Starting Real Estate

What Do I Know? (Image from sxc.hu)

In thinking about the prospect of blogging, I had to ask myself, “What do I know?”

There are tons of real estate brokers who know much more about the biz than I; however, they are off doing other things. Perhaps they don’t enjoy writing or sharing their knowledge. Maybe they would rather spend their spare time fishing or golfing. That being said, I love sharing my thoughts, and the perfect pastime for that type of person is writing a blog!

Being a Real Estate Broker
Being a real estate broker is not for the faint of heart. So many people think that it is the easy path to a fortune. There have been some rock stars emerge in the business that have shot to the top like out of a cannon. Some stick and others fall like a shooting star. The majority of new brokers will scratch and claw their way to a level of sales that are comfortable for them. It usually takes 1-3 years to get to where you feel like you’ve ‘made it’.

The Broker Exam
Studying and taking the state exam is no pushover, not in Oregon or one of those southern states that begins with an A. The other states may have an easier exam, but I doubt it what with all the new restrictions and laws put into place in the past couple of years both at the state and national levels.

The Peddling Begins
Once licensed, one has to begin to peddle like crazy to drum up buyers and sellers; usually depending on family, friends and neighbors to get you going. All this while getting acquainted with the routine in a real estate office, their protocol, filling out all the contract forms, learning how to advertise listings, meeting loan officers and escrow closers. A nice reprieve is the weekly multiple listing service (MLS) tours and broker luncheons to get a peek at new listings, and meet other brokers from all over your city. You may start to wonder when you are going to put all that knowledge, that you had to learn to obtain your license, is going to come into play.

The People Connection
Well, you will use some of it now and then (and it is always good to know that you learned something a while ago about that subject, and you know where to go to find it again when you need it); but no class prepares you for the most important aspect to real estate sales. That is the people connection, but what do I know?

Talking
Well, I know if the new broker is a talker instead of a listener, it will be difficult to pinpoint exactly what the buyers are looking for. He/she may wear out the client by showing them houses they like or that they think the client should like, and lose the client to a more understanding broker. If he/she only talks about what they are going to do for a seller, complete with all the wonderful advertising they will do and a higher price they know they can get, it may turn off the sellers. It could backfire to the point where the client picks another broker who actually does the work without trying to impress them.

Listening
A broker will save themselves a great deal of wasted time if they learn to listen very intently to their clients and show only houses that fit the criteria of their buyers. Likewise, listen to the sellers to learn what their needs are while their home is on the market. Don’t make promises you cannot keep is good advice in any business, but it can make a marked difference in the bottom line in real estate sales.

Let Me Hear From You
I would really like to hear from the reading public out there as to what subjects you would like to see covered. If you want to write, criticizing any facet of my blogs or my lack of experience or knowledge, just know that I will only agree with you. I do not have a Ph.D. in anything, nor do I claim to be an expert in anything. After all, what do I know? I write about my experiences so that you may glean what you need to grow as a broker or buyer or seller. I wish there had been someone to tell me the real deal when I started in real estate - it would have shortened my learning curve a great deal!

Until next time…..
Lynne

Prashant Gopal wrote an interesting article on December 23rd:
2009 Real Estate Forecast: Troubles Spread in BusinessWeek.

Highlights include:

• Wealthier neighborhoods that avoided subprimes may be hurt this upcoming year.
• Already hurt markets (like Las Vegas and California) shouldn’t slide as much as before because they’ve already fallen so much.
• Unemployment will make more of an impact, especially in Texas (energy sector) and Charlotte, NC (financial sector).
• Some places (DC, San Diego, Boston, and Orange County) might start to recover due to people picking up low prices.

Also included were links to the guys that do these predictions:
HousingPredictor.com, Moody’s Economy.com, and Miller Samuel

Whenever I read articles like this (at least after finishing the Black Swan and Practical Speculation) I wonder about the error rates and methodologies of the predictions. For example:

HousingPredictor.com is projecting a 19.4% decline in Manhattan home prices in 2009

But with what error rate (the +/- X%)? If the figure is +/- 50% how useful is it, and with all the wild variables, how does anyone expect to do better? The job analysis is interesting though.

Not that I have any better information nor do I think they’re doing a bad job nor do I lean toward a better or worse view, I just wonder about the inherent limitations of such forecasts.

What do you think?

• Cashflow is a great financial learning game from Robert Kiyosaki.
• You learn more if you play with a group.
• Find a local group through meetup.com (search “Cashflow”).

I’m guessing most of you have already read Rich Dad, Poor Dad by Robert Kiyosaki. In the book he talks about the Cashflow game he designed to help raise people’s Financial IQ’s. If you’ve never played this game, you definitely should.

The point of the game (outside of the financial learning) is to escape from the rat race. You have a job and get a regular pay, you get chances to make small deals and big deals. You can lose your job, buy doodads, give charity, have kids, and work creatively with other players to split or resell deals. Throughout the game, you keep a balance sheet, keeping track of your assets, liabilities, income, and expenses. The goal is to have your passive income greater than your expenses. Then you’re out of the rat race. These are valuable concepts that a person can apply to their life and their businesses, including real estate.

There are different ways to play the game, the easiest being the online or e-version. My little brother and I started playing this game when he was just ten, and even he picked up the concepts really quickly. However, the board version is even better because it teaches you to work as a team. Unlike other games, the game can be played with all the players helping each other out (at least that’s how we played it during my last meeting) and this creative cooperation (for example joint deals or deals for a percentage of the income or giving loans) are creative learning tools that you can’t get through the electronic version.

I didn’t know these guys were around, but a couple weeks back I attended a Cashflow workshop in Santa Clara. The man who runs them, actually helps host a biweekly meet-up and he’s not alone. There are over twenty five clubs in the Bay Area (CA). To find one, just search for “cashflow” on meetup.com.

Joining this club will help you network with like-minded people and build your business, financial, and real estate skills.