We approach the July 4th holiday and the housing market has been on a wild rollercoaster ride. The lessons of being overleveraged have been painfully felt by many homeowners and investors. The loss of one's home is one of the most painful events of our life.
I know. I lost my home in the downturn of the early 90's. There were compounding events that were out of my control, but I was overleveraged and could not weather the storms of the market that I depend on for my livelihood. I do not overleverage now. It was an indelible lesson and I shall never repeat it.
If you read my blog from a few months ago, you know that it was even painful for me to show a home in foreclosure to a client. I shall never forget the face of the 70+ woman who raised her family and her grandchildren in that home when I asked her, "where will you go?" Her eyes were empty of energy when she replied, "I don't know". I look forward to a market with more restraints and controls on how loans are given and paid back. I look forward to a community of realtors who take the responsibility of asking the necessary questions - perhaps even pre qualifying buyers with simple income/expense/proposed purchase price ratios before we send them off to their mortgage brokers.
To those who will speak to me about their homes and their ability to downsize or take advantage of the lower prices and buy, you will find a more measured response from me. I want you to achieve your dreams, but even more important, I do not want you to lose your dreams because we did not plan ahead. Live well and prosper.
Friday, June 26, 2009
Tuesday, July 15, 2008
ReInventing Myself
Most everything I thought I knew about doing business as a Real Estate Broker, I am re examining. The lens through which I look forward is the lens of a new demographic, and a new and brave world.
Everyone has their opinion as to why the real estate market slowed, skidded and came to an abrupt and downhill race to a bottom that no one knows the location of. Not one real estate broker I speak to is willing to get off his (this is what we mostly have in ownership) "It's a beautiful day and business is great!" horse to muck around in what really seems to be happening.
People (homeowners, investors, buyers, sellers and our agents) need us to be guides through this new terrain. If we are to be guides that earn our living, we must educate ourselves on our local market, while being broader in reach with our understanding of the Global economy. We tend to give weather reports to people, "well, my business is doing just fine" or "The Berkeley Market is thriving" without understanding the way in which the larger US economy is slowly collapsing around us. True, some micro markets are still healthy with good sales and decent prices, but is it only a matter of time before the layoffs at GM and IndyMac filter up to the more affluent neighborhoods and the housing market slows and prices move downward. Time is on the side of those who have lived frugally and not overextended. How much time do I need before I can refinance out of this adjustable loan, or sell my house so I can pay off my debts, or get another job? That is the unknown piece in this scenario.
So what can we do to help people with these fears and realities? We can do alot, and we should do alot.
First of all, "It is not about us, it is about them" By that I mean that it is not a great time to buy or sell for many people. Let's drop that line. Let's help them analyze their local market and their personal financial situation. Let's give them resources - for goodness sakes, LET'S DEVELOP GOOD RESOURCES!
Next, Anyone who comes to us with interest in buying or selling deserves a careful consideration of what they want to achieve, what they can do financially, and how that might play out for them over the next two to five years. Think of them as your sweet younger brother or sister, and treat them with that level of care and caution.
Finally, RETOOL! Do things that scare and intimidate you. Communicate with new people - not for a sales pitch, but for ways in which you and your skills and talents can contribute to their well being. "When everything looks bleak, GIVE BACK!"
It works every time.
Everyone has their opinion as to why the real estate market slowed, skidded and came to an abrupt and downhill race to a bottom that no one knows the location of. Not one real estate broker I speak to is willing to get off his (this is what we mostly have in ownership) "It's a beautiful day and business is great!" horse to muck around in what really seems to be happening.
People (homeowners, investors, buyers, sellers and our agents) need us to be guides through this new terrain. If we are to be guides that earn our living, we must educate ourselves on our local market, while being broader in reach with our understanding of the Global economy. We tend to give weather reports to people, "well, my business is doing just fine" or "The Berkeley Market is thriving" without understanding the way in which the larger US economy is slowly collapsing around us. True, some micro markets are still healthy with good sales and decent prices, but is it only a matter of time before the layoffs at GM and IndyMac filter up to the more affluent neighborhoods and the housing market slows and prices move downward. Time is on the side of those who have lived frugally and not overextended. How much time do I need before I can refinance out of this adjustable loan, or sell my house so I can pay off my debts, or get another job? That is the unknown piece in this scenario.
So what can we do to help people with these fears and realities? We can do alot, and we should do alot.
First of all, "It is not about us, it is about them" By that I mean that it is not a great time to buy or sell for many people. Let's drop that line. Let's help them analyze their local market and their personal financial situation. Let's give them resources - for goodness sakes, LET'S DEVELOP GOOD RESOURCES!
Next, Anyone who comes to us with interest in buying or selling deserves a careful consideration of what they want to achieve, what they can do financially, and how that might play out for them over the next two to five years. Think of them as your sweet younger brother or sister, and treat them with that level of care and caution.
Finally, RETOOL! Do things that scare and intimidate you. Communicate with new people - not for a sales pitch, but for ways in which you and your skills and talents can contribute to their well being. "When everything looks bleak, GIVE BACK!"
It works every time.
Thursday, May 22, 2008
Wednesday, February 13, 2008
The New Rules of Business
compliments of The Harvard Business Review
1. Always study the competetive landscape.
2. Find a niche and create something new.
3. The Customer is always treated like royalty.
4. Hire Passionate People.
All of the above sound right, logical, and helpful for the beginning entrepreneur. Still, something feels incomplete.
Perhaps it is there in the "competetive landscape" suggestion. Perhaps it needs to be clarified.
Perhaps it benefits the customer most when we add, "Look for opportunities to collaborate on behalf of the customer", and "ask what is required of you and your business to be of service to the customer?". Someone recently asked me, "what are your strengths, what are your weaknesses, and what would you say your customers get from you that they may not get from other Brokers?" My answer to the last part was, "my customers become the smartest customers in the market place". That is my goal and my reason for perservering in a highly competetive business. I want to know, "what is required of me and my business in order to achieve smarter customers?" It is a worthy question, answered more each day I ask it.
1. Always study the competetive landscape.
2. Find a niche and create something new.
3. The Customer is always treated like royalty.
4. Hire Passionate People.
All of the above sound right, logical, and helpful for the beginning entrepreneur. Still, something feels incomplete.
Perhaps it is there in the "competetive landscape" suggestion. Perhaps it needs to be clarified.
Perhaps it benefits the customer most when we add, "Look for opportunities to collaborate on behalf of the customer", and "ask what is required of you and your business to be of service to the customer?". Someone recently asked me, "what are your strengths, what are your weaknesses, and what would you say your customers get from you that they may not get from other Brokers?" My answer to the last part was, "my customers become the smartest customers in the market place". That is my goal and my reason for perservering in a highly competetive business. I want to know, "what is required of me and my business in order to achieve smarter customers?" It is a worthy question, answered more each day I ask it.
Monday, January 14, 2008
Foreclosure is a sad experience
Last week, I showed a house to a prospective buyer. It was in North Berkeley on a great street. It is a large, 4 bedroom two bath house and is occupied by the owner of the house - or so I thought.
The house was dark inside - all the drapes, curtains and shades were drawn. It was pouring rain outside. A woman in her forties answered the door.
Once inside, a young boy - maybe six or seven years old was being his energetic self while his young father - perhaps early twenties - tried to get him to the front door so they could leave for their next destination. In the kitchen, a woman in her mid to late sixties was standing and staring straight ahead until we entered the room. I introduced myself and my clients. The woman in the kitchen attempted a smile, and I asked, "Where are you and your family going next?" - this is not an unusual question I ask of sellers. It is usually answered by a rather excited description of what they are moving on to - in this case, the woman said, "I don't know". She then said, "I was born in this house - my parents bought it when they were first married, and they raised four children here" and then she shook her head. They are losing the home she was born in, raised in, and raised her own family, and now grandchild. This is heartbreaking.
I have not been able to get them out of my mind since that day.
The house was dark inside - all the drapes, curtains and shades were drawn. It was pouring rain outside. A woman in her forties answered the door.
Once inside, a young boy - maybe six or seven years old was being his energetic self while his young father - perhaps early twenties - tried to get him to the front door so they could leave for their next destination. In the kitchen, a woman in her mid to late sixties was standing and staring straight ahead until we entered the room. I introduced myself and my clients. The woman in the kitchen attempted a smile, and I asked, "Where are you and your family going next?" - this is not an unusual question I ask of sellers. It is usually answered by a rather excited description of what they are moving on to - in this case, the woman said, "I don't know". She then said, "I was born in this house - my parents bought it when they were first married, and they raised four children here" and then she shook her head. They are losing the home she was born in, raised in, and raised her own family, and now grandchild. This is heartbreaking.
I have not been able to get them out of my mind since that day.
Sunday, January 13, 2008
Friday, December 21, 2007
Seeing into 2008 - or Liz dons her Turban
December 21, 2007 - tonight is the longest night of the year.
Lack of light influences our emotions more than most people realize. I have a friend who bought a light table - a device that photographers used in years gone by to look at slides - photos on film that were projected onto larger screens. In days gone by, the best way to choose the best shots was to review the slides on a light table with a magnifying glass. Arther uses the light table to give his body some needed light in the dark winter days. It works for him and many others with Seasonal Adjustment Syndrome.
The Real Estate Market in the US is in the long dark winter of its cycle and may not see sustained light for 18 more months - 24 more months. What does this mean for buyers and sellers?
Savvy investors are watching to see a break in the credit squeeze (jumbo loans are scarce and expensive now), and once they see the loosening of jumbo loans, they will move into the softened market to buy properties they can add value to and sell in two years, or hold for longer term investment. Investors want to buy with "OPM" (other peoples' money - the banks) and leverage is their best friend. I am looking for good multiple units - rents are strong and tenants are plenty. I think we will see easier jumbo loans and better quality inventory of properties, maybe with needed price reductions come Spring. I am the eternal optimist.
Meanwhile, agents and brokers would do themselves a service to be questioning their value proposition for the coming three to five years as consumers show us what they want and expect from us. Time to re invent our business models.
Have a creative holiday, full of self inquiry and plenty of acknowledgement. Best to you all.
Liz
Lack of light influences our emotions more than most people realize. I have a friend who bought a light table - a device that photographers used in years gone by to look at slides - photos on film that were projected onto larger screens. In days gone by, the best way to choose the best shots was to review the slides on a light table with a magnifying glass. Arther uses the light table to give his body some needed light in the dark winter days. It works for him and many others with Seasonal Adjustment Syndrome.
The Real Estate Market in the US is in the long dark winter of its cycle and may not see sustained light for 18 more months - 24 more months. What does this mean for buyers and sellers?
Savvy investors are watching to see a break in the credit squeeze (jumbo loans are scarce and expensive now), and once they see the loosening of jumbo loans, they will move into the softened market to buy properties they can add value to and sell in two years, or hold for longer term investment. Investors want to buy with "OPM" (other peoples' money - the banks) and leverage is their best friend. I am looking for good multiple units - rents are strong and tenants are plenty. I think we will see easier jumbo loans and better quality inventory of properties, maybe with needed price reductions come Spring. I am the eternal optimist.
Meanwhile, agents and brokers would do themselves a service to be questioning their value proposition for the coming three to five years as consumers show us what they want and expect from us. Time to re invent our business models.
Have a creative holiday, full of self inquiry and plenty of acknowledgement. Best to you all.
Liz
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