Greed or Fear Up the Yin Yang?

Another mad rush of a week in real estate.  The hits just keep on coming don’t they? Here in the thickness of the open space we occupy.  Where the silence is often deafening. Where so many things seem caught up in the fastness of their own slowness. Sometimes it’s hard to tell.  Do we have too much to do and too little time? Or is it more like Willy Wonka said: “so much time and so little to do”?

I go back and forth. Hour by hour. Day by day. The internal debate rages on – riding a wavering frequency modulated by the interplay between my own fluctuating biorhythms and those of the global village as a whole.  Getting better? Not getting better? Glass half full?  Eighty percent empty? The market loves me? The market loves me not?

But I think perhaps the California Association of Realtors is finally on to something.

I’m talking about their new Home Protection Payment Program.  In simple terms,  the HPPP allows a Seller to fund an insurance policy that covers up to  $1,500 of a Buyer’s monthly mortgage payment if that unfortunate soul loses their job in the first year after close of escrow.  This service has been available for about a month now but CAR is going to roll it out big time right after the first of the year.

Another gimmick?  Sure. Anything designed to sell people something qualifies as a gimmick. What’s important is that this is a whole new breed of gimmick.

Think about it.  Here we are in the middle of what ought to be the most robust Buyers Market in history.  Buyers have had every conceivable advantage going for them for quite a while. Precipitous price drops. Interest rates not seen since the 50’s.  Sellers capitulating right and left. Rebates and incentives up the yin yang. Tax credits. Extensions of tax credits.  Extensions of extensions of tax credits.

But why are so many Buyers missing in action? Specially when everyone keeps chanting the mantra of mo’ – mo’ opportunity, mo’ return,  mo’ juicy money.  Apparently very few are feeling messaged by the message. This whole recovery thing has been plagued by screw ups. One long series of failed attempts to get Buyers back into the game.

Why?  Because we’ve been going about it the wrong way. We’ve been acting like One Trick Ponies trotting out the same old MO’s (modus operandi) dressed in different clothes.
It’s time to stop appealing to people’s greed.  It’s not working.  Consumers’ erogenous zones are exhausted.  Played out.  Numb from all hyper-activity they got groped with for way too long.

Instead of finding new and bigger and better ways to stimulate the greed glands of the marketplace, we have to do an about-face and move towards the other end of the spectrum.  We have to start finding more effective ways to deincentivize  people’s fear.

Greed and fear. Fear and Greed.  Self-proclaimed real estate pundits have always mouthed those two words together like they were twins separated at birth.  Time to forget greed for awhile.  Flip the coin. Walk to the other side of the talk.

We don’t need one more litany of all the reasons Buyers should buy a home.  We need to pare down the list of reasons Buyers fear buying a home.  We shouldn’t keep harping on what Buyers have to gain.  Rather, we should be reducing their nagging suspicions about what they have to lose. We don’t need to inflate their endorphin levels. We need to diminish the adrenalin rush fueling the fright and flight mechanisms that send them scurrying for cover.  Less emphasis on carpe-ing the dinero and more attention aimed at shrinking all those inflamed what-ifs that torture the psyche and hold us hostage.

So CAR is on the right track.  An insurance program for one of the biggest what-ifs: “What if I lose my job?!!!!”  Way better than an $8,000 tax credit.  But this is only the beginning.  I’m thinking CAR can take it to another level.  Steal a page from Lloyds of London which has insured just about everything under the sun at one time or another.

If Lloyds can insure a food critic’s taste buds, Bruce Springsteen’s gravelly voice and Jennifer Lopez’ famous ass for a whopping billion dollars, not to mention issuing more than 400,000 policies insuring against alien abductions, werewolf attacks and vampire bites, why should real estate stop with simple job loss.  Let’s get all our fears out on the table and really insure that we’ve got everyone’s butt covered!

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