street or neighborhood and assess whether or not the Zestimate (an estimate of home value) is correct. The consumer can then decide to contact their agent, or an agent or broker advertising on the site. Agents pay for fractions of or whole zip codes to be listed as an agent (or broker) to contact regarding more information on a home, and the listing agent is also noted on the web page.

Rumors of a national MLS continue to rise.

And advertising has taken a wild turn

Advertising has completely changed, though some ad resources stay the same.

The MLS as noted above was once the primary method of advising other agents that a property had come on the market. Though some agents still use the 3P type of advertising (Put the home in the MLS to alert agents the home is available, Put a sign in the yard to alert the neighborhood and passersby the home is available, and Pray it sells), the digital age requires the agent promote the property using numerous methods and platforms.

Zillow.com negotiates with brokerages to carry their feed of properties available for sale. If the feed is not negotiated with the brokerage but an agent wants to place the home on the Zillow platform, it is considered “free” advertising. Other platforms also court brokerages to carry their listings.

Digital marketing can encompass email, landing web pages specific to the property address, advertising on Zillow and other platforms, advertising on Craigslist and more.
“Old-school” advertising does still work – whether it’s sending “just listed” postcards to neighborhood, sending handwritten notes as an introductory method to the brokerage and agent, sponsoring community activities, placing ads on restaurant placemats or on sports scoreboards and more.

Cold calling is taboo unless lists are scrubbed

Pulling a list of names from homes in the neighborhood was easy, and cold-calling homeowners to find people looking to buy or sell was scripted and productive. Then came the legislation against such activity by sales organizations – if someone’s telephone number was shown on a “do – not – call list” and was called by a salesperson looking to transact business, a hefty fine could be – and has been – assessed to the brokerage. This once relied-upon method of finding listings has nearly ceased in practice.

Sources exist where the lists of homeowners is “scrubbed” to remove numbers that show up on the Do Not Call list. The remaining homeowners may be contacted by phone without fear of the brokerage being fined.

The takeaway

A lot has changed in the last decade, but nothing so dramatic that can’t be adapted. Some of the mechanics have changed, and approaches have shifted, but the bottom line is that even as consumers evolve, the core practice of real estate still relies on diligence, negotiation, and expertise.

#HistoryLesson

Landis is involved in consulting for and sales of residential and commercial real estate. Landis is also working on obtaining her Ohio real estate broker license. College educated with a business, sales and performing arts background, Landis brings a well rounded world view to her real estate practice.

Op/Ed

Your career depends on you, and the mentors you select

(EDITORIAL) Moving up in your career can be dependent on your drive to be better, but improving does depend on who you choose to teach you

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career mentor

Remember when you were younger and were encouraged to join extra-curricular activities because they would “look good to colleges”? What if the same were true for your career?

While applying to a university may be a thing of the past for you, there are still benefits to having extra-curricular activities that have to do with your career. Networking is a major piece of this, as is finding mentors who will help point you in the right direction.

These out-of-office organizations or clubs differ for every industry, so for the sake of this article, I will use one example that you can then interpret and tailor towards your own career.

The Past President of the national Federal Bar Association, Maria Z. Vathis, is someone who has taken the extra-curricular route throughout her entire career, and it has paid off immensely. Working as an attorney in Chicago, Vathis joined the FBA shortly after beginning her legal career and now is the Past President of the almost 100-year old organization.

She started working her way up the ladder of the Chicago Chapter of the association, and eventually became the president of that chapter. At the same time, she was also becoming involved in the Hellenic Bar Association, and would eventually become national president of that organization, as well.

“Through these organizations, I was fortunate to find mentors and lifelong friends. I was also lucky enough to mentor others and to have opportunities to give back to the community through various outreach projects,” said Vathis. “As a young attorney, it was priceless to gain exposure to successful attorneys and judges and to observe how they conducted themselves. Those judges and attorneys were my role models – whether they knew it or not. I learned how to be a professional and how to work with different personality types through my bar association work.”

Finding people in your industry – not just in your office – can be of great help as you go through the journey of your career. They can help you in the event of a job switch, help collaborate on volunteer-based projects, and help collaborate on career-advancing projects (like writing a book, for example).

And all strong networks often start with the help of a mentor – someone who has once been in your shows and can help you handle the ropes of your new career. Most importantly, they’re someone who you can seek advice from when you’re faced with someone challenging – either good or bad.

“I have been unbelievably fortunate with my mentors, and I cherish those relationships. They are good people, and they have changed my life in positive ways. I still draw on what they taught me to help make important decisions,” said Vathis. “My career success is due in large part to the fact that my mentors took an interest in my career, had faith in my abilities, and supported me while I held various positions in the organizations. Not only is it important to continue having mentors throughout your career, but it is important to recognize that mentors come in all shapes and sizes. You never know who you will learn something from, so it’s important to remain open. Also, after you become seasoned, it is important to give back by mentoring others.”

When asked why it’s important to be part of organizations outside of the office, Vathis explained, “To build a book of business, you need to be visible to others.” She also stresses the importance of putting yourself out there for new affiliations and challenges, because you never know where it may lead.

If you’re unsure of how to start this process, try asking co-workers and other people in your professional life if they have any advice or recommendations of organizations that can help advance your career. Another simple way is to Google “networking events in my area” and see what speaks to you. In addition, never be afraid to reach out to someone with a bit more experience for some advice. Take them out to coffee and pick their brain – you never know what you may learn.

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Op/Ed

Kakeibo: The Japanese art of spending wisely

(EDITORIAL) If regardless of how much money you make, it seems like you’re always short a buck, take a hard look at how you are spending. It could save you a lot.

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control your spending

Raise your hand if you have cash in your wallet.

What is a wallet you ask.

I jest. I know you know what a wallet is. (I hope.) But, sometimes I wonder if cash will go the way of the rotary phone. Seems most folks I know use debit cards, Venmo or their phones to pay for things nowadays.

Ever notice when you go to the store and have a debit or (worse) a credit card at your disposal, your plan to spend $20 ends up more like $50-$100. For example, anyone who shops at Target knows that when they ask you at the checkout, “Did you find everything you needed,” the answer is “ugh… Yes, and then some.”

Living in a plastic economy has made us less cognizant of how we spend money. But, leave it to the Japanese to have a system for putting the thought into buying. It’s called Kakeibo (pronounced kah-ke-boh) and it translates to “household finance ledger” and it’s something most Japanese folks learn to use from the time they are wee children.

The system began in 1904 and was “invented” by a woman name Hana Motoko (also known as Japan’s first female journalist), according to an article on MSNBC. The system is a no-frills way of approaching finances, whether personal or business.

Now, some folks are great at keeping a budget and knowing where the money is going. My mom, for example was the best bookkeeper. Unfortunately, her skills with money didn’t pass down to me. So, I actually purchased a Kakeibo book to try and get my finances in better shape.

You don’t need some special book (save your money), though you can find lots of resources online, including these downloadable forms, but in actuality all you need is a notebook (preferably one to take with you) and a pen. No Technology Required.

If you have been spending money and not knowing where it is going, then it’s going to take some work to change your habits around money.

In her article on MSNBC, Sarah Harvey says what makes Kakeibo different than using an Excel spreadsheet or budget software is the act of physically writing purchases down – it becomes a meditative way of processing spending habits. “Our spending habits are deeply cemented into our daily routine, and the act of spending also includes an emotional aspect that is difficult to detach from,” Harvey says.

As a business owner or entrepreneur, it is also easy to get sucked into believing you have to have new technology, systems and bells and whistles that maybe you don’t need – just yet. Spending goals for a business, just like a personal budget, are important if you plan to stay on track and not lose sight of where your money is going. Lord knows the money flies out the door when starting any new project.

Based on the Kakeibo system, there are some key questions to ask before buying anything that is nonessential (whether for your home or business):

• Can I live without this item?
• Can I afford it? (Based on my finances)
• Will I actually use it?
• Do I have space for it?
• How did I find the item in the first place? (Did I see it in an IG feed? Did I come across it after wandering into a store, am I bored?)
• What is my emotional state today? (Calm? Stressed? Celebratory? Feeling bad about myself?)
• How do I feel about buying it? (Happy? Excited? Indifferent? And how long will this feeling last?)

For Harvey, who learned about Kakeibo while living in Japan, using the system forced her to think more about why she was making purchases. And, she says it doesn’t mean you should cut out the joy of buying, just possibly making better choices when needing retail therapy on a crappy day. She found the small changes she was making were having a positive impact on her savings.

How to be more mindful when spending:

• See something you like, wait 24 hours before buying. Still need it?
• Don’t be a sucker for sales.
• Check your bank balance often. Can you afford what you’re buying?
• Use cash. It’s a different feeling having that money in your hand and letting it go.
• Put reminders in your wallet. What are your goals? Big trip. Then, do you really need new headphones, a bigger TV, a new iPhone, etc.
• Pay attention to what causes you to spend. Are you ordering every monthly service because of some Instagram influencer or, because of some marketing you get online. Change your habits, change your life.

Using the Kakeibo system of a notepad and pen or a Kakeibo book for the process can help you identify goals you have for the week, month and year and allow you to stay on track. Remember, cash is still king.

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Op/Ed

5 Things your home office may not need

(EDITORIAL) Since many of us are working entirely from home now, we are probably getting annoyed at a messy desk, let’s take a crack at minimalism!

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desk minimalism

COVID-19 is changing our behaviors. As more people stay home, they’re seeing (and having to deal with) the clutter in their home. Many people are turning to minimalism to reduce clutter and find more joy. There are many ways to define minimalism. Some people define it as the number of items you own. Others think of it as only owning items that you actually need.

I prefer to think of minimalism as intentionality of possessions. I have a couple of dishes that are not practical, nor do I use them very often. But they belonged to my grandma, and out of sentimentality, I keep them. Most minimalists probably wouldn’t.

They say a messy desk is a sign of creativity. Unfortunately, that same messy desk limits productivity. Harvard Business Review reports that cluttered spaces have negative effects on us. Keep your messy desk, but get rid of the clutter. Take a minimalistic approach to your home office. Here are five things to clean up:

  1. Old technology – When was the last time you printed something for work? Most of us don’t print much anymore. Get rid of the old printers, computer parts, and other pieces of hardware that are collecting dust.
  2. Papers and documents – Go digital, or just save the documents that absolutely matter. Of course, this may vary by industry, but take a hard look at the paper you’ve saved over the past month or so. Then ask yourself whether you will really ever look at it again.
  3. Filing cabinets – If you’re not saving paper, you don’t need filing cabinets.
  4. Trade magazines and journals – Go digital, and keep your magazines on your Kindle, or pass down the print versions to colleagues who may be interested.
  5. Anything unrelated to work – Ok, save the picture of your family and coffee mug, but clean off your desk of things that aren’t required for work. It’s easy for home and work to get mixed up when you’re working and living in one place. Keep it separate for your own peace of mind and better workflow. If space is tight and you’re sharing a dining room table with work, get a laundry basket or box. At the start of the workday, remove home items and put them in the box. Transfer work items to another box at the end of the day. It might seem like a little more work, but it will give you some boundaries.

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