Driving in Utah

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Ever since the Vatican released it’s list of ten commandments for driving, there has been discussion around the issue. KSL.com also has a discussion going about Utah drivers and their opinions about it. I’m going to take this opportunity to publish my own list of ten commandments for driving, specifically directed toward Utah drivers.

When I was a teenager I wrote music with friends and we even recorded a bunch. Mostly it was sappy love songs or extremely hard thrashing metal with distorted guitars, drumming as hard and fast as we could play, and screaming over the top. This was good music to us, mostly because we addressed the most pressing issues of the world in our songs. One of the songs I wrote was called, “Get the F@#% out of the Passing Lane”. This was a moving song. (pun intented).

It was mostly aimed at minivans because I’ve long been curious about how minivan owners seem to drive by a different set of rules than the rest of us, but it applies to everyone. One verse went like this;

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It’s elegant, refined, and drives home the frustration a teenager  with a sports car feels when driving behind slow vehicles. Utah doesn’t have the worst drivers in my opinions, but some of the crap that flies for acceptable driving around here is pretty lame. AOLAutos ranks it’s top five best and worst drivers as

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So here is my own Ten Commandments of driving;

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I remember in Colorado I would guest host a Saturday radio program and the first time I was introduced I said, “Hello. I appreciate the chance to be here and I would like to take this opportunity to say- the left lane is called the ‘passing lane’ for a reason.”

For the most complete, and entertaining list of driving pet peeves- you must see Real Lans

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Should Buyers and Sellers Meet During the Transaction?

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Most top agents have had experiences with buyers and sellers who have met and things were promised and not delivered or misunderstandings took place. It happens all the time. And sometimes this can lead to problems during the transaction and at closing. In fact, many times it does.

But there can be benefits to having the clients meet and talk.

Yesterday my wife met with some buyer-clients for their home inspection and afterward the sellers and the buyers sat and talked. They poured wine and just talked for about an hour. It wasn’t planned and there was no negotiating done but it gave them a chance to get to know each other. There are some issues being negotiated right now and my wife says the opportunity to have the clients meet really went a long way by allowing everyone to see each other as people and not simply opposing sides of a deal.

I wonder if there would be a benefit to having a scheduled time during every transaction where the clients could meet for an hour or have luch and just get to know each other a bit, ask questions about the area and neighbors, hear all the stories about the home and memories made there, and just have the chance to connect. The agents could make sure things aren’t said that shouldn’t be- and if anything is agreed to verbally, the agents could put it onto an addendum and get it signed so there are no misunderstandings around it.

Being a managing broker over the years I’ve mediated dozens of transactions where, once both sides get together and talk it out, things can be solved without going to court or arbitration. When I was a broker in Colorado it was common practice for the buyers and sellers to attend settlement at the same time, where they could exchange keys and talk a bit before closing. In Utah and California (in the areas where I’ve worked) buyers and sellers close seperatedly so they usually never meet.

I don’t know how it would look exactly, but I wonder if it could help smooth over some things and help ease buyer’s minds a bit. I’ve had clients meet before of course, in fact a lot of times they meet (when first seeing the house or at the walk-through) but not in this capacity, where the whole objective is to get to know each other and discuss the house as a home.

The idea has merit- I wonder if anybody else does this already and has experience with it?

Inman Connect

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Last year I launched my own company, BlueRoof Real Estate (and BlueRoof.com) right before InMan Connect in San Francisco. The president of my company, Mike Shehan, and I went to Inman Connect to meet people, learn, and to get our name out in the industry. We had some fun experiences and met some great people. It allowed us build relationships in a way we could not have done otherwise- for example we were able to meet and speak with Mike Arrington of TechCrunch, Pete Flint of Trulia, Glenn Kelman of Redfin, and Rich Barton of Zillow all within a couple of days (we also met some pretty crazy Canadian guys who we went out partying with, but that’s another story).

This year it will be pretty cool to be going back, and this time I’ll be speaking on a panel about blogging, along with Jim Duncan of Real Central VA  and Matt Goyer of Redfin.

I encourage everyone in the real estate industry to attend, sit in on some sessions, and meet some fun people. It’s a great way to build relationships and have a San Francisco vacation, and it’s a tax write-off.

InMan Connect is August 1-3 at the Palace Hotel in San Francisco. (Register)

Real Estate Marketing- Good, Bad and Ugly

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Let’s face it- not all marketing is good. A lot of marketing is horrible, some is simply bland, some is very good and some should be burned immediately. Good marketing people are not always easy to find, and once you do find them they are often very busy because of the aforementioned difficulty in finding them to begin with.

Selling real estate effectively requires marketing. It takes people looking at your ads so they see the homes. Whether it’s on the internet, magazines, newspapers, postcards, or wherever- sellers want buyers seeing their property and buyers want to find good homes. The right marketing can have a significant impact on the amount of traffic a property gets.

Sometimes good companies have bad marketing, which makes them less-good, but this could simply be the result of bad taste from management, or designers who are either getting revenge on their bosses or are just wasted on crack. Either way, as important as marketing is in the real estate industry, I would think that more companies would care about the look of their brand, which also speaks of the brand of their clients.

I have no doubt people who work for companies with ugly marketing will say that it’s not important what your ads look like, but all things being equal most people would rather have their home appear in high-quality ads and represented by a professional looking brand. And more people look at those ads so it does affect traffic.

Here are some examples of what I consider to be bad real estate marketing.

The whole pilgrim thing is way over-done

Constipation is not sexy

Drugs- I’m 90% sure

In bright daylight causes blindness

Even the kid thinks it’s lame

Bad on so many levels

Not prestigious at all

Will never sell a high-end home

Judge books by their covers

Pray for a new design

Animal pornography is just wrong

All dressed-up for the big photo shoot

When accountants do design work

 

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$495,000 for a doghouse?

 

And now to recognize a couple of special companies and their design and marketing. Usually once a company becomes national, or large they get enough input to change bad marketing, or have enough money to hire good designers and consultants. But apparently, not all companies;

Ugliest National brokerage marketing goes to these two;

It’s almost as though they’re trying to be ugly

 

Sad thing about Exit’s marketing is, they actually think it looks good

And here is some real estate marketing that I think is very good and should be used as examples of good taste. There are many companies that have good marketing- here are just a few that come to mind. For more great internet design work in real estate go to Posh’d)

Obviously, if I didn’t think my own  logo and look was good I would change it

Sellsius guys  have a cool look

Re/Max -Always recognizable, often imitated, and the balloon gives them options

Prudential– Rounded top and the rock symbol differentiate, good font and color.  I think the blue is friendly and inviting.

There are obviously many companies that have great marketing, logos and looks that are not mentioned here, but you get the idea. Many Realtors create their own marketing with only the brokerage name attached (which is required by law), and that can be good or worse, depending on the agent.

Good marketing also includes the copy of the ads, and how a home is presented on the MLS, in the remarks and having accurate information. Homes that have no photos are shown many times less, and a virtual tour helps even more. The quality of the photos can make a big difference.

Agents that snap a few shots of hallways and cabinets with their phone-cams are doing a disservice to their clients, while agents who hire a professional photographer who knows camera angles and lighting techniques will be presenting a better product and ultimately have more people looking at their listings.

Here’s an example of two photo tours, which one showcases the home and compells you to see the home more?

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This is a home I just put on the market. I hired a professional photographer to take the photos and create the tour.

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This is the complete tour provided by an agent on a home that is about the same price as my listing, has a bit more square feet, same size lot, and an extra bathroom.

More buyers will look at my listing than the other simply because of the photos, which means the seller of the second home is missing out. It’s a good home that is not being represented well.

MLS and marketing copy makes a difference as well. Here’s an example;

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These are the remarks on the MLS for a home listed by another agent. I brought a buyer who bought the home last month for $170,000 with the seller paying $6000 for the buyers closing costs, so the net price to my client was $164,000. Here’s the thing- the home actually wasn’t in that bad of condition and certainly not as bad as those remarks make it seem. It had granite counters, a huge yard, a new roof, a jetted tub and all new vinyl windows. But none of that was mentioned in the remarks. This home appraised for $188,000 and probably would have appraised for $200,000 if that was the selling price. We made a low offer because the sellers were obviously expecting a low offer. Their agent did a horrible job representing them and the MLS remarks brought people looking for an investment, like my buyers. Different marketing and they could have attracted people wanting to live in the home who would have paid $200,000.

My clients paid $164,000 (after the $6000 credit), put less than $10,000 into the home for paint, carpet, and some other upgrades, and we will sell it for $220,000, which is actually a good price for this home with the upgrades.

The best agents coordinate all the little things and have the expertise to bring in top dollar while branding the property well and making the whole transaction go smoothly. Getting a quick sale for top dollar with as little inconvenience as possible to the client. Good marketing takes more than a clever tag-line or some “unique” idea- it takes an understanding of the target audience and what appeals to the largest group of them as possible.

In my opinion simple is always better than complicated. If you can say it in twenty words don’t use fifty, use images to elicit a favorable response, not because you just like the image, and colors matter. Look at the overall brand and what it says about you, because that’s what marketing is really all about- delivering the message of what your brand is, what it is you have to offer, and what you’re all about.

I don’t know that a bad yard sign will keep a buyer from calling or not, but I think a nice one may make it easier for them. Beyond signs- I think the overall image of an ad makes a huge difference in the traffic it generates and the overall image of a campaign can make a significant impact on the business and clientele of a company.

Look at Alain Pinel in the bay area of California. Everyone in the area knows of their name and brand. They attract high-end clients and agents and their branding is a major reason for it. Obviously facility, personnel, training and leadership all play roles as well, but the branding impacts the pride people take in their company and the image they themselves take on when meeting with consumers.

As an agent I prefer to be with a company that I associate with being a high-quality organization. Whether or not the yard signs bring me business is not the point- I do more business because I’m proud of my service and my brand. Everything else being equal- I will do more business, and enjoy a better brand of business by having a high-quality image and having marketing that conveys that image. It gives me confidence and I believe it gives my clients confidence and pride as well.

People are the biggest contributing factor to success, but don’t underestimate the power of branding and the effectiveness of good marketing.

The Natural Cycle of a Real Estate Market

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As the real estate market was rising nationally the last few years the media went hog wild over the frenzy and everywhere you looked there was someone or something telling you that real estate was HOT HOT HOT! Prices were going through the roof and there was unprecedented growth and people were becoming multi-millionaires from selling their homes. It was craziness.

Now the “national market” is going through a correction because it has to- there was too much too fast. In some areas prices and inventory levels are going to decrease. Is that a good thing? Yes, it is. It’s healthy for each market to go through it’s cycle. This ebb and flow is good and allows each market to grow and then collect itself and catch up, and then eventually grow again.

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Often when an area does go through a slowing or correction, the prices do not actually go down, but rather just don’t go up as fast. Usually the decline of a market is actually just a decline in it’s growth rate.

Areas can see rapid appreciation for different reasons. Usually it’s because of either speculatory (investment) buying or a major influx of people in a short amount of time. When an area has too many properties being bought and sold solely for investment purposes, the market values rise quickly, but this can create hollow values, because the values rise faster than the populations ability to afford them.

When an investor buys a home for $200,000, puts $70,000 into remodeling and then sells that home two months later for $400,000, that home gained 100 percent appreciation in two months. No worries. But if that happens to 20% of the homes being sold in an area over a year, and the prices are now growing exponentially while the area wages are staying the same, you have trouble.

Eventually this can catch up to the market when people are no longer able to pay the prices of the homes. The other thing that happens during this time is people begin to notice how much these neighboring homes are being sold for and they want in on the action. When a market heats up and prices begin to rise quickly everybody starts throwing their homes on the market and the market becomes flooded with property.

Eventually when the demand slows, but people are still wanting to sell for more and more, those home-sellers (who are always the last to accept the end of a growth period) will need to adjust for this and the market can correct itself. Historically this has happened through a period of prices staying relatively flat and growth slowing for a period of time until the demand increases again.

When both factors happen at the same time (investors flipping homes and people throwing their homes on the market to get the high prices), and when new homes are built rapidly in the area because of the demand and the construction brings jobs related to that construction it can really make things interesting. Because these jobs are created by, and sustained by, the real estate market.

This is what happened in Vegas between 2001 and 2005- people began to move into the area, then investors starting buying and flipping homes, and then home builders began building homes as fast as humanly possible and they were hiring people to help build all of these homes and to staff the expanding casinos and the market appreciated over 50% in a year. When the market reached the point where the demand was no longer there (everyone had bought a new home?) and all of these builders no longer needed the help and the construction crews needed to sell but couldn’t and the prices had been artificially driven up by the investors, what happened to the market? It’s now in a period of decline.

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According to Marc Garrison, founder of The National Association of Real Estate Investors (NAREI), there are four main components of the real estate cycle every area experiences. These are Expansion, Equilibrium, Decline and Absorption.

It’s important to note that this cycle not only applies to large geographic areas, but also applies to cities and even neighborhoods.

Expansion brings job growth, population growth and a high demand on the infrastructure of an area. Roads need to be built, restaurants open, hospitals expand and prices rise.

Equilibrium is when things begin to slow and settle. Prices have reached their limits, or beyond, and this period of time brings high prices and as a natural consequence less businesses move into, or expand in, the area. Governments are less likely to offer incentives to businesses to move into the area and job growth slows.

Decline then occurs as the job growth stops and businesses begin to relocate to save money and the demand for housing decreases. During this time, prices become stagnant or even decline as rents and occupancy go down. Usually this decline is merely a slowing of the growth rate, but in markets where the rise was too fast the decline must result in a correction (decline) of prices.

Absorption occurs as the lower prices and occupancy fall below the national averages and/or the area becomes attractive again to businesses looking to relocate. Governments again begin to incentivize business to move into the area and the population begins to grow again.

These four periods of time are all necessary and this is why real estate is so local. One market may be in a period of decline, which pushes another market into expansion. This helps explain why Utah always seems to follow California. As business move from the left coast into Salt Lake City, Provo or Odgen, the market here expands as their markets decline.

Currently the Salt Lake market is in a period of expansion while much of the country, especially along the coasts are in decline. Hopefully, with all of the job growth, our market will see this period last for another couple of years.

Just as nature has it’s seasons, real estate markets have a healthy way of transitioning from period to period. Experiencing these transitions and understanding them can give home buyers and sellers not only an understanding around them, but hopefully, more peace while trying to navigate through the moving process.

Originally posted August 27, 2006