Where does your real estate business come from? In this episode of Power Tools, we talk about know the answer to that questions, why it is pivotal to your success, and how to track your leads.
To start off this post, I have to put out a quick disclaimer. I no longer have any concept of time. It was a victim of COVID. The last six months have genuinely been like six years. So, when you see me reference a particular time period in this post, it could be ten days or four months. Who really knows at this point?
Somewhere towards the beginning of the pandemic, sick of everyone posting their medical opinions online, my wife had the brilliant idea to deactivate her Facebook account. She went on and on about her peace of mind as I ignored her ramblings to look at the same shit in my feed that I had already seen ten times that day. A month-ish or so later, I asked her to reactivate it because she needed it for work in our brokerage. Begrudgingly, she agreed but told me she wasn’t going to put it back on her phone. I ignored her ramblings to look at the same shit in my feed that I had already seen ten times that day.
Until I had just had enough.
Enough politics, enough medical opinions, enough of the nonsense scam posts, and certainly enough of the “news”. For that matter, frankly, enough of seeing the same shit in my feed that I had already seen ten times that day. Why the hell can’t we just see posts in the order they were posted by everyone? Anyway, I digress.
I followed suit. I will admit there was a touch of anxiety as I deleted those familiar icons from my phone. In full disclosure, I kept Instagram on my phone because you can’t post anything other than IGTV from the desktop interface. I wasn’t giving up on social media. It’s “essential” to my business, and, honestly, I like seeing what y’all are up to when you aren’t sharing your political opinions. Just cat memes and food, please.
So, how’s it gone so far, you ask? In a word, awesome.
To start, for probably about a week, I still picked up my phone a lot. There wasn’t anything to look at on the screen, but old habits die hard. Next up, screen time decreased, on average, by over 40%. Sure, I still have days with lots of screen time, but it isn’t on social media. I noticed my mental state was more optimistic. I felt more relaxed.
More importantly, I was more productive. I had more time to be productive. I used that time wisely. I genuinely feel that in the last 6 weeks, I accomplished more than in the three or four months prior. It was pretty great. So far, I have crossed a lot of stuff off of my to-do list, doubled my grad school load, and have some crazy cool stuff coming out for my agents soon.
I heard an analogy on TV recently about social media. They were talking about how, if you lived in a city 100 years ago, you might leave your home in the morning to go to work. On your walk to the office or job site, you might cross paths with and exchange pleasantries with a grocer or some other sort of vendor you knew. Fast forward to today and before you even get out of bed you have 1000 neighbors yelling their unwanted opinions at you. That’s what social media is. No wonder we have so much division in this country.
Now I am not saying that you should delete your social media. You do you. I’m just saying that you don’t need it as much as you probably think you do. Try deleting it for a week. Anytime you habitually pick up your phone to look, remind yourself why it isn’t there. Check in a couple of times a day and you’ll be fine. I think that by practicing this kind of social distancing, you’ll experience some real health.
In this episode of Power Tools, we take the negative connotation away from the word accountability and talk about how it is the number one game-changer for your business.
In this episode of Top 5, Verl Workman of Workman Success Systems shares his Top 5 Reasons to Hire a Real Estate Coach.
In this episode of Top 5, Liondesk founder and CEO, David Anderson, shares his top 5 tips for Realtors to leverage their database to grow their business.
Pre-Listing Packages are important, but in this episode of Power Tools, we talk about two big reasons why.
I’ve been on something of a documentary/video course/non-fiction kick lately. If you’ve read this blog long enough, you know that I love to read, but I like to have something on in the background when I am working at night. These are some of the titles, in no particular order, that have caught my attention recently. I hope that you enjoy them as much as I did.
1) The Crown
I’ll be the first to tell you that as a red-blooded, bacon-eating, gun-toting, Texan, I was surprised to like this series because let’s be honest, who needs a silly bunch of entitled, British figureheads? Not only is this series very well done from almost every perspective, but it also teaches a very valuable lesson about patience and endurance. While the rest of the world, at times, crumbled around her, Queen Elizabeth plays the long game better than most. Likewise, serious Realtors should be looking years into the future, not to next week’s closing or yesterday’s short appraisal.
2) Chef’s Table and Abstract
These are both outstanding series that highlight amazing artists. Chef’s Table follows a groundbreaking chef in each episode and tells their story. Abstract does similarly for artists, from illustrators to shoe designers. I am inspired by and love learning from creatives, specifically those whose lessons can translate to business. For agents, I love these to stimulate creativity and take your train of thought down an unconventional path. Think about the way these artists and chefs challenge traditional thinking.
3) Inside Bill’s Brain: Decoding Bill Gates
If nothing else, it’s cool as shit to see the daily routine of one of the world’s smartest and wealthiest men. What I liked about this limited series, though, was the controlled scheduling by which Bill Gates lives his life. I tend to get off-task very quickly. I try to make up for it by being very strict with my schedule, but nothing like Bill. I also am inspired by how much he reads and his drive to impact the world and leave it a better place.
4) Jiro Dreams of Sushi
Subtitle warning. You better be ready to read a movie. If you invest the time, however, you won’t be disappointed. Jiro Dreams of Sushi tells the tale of Jiro Ono, possibly the most renowned Sushi chef ever. This show is an ode to discipline, practice, and persistence. When Brokers and coaches tell agents that it’s the little things done repeatedly, every day, that build a successful business, they should just tell people to watch this documentary.
5) The Black Godfather
Never heard of Clarence Avant? You’re probably not alone. Uncensored, unabashed, and relentless, Clarence might be one of the most influential black men in America that nobody knows. Just watch the list of Hollywood stars, politicians, and musicians that agree to go on camera to celebrate the life Avant. There are a host of lessons here, but these are my favorites: always be yourself, know & demand your value, we are better together than apart, it’s not what you know, it’s who you know, and each one, teach one.
6) Brene Brown: The Call to Courage
Ok, I admit it. I was late to the Brene Brown party. Just watch this. It’s all about being vulnerable and how that creates strength in a person. In real estate, there is something of a funny dichotomy. If you’re male, you are supposed to conform to traditional norms. If you’re female, you are expected to put on a mask and hide any vulnerability. Nonsense, says Brene Brown. Go watch this and think about how you can use this to help grow your business.
7) Self Made: Inpired by the Life of Madam CJ Walker
I wrote about this story on Facebook from a web video I saw a couple of years ago. It’s the story of America’s first, self-made female millionaire. Born a slave, Madam CJ Walker eventually lived next door to the Rockefellers after building a hair care empire. Wonderfully acted by Octavia Spencer, this series won’t disappoint. It’s an inspiring story of overcoming incredible obstacles, never taking no for an answer, focusing on quality, and caring about people being their best selves.
8) The Battered Bastards of Baseball
Heartwarming, hilarious, and heartbreaking at the same time, this tale of the Portland Mavericks is a seriously fun watch. Established by Kurt Russel’s father, Bing, the ragtag team of independent players challenged the establishment, broke all of the rules, and had a hell of a good time doing it. In the meantime, they laid the foundation, at a time when there were none, for future independent baseball teams. Agents should watch with an eye towards breaking tradition and challenging the status quo.
9) Minimalism: A Documentary About the Important Things
Last summer, I made two tragic mistakes. The first was spending a weekend in a tiny house with my family. The second was taking an RV trip with the aforementioned family. Never again. I need more space. That said, this is a story about getting rid of the unnecessary and focusing on the important. I know A LOT of Realtors who could benefit from that advice. If you like this show, give Essentialism a read. You won’t be disappointed.
10) Hip-Hop Evolution
If you grew up in the last 30 years or just like hip hop, watch it. I don’t know how many business lessons can be drawn from it, but all work and no play make Chance a dull boy. This is pure awesomeness.
What are you watching?
For the past week, I’ve struggled to put together my thoughts and feelings about what has happened in Texas since Hurricane Harvey came ashore. As I sit here writing this, trying to put these thoughts in order, I can’t even remember what day the storm hit us. Everything has just run together. As I was working at our church a couple of days ago, a word just popped into my head to describe my feelings. That word was overwhelmed.
We were overwhelmed by a storm that just kind of snuck up on us. Even just hours before it made landfall, it was supposed to be a small storm that hit and then went away. Then it wasn’t. All of a sudden what was just supposed to be a “rain event” for most of Texas turned into an overwhelming storm that destroyed the area where it made landfall and continued to wreak havoc for days on end.
The amount of rain was absolutely overwhelming. What started as 10 inches, a significant amount, turned into 30, 40, 50 inches. The amount itself is overwhelming. It’s hard to fathom over 4 feet of rain. We’ve flooded before. People have had four feet of water in their homes before. But four feet falling out of the sky? I mean, you hear 27 trillion gallons of rain and that’s not even something you can wrap your head around. Even the numerous infographics don’t help make it realistic. It’s just overwhelming.
The area affected is overwhelming. This storm is not a Houston thing, or even a Gulf Coast thing. Central Texas, South Texas, the Coastal Bend, Southeast Texas, and East Texas were all impacted by Harvey. In Houston, we see flooding in certain areas when we have the aforementioned “rain events”, but there was hardly any part of the metro area that wasn’t affected. The sheer number of homes, businesses, and people who have been damaged and displaced, many who never flooded before, is overwhelming.
The emotions have been overwhelming. Name one. They’ve all been seen this week. Despair, heartbreak, fear, anger, guilt, and the list goes on and on. The emotional toll for many will be as damaging as the rain. It’s just been an overwhelmingly emotional week for everyone, even those who didn’t flood.
Trying to find the words to describe this has been overwhelming. If you aren’t here to see it, you almost wouldn’t believe it. It’s impossible to wrap a keyboard around it all.
But as the rains slowed and, finally, stopped, something else happened that was absolutely overwhelming. People came out of hiding and immediately hit the ground running to help. Not just Texans, though. The Cajun Navy showed up early, pulling people from flooded homes left and right. People from all over the United States descended on Texas like the rainbow to the rain that had done so much damage. National Guardsmen, police, fire fighters, doctors, nurses, electric workers, and more service providers and public safety folks showed up within days, many from as far away as New York. So did just random people looking to help. I’ve seen lemonade stands from North Dakota and the Caribbean with kids donating their money to relief efforts. The response has been overwhelming.
Neighbors who may have never met the person one street over were there with hammers and knives, removing sheetrock and cleaning out damaged houses. Lines of people with donations and supplies, or ready to help their community were as long as the lines of people in need of that help. JJ Watt’s YouCaring.com fundraiser, has raised nearly $20 million from over 180,000 donors so far and isn’t stopping. While there have been a number of high-profile donors, the majority of the money has been raised by “regular” people, with an average donation of about $100. It’s been overwhelming (at times to the YouCaring servers, too).
As the waters rose, a funny thing happened. All of the reported dividing lines in our society got washed away. Black, white, brown, and yellow lined up side-by-side to serve or be served. Republicans and Democrats, gay and straight, rich and poor, and every other social construct that the news would have you believe divides us were dissolved by the overwhelming need to just be together and support all of our friends and neighbors regardless of our perceived differences. The unity of this city has been overwhelming.
Since this is, normally, a real estate coaching blog, I am proud to say that the response of the Realtor community during this storm has been so incredibly impressive. I am proud to be a Texas Realtor. From actually being on boats rescuing people, to setting up and delivering supplies into much-needed areas, to giving time and money to relief efforts, to getting out and helping friends and clients start their journey to recovery, it has been overwhelming to see the hearts of these Realtors shining in the community. Not to limit it to local agents, funds and assistance have come rolling into Texas from our colleagues all over the country.
We have a long way to go, to be sure. There are still areas where people can’t get home, get clean drinking water, or even drive on some freeways. We have hundreds of thousands of homes to rebuild, families to return to something that looks like normal, business to reopen, lost lives to remember, and plans to redraw to help make sure this doesn’t happen again. The amount of work ahead might look overwhelming, but as I write this, based on what we’ve seen these past 7 days, I have an overwhelming sense of hope, resilience, and optimism. HoustonStrong and TexasStrong will, I believe, be the war cries that show the rest of the country and the world what it means to come together to rally, respond, and recover stronger and better than before.
I want to just take a second before wrapping this up to give thanks. If you are reading this and have donated, worked, helped, given, served, volunteered or done anything to help in this relief and recovery effort, I want to thank you. It’s because of you and those efforts, no matter how big or small, that we will not be overwhelmed, but come out of this stronger.
99% of my posts here are designed to help Realtors grow a better, more profitable business. This post is no different. However, unlike most of my posts, this one is just as applicable to the real estate consumer as it is to the real estate practitioner. Why? Because I hope it will dispel one of the most prevalent mistakes in real estate: the fallacy of price per square foot. Despite its prevailing use in valuing property by both Realtors and consumers, and its marketing appeal by certain builders…
The truth is that price per square foot is garbage and means almost nothing.
But how can it be garbage if everyone uses it, you ask? Let’s take a look, first of all, at the simple mathematics of why it is garbage and then we’ll examine why there is no practical application of the price per square foot measurement that, at the end of the day, matters. (One quick caveat: this post is not really applicable on commercial properties.)
The Simple Math
Price per square foot doesn’t hold up under the microscope of scrutiny because of simple mathematics. Whether you are selling a home and trying to figure out a sales price, buying a home and trying to see what kind of value you’re getting, or using price per square foot as a marketing technique, you are wrong. Here’s why. In an average community there is a wide range of home size, shape, and features. To take a real simple look at this, consider the following:
- A one-story home costs more to build than a two-story home. As such, the price per foot on a two-story will be less than that of a one-story.
- A smaller home will have a higher price per foot than a larger home. If a garage door costs $1000, you have fewer square feet to spread that cost over on a smaller home. Thus, the higher price per foot is natural.
- What about upgrades, renovations, pools, etc.? An upgraded or recently renovated home should have a higher price per foot than a home that does not. How many dollars per foot does a pool cost?
- A builder marketing themselves by price per foot is full of shit and you should run away. I can build a Lincoln Log home for a remarkably low price per foot, but would you want to live in it? The only world where this kind of marketing works is a world where every single builder built the exact same home with the exact same construction techniques on the exact same piece of land and the exact same features. Then price per foot would not only be applicable, but also, once again, completely useless because it’s the same thing for everyone. So, until communism sets in with the builders, price per foot is absolute nonsense.
So, based on that, taking a look at the price per square foot of a neighborhood and applying it to a single property is necessarily going to result in an incorrect value. If you’re the smallest home in the neighborhood, the value you get by using this method is almost certainly going to be low. On the other hand, if you’re the largest home in the neighborhood, you’ll be priced to high. How, then, do you correctly value a home? We’ll get to that.
The Practical Application
Ok, I admit that this is a bit of a fake news subheading. There is no real practical application of price per square foot for one reason and one reason only. Appraisers don’t use price per square foot to value residential properties. That’s really it. You can come up with whatever convoluted price per foot you want to come up with, but if you are selling a home that will be financed or buying a home using financing, it doesn’t matter what you came up with because the appraiser determining the value of that property doesn’t care and isn’t going to use it as a factor in determining the value. Don’t believe me, pick up the phone and call your lender or an appraiser. The really simple, ugly truth is that price per square foot is useless because the appraiser valuing the home isn’t going to use it to decide the value and the appraiser’s value is what gets you to the closing table. End of story.
How, then, do you value a home you want to buy or sell? Well, if the last paragraph didn’t answer that, you use the same method as an appraiser. Appraisers look at comparable properties to value a subject property. It’s really that simple. You don’t see an appraiser using five 2,000 square foot, single-story homes to come up with a value for a 3,000 square foot, two-story home. That should be pretty common sense. Yet, time and time again I see and hear people upset with a “bad” appraisal because the price per foot doesn’t make sense. You’re right, it doesn’t make sense. Now, let’s look at comparable properties and see where the disconnect was. That makes sense.
And now for the industry-serving portion of tonight’s programming. Who can help you come up with a correct valuation? A knowledgeable Realtor, that’s who. Not a Zestimate, not a community newsletter where someone gives a range of prices and you do some math, not a builder claiming that they build three dollars a foot cheaper than their competition, and for damn sure not by looking at what your neighbor sold their home for and saying that your home is nicer and bigger. A knowledgeable Realtor will pull comparable, recent, sold data for you and put together an accurate market analysis. Ignore the price per foot fallacy, get a good valuation of your property, then buy or sell and get to the closing table without an appraisal mess to deal with.
On Monday, I was having a conversation with my business coach about some things that have happened over the past year and the ramifications of those things on the future. Specifically, we discussed how my actions, or reactions, to the events may have an effect on the future. Even when we don’t think we are involved in an impactful way in something, our limited involvement still affects our end result. But, the thing he said during that brief exchange in an hour-long phone call that stuck with me was that the difference between people who make the most of a situation and those who don’t is how they accept their role in the situation.
This afternoon, I was talking with one of my agents about an agent he knows (and we all know an agent like this one) that was all drama. She was constantly making excuses, placing blame, and putting out fires in her business and personal lives. It reminded me of a favorite quote of mine from Dan Stewart, “People who spend most of their time putting out fires are also usually the arsonist.”
The root of the issue is this: whether we admit it or not, we are responsible for what happens in our lives, period.
How we react to what happens in our lives is, ultimately, what defines our success. We can choose to accept our role or responsibility for the things that happen in our lives or we can choose to place blame, deflect, and/or ignore. Our reaction can manifest itself in I/me/we/us talk or they/them/you talk. If you adopt the former, you are far more likely to learn from the situation and be better off in the long-run. On the other hand, people who adopt the latter are far more likely to be miserable, angry, and full of contempt.
The I/Me/We/Us Crowd
If we choose to take the things that happen in our lives as steps in our overall journey, we can begin to accept them and use them as growth factors. But, it is a choice, and for the big things, it’s an active (and sometimes very difficult choice). Believe me, I’ve been there when it’s really difficult to choose to make the best of things, and, yes, I have, on more than one occasion, made the wrong choice. It takes work. It takes time. If we pause for a minute when these challenges confront us and consciously make the choice to accept the responsibility for what’s happened and react in a way that moves us forward, it can become habit.
The amazing thing is that when this habit really starts to take root, it will radiate out into other parts of your life. You’ll start to see the best in almost all situations. You’ll see opportunity where you may have previously avoided a situation. You’ll become more magnetic, attracting the kinds of situations and people you want to have in your life. And you’ll live happily ever after, or something like that.
The They/Them/You Crowd
On the flip side, the other crowd is miserable, angry, stuck in their current situation or worse, and, worse than anything, oftentimes alone. Their reactions to the things around them drive people away. Nobody wants to hang out with someone who is constantly upset or miserable or just a drama queen do they? The drama of it all costs personal and professional relationships to go bad. In a world where it’s not what you know, but who you know, who wants to drive away people?
If you find yourself, honestly, a member of the first crowd, good for you. Keep it up. If not, I have a challenge for you. Not to get all motivational speaker on you, but this will really work. For the next 30 days, I want you to track the things you are grateful for in your life and look at one thing, each day, that you reacted to and how that reaction might have been different. You don’t have to get all fancy with it. A simple notepad will suffice. In the morning, before you start your day (even if it requires waking up a few minutes early) write down 5 things that you are thankful for. Then, in the evening, as you wind down the day and have a few minutes, write down one thing that happened that day and how you could have reacted in a way that could have propelled you forward in life. At the end of the month, you’ll not only have built a habit of gratitude, one of the most important factors in seeing life in a positive light, but you’ll have actively practiced, every day, addressing the things in your life in a way where you are looking for the best in them and the best in you. These are two very powerful tools.
Once we start to build the habit of reacting in a way that moves us forward, we can change our lives for the positive in ways we can’t imagine are possible when we are placing blame and reacting defensively. It takes effort, but like anything that requires effort, the reward is almost always worth the work.