Inspired Real Estate For Today

A common misconception amongst real estate agents is that the most important resource in the real estate process is the buyer or seller.  After-all, without them, we don't have a job! In our frantic desire to have buyers or sellers, sometimes at any costs, we tend to forget that there is an even scarcer commodity at stake.  Ourselves!  Our time, our health, our knowledge base and yes...our sanity!  If we don't take care of ourselves and properly evaluate the viability of a potential client, we risk loosing far more than a transaction.

You may have heard about the story of Casey Serin, the 24 year old whose real estate misadventure in flipping homes resulted in eight homes bought in 8 months with 5 of them currently in default and being repossessed.  Not one to go quietly, Casey regaled the world with stories about his recklessness;  even admitting to lying to justify mortgage loans...on camera.  Well, it's over for Casey who now faces a number of lawsuits, problems at home and problems with the FBI.

Unfortunately, although Casey's story is extreme, it is not unique.  And far more troubling than the specific details surrounding this particular media circus is the fact that the traits that propelled Casey Serin into a series of disastrous decisions are far more widespread than most of us would care to admit. Casey's inability to come to terms with reality and live within his limits may have ultimately been his biggest flaw.

But you don't have to be a foolish investor to make this type of error. The tendency to ignore warning signals regarding a potential clients qualifications and limitations is a trait which is so inimical to the real estate community that it's like a moth flitting towards a flame.  Certain destruction...but enticing nevertheless.  

The investigation surrounding Casey Serin is likely to expand to include a wide swath of professionals within the real estate community who assisted a client who really shouldn't have been one! But  we must ask ourselves, would most of us have had the criteria in place to properly evaluate whether we should have taken on Casey as a client?

This is a big issue for most real estate agents.  Many of us do not practice the discipline of qualifying a client.   Consequently, we waste time working on deals which will never materialize.  Several years ago, my real estate mentor shared a simple system which has proved invaluable in clarifying how and when to work with clients. This tool, that he referred to as the ABC Rating System  has helped me to appropriate scare resources...namely my time and energy. Although, I have modified the systems somewhat, the basic tenants remain the same.  Here's an example of how the ABC System qualifies a potential buyer client.

• An (A) Client is Someone who is Willing (wants to work with ME) Ready (would like to do a real estate transaction within 3-6 months) and Able (can qualify for financing within normal parameters)
• A (B) Client is Someone who is Willing ( wants to work specifically with ME) Ready (would like to complete a real estate transaction within 6-12 months) and Able ( is able to qualify for financing within normal parameters)
• A (C) Client is Some who is Willing ( wants to work specifically with ME), Ready (would like to complete a real estate transaction within 12-18 months) and Able (is able to qualify for financing withing normal parameters )

You will note from the above list is that the only criteria which changes is the time frame in which a client desires to move forward.  After all is someone who doesn't necessarily want to work with me, and is still "shopping"  around for real estate agents truly a client? NO!  Neither is someone who cannot qualify for mortgage financing. But rather than asking these questions right in the beginning, many real estate agents play a high stakes game of chance...hoping that driving clients around and continuing to stay in touch with them will yield a lucky roll of the dice and create clients from the non-committed or unable.

The inability to accurately discern the viability of a transaction is becoming increasingly expensive.  For every non-client that takes up time, the loss is far broader than the deal at hand. The fact is that my ability to earn a living 3 months from now is based on what I am doing right now. Focusing on the wrong thing now guarantees that the right things will not occur in the future. 

So ulitmately, it's about practicing Triage.  It's realizing that my time, energy, stamina and strength are limited resources that must be protected and utilized in the most effective and efficient way.  It is only through this kind of sober discipline that real estate agents can hope to be around long enough to assist those who are not clients today when  they become clients in the future!

Copyright 2007 Audu Real Estate  All Rights Reserved

 Click Here to Read More about Grand Rapids, Michigan

According to Wikipedia: 

"Triage is a system used by medical or emergency personnel to ration limited medical resources when the number of injured needing care exceeds the resources available to perform care so as to treat those patients in most need of treatment who are able to benefit first."  In some ways, the situation which is emerging in the real estate community may necessitate the  practice the skill of triage to survive.

For most real estate practitioners, this is not a term we associate with the real estate industry.  After all, the ethical confines of our Code (Article 11) prevent us from representing ourselves in the role of other professions and/or experts whether they are lawyers, appraisers, accountants...etc. 

But sometimes, a practical discipline from another industry can be effective in helping us to understand more clearly the challenges that we face in our own.

And then there is this issue.  Making prudent professional evaluation about the viability of a transaction is a skill that is rarely taught. Most of us have an innate drive which pulls us to accept just about everything that has the potential of a deal and a paycheck in the future.  So, even when the reality of scarcity is stridently bearing down upon us, there's a tendency to avoid looking and responding to some pretty loud signals.

Triage was developed by the French on a philosophy which is largely alien to American popular culture...the concept of scarcity and the need to ration.  Living in the land of plenty has made most of us unaccustomed to dealing with scarcity.  If we don't have the money in the bank...well, there's plastic.  And if that's not enough...well, we apply for more plastic.  Now, that the well is drying up...Triage on a number of levels may be a skill that we all are forced to develop.  Agents, Buyers, Seller, Appraisers, Loan Originators etc, etc, etc.

An interesting story ran in the Rocky Mountain News in October of last year.  The article entitled "Real Estate Chief Targets Kickbacks" was a feature on Erin Toll, the newly appointed director of the Colorado Division of Real Estate.  About  a year prior to her appointment, Toll who was then Colorado's deputy insurance commissioner was riding her bike when she came upon a gentleman who had just suffered a heart attack while riding his bike.  Erin, being trained in CPR rushed to his aid and her actions eventually saved his life.  The man was Chuck Mayhew, a developer from New York who was in town to consummate a big real estate deal! 

In some ways, this event foreshadowed the challenge that Toll and many others in professional leadership roles are facing as they deal with an industry gone awry.   According to Erin Toll, Colorado's Chief Real Estate Cop: "Inflated appraisals are seen as one of the primary contributors to Colorado's dubious distinction of having the highest foreclosure rate in the nation, according to national reports."  It was interesting to note that while she started the Triage process in her former job by cleaning up the title industry in Colorado, she is now moving on to relieve crooked appraisers of their license and livelihood. Will real estate agents and loan originators be next?

Make no mistake, Toll is not limiting her focus in the clean up to appraisers.  She is targeting appraisers because with limited resources at her disposal, she wants to "attack the hard stuff first, go after the heart attacks not the colds."   Her reasoning in this course of action is that appraisers in Colorado have never been targeted in this way by law enforcement and she feels that their role in inflating the value of property was what made it possible for loan officers and real estate agents to perpetuate scams.

I don't know if I would have made the same decision that Toll made, but I do know that we will probably all be called to practice some Triage if we are determined to thrive in this market.  Another way of looking at it may be to call it "hard pruning."  It's very easy to carry excess weight if you're not going anywhere soon or in a hurry.  But the situation changes dramatically when the real estate is industry is changing very quickly and hurtling in direction in which a number of outcomes are possible.  Some of which are not very attractive.

Several years ago, a marginal buyer had a good chance of being approved.  It wasn't so long ago that almost every house SOLD as long as there was a sign in the yard.  With so many people buying homes, prices soared.  THIS IS WHEN our industry should have started practicing Triage.  That is... having the courage to answer some tough questions about where we were headed.  Questions that would place the quick and easy money on the back burner to do a slow melt while we looked critically at some very obvious fissures that were becoming clearly evident.

Failing to do so, we will increasingly find ourselves doing Triage on sicker patients.  One Broker described buyers who he has worked with recently like this:  "First you tie them up, bundle them up with every bit of string you can find to keep the deal together, and then...you gingerly roll the ball towards the finish line hoping the thing doesn't become unraveled just prior to close!"   A sad commentary isn't it...but who hasn't had a similar experience?

Real Estate in Triage Mode will force us to be more selective about who or perhaps better stated...what we can keep alive.  Lest you think this is all about the consumer...think again.  Real estate agents, mortgage lenders, appraisers, builders, surveyors and other related professionals will all have to re-think whether this business makes sense or not.  Making the wrong choices in selecting clients to work with may prove to be more devastating than not having a client at all.  Triage will create interesting and often difficult choices.  And it will eventually save lives and livelihoods.  It's just a matter of whose!

*Tune in for the next blog post as we explore this question.  Is Triage already impacting your business & you just didn't know it?

Copyright 2007 Audu Real Estate  All Rights Reserved

 Click Here to Read More about Grand Rapids, Michigan

One of the most fascinating Greek mythological tales is the story of a young man named Narcissus, who was the son of the river god Cephissus and the nymph Liriope.  He was an extraordinarily handsome young man and renown for his beauty.  When he was born, his mother was told that he would enjoy a long life provided he never saw his own reflection. There are several variations of this tale that have survived so there is a suggestion that the tale we commonly refer to today is a "compilation" of several versions that were passed down over time.

The story of Narcissus, is a story about love...self love.  Depending on the source, Tradition indicates that because of his looks, Narcissus attracted the infatuation of a nymph called Echo.  Echo's ardent love for Narcissus was rejected.  Spurned and wounded, Echo became heart sick and and withdrew into a lonely life of solitude and eventually pined away to a plaintive whisper.

When the Greek goddess of justice, Nemesis heard about Echo's prayers for vengeance, she enacted punishment on Narcissus by causing him to watch his own reflection endlessly until he too finally finally died. A peculiar form of judgment which doomed Narcissus to be wounded by the anti-thesis of what he carelessly disdained.  Today, the Greek flower by the same name, (the common daffodil is a member of this plant family) is characterized by the fact that it always bends it's head downward toward the water...a graceful reminder of the Greek superstition that excessive self focus is unhealthy and can be the ultimate "fatal attraction."

References to the term narcissism in the Encyclopedia Britannica indicate that in psychiatry and especially psychoanalysis, the term narcissism denotes an excessive degree of self-esteem or self-involvement, a condition that is usually a form of emotional immaturity."  Our modern culture is self-possessed in a manner that rivals the most extraordinary excesses of human history. 

It is a natural impulse to have self-interest.  In fact the biblical injuntive to "love you neighbor" assumes that you love yourself...the entire quote being..."love your neighbor AS you love your self.  I think the way in which the process becomes toxic is when self love becomes dammed up without an outlet.  The stagnation of unrelenting focus and self-interest becoming a dank, sour cesspool which obscures our ability to receive the gifts of others. And most importantly, to give of ourselves to others.

In some ways, the culture of self fascination is exponentially accentuated by the phenomenon of the Internet search.  For the first time in history, the entire collective wisdom and focus of the entire world can be almost instantaneously accessed to produce a compilation of every minute detail about anyone or anything.  We can search for our names, our interest, our celebrities, our heroes, our nemesis and anything else that supports the world of "US" with electric speed.  In fact, we religiously spend hours of our lives doing exactly this.  Google traffics entirely on this fact!  Through a Google search, we can track with relentless precision every element of information that is currently creating our personal archives in multiples of images, print, audio and video logs.

Meanwhile, the modern version of Nemesis continues to exact her peculiar form of justice.  Shattering the margins of our self-absorbed worlds, the chaos inherent in our culture and relationships wrecks havoc in homes through divorce, separation, alienation and brokenness.  But like the curse of Narcissus, we continue to peer deeper into the inscrutable reflection in the pool, looking for answers in realms that are increasingly self absorbed.  Witness the rise of the Self-Help movement and the enormous growth of the Spa industry which promote the ultimate indulgence in self-care and in some ways self absorption.

I think this ancient tale still offers a valuable contribution to assist in creating appropriate boundaries.  In my analysis, Narcissus was not ultimately condemned for the sin of loving himself too much, but rather because he failed to extend love and appreciation to others.  The sword of his disdain eventually held him hostage to the image of his own affections.  Note also that he didn't fall in love with himself...he fell in love with a poor reflection of his true self...an entity that could never sustain life.

This type of excess remains a real temptation...even more so today when hours of self absorption on-line can so easily fool us into thinking that virtual reality is a subsitute for real life.  In the process of interacting on-line, it is prudent to make sure that our love affair with the computer does not condemn us to a life poor in the wealth that can only come through investing time and love in those with whom we live everyday.

Photograph of dafodills courtesy of Brandon Cirillo on flickr.

Copyright 2007 Audu Real Estate  All Rights Reserved

 Click Here to Read More about Grand Rapids, Michigan