Tap Out

Posted on 29. Oct, 2008 by Jay OHare in Create Value, Real Estate

It’s no secret that Steamboat isn’t immune from the economic & real estate downturn. Steamboat is not the real estate utopia many brokers were raving about 16 months ago and a bunch of brokers are wondering where the next sale will come from. There’s still tons of value in Steamboat. The value of Steamboat didn’t simply evaporate.

So what are you going to do differently NOW to be more prepared when this happens next time? How is your business model going to change so that next time we hit a down market (and we will) you’ll be better prepared? It’s too late to do anything now. You’re not suddenly going to find the silver bullet. For many this is a time for survival. Better to look to the future and begin to change things.

Many brokers will go out of business; the opportunity seekers who only got in because they thought it would lead to quick money will, hopefully, be the first to go. The real estate community will be better off when they “tap out.” Others will panic & suffer while they work another job and try to ride out this storm. A small few will continue to do well. That got me thinking about what it means to and what leads to success in real estate. I think most brokers fit in one of these buckets:

1. The Cheapest

2. The Middle

3. The Longest

4. The Best

Being the Cheapest

There are some who have found a niche by being the cheapest. Time Value Real Estate & Help You Sell are two examples. But there’s a fundamental problem with being the cheapest in real estate. Being the cheapest is predicated on being able to cut out inefficiencies in the industry so you can offer the same service at a lower price and still make a profit. Dell Computer did this really well for a while. Inevitably that advantage gets eroded over time as your competitors cut out their inefficiencies and soon your advantage is gone. You’re left with a cheap brand that no one wants in their front yard and no way to make a profit. After Dell optimized their manufacturing and logistics as far as it could they then cut corners on quality and customer service. They lost a lot of customers, market share and brand equity. In the long run being the cheapest rarely pays off.

Being in the Middle

“Average,” “crowded,” “staid” and “hopeful” are a few adjectives to describe brokers in the middle. They don’t do anything bad but don’t do anything exceptional either. They play by the rules, and hope by sheer luck that a deal comes their way. They hop from company-to-company hoping that they’ll be exposed to a little more “market share.” Or they plod away year-after-year doing the same thing hoping for the big break. This is a tough, crowded spot to be in and the majority of brokers will always be here. This is the land of mediocrity not success.

Being in the Longest

Right or wrong, many attribute “time in grade” as the primary driver in choosing a broker. They want the person with the “most experience” the person who’s been in real estate “the longest.” Not much you can do here. You’re not going to add 20 years to your resume overnight. So that leaves the last option.

Being the Best

Being the best may have a lot of interpretations but I think they all lead to one conclusion. Clients see you as a “trusted advisor” that’s a resource beyond real estate. Being “the best” calls on you to question the status quo, rules of thumb, and traditions. Being the best means you solve problems, not simply place an ad in Homes & Land. It means constantly improving & learning new things. Being the best means that what you tell a client and what you actually do match. Being the best means that you sacrifice short-term profits for long-term reputation. You become a trusted advisor that transcends mere real estate transactions. Real estate almost becomes a secondary issue in the minds of your clients and friends. The benefit is that when all hell breaks loose your trusted advisor reputation provides much more insulation.

You are your own best asset whose value is directly tied to your own self-improvement and reputation.

The real estate industry is in a huge state of change and that makes a lot of people nervous. The “risk averse” are shaking at the thought that everything they’ve been relying on is fading into obsolescence. Meanwhile others are blogging their way to the top of Google, approaching real estate in a fundamentally new way, adding value as never before and are reaping the rewards. So what would it look like to begin to make small changes? What if you started today? What would happen if you spent $100 less per month on print and $100 more on new marketing techniques? Start a secret blog, Google yourself, hire a consultant, learn what RSS means, upgrade your computer, keep a journal. Start small but move the f’ing ball forward!

You are your own best asset whose value is directly tied to your own self-improvement and reputation. Those who are truly the best naturally practice this whether they realize it or not.

If you’re not committed to being the best it’s ok.

Go ahead – “tap out.”

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