The Mirror Effect

Do you ever wonder how to deal with someone else’s opinion of you – especially if it’s negative?  Not how to handle a negative or even rude opinion; early on you should have learned that politeness is how we handle almost any situation.  No, I’m asking if you have a mechanism or coping skill for those times when you discover what someone else thinks about you and it’s painful in some way?  This is not an uncommon experience and might be especially common for real estate agents!  (I’ll leave you to find your own context on that one.)  Personally, I’ve heard a number of answers to this question and they are usually similar to the one found in The Four Agreements by Don Miguel Ruiz.  While not completely representative of everyone’s answer, it’s close enough. This solution seems to lie in finding ways to ignore, become indifferent to, or otherwise devalue the offending expression.  (Mr. Ruiz, for example, points out that when someone says something about us, we should remember they are limited by their own view of the world – their own prism – and realize what they say, says a lot more about them, than us.)  This is both obvious and oblivious.  May I suggest something a little different?

The Mirror Effect
Of course other people see things through their own prism; so what?  Their opinions can not – and do not – hurt me in the least. How could they?  They are only words and, depending on your philosophical bent, the person saying them may or may not even exist!  If I feel hurt or pain (or happiness for that matter), you can be sure I am the sole cause.  I hear the words, I interpret them (through my own prism Mr. Ruiz) and I create feelings in reaction to my interpretation.  I create…  That’s where the wonderful opportunity lies.  The negative or painful (or happy) feelings are created from within.  That’s not just a difference regarding who is in control (per Mr. Ruiz and the rest, I am to develop some ability that will counter the hurt caused by the words or expressions of others – thus giving them the control and me the dependent action).  It’s more than that.  It is how we evolve and become happier and more peaceful; how we become more succesful possibly, and more free definitely.

Suppose someone says to me: “Sean, you are not much of an athlete.”  I would not be stirred by this.  I know my athletic accomplishments.  I know my athletic abilities.  I am comfortable with who I am as an athlete.  I may believe this person to be mistaken or misinformed or ignorant, but I do not take their expression personally – I am not hurt by it. They could have also said: “You are not as good an athlete as Michael Jordan.”  Again, I would not be stirred by this.  Just as I know who I am as an athlete, I know who I am not and my self worth is not dimished by this comparison.  If, however, ten minutes later this exact same person said to me: “Sean, you are a bad father,” I may indeed walk away in pain.  I am divorced and a single dad; I have doubts about whether or not I am being everything my boys deserve.  So when I hear this I may feel angry or hurt; maybe I’ll want to argue and “convince” this person how wrong he is.  Why is that?  Why didn’t I want to convince him of how wrong he was ten minutes ago when he brought up my athleticism?   This is the same person after all, yet what he thought of me as an athlete had no affect and what he thought of me as a father did.  What changed?  Obviously, what changed was my interpretation; my reaction; my feelings on the subject at hand.  The problem does not lie with other people’s opinions, otherwise I would have been hurt both times.  No, the diffence in those two scenarios is… me.

When confronted by an opinion I knew to be false (or at least believed to be false), I was not bothered.  My vision of myself, athletically speaking, was in alignment with my day-to-day experience.  But that last opinion, the one about my being a bad father, that bothered me a great deal.  Why?  Because there is a truth to it – or at the very least I fear there is a truth to it – that I do not wish to face.  This is, in effect, a mirror held up to me – and I don’t like what I see.  That’s why we can’t cultivate an indifference; the indifference would be to ourselves.  That’s why Mr. Ruiz’s answer is so off track too: how do I devalue the prism when it is my own?  I cannot.  Even if I could… what an opportunity I would miss.  What a blessing upon myself I would be throwing away.

The Opportunity!
The next time someone lets you know what they think about you and it hurts, don’t argue with them or run away from the pain or try to devalue what was said.  What’s needed isn’t a coping method.  Instead, thank them!  Thank them and mean it.  (After all, they were merely the person holding the mirror and nothing more.   Besides, this has the added benefit of messing with their heads.)  Then walk away and realize you’ve just been blessed with an intimate look at yourself.  A look we don’t like, no question; we’re face to face with how badly our internal vision of ourselves does not match our external expression of ourselves.  But if we’re honest about it, that look is also a revelation – and a roadmap to greater happiness and success.

Live a Life that POPs

Filed under: BUYERS, INVESTORS, LENDERS, LIFE THAT POPs, REALTORS, SELLERS

Killer Real Estate Videos That Won’t Kill Your Budget

Yesterday I put up a post on Marketing Videos and Real Estate.  My plea was for more creativity and less facts.  My point? An agent who gets creative and starts using video wisely might just take down the Goliath agent in their neck of the woods.  Later that day, in answer to a question by someone who read the post, I sat down and jotted out a half dozen video ideas, then put the pad down and walked away.  When working with creative ideas, I usually find it’s a good idea to let them breathe for a while and come back later.  Often times, after rereading them, you discover even fresher and better ideas.  No such luck today though… you get the original ideas and all their rough edges.

The goal here is to throw some ideas out.  If we’re lucky, this could turn into a “mini-library” of video marketing ideas for real estate agents temporarily running low in the creativity tank and staring at an empty screen.  For me, it’s all about latching onto an aspect of the house and then running a little wild.  Oh, and I love to steal already well-established ideas from the big boys.

VISA Take-Off #1 - there are a number of ways to shoot this.  Show aspects of the house that shine and do the voice-over: “View of the mountains, $10,000; Jacuzzi tub in your masterbath, $3000; and so on.  Then come in with the conclusion everyone knows: “Owning your own home, priceless.”  The key is what you show during that line: Young husband carrying beautiful bride across threshold.  Or, husband painting vertical, purple stripes in the living room while the kids nod approvingly. Or, an exterior evening shot of the house with every window warmly lit while we see the sights and sounds of a fantastic party going on inside.  Single site web address appears at the bottom of the screen.

VISA Take-Off #2 – Same idea, but a child’s perspective (especially designed for a family home in a family neighborhood).  Filmed from a child’s height, but the voice over is the same idea: “Putting new child-proof latches on these beautiful oak cabinets, $100,” while panning the awesome kitchen.  “Putting (say your plumber’s name here), the best plumber in (your town here) on retainer, $500,” while showing a child’s eye view of putting a toy soldier in the toilet and flushing.  (Might get your plumber to incur some of the costs…) Continue with carpets or whatever is great about the house and allows you to work a child into it.  Then, the close.  “Giving your child a world of his own, priceless,”  said over video of a little boy running to the tree house or swing or whatever in the backyard.  Or how about “First step to Olympic glory, priceless,” and show a 6 year old girl in a starting position with a determined look on her face at the edge of the home’s pool.

Super-Agent – if the home is located in a terrific neighborhood, reinforce the idea of you as super agent (costume? depends on you) and take your clients on a Superman’s view of the local town and neighborhood.  (Strap camera to top of car or stand up in a convertible.)  The key is to make it obvious.  Make fun of the Superman aspect while showing off the awesome coffee house and local school.

Historic Home – While doing a voice over of the historic nature of the home, walk through and keep bumping into people in period costumes who talk about how fantastic it is… or how odd the contraptions are (which you conveniently explain to them and the viewer, e.g. Viking Oven which of course leads to a quick shriek in obvious fear of Vikings).  Better still, if some of the competing homes in the neighborhood aren’t historic (best opportunity: built in the 70s) keep the theme.  After talking to your historic figures, show some hippies coming out of the 70′s home for sale down the street and ask the viewer where they want to live.

Beer Commercial – Video shows people going in the beautiful kitchen and coming out thinner.  Or the owner’s friend comes over alone and leaves with a gorgeous bikini babe from the pool in back.  The voice over says something like: “You know how those beer commercials imply that if you drink their beer you’ll lose weight, be the life of the party and date the best looking guys and gals… well, this house is spectacular and at $250,000 a great value.  But will it deliver everything a good beer does?”  Then walk out from behind the camera and win a lottery or have a beautiful woman offer to marry you or whatever, turn back to the camera and wink: “I’m not saying… I’m just saying…”

Large – if the house or yard is really large, talk about it while a small car pulls up and the new buyers get out and remove the sign from the front yard.  Then they turn back to the car and greet an endless stream of children, friends, local merchants, etc. all getting out of the ”circus car.”  End with something clever about a big house or maybe about you, the agent.  “It may look like magic (a miracle, impossible, etc) to most people, but when you buy a home from (insert your own name here), we simply call it: doing our job.”

So, there’s a few ideas from the slightly off-center head of a Tin Foil Hat wearer.  Can you top ‘em?  Let’s get this library started!

Filed under: MARKETING, REALTORS, SELLERS, WORLD OF 2.0

A Scary Thought on the (Non-Existent?) Shadow Inventory

The shadow inventory has been a topic of interest with almost every agent I talk to lately.  Most believe it is large and few understand why it isn’t in the marketplace rather than held by the banks.  Russell Shaw recently wrote about the shadow inventory being gibberish.   It is an interesting article and one I recommend reading.

I rarely disagree with Mr. Shaw, and rather than do so now I’ll simply suggest that we are talking past one another.  As I read it, he is suggesting that this inventory doesn’t exist because it is, for the most part, out there already; just not listed as REO.  He makes it quite clear, however, that he is not talking about foreclosures still to come. (Apologies to Russell for over-simplifying.)  This is where we begin to part ways.  I submit that the shadow inventory must necessarily include not only actual REOs (or REOs not listed as REOs), but the entire picture.

More to the point, if we look at all the homes that have been foreclosed on, are in foreclosure and should be in foreclosure, we are left scratching our heads and find ourselves back to the same question: why aren’t the banks taking these homes in, putting them on the market, and selling them?   (I’m talking here especially about those homes where people have stopped making their payments and continue to live for 6, 12, even more months.)

MORTGAGES IN DEFAULT
Here’s a graph courtesy of the New York Times:

Sources: Federal Reserve Board and Mortgage Bankers Association, via Haver Analytics

That is an awful lot of mortgages in foreclosure; but add to that that lower line – of mortgages in default and not yet in foreclosure – and the numbers are staggering (again, think of people staying on a year after they’ve stopped making payments).  So no matter what we call it, the question remains: What are the banks doing? Why aren’t these mortgages foreclosed?  Why isn’t this inventory on the market?

I know all real estate is local and there are plenty of areas around this country where the last thing agents want to see is more inventory.  But here in San Diego this question of  Shadow Inventory is burning a hole in people’s brains.  We are down to less than two months inventory and the effective inventory (discounting homes that are not financeable due to cracked slabs, missing kitchens, etc.) is closer to one month.  The average buyer is writing over fifteen offers before buying a home or simply walking away in frustration.  We are clamoring for this inventory; why isn’t it out there?

A THEORY
Here’s a theory I’ve been sharing over the past two months with the agents I talk to: the banks have a financial incentive NOT to sell these homes for the same reason they have a financial incentive NOT to lend money.  Let me ask you: if you could borrow money right now from the Fed at roughly 0%, and through carry trades create a very low risk return of 3%, would you do it?  Of course you would; that would certainly be more prudent than putting the money out there in relatively risky mortgages?  More important to our discussion of Shadow Inventory:  you can borrow that money at 0% so long as your balance sheet and reserves are in order. When you have a non-performing asset (like a mortgage not being paid) you can carry that for quite a while.  But, if you sell that home in foreclosure you book the loss.  I don’t know about you, but if I were a bank I would happily carry a non-performing asset and continue to borrow money at 0%.

CONCLUSION
When the Fed begins to raise rates -expected to be late 2nd quarter or early 3rd – the banks will thank them for the ride and begin clearing their books of these non-performing assets in a hurry.  If we follow this theory to its inevitable conclusion, we are looking at a scenario wherein inventory is going up (and home prices are dropping) while at the same time rates are rising.  Falling home prices and rising interest rates. Not the summer I want… and I hope to hell I am as wrong as I have ever been.

Filed under: BUYERS, INVESTORS, LENDERS, REALTORS, SELLERS

On Mortgages and Moral Compunction

What would it take for you to walk away from your mortgage?

Kenneth Harney, in his column Nation’s Housing, reports on an interesting study recently done by the University of Chicago’s Booth School of Business and Northwestern University’s Kellogg School of Management.  This study took a look at homeowner’s attitudes toward mortgage defaults, specifically what’s come to be called “strategic” walkaways or decisions to bail on a mortgage due to purely economic reasons.  The study found that “26% of the record number of home mortgage defaults across the country” were strategic – the homeowner had the ability to pay the mortgage but chose not to because the debt was greater than the asset.  In other words, one in four of the current foreclosures is not due to hardship, but rather a lack of compunction.

My partner and mortgage rate expert, Brian Brady, has for some time now railed against the disappearance of moral compunction with regard to mortgages.  His contention, as I understand it, is that moral compunction was  priced into the model by lenders.  There has historically been a stigma attached to not paying one’s debts, especially one’s home mortgage debt.  This may or may not be true; I am no expert on the history of mortgage defaults in our nation, but it is certainly compelling.  If accurate, the obvious question then becomes: to what degree did moral compunction affect rates and if it is indeed gone, how much higher will rates go?

There is no real mystery to how mortgage rates are priced.  Mathematicians create models of mortgage “behavior” based on the 4 C’s: Capacity, Capital, Collateral and Credit.  Of these four, Credit is really what we’re talking about here.  Your income, your assets and the property’s value are theoretically objective but your credit… well, it’s not really credit that’s being measured here is it?  It’s your Character; your likelihood to honor your debts, although lenders don’t like to say that because it has a snooty, superiority quality.  Make no mistake though, character is most definitely being evaluated during the loan process.   So the question seems to be: How do these mathematicians change the models to reflect a decrease (or abandonment) of moral compunction?

That sounds like a difficult question to answer but I think we can make it a little easier.  If we read further into the study by co-authors Paola Sapienza, Luigi Zingales and Luigi Guiso we realize there is in fact a sliding scale of moral compunction practiced by American homeowners.  (That last statement should be read with tongue in cheek; sliding scale and moral compunction are oxymoronic… you cannot be a little bit pregnant.)  When asked, “81% of household heads said they believe intentional defaults on mortgages to be ‘morally wrong’.”  Yet that number dwindles down as negative equity grows; by the time we get to negative equity of $200,000 fully one in three of these same homeowners would strategically default.  Turns out the act they found “morally wrong” was actually just mis-priced.  In other words, a great many homeowners find morality to be a good thing… taken in moderation.

Besides negative equity, the authors discovered a number of other factors that might influence a homeowner’s decision to strategically default, including age (younger were less likely to have a moral issue) and political affiliation (self-described political independents were also less likely to have a moral issue).  But the other significant factor was familiarity.  Not only did having a greater number of foreclosures within the local community increase the likelihood of a strategic foreclosure, but “owners who (knew) someone who defaulted strategically (were) 82% more likely to default themselves, compared with owners who (did) not know anyone in that situation.”  As the old saying goes: “Familiarity breeds contempt.”

Earlier I wondered how mathematicians could change mortgage pricing models to reflect the empirical observation that making one’s mortgage payment has lost moral compunction.  Based on this study, there is no moral component and probably never was.  The first step then, is to remove the variable of morality altogether.  The model should instead add two more C’s: Community and Contact.

• Community would account for the percentage of foreclosures within a borrower’s local area, probably using the same distance radius now used for comps in appraisals.  Deriving a statistically significant factor for the likelihood of foreclosure based on the percentage of foreclosures within a Community should not be too difficult
• Contact would ascertain whether or not the borrower is acquainted with someone who has walked away from their mortgage.  Again, if a borrower is 82% more likely to walk away from their mortgage based on knowing someone else who has done so, that’s a pretty important variable.

Does that last one sound a little intrusive to you?  We ask similar questions of potential jurors in order to seat an impartial jury.  Is accurately pricing mortgages for the housing industry somehow above such questions?  Have you looked at a mortgage application lately?  It is easily the most intrusive document ever created for general public use.  Have a job?  We want to talk to your employer.  Got divorced?  We want to look at the entire decree.  Own your own business?  You better just send me a copy of every schedule of your tax returns for the past two years.  There is a list of over a dozen declarations you must attest to regarding law suits, bad debts, citizenship and so on.  Another question regarding your familiarity with strategic foreclosures would hardly encumber the process.

Like it or not, this issue has to be resolved.  Without a substantive discussion and response to strategic foreclosures, mortgage pricing models will have no choice but to account for foreclosures – both hardship and strategic – with across the board increases in rates.  That is the easiest hedge against increased risk.  But such indiscriminate rate hikes will only serve to diminish the housing industry and punish the vast majority who have acted responsibly.  Does that sound moral to you?

Filed under: LENDERS, LIFE THAT POPs, POLITICAL & ECONOMIC FOLLY, SELLERS , foreclosures, Moral Compunction

A Poke (in the eye) From Facebook

You know, they say it isn’t wise – when you visit the Wizard of Oz – to look too closely behind the curtain.  Might not like what you see.  In Australia we were recently treated to a quick look behind Facebook’s curtain and I have to tell you: the king ain’t wearing any clothes!

Seems a nice young couple had bought a house, got upside down, stopped paying their mortgage and were doing everything they could to avoid the process servers and foreclosure coming their way.  Not altogether different from the unfortunate antics of a great many folks over in our neck of the woods.  I doubt many of us condone their behavior, but I find it difficult to root for the mortgage company either.  Sort of like watching a tether ball game between your ex-wife and her attorney: I don’t really care who wins just so long as both sides take one or two in the kisser.  Aaaaanyway, the mortgage company finally won the game.  Want to know how?  They looked this couple up and served them legal documents on Facebook!  (Read the full story here.)

Better yet, the local Supreme Court in Australia ruled that this was an acceptable use of the social networking platform.  Are you surprised?  Shocked?  Maybe even a little outraged?  I should say so.  I’ll bet Facebook was none too happy either.  Imagine the chilling affect this development may have on their social network site.  Let’s listen in:

Facebook spokesman Barry Schnitt praised the ruling.

“We’re pleased to see the Australian court validate Facebook as a reliable, secure and private medium for communication,” he said.

“The ruling is also an interesting indication of the increasing role that Facebook is playing in people’s lives,” Schnitt added.  The company said it believed this was the first time it has been used to serve a foreclosure notice.

I can only guess at the pride they’ll feel when the first paternity suit is served.  Are you kidding me?  I read this and the first thing I did was look up hubris in the dictionary, just to make sure I was using that word correctly in my initial reaction.  Turns out my problem was redundancy.  Webster’s used to define hubris as: “excessive pride or self-confidence.”  Now it simply says: “see Facebook.”  Did he say “… an interesting indication of the increasing role that Facebook is playing in people’s lives?”  Is that anything like reveling in the expanded role the stock market is currently playing in people’s lives?

Sydney University of Technology law professor Michael Fraser:

“It does change the rules of the game because people thought of these as social sites; now they can be used to serve official court documents and it may change the way people establish a presence on the social networks and the way they use them.”

Do you think?  We are told by Rory Ryan, a Baylor Law School associate professor, that U.S. users do not have to worry about being served though the program yet.  Yet?  Oh really?  Have you ever seen the 9th Circuit Court of Appeals in action?  I am here to tell you I have as many problems as the next guy – maybe more.  But do I want my dirty linens cleaned on Facebook?  Do you?

Filed under: BUYERS, INVESTORS, LENDERS, REALTORS, SELLERS, WORLD OF 2.0 , Facebook, Social Media Marketing

Social Media Marketing and Real Estate

Earlier this month I spoke at the Social Media Marketing National Conference in Orlando.  The conference itself was over twelve hours of real estate marketing ideas you can implement right now.  Each speaker was a recognized expert in their field and I left with my head spinning.  This post is part of a series in which I will share what I learned.

By now most of us have heard the term Social Media Marketing.  It is variously described as the future of prospecting, a revolutionary version of networking for a 2.0 world, the miracle of permission based marketing and – if I remember correctly – a cure for the common cold.  Do you ever feel as if there is some tremendous movement sweeping through the industry and no one has stopped to explain it?  You hear all the sizzle but what’s needed is for someone to actually throw a big, juicy steak on your plate.  Well I hope you’re hungry because Brian Brady worked the grill for hours at the Unchained Conference in Orlando and he did not disappoint.  Not only did he serve up the meat of the matter, he cut it into bite size pieces and made it easy to digest.

His very first statement set the tone for the rest of his presentation, but regular readers of mine will not be surprised by it: “Marketing is an Obsession.”  I couldn’t agree more, although I might add more: “Marketing is More Than an Obsession… It’s a Passion.”  He goes on to lay out the basis for marketing in a nutshell:

• New customers are the life-blood of a practice
• Farming new customers produces new customers
• The Internet allows us to automate our Unique Selling Proposition

Think about the power in that last point.  Automating your USP and reaching an exponentially larger audience with no extra effort or cost is a magical formula.

The Five Pillars of Social Media Marketing (with my notes)

1. DECLARATION OF IDENTITY – Here I am and I am and here’s what I do.  Don’t hide your light under a bushel.  There is no point to marketing if people don’t know how they can use you or why.
2. IDENTITY BY ASSOCIATION – You are judged by the company you keep.  This is true in all aspects of life but can be utilized advantageously on-line.  Make purposeful decisions about what groups you join and who you associate with; the perception of who you are can be greatly enhanced.
3. CONSUMER GENERATED CONVERSATION – By declaring your identity in well chosen places, you open yourself to contact by consumers.  Either directly, through forums or in question & answer format, the consumer will talk to you if you are listening.
4. PROVIDER GENERATED CONVERSATION – This is what you push out; the answer to the question, the story that relates a benefit, the information that is useful.  This is your opportunity to really shine.
5. OFF-LINE CONVERSATION – The secret!  This is the step missed by so many.  The first four pillars will enable you to acquire prospects, but this game is a contact sport.  The whole point of marketing is to cause the consumer to take action.  This reminds me of a little retail wisdom I heard from Home Depot’s founders.  They said “we didn’t spend all that money paying for advertising and buying products just to have the consumer walk away because the check-out line was too long.”  When someone walks up to your register with money in their hand… engage them!

Setting Traps on the Internet

You want to be where your potential clients can find you and engage you.  The easiest way to find that place is by asking previous clients where they go on the internet.  Once you know, show up and build a profile.  Your profile is pure marketing, by which I mean a golden opportunity to share your USP and not a place to hammer consumers with sales gimmicks.  Keep track of your profiles, revisit them from time to time and make sure they are all up to date and expressive.  Connect with everyone you know.  Be an active member of the community (both online and off).  Another idea Brian shared is to update your status bar on Facebook.  (What’s that?  You’re not on Facebook yet?  Your clients are…)  Also comment on other people’s status bar updates.  Again, be an active part of the community.

Goals

So what are the goals of social media marketing?  Brian points out the primary goal is get people to your landing page, your blog or website.  This is your office… your home.  Once there they can get to know you and transform from a cold call to a warm lead.  You would like them to subscribe to your Provider Generated Conversations.

• RSS feed is OK
• email subscription is better
• e-zine subscription is way-better

If you are doing it right and providing useful information to people you’ll get what’s called a full data dump.  In other words, the consumer will share all of their relevant information with you.  This allows you to start moving them into your community and practicing Mayoral Marketing.  Just don’t forget to continuously feed the community with good ideas.

The Ubiquitous Road

Ubiquitous yü-ˈbi-kwə-təs – from the Merriam-Webster Online Dictionary: existing or being everywhere at the same time : constantly encountered .  Here are a number of the best places to practice your social media marketing according to Brian:

• LinkedIn – go to the “answer questions” section and get involved
• Meetup – whatever your interest, it’s out there
• Facebook – average age is now over 35 years old
• Zillow – another opportunity to answer questions for potential clients
• My Space – younger and hipper than Facebook – source of the next generation of buyers
• YouTube – real estate’s use of video will be widespread in the coming years

In the end, Social Media Marketing is all about being in front of your prospects, consumers, clients and community on a regular basis.  It is the process of creating your own community of raving fans by being where they are, making sure they know who you are and giving them answers and information they can use.  Consumers have the power in the real estate business relationship.  They can choose to learn about you (or not learn about you) as they see fit.  They reject most forms of “push” marketing (cold calls, email spam, flyers on the door step, etc.) and are out there – in the various mediums just mentioned.  Imagine a potential client stumbling across your front doorstep… make sure your porchlight is on and your door is open.  Maybe even offer them a steak.

Filed under: REALTORS, SELLERS, WORLD OF 2.0 , Social Media Marketing

Real Estate Marketing is Greek to Me

Earlier this month I spoke at the Social Media Marketing National Conference in Orlando.  The conference itself was over twelve hours of real estate marketing ideas you can implement right now.  Each speaker was a recognized expert in their field and I left with my head spinning.  This post is part of a series in which I will share what I learned.

Greg Swann is famous, if not infamous, throughout the RE.net world.  To give you an idea of his reach: the term RE.net was coined by him.  He is the creator of the BloodhoundBlog, a nationwide industry blog with a host of expert contributors posting multiple articles each day.  Their are tens of thousands of people reading the blog at any one time and the comments are at least as informative as the posts.  Greg’s philosophy is one of absolute free market activity and it is based on the watershed leap in humanity handed down to us by the Greeks.  Greg’s philosophy boils down to one, concise statement of freedom… which, much like dessert, you cannot have until you have finished reading this post.

Greg pointed out that most civilizations will do just what is needed to survive and no more.  When faced with a new problem they will do just enough to overcome it but again, no more.  The Greeks were the first culture to come along and reach for more than just surviving; to become, as Greg wrote: ”a doer for the sake of having done, a thinker for the sake of having thought, a poet for poetry’s own sake.”  We, each and every one of us, has that opportunity.  We are free to succeed and we are free to fail.  We are free to control our business and we are free to believe others control it.  But we are not free from making the choice.  Either you choose to recognize and more importantly acknowledge that you alone are responsible for your thoughts, actions and results or by definition you cede control of them to someone else.  The only true wealth in the world, Greg shared, is intellectual capital.

Here then, are ten things Greg suggested you do – all of them FREE - to increase your intellectual capital immediately (with my notes in italics):

• Start your own weblog.
  • does not have to be perfect
  • does have to be updated frequently
  • does have to be on topic
• Comments are fine if you just do not want to blog. (called comment marketing)
• Blog all of your listings.
• Don’t spin your wheels in the RE.net echo chambers. (other agents are not your audience)
• Good at weblogging?  Build a blogging network.
  • PTA
  • Local handymen
  • any group of interest to you
• Use LinkedIn, Facebook, etc.
• Start a ding-dang Ning group (don’t know what it is? Google baby…)
• Leave your scent trail all over Zillow and Trulia’s trees.
  • post pictures of homes in your farm on Zillow
  • answer questions in the forums
  • make sure all of the above links back to you (linkation, linkation, linkation)
• Post a profile and make it great (marketing opportunity)
  • say what you would say if in person
  • use pictures
  • make it a part of your scent on Zillow, Trulia, etc.
• Don’t sabotage your business plan with internet irresponsibility
  • remember there is no privacy – it does not exist
  • your clients are out there – don’t write it if you wouldn’t want them reading it

Now for dessert.  If you accept ownership of your own production and embrace the exploding information age, you will learn it is not the Geek who inherits the world – it is the Greek who will inherit the world.  Or, as Greg serves it up in his one, concise statement of freedom: “You will never have to take crap from morons again.”

Filed under: REALTORS, SELLERS, WORLD OF 2.0

God Save Me From Another Real Estate Flyer

Over the past couple weeks I have been reading every real estate flyer I could find. I am sure many of you are asking why I would submit myself to such torture… and you would be right to ask. If I had to guess, eight out of every ten flyers I read were sheer torture. How familiar does this sound:

Just look at all the room in this lovely 3 bedroom, 2 bathroom ranch style single family residence with attached garage. Enjoy 1742 square feet of flowing space with enough room for parties or quiet solitude overlooking your own private backyard. Hurry, this one won’t last long!

Did you just call that home a “single family residence?” Why are you repeating the bedrooms and baths? Is that information not available somewhere more appropriate? Who are you talking to when you look up over your slide rule and say 1742 square feet? Appraisers? Contractors? How many people do you think know the difference between 1742 square feet and 1648? Or even 1700? “Honey, stop the car! This house has that extra 42 square feet we have been dreaming about.” Please STOP… or you won’t last long.

Most of the real estate marketing I see starts like this and goes downhill from there. The reason is simple: this is not real estate marketing. Unfortunately, most agents do not know the difference. I attribute some of this to the poor copy writing we are inundated with via the television and a lot of it to the fact that marketing is just not taught, or at least not taught well.

THE BIG FIVE
Over the next few posts I am going to discuss real estate marketing. The list of potentially innovative ways to market a home are never-ending. Many new ideas are shared right here on BloodhoundBlog. I do not hold any illusions of being so creative myself. But I do understand the basics of marketing and I am quite adept at borrowing great ideas from other people. With that being said, in the next couple of posts I am going to discuss the five basics everyone should be doing:

1. MLS – Usually viewed as a data sheet rather than the opportunity it really is
2. Flyer – Reread the example… enough said
3. For Sale Sign – Nine times out of ten it fails at the only two purposes it has
   1. Market the property that is for sale
   2. Differentiate the agent selling the property
4. Brokers’ Caravan – For those who still have access, this is often a missed chance at very effective direct marketing
5. Single Site – Normally a static web site regurgitating the same boring data found in the MLS… with the added benefit of poorly taken pictures

Before any further posts discussing the Big Five, I just have to share with you… the SECRET.

THE SECRET
No, not a movie about attracting wealth by thinking (as much as I strive to join the ranks of nationally known success coaches, the answer to life’s problems is not found in a yoga pose). I am talking about the secret to successful marketing. Ready? Drumroll please… the secret to every successful marketing campaign is realizing that it is a campaign. You are no different than a politician planning a fund-raising campaign or a general planning a military campaign. There is an objective and there are various methods (volunteers / military branches) that must be coordinated. If they are not coordinated the campaign fails, homes are not sold, elections are lost and good men die. Too dramatic? So how do we go about creating a campaign? A true, coordinated marketing campaign. It all begins with three simple questions.

THE THREE BASICS OF COMMUNICATION
Before you start any marketing campaign you must answer these three questions:

1. What is the message or theme?
2. What is the medium?
3. Who is the audience?

What is the message – Most agents fail at step one. A marketing campaign starts with a theme or a unique selling proposition. Something that makes the house “sticky.” Sometimes it may jump right out at you. (I recently saw an Open House with an eight foot tall miniature of the Eiffel Tower in the front yard. Now that is a hook you can build a campaign around.) But most of the time you have to tease it out; this is a creative process! Start by asking yourself

• Is there anything unique about this home?
• Is there anything special about the sellers?
• Is there a compelling story in this house or even behind why the owners are selling?
• Who is the IDEAL buyer for this home?
• Is the neighborhood special or unique in some way?

The answers to these questions will allow you to create a narrative – a story. This is the compelling, sticky motivation that moves people through your various marketing pieces and leads to that all important “call to action.”

What is the medium – Most often we use words, but pictures, videos, sounds and numbers are all at our disposal. Look at the theme you have developed and choose a primary way to construct it. How can you best tell the story? Remember that spoken words communicate more than written words. Pictures communicate more than both. Videos can incorporate words, sounds and pictures. But don’t forget that a good story holds attention better than a poor story no matter what method is used. A mix of mediums, so long as it is not distracting, may often work the best.

Who is the audience – This question merits a lot more thought than it is usually given. Your primary audience is normally potential buyers, but that is not always the case. Sometimes you are marketing to other agents, other times the audience is homeowners who may or may not list their home with you. Sometimes you are talking to an audience that is not in the market to buy or sell, but with whom a relationship is desired. Not only do the audiences differ, but so too does their attention. Are you showing, sharing or telling? Is your audience live, on the street, on the internet or simply reading? These all affect the length of your narrative and the message you are getting across. In the end, all of your marketing campaign methods should be driving the audience member further down the information chain. Ultimately, you want them to arrive at a single site or web site (you do have those, right?) where they can really get caught up in your message. It is here that your most powerful “call to action” occurs, but how they get here depends a lot on who they are. Think about the focus of each medium you use.

NEXT TIME
Now that you have a theme and you understand your story, you have decided on the medium and made a list of potential audiences, you are ready for Step 1. (No, it is not the MLS.) Step 1 is the Single Site for your new listing.

Next, we will go over single sites and signs. Upcoming: MLS, flyers and the Brokers’ Open pitch.

(This post was first published here.)

Filed under: REALTORS, SELLERS

Tiger the Caddie?

Last Monday Tiger Woods returned to Torrey Pines in beautiful San Diego, but not to golf. Instead he caddied for John Abel, winner of the “Tee Off With Tiger” online sweepstakes sponsored by Buick. This is such a great picture that I can’t help but fill in some dialogue. Mine is below. What do you hear them saying?

Abel: “This looks like a tough one Tiger. What would you do here?”

Tiger: “Well, I would push this putt along a path eleven inches left of the true line, with just enough touch to clear the fringe but still allow the natural slope of the green to pull the ball back and down, dropping into the hole dead center… I have no idea what you are going to do.”

AP Photo/Lenny Ignelzi

(This post was first published here.)

Filed under: BUYERS, LENDERS, REALTORS, SELLERS, TAO OF SPORT , Fun, Tiger Woods

Point / Counter-Point

Michael Cook wrote a thought provoking post earlier entitled What Happens to the Early Worm.  So thought provoking that I found my comments drifting to post length.  So how about a little point/counter-point?

Michael, a very detailed and thoughtful post. I would not disagree with you that cautiousness is a safe strategy (although not always a profitable one) and I certainly do not disagree with your assessment of the people here on BHB.  But I do have some other questions:

The income / price equation did not get out of whack overnight, so buyers and sellers should not expect it to correct itself overnight either.

All real estate is local and that is never more true than now. In some areas we have seen real estate go through the support level of fundamental value (that value which would allow an investor to purchase a property and cash flow). This is no different than the Dow last week. It was oversold and many companies could be purchased below their fundamental value. So are you suggesting that rents are going to decrease in these areas?  Otherwise, the correction has already occurred in some areas.

You are looking at some of the best real estate agents in the business here. So when they write that their business has not dropped off, it might lead the casual reader to believe that the real estate market is not in a tailspin or even that real estate is close to a bottom. Do not be lulled into a false sense of optimism. This group is adaptable, smart and most of all well above average.

Michael, to whom are are you writing this post?  If it is agents then I suggest the new market has caused an industry-wide house cleaning.  Those that do not belong have seen business disappear and those that do have been rewarded; but this does not necessarily reflect a worsening real estate market.  If, on the other hand, you are writing to consumers then I suggest they read you closely when you say that the top agents have found “their business has not dropped off.”  It has not dropped off for a reason and would behoove those buyers and sellers to search out the agents that remain busy; again, because the market does not seem to be as bad for them.

Consumer spending is down – Much of it fear-based
Manufacturing is down and declining – As the credit crunch alleviates, this should soften
Jobless claims are up and rising – DEFINITELY A STAT TO WATCH
Housing remains weak – This begs the question
Housing inventory remains well above average – But dropping in many areas.  Plus, programs like Hope for Homeowners may put a significant dent in the rate of increase of REOs
Dow Jones has dropped nearly 40% over the past six months – This is significant, as you said. But may be good for real estate. The markets can go to zero but a house is still a place to live

…decline in the stock market. This represents a decline in confidence in the global economy. This level says that investors believe business could be in for sustained economic distress

There are a couple of great articles addressing this over on Coyote Blog.  Don’t Panic discusses what stock pricing represents and how it does not always address company value (especially in the comments). There is also a great graph in Good News, Really along with this summary: “(i)n fact, the current level of the stock market is screaming normalcy.”

housing still has room to decline because the historical ratio of median housing prices to median income is still too high

Past is not always prologue.  I find problems with the affordability index and have discussed them here.

In the end I agree that people should not try to “catch the knife” (I was wondering if you would make use of that colorful term from the equities market).  But neither should people try to time the market.  I have asked this before but I will ask it here:

What do you fear more: buying now at $350,000 and seeing in six months that you could have paid $325,000 OR waiting six months for the price to reach $325,000 and finding interest rates have moved up two points and you can’t afford any home?

Interest rates negatively affect affordability much more than pricing.  If you are making a long term investment (which is what real estate should generally be) then buying now makes great sense in the areas that are fundamentally sound.  Just make sure to work with someone as “adaptable, smart and … above average” as the agents found here.

(This post was first pubished here.)

Filed under: BUYERS, POLITICAL & ECONOMIC FOLLY, REALTORS, SELLERS , Economy, government, Rates, unemployment