Normal is as Normal Does

What’s the most common refrain anyone working in real estate hears these days? That’s easy. “ I can’t wait until everything gets back to normal.”

 

Screech. Whoa. Stop right there.

 

Normal? What’s normal? What does it look like again? Would we even recognize normal if it jumped up and bit us in the collective behind while we were busy gazing towards the horizon, pining for its return?

 

I confess there’s part of me – not the better angel part – that hears the word normal and instantly imagines a rosey-colored-glasses version of the market circa 2005. I suspect I’m not the only one with flawed vision. You know, lots of supply and demand, tons of transactions and a median price streaking towards $800k!! All without the aid of subprime loans, credit default swaps or a heapin’ helpin’ of irrational exuberance.

 

Dream on. I usually settle back to earth, tempered by my real experience of the past four years. Reminding myself how crazy that craziness was. And I usually throw this question out to the universe: “If we knew then what we know now…would anyone have thought that real estate was anywhere close to normal?”

 

Is it even remotely possible to get back to an 800k median price without finding a new way to give everyone lots of debt disguised as free money while convincing them to buy into the notion that home is just another name for a cash cowabungalow?

 

I think I’m ready to start over. Search for a new story about the marketplace. A new definition of normal.

 

When I close my eyes to paint my fantasy landscape of “new” normal, I always start with a healthy tension between buyers and sellers. Relative balance between supply and demand. Very different from today’s market. Both sides feel comfortable being there. Doing business. Making life transitions. There are willing buyers and there are willing sellers in the new normal. Right now, neither buyers nor sellers are particularly comfortable.

 

I read the front page article in the Sentinel yesterday to see if there might be a new story starting to emerge there. I’m cringing a little as I read it again.

 

That’s not anyone’s fault. Real estate is a complicated thing. Select a headline. Call five agents. Get some quotes. String ‘em together with a few metrics.

 

But I always want to add an extra appendix onto the end to flush out the nuances and hidden meanings. I’m never sure it’s news the average person can use without a lot more translation.

 

Headline: County Home Sales Jump! There’s the hook. A nod to Sellers who need to believe in 2005. And a prod to Buyers. Oh-oh, prices going up. Time to buy.”

 

Real estate is treading a fine line. Parsing perspectives. Playing both sides. Trying to encourage more buyers and sellers at the same time. Get more people off the fence, moving in eachother’s direction.

 

The message in yesterday’s piece? Things are bouncing, not jumping. The market is going up and down simultaneously. When prices fall enough, multiple offers ensue. And there are lots of multiple offers – which isn’t supposed to happen in a “buyers” market.

 

When prices fall, the inventory shrinks, because most sellers don’t want to sell unless they have to. If more sellers would just put their properties on at lower prices, they’d have multiple offers too. Because more buyers would buy. Except if too many put them on. Then the inventory would be too high.

 

Seems like we need more or less inventory at the same time. More or less buyers, sellers and listings.

 

Why so much confusion? Blame the elephant in the market. Distress sales. People talk about them like they’re normal. Question: Can we intelligently assess a marketplace where 40% of the sales (70% condos) are distressed? Involving institutions rather than individuals? This is a significant deviation from anything we’ve known in past markets.

 

Do distress sales fit the definition of fair market value – willing buyers, wiling sellers? Aren’t they fundamentally different? Can we apply the same laws of supply and demand when analyzing data like prices, volume of sales and the unsold inventory index? Can a new normal emerge in an era defined by short sales and REOs. Before the pendulum stops swinging backward?

 

Smells Like Real Estate

There’s been an explosion regarding all things “neuro” in the last decade. Neuro-economics. Neuro-psychology. Neuro-marketing.
Neuroscience is a many-headed hydra that keeps spawning new and interesting things to study inside the infinite crampedness of our skulls.

Real Estate of Mind would be remiss if it didn’t give an occasional nod to those explorations on the final frontier of inner space.

So Mr. Wizard? Well…This is your brain. And this is your brain on real estate. This smaller, lower portion of your brain here? It’s the limbic system – an older subcortical region that includes the thalamus, hippocampus and olfactory receptors. Ever felt the fright and flight response sending a tsunami of adrenalin through your body? Say hello to your amygdala.

See this giant outer portion of grey matter that surrounds the limbic core? That’s called the neo-cortex – familiar home to so much of the abstract thinking we humans like to hang our hats on.

Some 50,000 years ago Cro-Magnon brainpans evolved to accommodate the swelling pride man felt about his dubious ability to think about his own thinking. Somewhere in there – God kicked Adam and Eve out of the Neolithic garden – recognizing self-awareness as the original sin.

Since then, humans have managed to survive tens of thousands of generations convinced that the burgeoning neo-cortex is where its at. Even though the older centers of our brain – the limbic system – still exert an amazing amount of control over what we do and how we act.

Sorry to take a quantum leap across so many synapses at once, but…Enter Tom Hopkins, sales-guru extraordinaire. The guy who bragged about selling refrigerators to the Eskimos.

When I was first getting into real estate, I watched a few Tom Hopkins videos from the 70’s. There he was in full leisure suit and wide tie splendor.

One thing he said never made sense to me: “ Don’t befriend your clients (customers). They’ll call you and suck up your time after escrow.” Guess his success system wasn’t based on referrals – just more refrigerators and bigger slices of Eskimo pie.

But there was something else Hopkins famously touted: “Sell the sizzle rather than the steak.” And in this, he was at the frontal lobe of today’s neuro-marketing revolution long before the concept of neuro-marketing was a gleam in anyone’s mind’s eye.

Why does the sizzle sell rather than the steak? Because the sound of the sizzle and the smell of fat burning on the Barbie go straight to the limbic region of the brain. Eliciting strong emotions and decisive urges attached to instincts and animal behaviors and powerful memories from childhood.

Our neo-cortexes might be busy visualizing a picture of a steak. Calculating its weight. Or how much lighter fluid it’s going to take to get those charcoal briquettes going. But the limbic system already has our mouths watering.

What part of the brain writes an offer on a house? The limbic system. What part of it rationalizes the decision and explains it after the fact? The neo-cortex. Go to an open house. See if you can feel parts of your brain wrestling for control.

Oven-baked cookies? Vanilla extract? Potpourri? Fresh flowers? Cedar-lined closets? Limbic Candy!

New house smell is just as intoxicating for some as new car smell is for others. Even if new house smell often contains an amalgam of toxic sheetrock and synthetic carpet fibers.

Good Stagers are Limbic Shamans. They Feng your Shui and Float your Dream Boat. I once saw a Yogi Berra catcher’s glove framed in a model home. It made my five year old self want to plunk down an all cash offer. Thankfully my inner fifty year old was in charge of the checkbook.

Need to Sell a house? Sell the Steam Rising. Not the Jacuzzi. Sell the green of the Grass. Not the Lawnmower. Sell the Fire. Not the Ashes. Trust me. The Nose Knows. The Limbic System Rocks the House.

Channeling Santa Cruz

Next time you kick back to channel surf, see if you can catch the most recent Apple ad. The one featuring a young couple somewhere in snowbound New England, asking the all-knowing voice of their Delphic I Phone Oracle: “What’s the best way to Santa Cruz, California?”

Notice they aren’t echoing the refrain of an old Burt Bacharach song…like…”Do you know the way to San Jose?” Nope. They’re humming a very different tune.

To make a short commercial shorter, the happy couple embarks on a cross country odyssey, finally reaching the promised land of the left coast – you know – Santa Cruz. Is there a left-er coast anywhere else?

Bottom Line? Santa Cruz is now a big league destination. Our little corner of the global village officially registers on the world’s radar. I Phones. I Pads. Macs. Even – PCs – which seem so unPC these days in a Santa Cruz-y/App-y kinda way.

Yep. We are wired into the planet’s brain. Plenty of neural pathways heading in our direction via all those internet homing devices.

Just as an aside – Don’t worry about our Keep Santa Cruz Weird lifestyles in Surf City. People move here precisely because they want both a latitude adjustment and an attitude adjustment. That’s the whole idea – they aren’t in Kansas anymore when they come here. This is the home of the Mystery Spot. It’s supposed to be weird.

Or….as we Realtors like to say when we get the opportunity for a perfect seque – Life’s a Beach and then You Buy. It’s easy…all you gotta do is phone home.

So if the world is calling our name – how are we answering? My contention: Sellers need to expand their world-view about marketing if they want to increase their world-views.

When your property hits the MLS, your street address automatically becomes a Web Address. Your home – a Home Page. Within seconds it is streaming to the four corners of the globe. Wall Street Journal? DuPont Registry? MSNBC? Click your heels. Your home page already resides here, there and everywhere.

There are 250 million internet users in the US. Two billion on the planet. 90% of all Buyers utilize the web as their primary tool to view homes. The internet drives thousands of Buyers and Agents past your place daily. It is the market. Search engines run 24/7/365. Forget: “Where is my property being advertised?” Rather: “What do people see when they take that first virtual drive-by?”

If the Medium is truly the Message in the age of the digital download…it begs the question: What kind of Message is your Message sending to that huge home audience out there?

The distinctive homes and remarkable settings for sale in and around the Monterey Bay deserve distinctive home pages and remarkable web sites that successfully capture and promote exactly what it is that’s so unique about them. And about here.

Homes staged with beautiful contents should have home-sites staged with meaningful content of their own. Mindfully crafted images, words and descriptions that capture their essence and communicate their true character. Why do so many websites promoting special homes look and feel so one dimensional and uninspired?

Visual Tour. Tour Factory. Obeo. Take a few pictures. Slap them into the tour widget. Cue the canned music. Whether it’s the $29.95, $49.95 or $99.95 tour – might as well be the ten cent tour in terms of the amount of custom time, effort, marketing skill and money some Agents invest into the online presence of those expensive custom homes they represent.

If you want the ultimate destination for buyers to be your home, your Agent can’t just show up anymore and upload your listing off the assembly line. Time to list local. Think global. But insist the design be compelling and personal before the world logs on.

Like This:

www.Pacific-Crest-Estate.com

www.SanctuarySpeak.com

www.NaturesAlchemy.net

www.SanctuarysPreserve.com

www.GoldenGateVilla.com

List Local. Think Global.

I’ll try to hurry this along. Sellers out there don’t have a lot of time for idle chit chat. They’re busy primping, painting and prepping their homes for the crush of Facebook millionaires about to overwhelm the marketplace and make real estate feel all warm and fuzzy and magically 1999-ish again.

 

Remember? IPOs. Stock Options. An endless supply of money falling out of the sky like manna from heaven. Swarms of 30-somethings wandering house to house. Millions of dollars of what felt like “found” money, burning holes in their jean pockets. Competing with each other to play beach-blanket–bingo and push our ocean view prices up.

 

Now, more than a dozen years later, way post-tech and way post-housing bubbles, there are new signs of life. Everyone is getting addressed up. Poised with plenty of expectations. Asking the proverbial question: “How do we get us some of that?” As in – a Silicon-induced altered-estate of mind riding a new wave of mojo and moolah.

 

Funny thing… the revolution that transformed the market of the 90’s, also transformed the way real estate works. And although we all want the dough, some still seem slow to catch on to the altered the landscape and how Buyers actually Buy.

 

Here’s an exercise for those currently selling a home: Google your address and zip code. Get one of your kids to do it, if you have to. Hit search. See what comes up.

 

Say hello to the global village. An instant tower of babel that kicks into gear the second your listing gets loaded on the MLS. From there it’s downloaded through the wormhole-like portals of cyber-space. Distributed to the far reaches of the globe.

 

Look at your screen. There’s your home. Wave to yourself on Zillow, Redfin, Trulia, Movoto, Realtor.com et al. Check the satellite view. See if you were nude sun bathing in the backyard, the day it circled overhead and snapped the picture.

 

The feed doesn’t stop there. It keeps moving. Places like the Wall Street Journal, MSNBC and the DuPont Registry. You name it. Your home is a home away from home on thousands of search engines – cranking 24/7/365 – driving it directly by the eyes of tens of thousands of prospective buyers – primed for virtual drive-bys.

 

More than 90% of buyers and agents looking for property in Santa Cruz are using the web as the source. And most Sellers would be shocked at how many homes get deleted from consideration because they lack virtual curb appeal. Buyers zoom past with short attention spans. Quick reactions. Thumbs up or thumbs down. Until… something catches their eye and engages their attention. Then they switch gears. Suddenly they want as much information as they can get.

 

Sellers – stop worrying WHERE your property is being marketed. If it’s on the MLS, it is already everywhere. www. means the whole world is watching. Time to adjust your world-view.

Your home is a home page. You home’s setting is a web site. Your views are everyone’s views. If you want to obsess about something – how about: WHAT do buyers see when they take that first virtual drive-by of your home page?

Does your custom home even have a custom home page? A website commensurate with your remarkable setting? Sellers spend lots of time and $ staging their homes with interesting contents. Do their Listing Agents stage home pages with the same eye for quality content and interesting detail? Or are most Sellers just getting another version of the ten cent tour?

On the web as in real life, homes don’t get a second chance to make a first impression. What’s going to move that next generation of Facebook Millionaires? More great place looks and more likes online. Make sure your Agent is spending real time and real money in the virtual world.

Falling Off the Dinosaur

Falling Off the Dinosaur

I’m sure some of you would rather save your aging eyes from od’ing on 600 words of my tiny type. Or skip the tough task of following the muddled meanderings of my Real Estate of Mind. So, I’m going to give you the take away message of today’s story up front. To-go dessert before dinner.

 

Here it is: The biggest mistake Sellers make these days? They think too much like Sellers and not enough like Buyers. Since they invariably love to see their own image reflected back to them in the mirror of their marketing, they mistakenly assume that buyers look in the same places they look when admiring themselves.

 

The end result? Sellers get way too hung up worrying about WHERE their homes are being advertised. And they pay far too little attention to WHAT is being flung out there to the far corners of the globe.

 

Almost everything has changed in Real Estate in the last fifteen years. But some old myths die hard. Cultural imprints once stubbornly established can be exceedingly hard to shake – even when there are dazzling displays of special effects at everyone’s fingertips, just begging to differ with our prevailing stereotypes and mess with our heads.

 

Fact is: Attitudes about selling are still largely shaped by old, left-over notions from a buy-gone era when Realtors owned the monopoly on real estate information and controlled most of what circulated in the public domain.

 

Back in 1995, we (Realtors) still managed all the information. We edited it for our clients. We picked and we chose what our clients saw on a daily, weekly, monthly basis.

 

I still remember waiting for the new MLS Books to come out every two weeks. Cheapo newsprint. Nine little black and white listings to a page. One grainy photo each. A few property details.

 

I’d pour through those home pages – searching for anything that seemed vaguely like what my clients were looking for. I’d Xerox individual pages. Manually cut out listings with scissors. Put them back on the machine, zoom to 150 % and spit out separate tear sheets. By this time the pixels were so far apart, there was barely a discernible outline of a house left. I’d hop in the car, drive by each place. Call listing agents. Preview a few. And set up a tour for my buyers.

 

Xerox?! Cut and paste with actual scissors?! Compared to today, it sounds almost stone age. Like we were peddling prehistoric property Flintstone-style. Plenty of fancy footwork in fancy cars. Showing ten homes. Rushing back to the office to chisel out purchase contracts on stone tablets. Delivering them by courier-pterodactyl-pigeon.

 

The primary purpose of advertising in the old days? Convince Sellers that their listings weren’t getting lost in those MLS books. Or bogarded by Realtors. They really were being seen by a larger audience of potential Buyers. Big Ads. Open Houses. For Sale Signs. The works.

 

When MLS information first became available on the web, even in rudimentary fashion, Realtors noticed a shift. Suddenly Buyers weren’t waiting for us to do the editing and tell them what to look at. They started telling us what they wanted to see.

 

They got the addresses. They did their own drive-bys. They decided which ones had enough curb appeal to merit a visit.

 

Then, when even more information became available in the form of high-quality photos, satellite images, sales and tax information, google street views, Realtors saw the next stage in the evolution of their buyers.

 

Instead of doing actual live drive-bys, more and more prospective buyers began choosing what they wanted to see based on virtual drive-bys. Lap top or smart phone appeal became synonymous wtih curb appeal.

 

Most Sellers would be shocked by the number of people who reject properties based on an initial virtual drive-by. Yet, if they thought about how they actually search the internet as Buyers themselves – they wouldn’t be shocked at all. There’s an odd double standard and strange disconnect in all this.

 

One we’ll explore next week.

Blowing My Other Cover

It’s been a while since a column generated as many e mails from fellow-agents, as last week’s.  Must have touched a chord. Or discord? An exposed nerve? An erogenous zone connected to the love/hate relationship we all have with what we do?   Maybe I inadvertently hit upon one of those odd funny bone moments. You know the one’s that make you laugh in spite of the fact that they really hurt?

If any of you were remiss in your required real estate reading and want to catch up on your home-work….go to tombrezsny.wordpress.com and  read  “Blowing My Cover.”

Here’s the basic premise:  Most good old fashioned real estate advertising is designed to shape how Sellers think about Selling rather than how Buyers think about Buying.   Although we have to tread carefully here, because eventually all buyers become sellers and all sellers become buyers.

But it is interesting to note how short memory spans can be. And how many people like to practice the “do as I say not as I do” method of selective recall.

Classic example?  Sellers, selling here,  also looking for a property in Hawaii.  They log on everyday to look at homes in Maui. They have an Agent there and are on his automated search engine. Whenever they see something that strikes their fancy – they e mail him.

But  here in good ol’ Surf City USA,   where they are trying to sell, they want their Agent to advertise in the Mercury or the Chronicle at great expense.  Or run fancy, color spreads in magazines. Or…run a big Featured Home Ad in the Sentinel (oops… don’t look now…I think I just blew another cover.)

Don’t recall too many people here subscribing to the Honolulu Times-Picayune so they could hunt for real estate in Hawaii and say “Aloha” to the market there.

We aren’t even going to get into the absurdity of listing a house here with an over the hill Agent (I mean over the hill in the geographical sense – not over the hill as in the success-challenged and seen-better-days kind.)   The huge leap of sur-real logic it takes to list with a Santa Cruz property with a South Bay Agent who doesn’t know squat about our home turf is perfect fodder for another column on another day.

As is one of those other long-hyped myths of realty – the notion that somehow a mediocre Agent working at a giant brokerage can represent you better than a good Agent working at a smaller brokerage can.

And as long as we are at it…let’s toss one more myth-ing urban link onto the bonfire of the sanities: The notion that a vast network of personal contact exists between big city Agents within the framework of mega-national real estate franchises.  Secret handshakes and everything. When you sign on, your home is spoon fed to tens of thousands of Realtors waiting with bated breath to sell your property.

Just like most real estate advertising is designed to sell the sellers on the sell rather than the buyers on what’s being sold… the sell underlying most of the sales pitches from the big guys revolves around the subtle promotion of  Dual Agency.

As in:  List with us. We have a lot of Agents. One of them probably already has a buyer for your home.   Those who aren’t quite sure what Dual Agency is might want to google it and decide whether you think it is a good idea.

Darn! I’ve been yacking away so much our time is up.  Not to worry though, Sherman has been warming up the Way Back Machine.  Next week we’ll jump on board, travel to the fin de siècle era of the 1990’s and see what changed while all us aging baby boomer analogue types were struggling to get across the great digital divide.

Blowing My Cover

There I was at a listing appointment this week.   The owner of a beautiful ocean-view property was doing his due diligence. Interviewing three prospective Agents – like conventional wisdom says a smart Seller should.

At one point, this likeable, highly-educated, sophisticated home-owner, fixed his gaze intently on me and said with utmost sincerity: “I’m  looking for an aggressive Agent to get the job done.  Someone who will target the right markets. Places where the money and the buyers are  – starting with Silicon Valley.”

Ok. No problem. Makes perfect sense.  I’m with ya’.

But suddenly out of the blue he took a left turn and started pitching curve balls in my direction.  Holding up a glossy local real estate magazine he continued on with his defacto job description:  “ You know, I want someone who’ll run these big color ads. Someone who’s going to put my place in the Wall Street Journal. Get a special mailing list of big time corporate CEOs. Send them all postcards. Run displays in the San Jose Business Journal to connect with all those up and coming Facebook millionaires.

A crash of cognitive dissonance washed over me.  Punctuated by ringing in my ears – the sound of inner “ca-ching-ing” as all those imaginary dollar signs rolled along with my eyes back into my head.

I recognized the place. Been there. Done that. Many times.  One of those lonely marketing cul-de-sacs where listings go to die.  Despite everyone’s best wishes, best efforts and best intentions.

Once again I was reminded that there are still an amazing number of Sellers who don’t quite seem to get it yet.  They are unclear on the concept. Running on autopilot with notions that were old even in the old days.  Having trouble reformatting their brains. Possibly doomed to spend the rest of their upcoming days on market as analogue people lost in a digital world.

Perhaps it would help to list a few of the common disconnects between reality and realty that are floating around out there:

- Homebuyers from Silicon Valley aren’t driving over to the car wash in Santa Cruz to pick up a glossy magazines so they can search for available real estate.  They simply log on. Why would any serious buyer window shop randomly – when they can see the entire inventory in a couple of keystrokes?

Most Sellers in Santa Cruz moving to other parts of the Country are doing the very same thing their own potential Buyers are doing – looking on-line.  Why would it be different for their Buyers than it is for them?

Advertising isn’t going to convince someone to buy something if they aren’t already moving in the direction of buying something.   Buying is a long process. Property ads don’t create buyers.

The chances that someone reading a four line classified in the Wall Street Journal is going to drop his coffee cup, get on the next plane and plop his money down are none and slimmer than none.  Who reads the WSJ classifieds anyway?

Someone who isn’t already familiar with Santa Cruz isn’t going to be moving/buying here anytime soon.  Near-term buyers are people who already are attracted to our area and have it on the same radar as their homing instincts.

Corporate execs aren’t checking their daily junk mail on the latest and greatest random real estate opportunities. Snail mail or  email. You know how you ignore all the superfluous crap you receive?  Why would they be any different?

And those Facebook millionaires?  Check our their Facebook pages. Not a lot of them are reading the Business Journal.

The majority of advertising dollars that agents and brokerages spend – are designed to sell the sellers on an Agents’ sell. Not to sell Buyers on what they are selling. We run those expensive ads mostly so more of you will list with us.  Been there. Still doin’ that.

Oops.  Now that I’ve blown my own cover, perhaps next week we can focus on how today’s real estate marketing really does work and which things Sellers should really be insisting their Agents spend money on.