This is about habits …
Not the kind of habits that Catholic nuns would wear, either, but the habits that are hard to break. Although maybe you could get a post out of the Catholic nun habits, I just don’t know enough about them to really make it work. Another day, perhaps …
I’ve been thinking a lot about my business habits lately, specifically those that have prevented me from being as good an agent as I could possibly be. See, I started in real estate in 2004, late to the party but still one of those markets where things were pretty easy. Not that I didn’t work hard to try and be as successful as I could be, but 2004 was still a strong market, at least here the bustling metropolis of Southwest VA. Sellers were entertaining multiple offers, and buyers were putting their best foot forward, every time, or they risked losing out. It was a good time to start because it gave me the confidence that I needed to really take off – each year was a record year for me, and I had it made. I did everything by the book, I was confident that I was making the right decisions in guiding my clients, and everything was good. This real estate thing was easy!
Or so I thought.
Stinking It Up
It probably happens to all of us at some point, but we get ahead of ourselves and things fall apart. In my case, I got a little complacent, a little sloppy, and then I started making mistakes. Case in point … I once listed a home that had a completely different school system than what I represented. Completely different! There was an elementary school ½ mile down the road that I assumed was the school that served this neighborhood, but later discovered it was all wrong. Not so big a mistake, but it was still something that if I had used the resources available to me and taken just two minutes to call the school board and verify, I wouldn’t have made it. A quick change in MLS, and all was right with the world again. Sometimes the lessons weren’t so easy to flush away, however.
A couple of years ago I listed a home that I was sure would sell quickly, and it did – first day on the market, first buyer who saw it bought it. Cash. Quick closing. Awesome! Not quite. Two days before closing, the buyer discovered that the property was on a septic instead of a sewer, as I had entered into the listing. Uh oh. Big mistake. Didn’t check my resources, and it stunk the place up. The buyer and his agent held my feet to the fire, and in the end the buyer got a house with a new connection to the Town’s utility system, while I came up several thousand dollars short at the end of the year. (No, E&O wouldn’t cover it but that’s a story for another day.)
There have been many more mistakes along the way, of course. I’m not naïve enough to think that they’re not going to happen, but my point is that I can be a SLOW learner. It’s one thing to make a mistake because I get ahead of myself, or I’m just not paying attention; those things happen to everyone, it’s normal. It’s another to do it multiple times and not take anything away from the situation. That’s my one bad habit – sorry, typo, that’s ONE of my bad habits. For me, it’s easy to say “well, if only they’d have taken care of that crack two years ago when they saw it”, or “if they would’ve gotten a stronger preapproval then their offer would have been accepted”, but if I’m not changing my habits to make sure that the sellers have adequately prepared their home for sale, or that my buyers have an airtight preapproval from a reputable local lender before making an offer, then I’m not being the best agent I can be. If I’m not striving to be my best then my clients are getting shortchanged. I don’t want that – I want them to walk away from the transaction knowing that I and my Team do everything we can to make things go as smooth as possible.
Give It Your All
Lately it feels like bad habits have popped up far more often the good ones and I’ve beat myself up over them, but I know that there are good ones as well. There’ve been a couple of times recently where I’ve had to go back to a client and say “I screwed up, here’s how we’re going to get back on track.” Learning from my errors hasn’t been easy, but I’m trying. My assistant Aaron is great at learning from mistakes, and while she doesn’t make many she is always quick to take action to resolve it – in fact, I don’t know that I’ve not seen her make the same mistake twice. I really admire that, and I’m really trying to get better at it.
Maybe that’s one of the things that can make us good agents, as well, the desire to keep working and keep trying, to fight the urge to give in to the bad habits and keep striving to give clients everything we have. Because in the end, that’s what they want – our best.
Okay, I feel better.
Reality checking real estate market conditions – feelings, perceptions and facts
My perception of reality isn’t always factually accurate.
Mostly I’m a positive guy. But every other day or so, I think and feel like opportunities are scarce and market conditions outside my control make success elusive. Do you ever have thoughts like that?
When I think thoughts like that, my perceptions limit me. When I feel like business is slow and scarce, my spirit saddens, I roll
uptight tense and I struggle. As a result my attractiveness dims and my effectiveness dulls. People and opportunity don’t seek out and choose the dim, dull and struggling. Opportunity gravitates toward the positive, not the sad and negative.
To succeed, it’s important that I understand the difference between what I perceive and feel, and factual-reality. So, I have this daily Reality-Check thing that I do. It keeps my head on straight.
Here’s how I Reality-Check myself and my real estate market.
I consciously suspend my perceptions about my market. I don’t consider how I’m feeling or what others are saying. I flip my logical thinking switch to ON, suspend my beliefs and go directly to the MLS to see what’s really happening in my market.
Here’s what I do:
I search listing activity for the last 30 days. How many new listing came on the market per day?
I search pending/contracts written activity for the last 30 days. How many listings went under contract per day?
Running these simple searches give me the facts about actual activity in my market place. With the facts in hand I’m not poisoned or paralyzed by the negative opinions, speculation, conjecture or feelings of other people. What I discover is that no matter how well or poor I perceive my market to be, there are always available opportunities and possibilities. Always.
Whether I’m feeling flush or frustrated, every day sellers decide to sell and new listing come on the market. Every day buyers are buying. This daily Reality-Check sets me straight. People buy and sell everyday. The only question is, who will they choose?
Understanding the facts gives me hope and inspiration. Business is there, if I want it. It doesn’t matter what other’s report, believe or perceive. It only matters what’s really happening in my market, and what I’m willing to do to attract, discover and earn what I want.
I run my reports every morning. When my feet hit the street, I know what’s real and what is possible. I know the only thing holding me back is me. If I take action, I can sieze opportunity and change my future.
That’s how I Reality-Check. How do you Reality-Check yourself?
Cheers and thanks for reading.
Is it time to bury the past and rise up? Is it time to advise “buy”?
What’s your real estate market like this week? Is it better than it was a year or two ago?
Back then we had the difficult task of sharing mostly bad news. A rational Fear Of Loss kept buyers who wanted to move from making a move. It was simple logic, buy too soon and home values might fall, resulting in a financial loss.
Last year the Federal Homebuyer Tax Credit artificially stimulated 1st Quarter home sales. The free-money party ended in April of 2010 and real estate sales activity went from gangbusters to bust. It pretty much stayed crappy until January 2011.
From what I can see across the inter-webs and personal experience, the unstimulated 1st Quarter of 2011 is equal to or better than the artificially stimulated 1st Quarter of 2010. Which means that most likely, the balance of 2011 will be way better than 2010. Not a month to soon, amen.
But I’m worried. Real worried.
I’m Worried About Shell Shock
It’s been so crappy for so long, some us may be suffering from Shell Shock. When someone asks if now would be a good time to buy, we start mumbling, our shoulders slump and the light in our eyes dim. We hem and haw. Because we’ve been so beat up for so long, our answer limps from our mouth to their ears. On occasion we allow past emotional scaring to over ride current intellect and logic. This is normal human behavior, but we’re not paid to be normal. We’re paid to perform.
People are counting on us for unbiased and expert real estate opinion and analysis. When they ask the question, “Is now a safe time to make a move?” they expect a thoughtful and intellectual answer. Not an emotional reaction steeped in Shell Shock.
It’s Time To Bury The Past and Rise UP
Note from the editor: The video at the top of this article is of Maya Angelou’s “And Still I Rise,” particularly relevant to the theme of this article.
The Fear Of Loss is perpetually valid. Yesterday, the likely hood of suffering a financial loss by buying in falling market was high. Today’s and tomorrow’s market is 180 degrees different. If our buyer clients want to make a move and they don’t, waiting may cause them financial loss.
It’s a new day and a new market. Let’s think, advise and act like it.
Let’s start by reviewing and sharing a few important factors with our homebuyer clients.
Price & Value and Cost & Expense Factors
Advising our buyer clients to Not-Buy-Now because home values may go down, and they will have lost money by overpaying, is an example making a decision based on the Value & Price factor. Last year in many micro-markets this was smart, simple and logical.
Today, if we’re sincere about helping our clients avoid financial loss, we’ll want to include Cost & Expense factors in our advisory analysis.
Unless our buyer clients are paying cash when they buy, they’re going to use mortgage financing. Their mortgage interest rate determines the Cost & Expense of buying and has a bottom line effect on whether waiting to buy will result in a financial Win or Loss.
Here’s an example of what I’m talking about:
Here’s how we can use both Value & Price and Cost & Expense Factors in our advisory analysis. To figure out if it’s better to wait or make the move, consider alternate future outcomes.
Three What If Scenarios
Keeping in mind that our local and national economies are improving, inflation is real and mortgage interest rates, are rising, We can evaluate the financial risks by asking ourselves which of these three scenarios is most likely:
- Home Prices stabilize and mortgage rates rise. Using the example in the picture above, if mortgage rates rise to 6%, waiting may cost our buyer clients the extra expense of $175.86 more per month. If the value of the properties they’re interested in don’t drop more than 13% in value before mortgage rates inflate from current rates to 6%, the decision to wait would create a financial compound fracture. Waiting would mean they’ve lost on two fronts, Value & Price and Cost & Expense.
- Home Prices drop more than 13% and mortgage rates rise to 6%.
- Home Prices drop and mortgage rates stay the same or fall too.
If you believe that home values in your market will fall faster and further than mortgage rates will rise (2. or 3. above), then advising your buyer clients to stay put is the way to go. Keep your eye on the market and when you see a favorable entry point, advise them to make their move.
If you think prices won’t drop more than 13% before mortgage rates rise to 6%, then your logical left brain will tell you it’s wise to advise your buyer clients,
“Because home values are less likely to fall more than interest rates will rise, now is a safe time to make move you’ve been waiting and wanting to make.“
Do your homework on property-value-trends for your micro markets, consider the implications of rising mortgage rates, Rise Up and advise with confidence.
Here’s what I think about my micro-market. . .
I think home values are stable and some neighborhoods will enjoy a rise in prices/values. Mortgage rates have risen about 1% in the last four months and will continue to creep up.
When my clients who would like to move, ask me if it’s a safe time to move, I would discuss Price & Value and Cost & Expense factors with them. Afterwards, we’d be out the door dream home shopping. Pronto.
What do you think?
What’s happening in your market? What are you advising?
Cheers and thanks for reading.
Was Einstein Wrong About The Definition Of Insanity?
Ok, it’s not wrong-wrong, it’s half wrong. Here’s the classic definition of insanity:
The definition of insanity is doing the same things over and over again, expecting a different result. ~ Albert Einstein
It’s true. For example, you can’t lose a dollar on every deal and make it up in volume. I think we’d all agree, if what we’re doing isn’t working, we need to make dramatic changes. Right? But, what if what we’re doing is working? What if we’re not lazy? What if we’re the opposite – we’re successful? Should we keep doing the same things over and over again, expecting the same successful result? You’d think so. But doing so would fall into the insanity category as well. Here’s why.
The Other Definition Of Insanity
Because the expectations of our prospects, suspects and clients are steadily rising and savvy competitors are constantly upping the ante, doing the same things that made us successful yesterday will leave us in the dust tomorrow. Where would Apple be if it thought their first iPhone was such a big hit they didn’t need to change it or improve it? You know, what if their mindset was, if it ain’t broke why fix it? They’d be pipsqueaks instead of what they are now, right? It’s the same for you and me. If Einstein was alive today, I believe he’d approve of this second definition:
“The definition of insanity is doing the same thing over and over again and expecting the same result.”
You see, to succeed tomorrow,we have to reinvent and relaunch ourselves today and everyday. If we don’t, we fall behind. Then disappear. I bet you can think of a two or three formerly famous companies that fell on hard times because they didn’t change with the times. For example Blockbuster comes to mind. Renting DVDs was all the rage once, you know? What will you reinvent and relaunch this week?
Cheers. Thanks for reading. Photo Credit
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