Jun 11, 2008

"My Friend Told Me We Should....."

An important part of the home buying and selling experience is getting feedback. Validating assumptions is absolutely critical.

One thing you will find, is that everyone knows something about real estate. It's one of the joys and challenges of working in this industry. Everyone is willing to share their experiences, stories, and deep insight.

Be cautious.

Here are a few of my favorites:

* "My friend told me we should offer $xxx,xxx. He/she is an engineer and really smart".

* "My brother is in real estate in Pennsylvania. He told me we are missing the boat if we don't do X, Y, and especially Z. Please do them immediately"!

* "One of my co-workers lives in the neighborhood and tells me that prices are still doing pretty well. We should offer above list price".

* "My neighbor has a friend who's sister got a bank to drop 50% of their price on a foreclosed home, and I want the same"!

Please keep in mind that you've hired a professional in the Real Estate industry. Chances are pretty good that they know more about this business than those who aren't actually practicing in the profession.

Market drivers absolutely differ by state. What happens in Ohio has almost nothing to do with what happens in California. What happens in Southern California often has little impact to Northern California (did you know the processes for escrow are actually different within the same state?).

Differences between zip codes can be huge too - even neighborhoods across the street from each other?

Over the last couple of years, there are parts of Sacramento County that saw value decreases greater than 60%. Yet there are other locations in Sacramento County where the drop in value was less than 15%.

Placer County? An average drop of 23% last year. Yet there are places in Lincoln that dropped over 50%, while parts of Granite Bay actually appreciated!

Unless your friends, family, co-workers, etc.. are actually practicing Real Estate in your area, trust the professional that you are working with.

Chances are pretty good that that person is busy 7 days a week and works at least 12 hours a day. We have to. This market is changing so fast that daily participation is absolutely required, if we are to do the best job for our clients.

Operating models (placing offers, comp'ing for list price, etc) from just March are no longer valid! That's how quickly things are changing.

Pay attention to the professional you've hired. Listen to them. There will certainly be messages of good news and bad news. Ask questions. Dig deep. But make sure you are talking to the most knowledgeable person you can find.

Again, it is absolutely important to get feedback and to validate your assumptions. Just please do it with someone who is a professional and who is practicing on a daily basis. It will make your participation in these processes easier (and less emotional).

- Jim

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