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.

Bankruptcy is Immoral

I know it's a bold statement, but it's a bold move, too.

First, I am very clear about the legal rights afforded to businesses and individuals as it pertains to filing for bankruptcy. Second, I also realize that some people have no option but to file. When you have NO money and no way to pay for things by which you are obligated, you are left with no other options. As a tactic, filing for bankruptcy is not immoral.

However, refusing to pay (more like re-pay) the creditors consistutes an immoral action.

I completely understand one's inability to repay a debtor in the NOW world. But what about next year? Or five years from now? Or fifty years from now? Therein lies the moral aspect. Because one who chooses and succeeds in filing is saying to the world, "I can't pay you now. Please forgive me. Oh, by the way, I am choosing not to pay you for the rest of my lifetime - even when I can afford to do so."

As more and more Americans resort to the strategy of bankruptcy, the once-strong moral fibers of this nation weaken. Future generations will look back and recognize The Great Recession was a moral one.

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?

See You at the Cheesecake Factory

While on vacation recently, my family and I were biking the beautiful trails of Beaver Creek, CO. As lunchtime approached, we began searching for a nice lunch spot. A place where we could find a nice salad, some refreshing iced tea and enough fuel to get us back to our final destination.

We rode thru a quanit mixed-use shopping center housing some trend retail stores, your corner coffee shop and a handful of restaurants - all of which would likely satisfy our hunger after two hours of biking. After skipping over three or four dining establishments, our interest was piqued by the line of people waiting outside of a normal-looking cafe. Just like that our name was on a list (behind 13 other people).

The last thing we wanted was to wait 30 minutes to silence our growling stomachs. We could have easily walked across the street and grabbed a table for five and finished our meal by the time we were seated at the first place. But we didn't.

So, there we were, like the dozens and dozens of patrons with handheld pagers at The Cheesecake Factory, waiting for a table. The same people I mock every time I go to the mall. What in the world would cause someone to wait in line (sometimes hours) for an average meal, with average service at an average price when you could go across the mall for the same thing? BECAUSE EVERYONE ELSE IS DOING IT.

Human beings like to be led. In other words, humans like to follow (See Seth Godin's, Tribes). A select few (people, restaurants, amusement parks, automobile manufacturers, athletes) choose to lead. Learn how to lead and the people will follow. Add incredible service, great value and quality products and you'll have people waiting in line to buy from you.

Are you a Kategadi

Last night, I (thought) I had the greatest idea. I was watching an episode of Property Virgins on HGTV and..............Wait a minute. I should probably clarify why I was watching HGTV at 9:00 on a Monday evening.

I recently attended a Jeff Shore sales training workshop (twitter.com/jeffshore) in Charlotte and he recommended that we watch HGTV (especially House Hunters) to see how real prospective home buyers search for, (think about) and purchase property. Hint: everybody compromises.

Anway, I saw the most awesome way to market your home. Take the market value of your home, slash the price 25% (and reduce that number by $100), and advertise the lower price. Instruct all prospective buyers they have one week to present any and all offers. Seems catchy, doesn't it? For example, your home's market value is $380,000. You decide to list it for $284,900. Seems like it could be the deal of a lifetime, right?

Hopefully, the pool of prospective buyers know that the $284,900 asking price will likely be met and exceeded since it is significantly below market value. Consequently, those "bidding" on the home during the one-week silent auction period will get caught up in the frenzy (because people assume other prospective buyers are doing the same). Assuming the home you are marketing isn't average, you might dupe the marketplace into paying more for your home than if you had just listed it for $380,000.

You've created urgency.

Those of us in home sales know how hard it is to create urgency (in today's market). It's as hard as shooting a 59 on a par-72.

But are you willing to commit yourself (and your company, and your employees, and your reputation) to schemes; gimmicks (e.g., Cash for Clunkers, $8,000 tax credit); distrustful techniques? Are you a Kategadi (Greek slang for scam artist)?

Or are you the consummate professional?

What's in a Name

At EPCON Communities, we have 11 different floor plans (as far as I know) and each floor plan is given its own name. We have Aboreta, Bramante, Colonnade, Ducal, Abbey, Canterbury. We have Villa and Chateau and Portico and Promenade. Did I mention the Palazzo?

So, I was thinking. What's the point of all of these exotic and hard-to-spell names and why does every other brand marketer do the same thing?

Pulte (Sun City Carolina Lakes) has 23 different plan names! They have Kenwood, Brookside, Muirfield, Pine Spring, Copper Ridge, Surrey Crest, Willow Bend, Crestwood Meadow.............you get my point.

Actually, what is the point?

Take a look at General Motors (er, Government Motors). They have 8 different brands and each brand has its own model names. Chevy alone has the Aveo, Cobalt, Colorado, HHR, Silverado, Malibu, Camero, Impala, Equinox, Traverse, Avalanche, Tahoe, Suburban and Corvette. What the heck is a Traverse?

How much time (and energy.......and money) is spent coming up with these silly names when the same amount of time (and energy........and money) could be spent on product efficiency and quality control? I'll bet you GM (and Pulte) have employees whose main job description is naming each of the products they build.

I don't drive a BMW, but they've got cool car names: X6, Z3, 750, M5.

So, what's in a name?

What if Your Passion is Your Passion

I'm a passionate guy.

Not in that sense. At least, that's none of your business.

But, I have a lot of passions. I'm passionate about my country, my real estate business, the game of golf, stylish clothes, World War II veterans, sales theory, downtempo music, fitness, conservatism (not in the green sense, in the money sense) and the Pittsburgh Steelers.

I am passionate about my family. I am passionate about learning.

I am passionate about a lot of things and that's my point. Many of us were taught to follow our passion. None of us were taught to follow all of them.

There are 24 hours in the day. How many are you using?

Getting Back to the Basics

Maybe it takes a Great Recession to relearn the fundamentals needed to succeed. Maybe this is all about getting back to the basics.

Two years ago, my business was more about Paperwork than Peoplework. I think about the mindboggling number of hours spent studying reports and financial statements and cash flow diagrams and employee evaluations. I think about the amount in time spent in MEETINGS!

No more. At least it won't be as much.

Recently, I've been spending more time away from the office and in the field - in the trenches. I've been meeting with homeowners, touring the home sites with prospective buyers, inspecting homes with warranty claims - taking a more personal approach to the business. It all reminds me of how I started in the business 10 years ago. More Peoplework and less Paperwork.

And it's working.

My company just finished its best July sales performance EVER. As far as I'm concerned we've already started a trend. Some will argue that a month does not a year make. And they would be correct. But don't bet against me.

In closing, how much time are you spending on Paperwork versus time spent on Peoplework? If it's the former, how's that working for you?