They say that you can tell a lot about a person by the shoes they wear and, these days, the shows they watch. I tend to have a fairly wide range of shows that I enjoy for different reasons. One of my favorites is “The Office,” and I couldn’t help but comment on the season finale.
In last week’s episode, the company CEO (played by Kathy Bates) tells Dwight Schrute, a salesman, that he should be investing his money in real estate. She and his Realtor provide him with three bits of advice:
Tip 1: “I don’t like to tell a man what to do with his money, but if you ain’t investing in property, then you are dumber than a dummy.” It’s hard to argue with this logic given the opportunities in today’s market. While there might still be pockets of the country that will have a bit of pricing pressure in the coming months, we have seen prices stabilize and in many cases swing to the positive. Real estate, if bought right, has been and will be an excellent investment. I
t’s also an excellent time to buy, because the cost of borrowing is at historic lows and you can lock in your long-term borrowing rate. Five years from now (or sooner) many people will be kicking themselves for not purchasing a home or land now. I’m not certain if you would be “dumber than a dummy” or even how dumb you would be if you were “dumber than a dummy,” but I am certain that now is a good time to take a hard look at real estate as an investment and ownership as an alternative to renting.
Tip 2: The Realtor, featuring the attributes of the property, says to Dwight, “The property you’re looking at is in great shape. Buy the way, it has a very spacious basement office.” Dwight responds, “Basement office? You mean, like, a lair?” This is a bit less obvious than the first tip but just as important. Every property has some feature beyond number of bedrooms, baths or even location, and the real estate profession is finally waking up to the importance of marketing the features of the property that support a lifestyle.
Due to the nature of the types of properties we market on behalf of our clients, we “discovered” the importance of feature-based or lifestyle-based marketing more than 80 years ago. The web has recently (last 14 years) allowed us to have a real-time conversation with the consumer at the lifestyle level. Whether you call it niche marketing or just being alert to the “life” that someone is seeking as they look for a property to purchase, this is where real estate marketing needs to be. I doubt that we will find many people seeking a basement lair, but I bet there are a few thousand prospects out there that would jump at a chance to own one.
Tip 3: “Make them and offer they can’t refuse. No, on second thought, lowball them.” Negotiation is where an experienced real estate professional earns their money. Much has been written about the future of real estate and whether a fixed fee based (vs. commission percentage based) compensation structure is coming. Evidence supports this as an eventuality but, for now, we have a % of the transaction price model for commissions. In either case, one of the key value added components (man, I hate that business lingo, but it is appropriate here) of the services delivered to clients by real estate professionals is the ability to assist with negotiations and developing a negotiation strategy.
With so many training opportunities available in this vital area, any agent or broker that is not up to par in negotiation needs to step up and hone their negotiation skills immediately. I am certain the flip-flop strategy in Tip 3 would drive any client crazy.
What unlikely places have you learned something about real estate?