Tag Archives: Real Estate Isn’t Fair

Real Estate Isn’t Fair: Part II, Power of the Pen

Real Estate is ultimately a customer service profession.

Customer service has many descriptions (no, there is not one single definition, and no, “the customer is always right” is not the definition). Like a weird Supreme Court decision, “you know it when you see it.”

  • Customer Service is repeatable.
  • Customer Service is Durable (there’s that word again).
  • Customer Service is meant to deepen a connection and increase loyalty. This is very different from “brand-awareness”.
  • Customer Service succeeds when it makes the recipient feel 1.) heard 2.) understood 3.) worth attending to 4.) worth keeping 5.) kinda remarkable (or better).

What does this have to do with real estate not being fair?

I got two pieces of snail mail today. Two. That’s about as many pieces as I’ve received all year (amazing how big companies like ERA Shields get spammed with print mail, and little boutiques like Selley Group get nothing generalized. More on that later). Both were from peers in the real estate industry.

One was a recruitment letter. It was on cheap paper. It didn’t have the company indicated on the return address. The business card was ugly. All it spoke about was the stats of the real estate company. It addressed me as “Dear Benjamin” (no one calls me “Benjamin” unless they don’t know me. I use “Benjamin Day” on my business cards because Ben Day Consulting in Boston dominates SEO and the Re/Max Properties Front Desk always – ALWAYS – thinks Ben Gay is setting up a showing when I leave off my “jamin”) so instantly I knew this was circular-file material. Except I kept reading. Not only was it not concerned at all with me, it was obsessed with them. It was NOT oriented around any of the rules of  how customer service succeeds, not one. The only thing “remarkable” was that it made me feel like my special purpose in life was to have a pulse and a NRDS (our REALTOR ID #) to occupy one of their cubes. As long as I had a pulse and a NRDS, that’s all they needed. Who cares what I need?

Worse, I knew Hannah received one last week. So if I got mine this week, I knew I was a tier 2 candidate. I mean, who wouldn’t want Hannah Parsons over Benjamin Day (I’m totally serious, the former is much easier to broker!)? But I used to recruit agents, I did this stuff (I have the scrapbooking paper to prove it!), and when one company goes out on patrol for agents, EVERYONE you could want knows about it within a day. So you better hit all the good ones at once. While this letter was far from flattering, I already knew they had a first wave of “choice” agents that they thought were most recruitable, and I was not in that group. Save the best for later? No. It does not work that way.

The second piece of mail I received today was a handwritten thank you note. From Lee Bolin. Lee owns Saddletree and Symphony Homes. He has for 15 years. My clients said of Lee “I want him to be my Daddy, I love that guy.”

"I _____ Bigger than you, Ben. And, Thanks for bringing your people by"

Lee is like a friendlier version of Jack Palance’s Curly.

Lee wrote me a handwritten note. And mailed it to me. The dude has no email address. But he has the power of the pen.

Now you tell me: when one of these companies is involved in future real estate transactions, which one has my attention? Which one has the greater opportunity for success? Which one is more durable? You tell me. I think the answer is pretty obvious.

Real Estate Isn’t Fair: The Massive Change in the Market.

I was just reading a real estate-related column on the Denver Post by the Society/Gossip Wag, Penny Parker. It wasn’t exactly hard-hitting, stone-cold economics, but it was pretty insightful. A Denver developer is placing a wager that high-income professionals and aging boomers that are between houses won’t buy a house, but instead will pay big money monthly for a high-brow, state-of-the-art apartment building with fitness, amenities and prime location. Then when life calls, they leave. This developer believes that there is an under-represented segment of the classic, high-income, high-credit professionals in Denver Metro whose housing needs are under-served. They’re under-served, because they’d rather rent.

Over a year ago I read a column from a futurist who theorized a whole new form of ownership for homeowners, a new mortgage vehicle that would allow enhanced mobility. This was a fascinating article, lacking in specifics, a bit delusion about what it would require to transform an entire industry (and capital’s total unwillingness to do that), but it was still really interesting. It was hitting on something: under-served.

Ron Paul is also running for president, and he essentially wants to return American government to the 19th Century. He’s nice and folksy and all, but, have you really read his stances on anything? Or seen his voting record? But the man is popular, and I know some really smart people that are voting Paul. I think he represents something: under-served.

I point out Penny Parker, and the Futurist, and Ron Paul, because they form a triangle of conversation around the same thing: lifestyle in 2012. We know it is changing, but how deep is this change? Have our agreements with our real estate historically panned out? 

To begin with, real estate has never been fair. Never. By nature, every piece of dirt is different. This is not 10,000 red Kia’s coming off the production line, this is not 1 million incandescent bulbs, 57 Main Street is different than 59 Main Street and different than 59 Lexington. Every piece of dirt is different. There are different views. Solar yields. Traffic patterns. Dimensions. Topography. Distances to amenities. Sounds. In some cases, smells. When you can actually commodify something, it can be easy to see the relative merits of one over the other. A Red Kia might have higher insurance and unintentionally “say something” about the owner that a pleasant Green Kia might not. But take a single piece of dirt, and look at the dozens – nay, hundreds – of individual variables, and the mind gets perplexed. You don’t hear stories about people who missed out on the investment chance of buying a 2004 Red Kia. You do hear about people who missed out on a chance to buy a bungalow across from the Little Nell is Aspen. 

Consumers tend to like easy decisions. We will start the SEVENTH YEAR of post-ceiling real estate in April this year. The market tipped six years ago. The Great Recession began to unravel four years ago. Economic uncertainties and the practicalities of off-shoring of jobs began twenty years ago. To say we live in uncertain times is grossly redundant. Zip is certain. Well, speaking in economic terms, zip is certain. 

So that brings us around to this weird thing that used to account for about $1 trillion in annual GDP called “real estate”. If so much economically is uncertain, how can something so heavily rooted in permanence like real estate be that attractive?

I can make all the arguments in the world that there has never been a better time to buy, and I can shout until I’m blue in the face from the top of my building. Where’s my bullhorn? But all I’d gain is a blue face. It really doesn’t matter what I think. It only matter what consumers think.

Correspondingly, who is buying houses?

The ones that understand that real estate is not fair.

Not all neighborhoods are created equal. Great starting point. Not all floorplans are worth living in for 10 years. Another good one. You can’t change your neighbors and rearranging the topography and slope of your lot isn’t that practical, and if there is a possible six-lane road behind you… why would you want to live there a year, let alone ten? 

Sustainable is an over-used word in the contemporary vernacular, but people of all political and lifestyle persuasions bandy it around as if it was readily understood. Personally, I like the word “durable”. 

The buyers that are buying in 2012 are only interested in durable decisions. They are no interested in fluff. They are heavy, deep-thinkers, and they are looking for value. But value is no longer defined as square footage (note to most of the Colorado Springs HBA). Value is not defined as settling for a ranch home with vinyl floors. Value is not even defined as “new” (this is like a seismic shock in Colorado Springs, where the average age of all residences is less than 32 years old). 

Durable must be:

  • Readily obvious
  • Proven performance
  • Worth talking about
  • Highly Functional

Durable can be:

  • Possibly more expensive (the Mac argument ultimately winning the masses)
  • Possibly more personal
  • Possibly more spacious
  • Or possibly more space-efficient

Here’s a question:

Last year, 60% of all homes listed, sold. This was the highest percentage since 2005. This is encouraging. But here’s my question: with such a high percentage of those bank-owned and short-sold, what of that 40% that didn’t sell? Is there even a price that can cure the 40% that didn’t sell’s inability to sell? Will a consumer buy that house backing to Briargate Blvd for the Pikes Peak View? Will a consumer buy the bad solar idea house on an odd lot? Will anyone buy a 5000 square foot home with a bizarre floorplan on the simple metric that the dollar per square foot is 20% less than anything else in the area? 

Real estate isn’t fair. And as the consumer adapts to more durable decision-making, it’s getting less fair every day.