Comfort zones, the true enemy in real estate.

It's so easy in our everyday lives to get caught up in developing our businesses that we can forget to develop ourselves.

I know that I have to spend time studying listing and sales statistics. Or methods of having a better presentation or a better website but sometimes I just have to turn my computer off and put on a harness and do something crazy. For the last two years I've had the opportunity to work on the ropes crew for Over the Edge, a fund raising group that, in conjunction with a tall building helps raise money for the National Kidney Foundation. This year we rappelled off the  Baltimore Marriott Waterfront. Not only is it a great chance to get out of my comfort zone but it's a great way to give back to the community.

I also do some work as a challenge course facilitator. I get the chance to teach others how to stretch themselves individually as wall as a team. It's a great parralel between having someone afraid to act when they're 25 to 40 feet in the air and having someone making that final decision to write an offer or following our lead in pricing their property correctly to get it sold. I guess that begs the question, if we're not willing to push ourselves past what we fear, how can we ask our clients to do so?

I remember my early days as a Realtor. At that time Floyd Wickman was offering a great training program called "Sweathogs". By the way, even though he no longer has sweathogs he still has some great training materials and products. At any rate, that was before the days of the do not call list and our first order of the day was cold calling. If you ever want a way to push yourself out of your comfort zone and, of course, can do so without violating the law you should give it a try.

Finally my prayer for my fellow real estate agents and all of you who are making the decision to buy or sell that you follow the admonition of Eleanor Roosevelt. "Do one thing every day that scares you."

Should I use an individual real estate agent or a team?

What is the best choice for a buyer or seller to make?

I've been listing and selling real estate in Frederick, Washington, and Montgomery counties for over 23 years. For most of that time I was not in favor of using teams. Clearly my opinion has changed recently. About a year and a half ago I joined forces with a good friend, Darren Ahearn and became part of "The Ahearn Team". With all the technological advances, law changes and ever changing market scenarios I felt it was almost too much for one person to keep up with alone.

Unfortunately, I've seen many teams fail because of personality conflicts mostly due to the team not having clearly defined responsibilities for the team members. I also wasn't particularly in favor of large teams because I felt they lost some of the personal touch. That's why I chose to become part of a small team so we could be very efficient and specialized but still keep the personal touch.

Our team is comprised of only three agents and our assistant. Darren handles all the listing responsibilities. This is a great fit for him because he's a high energy detail oriented guy. So much so that when I was a manager I tried constantly to recruit him. He is also licensed in Pennsylvania. I handle our buyer calls. I love working with buyers because I know I can help them through the challenges of our quite unique market. I have numerous lenders I recommend to give my clients a broad spectrum of choices in loan programs. I also set each buyer up with their own listingbook account which they can also reach though my website. Our third agent is Billy Shreve. Billy handles all our commercial transactions. By having three agents, each with a specific field of expertise each transaction gets the undivided attention of their own agent. Last but certainly not least on our team is our assistant Christina. Christina takes care of all our file processing and marketing and keeps everything in order.

So what choice should a buyer or seller make? Certainly I'm in favor of using a small team but each person has their own needs and things they feel comfortable with. I would encourage each person to interview both teams and individuals and feel confident that you will be taken care of properly and that no details will fall through the cracks.

So you want to buy a short sale.

What are the pros and cons of shopping for a short sale. Can you get a "great deal"? How long will it take?

The first thing to consider is your time frame. If you're selling your home and moving in to your next purchase a short sale probably isn't the way to go. The only exception would be if you have someplace else to stay while waiting for settlement on your short sale purchase. In that situation you could try to negotiate a post settlement occupancy but that could lessen your chances of securing a buyer. Of course there is also the possibility that you could be three or four months into the transaction and suddenly find out the bank has denied the sale and you have to start over again. All things to take into account.

The second issue is financing. Although loan rates are pretty stable you can't lock your rate until you're within a certain number of days until settlement so your rate floats while you're waiting to hear from the bank. Of course if things stay the way they are you should be fairly safe in this area. Now, what are the chances things will stay the way they are? We all know what they say about the definition of "assume".

A question I often hear...Can I get a great deal? That depends. A while back I wrote an offer on a short sale for a buyer client that needed quite a bit of work. (The house, not the client) We looked at comparable sales and an estimate of work needed and made an appropriate offer. We ended up competing. The buyer who won paid almost what a house in good condition had sold for. On the other hand I found another home for a different client that needed substantial work and was priced accordingly. We made the offer at list based on comparable sales and when all the work was completed after settlement the buyer had a total of about 180K in the house and the comparable sales were in the 205K range. It's really a case by case issue.

Then there's bank approval to deal with. I've had that happen in as little as 60 days but that's unusual. Is there a normal time? I've heard from 60 days to 12 months in extreme cases. When writing an offer for a client on a short sale I usually advise a minimum of 120 days for approval from the bank. That can be extended if need be by the parties to the contract. The important thing to remember is that you need to understand the process up front so, when things seem like they will never come to a close you don't give up and walk away just before the bank says yes. One more word on bank approval. It can also depend on how many loans there are. The easiest scenario is when there is only one loan. Add a second or possibly third and things can get really complicated.

I think I would be remiss if I didn't add that the agents involved need to know what they're doing. If not the whole transaction can fall apart because the agent missed a deadline they were given by the bank. If the bank says they need such and such information by close of business Friday or they will close the file they aren't kidding.

Bottom line, a short sale can be a rewarding experience but go in with eyes wide open or rewarding is not the adjective you'll be using at the end of the day.

Armchair quarterbacks never throw interceptions

Have you ever noticed when you get in trouble for taking action it’s usually with those who take none?

I’ve had the opportunity to work with teens in various settings for over two decades. One sad observation I’ve made over that time is that teens abound in energy and ideas and they are constantly being pressed into a box of conformity by “concerned” (read fearful) adults around them. Now our children are being taught that things like competition and striving for victory are somehow bad qualities. This blog is dedicated to all those who rejected that pressure to conform and sought to be their own person. Here are some tips on getting on the field rather than sitting in the armchair.

1) Plan simple – “Confusion lies in the sophistication, success lies in the simplicity.” Kevin Eastman, assistant coach of the Boston Celtics. Armchair quarterbacks spend their lives preparing, planning, and consulting. Of course they’re far too busy to actually do something constructive.

2) Take immediate action on you plan – In the words of Tony Robbins, when you set a goal, take immediate massive action toward the accomplishment of that goal. Procrastination is the killer of dreams.

3) Beware the barking dogs – I once heard it said that a firefighter driving to a three alarm fire doesn’t stop their truck to address a barking dog. Don’t get me wrong. I’m not saying you should see people as dogs. Just be careful the weight you give their input. People of action make armchair quarterbacks very nervous. As long as no one is doing anything of significance they won’t look bad. As soon as a doer enters the picture the planners are shown to be unimportant.

4) Fail big – Small risk, small chance of success. Big risk, big chance of success. When the timid fail no one really notices. After all they weren’t really doing much of anything anyway. When the bold fail everyone notices. They may fail big but eventually the succeed big. A word of warning here. When you set yourself on fire with a vision the bucket brigade will quickly form.

5) Fail big again – Napoleon Hill, when interviewing some of the most successful people of his time noted that the one quality that ran through all great achievers is persistence. You can’t beat someone who won’t quit.

6) Build your team carefully – No one “makes it” alone. Even if you are a company of one your success depends on how well you are willing to serve others. Surround yourself with those who are likeminded and have a vision. The world is full of attitude vampires. If you find one on your team don’t be afraid to repalce them.

7) When everything falls apart, go back to step one. IMMEDIATELY!

Scare yourself: An engineered lifestyle

Besides my career as a real estate agent I am also a huge fan of experiential education. Specifically, I am a ropes course facilitator..

So why do I sometimes like to take my tie off and put on a harness? Because personal growth has been a passionate study of mine for many years. I love seeing people push through their fears and conquer them. Sometimes that comes from jumping off a pole and sometimes it comes from writing an offer on a house. Fear is fear and success is success.

What does this have to do with my title?

On the ropes course I try to create an environment where it's safe to challenge things that terrify you. Hmmm, kind of like selling houses isn't it? But more important, I work with groups to provide situations where the encouragement from the team can influence people to do things they would never dream of doing alone.

Likewise I see that kind of encouraging atmosphere in my fellow Realtors on Activerain. In fact I was inspired to write this post by a post from my Activerain friend Loreena Yeo. As much as we may try to control our destiny there are things that happen that are out of that realm of control. What defines us is how we interpret and react to those little surprises.

What determines our interpretation and reaction is our conditioning. So do we choose our conditioning or are we conditioned by circumstance? If we carefully guard and craft what we put in our minds, and if we carefully guard who we allow to influence us, then we will be in control of our destiny. Allowing life to happen to us just doesn't produce the desired results.

Think of it this way, if you dump random airplane parts into a huge pile they won't assemble themselves into a 747. If you dump random information into your head you won't come up with a successful life either. Like the 747, a successful life is carefully engineered.

Are you building your life according to a plan or just dumping random information in? I'm going to suggest you take inventory of what you are currently doing in your life. What do you read, watch, listen to? Who do you spend time with? Do you have a mentor or mentors? Most importantly, when was the last time you did something that really scared you?

Competition and living the American dream

What role does competition play in our American way of life? Without it, we sink into hopeless mediocrity.

Last week I listened to a news story about a school that had 30 valedictorians in it's graduating class. I decided to look up the dictionary definition of "valedictorian".

Valedictorian: a student, usually the one ranking highest academically in a school graduating class who delivers the valedictory at the commencement exercises.

Note the first two words of the definition! A student. That would be ONE student who had earned the right to carry the title of valedictorian. A right earned with years of consistent hard work. So what is the problem with having 30 valedictorians? The theory is to make everyone a winner. The truth is you are just making everyone mediocre.

Competition: the act of competing; rivalry for supremacy, a prize, etc.:

Competition is what made the US the greatest nation on earth. Unfortunately we are seeing the systematic dismantling of competitive environments in lieu of making everyone "feel good". We start with our children and the games they play. Schools are banning any type of elimination games. There are no more tryouts for sports. Let everyone have a chance to play. I speak as a parent who attended my son's little league games and watched the second base player sitting on the bag with their glove in their lap while the right fielder chased butterflies.

OK, so I'm one of those competitive parents who thinks the purpose of playing a sport is to actually win! I confess it's true. So why shouldn't every child have the right to play instead of having to earn that right? Simple, by allowing everyone to have the same opportunity whether they earn it or not we are preparing them for failure in the real world. My son is seeking employment after being laid off. One job he applied for had 1,000 applicants for only one position. Do we require that employer to hire the first 500 so they will feel better about themselves?

I would suggest that many of those little leaguers that sit on the bag or chase butterflies in the outfield really don't want to be there. They are there because mom and dad want to live vicariously through their children. If a child doesn't want to be on the ball field then we, as parents, should encourage them to pursue their own dreams, not ours. I suppose some would argue that they don't know until they try. I actually would agree with that. That's why, in my younger days, we had tryouts. So what if they really want to play but don't make the cut? Then we are preparing them for real life. If they truly want to play they will learn to practice and improve so they can make the cut next year.

We are training the desire for excellence out of our children if we allow them to participate in what they have not earned. Wow, that sounds harsh even to me as I write it. Fact is, though, it's how the world works. The more we lower the standards for our children (and adults) the more we doom them to a life of mediocrity. We need to teach our children to set goals and work for those goals. Life is not the art of getting safely from birth to the grave.

My prayer for America is that we would turn back to our desire to be the best at what we do. To learn, to grow, to dream and to take risks to achieve those dreams. If we seek only safety and demonize risk then we are participating in the demise of the American dream.

Are appraisals really objective?

sOK, to all my Realtor friends out there that title may bring a chuckle. Unfortunately the public and most underwriters see appraisal results as set in stone.

I'm writing this post because I'm seeing appraisals come in all across the spectrum of value. Not that we didn't have appraisal issues before but now, the law meant to protect the public is actually hurting them. As a Realtor and a licensee in the state of Maryland I'm required to be familiar with the market area I'm listing and selling in. Although I've heard from appraisers that they are also I'm not finding that to be true in practice. Any experienced agent knows the same house in a different neighborhood may be valued differently. This could be because of highway access, road noise, proximity to public transportation or numerous other factors. Of course one would assume an appraiser could look at the area and also make that determination. Unfortunately that doesn't seem to be happening in the real world.

What about distressed properties? I have a listing under contract and on the way to settlement that is the highest sale in the past six months in the subdivision. During that time a number of short sales and foreclosures have sold for well below market. The story turns out well because we got a local appraiser who was wise enough to go outside the subdivision to comp to similar properties that were not distressed. My listing appraised for the full contract price so this story ends well. However I hear horror stories for my fellow agents on almost a daily basis that an appraiser came from two hours away, sent by a management company and came in dramatically under market simply because they didn't know the area and compared a traditional sale to the short sale across the street. In this market that can mean the difference between the seller being able to complete a sale or being forced into a short sale situation or even a foreclosure down the road.

So back to my title, are appraisals really objective? I have actually been told by an appraiser in a CE class that they are. I didn't check his bio to see what planet he was from but I think anyone who has been in this business for more than one transaction knows better. I know many fine appraisers who are diligent and take the time to consider all factors in establishing value. Unfortunately with prices being driven down for appraisals by management companies some (to all you offended appraisers please note I said some) appraisers are cutting corners just to make enough to survive.

I think the answer to the problem lies with a little used resource of late called reason. Legislators, if you must make a law to fix something try tweeking what is in place to make it better. What we see going on now is similar to knocking the house down to change the paint color. To cite an idea I've used before in my blogs, laws made in the heat of passion and in response to an outcry are never good. I suppose I could expand that to deal with a lot that's going on in America today but that's for another blog.