The 3 Million Dollar Home for 1 Million - Or not

Earlier today, I attended a breakfast meeting and one of the highlights was a discussion about the deals that people can find in today's "market." In this case, this seasoned real estate professional shared with the group that a friend of hers recently "stole" a $3,000,000 ocean-front home in Charleston, SC for just $1,000,000. What a deal, right?

My comment was that her friend was now the proud owner of a $1,000,000 home, not a $3,000,000 one.

See, I don't understand the mentality (delusion) of some consumers (no offense, Louise). Isn't it like someone proclaiming to have purchased GM stock for 63 cents and stating that they just got a deal considering (at one time before electricity) it used to be $93 per share? Kind of. Meet the new owner of GM stock at 63 cents a share.

I have a great story that captures the true essence of my argument.

Two weeks ago, I sold a double-wide trailer. Don't let the mental imagery fool you. It was a NICE double-wide. It was actually used as a New Home Sales Center on a new construction site and it was no longer needed. I had invested close to $100,000 in upfitting the trailer - new roofing, siding, front porch, paint and furniture. Given the current market for double-wide sales trailers, I knew I couldn't get much more than $30,000.

Boy was I wrong.

I received one offer at $15,000. I took it. Cash deal. The story gets better.

The (proud) new owner was in the process of moving the trailer to his property when the trailer hauling the trailer jackkniffed. Disaster ensues. The trailer is demolished. Total loss. You can imagine my surprise when the new owner called me and calmly requested that we modify the sales agreement. You see, he was about ready to file an insurance claim for the total loss. His zaney idea was to increase the purchase price from $15,000 to $30,000. This way, he'd be able to purchase another trailer with the insurance company's money. After all, $15,000 doesn't get you too far in the way of trailers.

Here is someone who thinks he purchased a $30,000 trailer for $15,000. He didn't. He purchased a really nice, well appointed, first-class trailer for $15,000.

That's how the market works.

And no, I didn't acquiesce to his request.

The New Joint Venture: Your Customers

Question to Homebuilders and Developers:

What thoughts come to mind when you think of a Homeowner's Assocation meeting? Do you think of axiety, anger, tomatoes, frustration, friction and burning torches? Probably. I've had those thoughts, too.

Last Thursday, I entered such a meeting.

But this one had the makings of being worse. I was about to inform the homeowners that the construction of the clubhouse and pool would be delayed indefinitely. Not permanently, mind you, but for the foreseable future. Financing of the clubhouse and pool had recently by de-funded by my construction lender leaving me with no choice but to postpone the December 2009 opening.

Not surprising, tensions rose; emotions erupted. Profanity ensued.

After a period of civil discussion (missing from our culture in every day America) something amazing happened. I mean AMAZING. A handful of homeowners offered to loan the money to pay for the clubhouse. Unbelievable.

Details haven't been worked out and I'm sure there will be a few. One thing is for sure: My business has a new Joint Venture. I couldn't be happier.

In these (economic) times, can you think of anyone you'd rather partner with than your customers?

How Much Do You Charge for Integrity?

I know, it's a strange question.

But it seems to me that too many people are willing to compromise their integrity. In other words, people will discount their moral values to get the deal done, to please the boss, to avoid scrutiny. Some people don't even hide their intent.

You already knew that.

Here's the interesting part: I'm seeing this (lack of integrity) trend within prospective buyers of our homes. It's strange because I come from the school of thought that the buyer is always right. It occurs to me, though, that some buyers are only in the deal for themselves. There is no reciprocity.

Don't get me wrong. I respect the fact that people are looking out for themselves. Sometimes, you are all YOU have.

What I challenge is the immoral actions these buyers will take. For example, a prospective buyer who works with a buyer's agent (without a written agreement) for weeks in search of a new home only to then exclude the agent when the right (or wrong) home is chosen, hoping that the builder will slash the price even further. That's lack of integrity.

No doubt, the economy is wreaking havoc on our pocketbooks. It doesn't have to take a toll on our integrity.

At the end of the day, if you're only left with your integrity (and literally nothing else), you'll live a life worth living.