October 2008

In the process of creating my new “Command Center” in the walkout level of our Lone Tree town house, I was forced to move a very full bookcase 2 feet to the west to accommodate the printer stand. This really large bookcase is the repository of approximately 250 books of various description. This morning I re-shelved all 250, taking care to establish some sort of order from our former chaotic shelving approach. A few books of fiction, but most addressing real estate, business, sales, personal well being, travel, and our 2 wheel pedal passion. As I touched and briefly reflected on each book, I was amazed at how much I have read and have knowledge of.

Books

We have sales books describing every type of sales approach; motivational books; real estate technique books; esoterica of feeling good about self; travel books from 20 countries; and 15 books on pedaling off somewhere and leaving it all behind. We have Dummie books, Idiot books, exercise books, and make money books. Bunches of books about all kinds of positive things. So, what is the point?

Tune out the Negative

One point is that with the exception of economists, most authors write books to improve an aspect or skill of the reader, or at least entertain the reader. Economists write books to depress the reader. In trying to predict the unpredictable, most economists tend to err on their side of caution, which is usually gloomy. So stop listening to the economists.

A Moderate Lifestyle

The second, and far more important point is that most of the how-to books have the same message. Life, living, business, real estate, health, and politics are really served well by moderation. When too many people drink alcohol before driving a car, the accident rate goes up. When almost anyone can obtain a mortgage loan, house prices rise excessively. When one political party ignores the a thing that negatively affects the citizens, the other party gains power. When too many people make too much money without providing value, the market crashes.

Selling Simplified

And lastly, selling is simple. Here is how it works:

1.)Find another person to talk to.

2.)Ask that person about the things that matter, family, occupation, recreation, and dreams (F.O.R.D.).

3.) Listen.

4.)Determine if there is a need for the the thing you are selling.

5.)If so, sell it, if not, bid a pleasant goodbye and find another person to talk to.

We have 30 books on selling techniques, and they all boil down to that level of simplicity.

Live!

We all know a great deal about many things. We have great anchors and experiences. Enjoy them and share them. Reach out and touch your friends and family, and talk about babies and marriages. Speak of baseball and apple pie. Ride your bike, climb a mountain, LIVE! Talk about politics and faith. Agree, or agree to disagree. Share what you would really like out of your life. Take a deep breath, slow down a minute, and realize that you are really OK. The stock market will recover, politics will change (but not really that much), people will still need homes, and life will be OK, if we just remember what we already know, and do something with that knowledge. And please stop being afraid. We have developed a culture of fear in this country that does not serve us well. It is time we change that negative culture.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

The concept of going virtual means many things to many people. As applied to one particular real estate brokerage (The Berkshire Group) it means throwing the bricks and mortar over the side (at least most of it) and empowering the licensed associates to function without the security of walls and desks. From time to time, this forum will be used to discuss the whys and hows of “going virtual”.

Why?

In this Part 1, we will start with the why. It all started simply enough with a recognition that there were very few associates utilizing the 3500 square feet that formerly housed The Berkshire Group. Many days I found myself sitting in the office alone with my office manager, becoming more and more useless as a leader. I must admit that I enjoyed looking out of my fifth floor window at Pikes Peak and Mt. Evans, contemplating the tree tops green and the distant horizon. Nice view, no value. The basic purpose of a business is to make money. If the business is spending money inappropriately, then the business must change or cease. Since most Realtors® today can operate with a certain degree of mobility, and since most Realtors® today have some some sort of home office, it became blindingly obvious that 3500 square feet of desk storage was not providing value, and hence, not good business.

The office was also damaging my effectiveness as a leader. My mountain view was becoming my own ivory tower. Ivory tower’s look good, but have no real purpose. A basic tenant of leadership is to understand where your group is going, and help them get there the best way possible. The group had gone mobile, so I had better go mobile myself.

Questions?

Of course the “why” forces more questions, which will lead to how. First, let’s consider the questions. The most important one: What is the value of the group to itself? No value, no group, no brokerage. If the brokerage is to have value that can be translated to profit for the owner, then there must be benefits to the group. As Seth Godin stresses in has latest book “Tribes”, we all want to belong to a “tribe”, a group of people with a common purpose. Most people today belong to many “tribes”, but here I am only concerned about the “tribe” called “The Berkshire Group”. That sense of belonging is extremely important , and one of the value propositions of “The Berkshire Group”. The members believe they are very good, even excellent, at what they do. That belief in excellence is part of the culture of the group, and cultural belief has value. As a matter of fact, establishing a culture of excellence may be the most valuable offering of the brokerage. Later, we will comment on other cultural factors that influence “The Berkshire Group”, probably not unlike similar cultural factors in your organization.

WIIFM

Another important value proposition is the service package, the visible part of WIIFM (what’s in it for me). The inescapable and blunt reality is, we all want to know what we are getting for the price we pay. It has been many years since a broker-owner could say that merely associating with the broker was worth 40% or 50% of a transactions revenue. The service package is a large part of the value. The package includes such things as marketing support, transaction file support and/or management, a communications hub, hardware and software support, client support, and a “flowing consistency” in “how things are done around here”. (We will discuss “flowing consistency” later on.) A good service package, delivered by a really competent and caring staff, has great value, especially today in a difficult market, as the bulk of a Realtor’s® time must be devoted to finding and creating the sale, and less to the process of details.

Leadership

Without leadership, humans tend to mill around aimlessly. We may get work done, but we aren’t going anywhere. The leaders job is to help (convince, force, prod, cajole) the group to go somewhere. If the “somewhere” isn’t a good place when the group arrives, the group is not happy with the leader, and the group usually finds a new leader. Leading is tough. Reassuring anguished faces. Never showing doubt. Vanquishing foes the group need not see. Leading means doing great things and remaining humble. It means sleepless nights spent on selecting the correct S.W.A.G., so the group travels well and arrives in a good place ready to benefit from the continuing journey. Choosing poorly, the leader has no group to lead. Choosing well, the group likes (sometimes adores) the leader. Leadership has value, and a certain profit can be gained from leading well.

Part 1 Conclusions

So, here goes the real estate brokerage business. Less walls and desks, more mobility. Less “how we do things”, more “how will we do things”. Less “us”, more consumer. Defining and then providing the real value segments of culture, service, and leadership. In Part 2 we will discover more about the “how”, and begin building a new model.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

Along with many other Denver area residents I have enjoyed visiting the annual Parade of Homes, supported by the Home Builders Association of Metro Denver. As a Realtor®, I am of course professionally interested in the products, styles, and vision offered by some of the areas best custom home builders. Therefore I noted with interest the announcement in today’s newspaper of the 2009 Parade of Homes. The 2009 event will be held at McKay Shores, a high end development in Broomfield, a suburb northwest of Denver. Home prices from 1 million to 1.5 million, down somewhat from recent years. Reading the announcement led me to a curiosity moment. Knowing that million dollar plus homes are not flying off the shelves, I looked at the sales of homes in the 2007 and 2008 Parade of Homes, and then at the current available inventory of similarly priced homes.

Oops!

It appears that the very cool, extremely well designed and well built custom homes showcased in both the 2007 and 2008 Parades are not selling well. Some of the 2007 homes are now owned by the banks that financed them, and I am told that showing activity on the 2008 Parade is very slow. Seems we like to look, but do not (or cannot) want to buy.

There are 1,940 homes for sale in Metropolitan Denver priced between 1 and 3 million, the recent target prices for the Parade homes. 38 such homes sold in the past 30 days. That amount of inventory divided by that amount of sales indicates a 4.25 year supply of homes in the 1 to 3 million price range.

A much as I enjoy visiting new million dollar homes, I must question the wisdom of next years Parade. What banks are going to finance the construction, especially in light of sales at the past 2 events? Which builders really want to showcase their product, risking the embarrassment of their best not selling?

Why?

While it is probably too late to alter the 2009 event, I respectfully offer a thought on future events. Build really nice showcase products that are obtainable by the above average buyer. Make them very functional, use the best products, make them green and energy efficient. 2000 to 3000 well designed square feet, with space for 2 cars and some toys (and a plug for electric cars). With a four year supply of million dollar homes, the building community may need to rethink.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

Franklin Roosevelt said in his first inaugural address in 1933 that “we have nothing to fear but fear itself”.  Today, as a nation, we are certainly at a similar moment in our history.  We are weeks away from a momentous Presidential election, and the election has become a sideshow to the media’s daily main event of of a paralyzed economy.  There are seemingly thousands of “expert” talking heads providing biased opinions on why the worlds financial system is broken, how to repair that system, and how long we have to suffer.  There is no question in my mind about those issues, and probably not in the minds of most aware citizens.  So enough already.  I have a grasp of it.  Let us stop watching and listening to the train wreck, and get back to work.  The train is wrecked, we are all agreed; now let’s clean up the mess.

Please stop buying and selling stocks and commodities based on the advice of the last expert idiot on television.  Please understand that your home, or the one you want to have as your own, is not a liquid investment, it is your now or future home. Your personal residence is not at all like owning residential real estate for investment purposes, which is serious business, requiring education and understanding.

Avoid driving your automobile whenever possible, and watch as OPEC flounders. We do not have to give up automobiles, but it might be good to stop driving vehicles larger than one bedroom condos. Turn the thermostat down a few degrees, you won’t freeze, and you will save money.

Understand that stock market swings of 700 points in days are not reflective of any rational behavior, they are statements reflecting an almost primal fear.  Roosevelt was right, and we are now again fearful of fear.  And frightened people make really stupid decisions.  I suggest that we all take a deep breath, look around, determine how we are as individuals and families, and get to work.  Call your politicians and tell them to get some backbone, and stop yelling fire in the theater.  If you have stock in a bank, call the board members and tell them to start lending in a reasonable way.  Call the television stations and tell them to unplug the transmitter.  OK, that probably won’t work, but if we keep listening and reacting to the never ending cries of panic, we will remain frozen in place, rather like that deer in the headlights we keep hearing about.

Can it really be that simple,  just stop being afraid, get a grip and a little intestinal fortitude?  No, the world today really is a complicated place, and we are facing complicated issues.  But things are not as bad as our leaders and irresponsible media would have us believe. We can repair this crises, and sooner rather than later. It may be painful, but it need not be fatal, and we will all be the better for the effort.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content