The third force which arrived about the time as the other two was market decline brought about by the financial collapse.
This is not news by now. But what was important about the market decline due to the collapse of the financial markets was why the financial markets collapsed. No one could trust anymore. They'd been taking on faith all this stuff and they found out that what they're relied on before they couldn't trust anymore. Then deals went away and no one would work together because no one trusted anyone anymore.
As Stephen F. Covey shows in his terrific book The Speed of Trust, when trust goes away, business slows. In some places in the country, the market disappeared altogether. In Philadelphia market speed slowed by a factor of about 2 or three. This means the goals you could have reached last year now took 2-3 years to accomplish. So if you thought you were going to do $150,000 this year, you're only going to do $50,000 - $75,000, if you were lucky. I'm looking at the Covey book in detail in my entrepreneurship blog, cited below. Get the book and read it, if you haven't. He's the son of the 7 Habits of Highly Effective People book.
happened when financial markets collapsed was many buyers are stuck sometimes because they know what they think they want, not what they really want.
I'm trying to create a more informed real estate customer. Is this working?
Want to learn entrepreneurship? Go to www.hatman2.blogspot.com.
Want to get a poem or short story published? Go to www.byandforwriters.blogspot.com
Want tips on writing, or to read my first book for free, or maybe get it? Go to www.kearneymusicschoolmurders.blogspot.com.
Want to really know how to network? Go to www.referralbasedbranding.blogspot.com
Monday, October 26, 2009
Why Buyers So Often Spin Their Wheels
Many buyers are stuck sometimes because they know what they think they want, not what they really want.
Toby Israel, in Some Place Like Home. Using Design Psychology to Create Ideal Places (Chichester, Eng.: John Wiley & Sons, 2003), maintains that our image of the perfect living space is hard-wired into us when we're very young. And these determine what we really want.
Over time these hard-wired preferences change and become more nuanced. The main reason some buyers have so much trouble finding what they want is because they don't really know only what they think they want. She has a number of exercises in her book which can help a buyer bring their unconscious preferences to the conscious level. One of them she calls an environmental autobiography.
To complete an environmental autobiography, the buyer simply lists chronologically every residence in which he or she has ever lived. For each residence, the buyer would give what they liked and/or didn't like. By drawing out themes from the entries, the agent can gain a much more powerful picture of what the buyer wants in a home.
Agents too often focus on price range, neighborhood, number of bathrooms, number of bedrooms, and other features. They're not trained to think about these issues, and too often they just aren't curious enough about science or smart enough to think about these issues. They know the real estate process, but they tend to bumble through life.
A good real estate agent will work with buyers to determine the kinds of spaces that have resonated with them in the past. If more buyers came to grips with that, they wouldn't spin their wheels so much and the experience of finding a home wouldn't be so daunting.
I'm trying to create a more informed real estate customer. Is this working?
Want to learn entrepreneurship? Go to www.hatman2.blogspot.com.
Want to get a poem or short story published? Go to www.byandforwriters.blogspot.com
Want tips on writing, or to read my first book for free, or maybe get it? Go to www.kearneymusicschoolmurders.blogspot.com.
Want to really know how to network? Go to www.referralbasedbranding.blogspot.com
Toby Israel, in Some Place Like Home. Using Design Psychology to Create Ideal Places (Chichester, Eng.: John Wiley & Sons, 2003), maintains that our image of the perfect living space is hard-wired into us when we're very young. And these determine what we really want.
Over time these hard-wired preferences change and become more nuanced. The main reason some buyers have so much trouble finding what they want is because they don't really know only what they think they want. She has a number of exercises in her book which can help a buyer bring their unconscious preferences to the conscious level. One of them she calls an environmental autobiography.
To complete an environmental autobiography, the buyer simply lists chronologically every residence in which he or she has ever lived. For each residence, the buyer would give what they liked and/or didn't like. By drawing out themes from the entries, the agent can gain a much more powerful picture of what the buyer wants in a home.
Agents too often focus on price range, neighborhood, number of bathrooms, number of bedrooms, and other features. They're not trained to think about these issues, and too often they just aren't curious enough about science or smart enough to think about these issues. They know the real estate process, but they tend to bumble through life.
A good real estate agent will work with buyers to determine the kinds of spaces that have resonated with them in the past. If more buyers came to grips with that, they wouldn't spin their wheels so much and the experience of finding a home wouldn't be so daunting.
I'm trying to create a more informed real estate customer. Is this working?
Want to learn entrepreneurship? Go to www.hatman2.blogspot.com.
Want to get a poem or short story published? Go to www.byandforwriters.blogspot.com
Want tips on writing, or to read my first book for free, or maybe get it? Go to www.kearneymusicschoolmurders.blogspot.com.
Want to really know how to network? Go to www.referralbasedbranding.blogspot.com
Thursday, October 22, 2009
Should you do a 1031 Exchange
Yes, if it's right for you. It allows an owner of investment property to sell it and buy another of equal or greater value and defer all the federal tax implications.
The number 1031 comes from a section of the IRS code. The applicant has 45 days to identify a property and 185 days after that to close. If you are successful you can defer any federal tax implications for later on. You have to use a special company empowered to do these deals.
A 1031 exchange might work for if you're looking for investment property. If you are going to live in the property, it's not for you. You could not use it to buy a condo and move into it. You could use it to buy a condo if you were going to rent it out for at least 2 years. There is no period of time written into the law, but most people give you at least 2 years before you can move in. And the property you sell also has to be commercial property.
It may or may not be good for your state taxes, though. It doesn't work in Philadelphia. Check with your accountant. You also have to be able to meet the deadlines. Go to your accountant for the full story.
I'm trying to create a more informed real estate customer. Is this working?
Want to learn entrepreneurship? Go to www.hatman2.blogspot.com.
Want to get a poem or short story published? Go to www.byandforwriters.blogspot.com
Want tips on writing, or to read my first book for free, or maybe get it? Go to www.kearneymusicschoolmurders.blogspot.com.
Want to really know how to network? Go to www.referralbasedbranding.blogspot.com
The number 1031 comes from a section of the IRS code. The applicant has 45 days to identify a property and 185 days after that to close. If you are successful you can defer any federal tax implications for later on. You have to use a special company empowered to do these deals.
A 1031 exchange might work for if you're looking for investment property. If you are going to live in the property, it's not for you. You could not use it to buy a condo and move into it. You could use it to buy a condo if you were going to rent it out for at least 2 years. There is no period of time written into the law, but most people give you at least 2 years before you can move in. And the property you sell also has to be commercial property.
It may or may not be good for your state taxes, though. It doesn't work in Philadelphia. Check with your accountant. You also have to be able to meet the deadlines. Go to your accountant for the full story.
I'm trying to create a more informed real estate customer. Is this working?
Want to learn entrepreneurship? Go to www.hatman2.blogspot.com.
Want to get a poem or short story published? Go to www.byandforwriters.blogspot.com
Want tips on writing, or to read my first book for free, or maybe get it? Go to www.kearneymusicschoolmurders.blogspot.com.
Want to really know how to network? Go to www.referralbasedbranding.blogspot.com
Monday, October 19, 2009
Why Buyers Get Stuck Sometimes
This is worth repeating from my 2007 posting in my previous real estate blog in 2007:
I'm going to unpack this in later posts. I recommend the Israel book highly. To order it, they give the e-mail address cs-books@wiley.co.uk
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Many buyers get stuck in their searches. They look and they look, but they can't find the house that they want. Toby Israel, in her book Someplace Like Home offers an insight which may explain a lot. She says, the image of our perfect living space is hard-wired into us when we are young. It changes over time, but stays substantially stays the same. Often how we feel about where we live is below our conscious level. Many buyers do not understand what they really want. Rather, they're being driven by what they think they want. She offers a number of ways to bring this material up to the conscious level.The full citation is Tobey Israel, Some Place Like Home. Using Design Psychology to Create Ideal Places (Chichester, Eng.: John Wiley & Sons, 2003).
I'm going to unpack this in later posts. I recommend the Israel book highly. To order it, they give the e-mail address cs-books@wiley.co.uk
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Thursday, October 15, 2009
Real Estate's Perfect Storm, Force 2: Disintermediation
Wikipedia defines disintermediation as:
It's now happening in the entertainment and publishing industries.
Disintermediation hit me in November, 2006, it became apparent that buyers weren't using agents to the extent they were even a few months earlier. The rapid shift to the computer searches, with Realtor.com, Zillow, etc., has totally changed the industry.
I used to do "floor" time, a period of time when the sales agent would field phone calls. Before that date, people would call up and say, "I want to buy a house, is there someone there I can talk to about it?" I would say, I can help you with that and away we'd go.
Beginning with November people would more likely call and say, "I'm interested in the house at 1234 Main Street. Can you tell me about it?" I'd look it up, describe it to them, then say, "Would you like to see it?" The caller would most likely say, "No thanks, I was just curious about it."
Our office kept records for a month on what callers were looking for. To a call, it was just seeking information. The number of buyers I was working with dropped each month after that.
I'll tell you the problem with this next time.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
the removal of intermediaries in a supply chain: 'cutting out the middleman.' Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now deal with every customer directly, for example via the Internet. One important factor is a drop in the cost of servicing customers directly.This has already happened to the travel industry. It used to be when I wanted to fly somewhere, I'd call up my travel agent and say, I wanted to go to San Diego on a certain date and return on a certain date. She'd say, "I'll check and get back to you." A couple of hours later, she'd call back and book the flight for me. Now, I go to the computer.
It's now happening in the entertainment and publishing industries.
Disintermediation hit me in November, 2006, it became apparent that buyers weren't using agents to the extent they were even a few months earlier. The rapid shift to the computer searches, with Realtor.com, Zillow, etc., has totally changed the industry.
I used to do "floor" time, a period of time when the sales agent would field phone calls. Before that date, people would call up and say, "I want to buy a house, is there someone there I can talk to about it?" I would say, I can help you with that and away we'd go.
Beginning with November people would more likely call and say, "I'm interested in the house at 1234 Main Street. Can you tell me about it?" I'd look it up, describe it to them, then say, "Would you like to see it?" The caller would most likely say, "No thanks, I was just curious about it."
Our office kept records for a month on what callers were looking for. To a call, it was just seeking information. The number of buyers I was working with dropped each month after that.
I'll tell you the problem with this next time.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Monday, October 12, 2009
Rewards of Real Estate
What I like about real estate is what I can do for people. When they say, "Thank you, Tim, you changed my life. I couldn't have done it without you," that is its own reward, not any money that may come from transactions. And you have this warm fuzzy feeling with them that will last a long time.
Yesterday, my wife and I were walking around the Graduate Hospital area of Philadelphia. I had a listing over on there that I referred to another realtor when I transitioned to referral real estate. It was a total wreck. Inside and out.
We took a detour and looked around the place. People were living there so I couldn't go in of course. Nor did I have a key. They had totally redone the downstairs, maybe the upstairs too, I couldn't see. They had opened it up where it had been a dank hallway and a tiny living room previously. Around back, where there had been a crapped up "yard," about a 5-square foot dog poop-strewn bunch of dirt, and a falling down concrete block fence, they'd repaired the broken window, paved the yard, torn down the wall, and had a nice driveway. Excellent.
They had taken a wreck of a house, made it theirs, and improved the city in the doing. Fantastic. I wish everyone would do that.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Yesterday, my wife and I were walking around the Graduate Hospital area of Philadelphia. I had a listing over on there that I referred to another realtor when I transitioned to referral real estate. It was a total wreck. Inside and out.
We took a detour and looked around the place. People were living there so I couldn't go in of course. Nor did I have a key. They had totally redone the downstairs, maybe the upstairs too, I couldn't see. They had opened it up where it had been a dank hallway and a tiny living room previously. Around back, where there had been a crapped up "yard," about a 5-square foot dog poop-strewn bunch of dirt, and a falling down concrete block fence, they'd repaired the broken window, paved the yard, torn down the wall, and had a nice driveway. Excellent.
They had taken a wreck of a house, made it theirs, and improved the city in the doing. Fantastic. I wish everyone would do that.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Thursday, October 8, 2009
Ego and Real Estate
A healthy ego is important in completing a real estate transaction. Your ego is your sense of yourself. You have to know who you really are and how you want others to see you. In a perfect world, people see you as you really are. An unhealthy ego is either an overblown ego, where you are the most important person in the world and everybody has to kowtow to your needs, or a underdeveloped ego, where you undervalue who you are, what you want, and what you need because you have a poor sense of yourself. This interferes with your ability to get what you should get because you give away too much.
In the film Funny Lady, Fanny Bryce, played by Barbra Streisand, gets a plum offer from Flo Ziegfeld. She says she doesn't deserve it because she hasn't suffered enough. Yet in other places in the story she oversteps her bounds by telling Ziegfeld (a god in his industry at the time) what she won't accept. He would throw her out except she was very popular. She has an ego that's sometimes overblown, sometimes underdeveloped.
This is no different than any other business transaction. Each side has to have a healthy sense of themselves, what they want, what they're property is worth, what they want, what they're willing to accept, what they want for the other person, and so-on.
There is no justifiable place in a real estate transaction for an unhealthy ego, just as there is not justifiable place for an unhealthy ego any other business transaction. A overblown ego causes trouble because the buyer or seller's emotion spills over the top and interferes with fashioning a deal that everybody can live with.
An overblown ego infects the transaction and undermines the interest of the offending party or parties. The professional becomes personal and that spells at best a rough ride for the negotiations or downright ugly scenes. This should not be a zero-sum game where whenever one side gains something, the other side loses something. It should be a win/win situation for both sides.
There is a place for emotion. Emotion should support you by informing your intellect. When you have an unhealthy ego, emotion gets in the way of your ability to make rational decisions and act in your own best interest.
You have to remember that buying a house is a business transaction, not a pissing contest.
That doesn't mean that everybody is rational. Real estate horror stories abound.
Sure you're going to react emotionally. You're looking for something that has to meet several needs at once. First off, the new house will be a home that will help you have a satisfying and comfortable life.
Second, it has to be a sound financial investment. It needs to support your life, not be one which requires you to devote your life to supporting your home.
Third, there's a reputational component. Having a house in a given area says things about you to other people. If you want to be know for being rich, you want to live where other rich people live.
Trouble comes in when you want people to see you as rich, but you aren't rich, yet you overbuy, pay too much, take on too much debt, and spend your days working to make that mortgage payment when a better investment in a less tony neighborhood would have worked better. That's why you have to figure out who you are, what you want, what you're willing to give up, and what you won't.
Like I said, a healthy ego is necessary in completing a real estate transaction.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
In the film Funny Lady, Fanny Bryce, played by Barbra Streisand, gets a plum offer from Flo Ziegfeld. She says she doesn't deserve it because she hasn't suffered enough. Yet in other places in the story she oversteps her bounds by telling Ziegfeld (a god in his industry at the time) what she won't accept. He would throw her out except she was very popular. She has an ego that's sometimes overblown, sometimes underdeveloped.
This is no different than any other business transaction. Each side has to have a healthy sense of themselves, what they want, what they're property is worth, what they want, what they're willing to accept, what they want for the other person, and so-on.
There is no justifiable place in a real estate transaction for an unhealthy ego, just as there is not justifiable place for an unhealthy ego any other business transaction. A overblown ego causes trouble because the buyer or seller's emotion spills over the top and interferes with fashioning a deal that everybody can live with.
An overblown ego infects the transaction and undermines the interest of the offending party or parties. The professional becomes personal and that spells at best a rough ride for the negotiations or downright ugly scenes. This should not be a zero-sum game where whenever one side gains something, the other side loses something. It should be a win/win situation for both sides.
There is a place for emotion. Emotion should support you by informing your intellect. When you have an unhealthy ego, emotion gets in the way of your ability to make rational decisions and act in your own best interest.
You have to remember that buying a house is a business transaction, not a pissing contest.
That doesn't mean that everybody is rational. Real estate horror stories abound.
Sure you're going to react emotionally. You're looking for something that has to meet several needs at once. First off, the new house will be a home that will help you have a satisfying and comfortable life.
Second, it has to be a sound financial investment. It needs to support your life, not be one which requires you to devote your life to supporting your home.
Third, there's a reputational component. Having a house in a given area says things about you to other people. If you want to be know for being rich, you want to live where other rich people live.
Trouble comes in when you want people to see you as rich, but you aren't rich, yet you overbuy, pay too much, take on too much debt, and spend your days working to make that mortgage payment when a better investment in a less tony neighborhood would have worked better. That's why you have to figure out who you are, what you want, what you're willing to give up, and what you won't.
Like I said, a healthy ego is necessary in completing a real estate transaction.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Monday, October 5, 2009
Set a plan
When you're looking, set a plan. Decide to see about X number of houses, where X is not more than 10, definitely not more than 20, then if you haven't seen the house you want to make an offer on, recalibrate.
If your agent has taken you to 20 houses, and you can't find one that fits your specifications, you need to rethink something. I actually think the cap should be 10, but that's just me.
Maybe look in a different price range, different area, so on. That doesn't mean that if a house comes open that fits what you want in the category you've sworn off you can't go look at it. You just have to think, "if I've seen 20, and none of them are right, what are the odds that the 21st will be any different?"
Of course, the market might change which can realign the playing field. The market is a lot like that game that comes in a box, and you tilt the surface this way and that to nurse a marble past the holes to the end.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
If your agent has taken you to 20 houses, and you can't find one that fits your specifications, you need to rethink something. I actually think the cap should be 10, but that's just me.
Maybe look in a different price range, different area, so on. That doesn't mean that if a house comes open that fits what you want in the category you've sworn off you can't go look at it. You just have to think, "if I've seen 20, and none of them are right, what are the odds that the 21st will be any different?"
Of course, the market might change which can realign the playing field. The market is a lot like that game that comes in a box, and you tilt the surface this way and that to nurse a marble past the holes to the end.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Thursday, October 1, 2009
Ability to Repay
One thing buyers have to keep in mind that lenders, when the evaluate a applicant's risk, that is the likelihood that they will default on their mortgage, lenders evaluate the ability to pay the mortgage, not whether you're a good guy, or smart, or anything else.
Buyers find this out when they quit their job and try to get financing for a new house or car. They may have cash in the bank, but since they aren't drawing a paycheck, they can't prove to the lender they will pay it back. Many people with very good credit yet no job are being denied a refinancing because they are perceived to be too risky by the same bank that they may have been paying back for years and years.
This is why I'm saying don't quit your job before you get the new house.
You can always try to wait until your current house sells, but in a difficult lending environment, that may take too long and that new house you wanted might away.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
Buyers find this out when they quit their job and try to get financing for a new house or car. They may have cash in the bank, but since they aren't drawing a paycheck, they can't prove to the lender they will pay it back. Many people with very good credit yet no job are being denied a refinancing because they are perceived to be too risky by the same bank that they may have been paying back for years and years.
This is why I'm saying don't quit your job before you get the new house.
You can always try to wait until your current house sells, but in a difficult lending environment, that may take too long and that new house you wanted might away.
I'm trying to create a more informed real estate customer. Is this working?
For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.
Go to www.byandforwriters.blogspot.com if you would like to get a short story published.
For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.
For a proper connection strategy, go to www.referralbasedbranding.blogspot.com
