Wednesday, October 24, 2007

Memoirs Of A Big Fat Liar

Lightning In A Bottle

Actually, a bunch of big fat liars. I'll include myself in the group for this exercise (as an embedded observer, of course) although I can state here comfortably--eyeball to eyeball, without flinching and safely nested behind the double locked doors of my home office library--that my truthfulness in business dealings consistently falls within the soupy gray boundries of acceptable sales chatter. In other words, I try not to exaggerate or overblow my Real Estate accomplishments when things fall nicely into my lap nor do I whine and moan (or shriek like a little girl...anymore) at the first sign of a market correction or the foreshadow of a lenghty Listing stint.

   The truth is, the Listing Agent who has the signed Exclusive Agreement when the actual Buyer walks through the door is the hero. Period. Don't let them (us) tell you otherwise. We all know this. I once lost a deal (and one of my best friends) early on in my career two days after an Agreement expired. I had a lot of activity on the property--many showings, loads of interest--but on day 90, my about-to-be-married buddy decided that the unsold property was hurting our friendship and yanked the house from me. He fired me over the phone from Vegas--on his honeymoon. (I'd love to report here how that marriage ended up but that would be gloating now, wouldn't it?)

   The new Agent was literally taking down my sign and putting his own up when the eventual Buyer came tooling along with his wife. They wrote a deal without representation (a 'double bubble' for the Agent) and Closed in 30 days. That my friends is what we Realtors call, 'lightning in a bottle.' And I've been the recipient of such happenstance, as well. I've just learned not to gloat over it when it occurs nor do I stand outside in the the middle of a thunderstorm (or worse yet, a drought), arms raised to the heavens with coke bottles in each hand, waiting for it to strike again. I have other stupid things I do...

Promising The Moon
  ...And this is one of them. Not so much anymore but still...I want to be liked. Deep down, I don't want to be the person to break the bad news...
   "You see, Mr and Mrs Climbladder, your house is very beautiful. It's just 1.2 million dollar beautiful... not 1.7 million dollar beautiful. If it were 1.7 million dollar beautiful it would most likely be surrounded by several other 1.7 million dollar beautiful homes in a 1.7 million dollar neighborhood."

   blah blah blah.

   "Yes, I know it was featured in the local newspaper but no one is reading that particular issue anymore...except of course, you."

   blah blah blabbity blah! 

   "And yes, I see you spent a couple hundred thou on the bathrooms and kitchen and I'm sure you have enjoyed them but Buyers expect such finishes at this price point. Like I said, it's's just not 1.7 million dollar beautiful."

   "Yes, Mr and Mrs Climbladder...I'm afraid so....blah."

   The point is I try not to promise the moon unless I promise a Price Recduction to go along with it. I'm very nice about it, though.

The Sunday Papers
   I once heard renowned newscaster, Sam Donaldson, state in an interview, "I don't go to the casinos because winning a hundred dollars means nothing to me but losing a hundred dollars really pisses me off." I concur. I also feel the same about newspaper advertising. IMO, it only brands the company doesn't sell houses. Not here in Chicago, anyway. To spend money foolishly on a longshot bet is one thing, but to advocate such a strategy as a Marketing Plan is cretinous. (You can look it up if you like but it basically means stupid.)

   Marketing in this day and age goes well beyond ink on paper advertising. If it is disposable then it will be disposed of. Print advertising is untrackable, expensive, and passive. I'd rather pay-per-click any (every) day of the week though the cost of doing business is equivalent. At least I know my hard earned money isn't wrapped around a dead fish in the garbage.

   I am confident that Internet Channels, Digital Open Houses, and other technologies along these lines are the way of the future in Real Estate. And even as I restructure my own business model for the next five years I'll still make it a point to tip the paperboy every month when he knocks on our front door. (Besides being an enterprising young kid in the image of you know who, he's the best hacker I know.)

Ladybug In A Juice glass 

   I won't promise 'lightning in a bottle' to a potential client but I will pledge to use my resources (spend my own money) in the most efficient manner I see fit. Let's face it, the Listing Agent is in the hole the minute he walks out the door with the Exclusive and only collects when the property actually sells--correction: ...when the property actually sells under his watch. Phone calls from Vegas are never good under any circumstance, I've found.

I'll try not to promise the Moon no matter how much I allow myself to be manipulated by the situation (potential paycheck). And that is why we do it, you know. We Realtors are ironically, the easiest people to manipuate because we count the money before it's printed. We may say we don't but most of us secretly do. After all, we have BMWs and college to pay for. (It also stokes our Ego when we nail a Sold placard across the For Sale sign. I usually wait until rush hour so everyone stalled in traffic can watch me perform the ritual. It usually takes a good half hour depending on whether or not I have to find and unbury St. Joseph.)

I may be big, and I may or may not be fat depending on the season or what I'm wearing, but a Big, Fat, Liar I am not. Not all three. I won't promise 'lightning in a bottle' but I will do my best to catch a ladybug in a juiceglass. Oh yeah....and work for free until I get the place sold, just like every other self-respecting Realtor.

Geno Petro

Sunday, October 07, 2007

The Eight Deadly Sin...

Fear Knocked

We've all heard tell of certain California and Nevada housing markets in recent years where simply offering 'List Price' on a property didn't cut it on the real estate trading floor. Demand had a strangle hold on Supply and only the earliest of pre-approved birds brought home the juciest worms to the nest. Even the economically horizontal section of the United States where I reside and conduct business enjoyed it's own vertical spike in new construction housing starts with six and seven figure price tags to go with it. The appetite for real estate--condominiums in particular--seemed insatiable and looking back I'm not quite sure if it was greed, gluttony, or some other deadly sin feeding the emotional frenzy. The market was big and it was fast and the word on the street was...the only 'losers' were the snoozers when it came to building a portfolio of brick and mortar. What we didn't realize at the time was we were approaching the top of a housing cycle. No biggie, unless you really overpaid.

Over the past 18 months though, the typical real estate Buyer has steadily evolved from the above mentioned 'Emotional' type to the more cautious 'Analytical' type, or so notes my Broker, Joe Pinto. It is a keen observation, I believe. No longer are young couples packing a 'back-up' checkbook in the glove box of the Hummer before beginning their weekly Open House patrol on Sundays. The day of the great American housing auction has gone the way of detente, it appears.

CNN reports that 'outbidding ambushes' in model units by the ubiquitous Jones clan (down the street) as well as Multiple Offers in general declined sharply in the Third Quarter across the Midwest. I heard Alan Greenspan sneezed during a luncheon in Washington and the market reacted accordingly. Sellers are jumping from first floor windows of their cul-de-sac ranch homes from Peoria to Padukah, says one suburban Broker. In downtown Chicago, Listing Agents just take the elevator to the lobby, head straight for the bar and wait for the Buy-side representation to serve up a lowball on the rocks....Ingredients: Identify a property, measure twice, Offer once, hold the urgency. No bubbles, please.

Faith Answered

Shame on anyone in the market for a home if they fail to make a deal at the bottom of this current housing cycle. One National Association of Realtors (NAR) report pointed to an 18 year high in housing inventory across the board nationally. That's a lot of meat in the freezer, as they say.

It is my observation that only the truly needy' are moving forward these days. And by 'needy' I mean just that--in need of a home. Be it a job transfer, domestic change (marriage/divorce), or unexpected triplets, there is a certain sector of the population always in the market for a new place to live.

If a thousand closed escrows a week was the Chicago average in 2004 and that number has been reduced by 30% today, this is still 700 transactions being negotiated, closed and recorded on the tax rolls. And while once wily investors are perhaps now standing in the wings licking their collective, speculative, and respective spreadsheet papercuts, I believe the path is clear and safe for those who purchase real estate for their primary residence.

No One Was There

The Cuban Missile Crisis. The Cold War. The Gas Shortage of the 1970's. The Double Digit Mortgage Rates of the 1980s. Inflation. Solar Flares. The Savings and Loan fiasco of the 1990s. The Killer Bees. The Killer Asian Carp. The Killer Asian Beetles. Recession. The Dot.Com thing of a decade ago. Health Care. The Y2K computer thing in 2000. The Housing Bubble talk of a year ago. Sub Prime Lending. The Credit Crunch. Over a dozen Presidential elections in my lifetime, both Republican and Democrat...all those panic driven headlines for the past 50 years and you know what?

Nothing really happened. Nothing that a little patience couldn't have remedied. Nothing that couldn't be attributed to some type of cycle except maybe that whole Y2K thing which was just plain stupid.

So Relax. Buy a house. I just did. In five years I'll be wishing I bought two at this price (like I always do). Only my self-proclaimed 8th Deadly Sin of Fear is keeping me from doing so. I admit it, I too am human and not immune from the media scuttle of the month. I keep one ear on the radio and one eye on the news channels like everyone else I know. And just between us, I do still wonder about those Killer Bees on occasion.

Geno Petro