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What Would You Tell Your Younger Self?

What would you tell your younger self? This is a frequently asked question of Entre Leadership podcasts from Dave Ramsey. It is a super question. I sometimes think if I could go back in time and have coffee with young Brian. What would I tell him? Here are a few topics:

1. Turn to God frequently and for little things. Early in my adulthood, I thought my Maker wanted me to handle as much as I could on my own and rely on Him for the big important stuff. Wow… was I wrong on that one. God is into the details.Young Ross Man

2. Embrace asking others for help. Learn to receive it. Slow down and ask for help.

3. Invest in counseling early. You think you are only sporting a carry on. There are a few trunks of crap you ain’t seeing yet.

4. Take more time with your beautiful wife. Shut up, face her, look her in the eyes and listen.

5. Keep a journal daily and don’t give excuses about why you couldn’t do it. You need to find your heart.

6. Be intentional about spending time with a few guys. Maybe take up golf earlier or play in a band, or camp/hike.

7. Spend more time with your children when they are little and do not think that your work is so important. It isn’t.

That is a good start to the coffee conversation… Oh, and one more thing Brian… wait one year before you sell your house in Franklin, TN. The value will nearly double. Oh… and yet just one more thing… buy some Apple stock. The brand will be stronger than Coca-Cola by 2013.

What would you tell your younger self?

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Realtors beware of over engineering the real estate business. Real estate is all about people. People buy things from others with emotion and feelings of trust. Don’t get me wrong here. We need good process flow and checks and balances. What I am talking about is making the business too transactional and less relationship focused. Looking at efficiency, profit, and lots of data is fun for an engineer. I is one.

I jumped into a family real estate business from manufacturing consulting. I looked at processes and ask questions, drew charts, asked more questions. Why do you do this? Why do you fill this form out? Why? Why? Why? I was an adult 2 year old.Jaw Breakers

I did the same thing with real estate. I drove my first broker crazy. I wanted to break the rules, because at the time they seemed stupid to me. As an example, I take a listing and with a pen fill out a form that has all the information about the property. Then I take it into the office for the salaried administrator types it into the computer. Why touch it twice? Why? (Once I became a broker I started understanding “liability”) You do not need an agent taking a shortcut to change a list price if both seller and buyer have not signed a paper authorizing it. Example…

I am noticing that teams and mega agents are putting more layers between them and the client or customer. It is causing problems.

Talked with a person today, about a former real estate deal. He said that his agent was not present at the closing, and neither was the buyer’s agent. Both sent a proxy. Substitutes are fine but it does not relieve responsibility. The title company left off the home warranty payment on the closing statement. The money was not collected at closing. The warranty company was not notified. The parties were looking at the seller to pay. The closing was months ago. He did sign an agreement that he would pay the money, but he did not catch it and neither did the title company, or substitute agents. They are left with a few problems and shared liability. It still leaves the problem of who pays for the HVAC repair or replacement that just happened?

I spoke with another gentleman who had his home listed for quite some time and he said that the listing agent never bothered to call him after his listing expired. He did not know why it did not sell. He wanted feedback. Perhaps he lied to me, but his perception was that the listing agent did not follow up and give him news.

These are things that I am guilty of right now in the feedback lacking department and not providing enough hands on direct work with clients. It is not easy to manage the balance of being personal and providing the amazing level of details for many clients over time. That is an agent or broker’s challenge. How do you foster personal relationship and trust? If you want more income and more free time, you try to put processes and people in place that are trustworthy.

I do know that sellers and buyers want to work with their Realtor. They do not want to feel slighted by working with a substitute and sure do not want to experience a drop in service. That is not good for word of mouth referrals. Realtors beware of over engineering real estate business.

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Serving Real Estate Customers Is A Noble Calling

Serving real estate customers is a noble calling. A calling to bring honest and trustworthy dealings to others. People with relationships built with trust. Trust that is earned over time with expectations met or exceeded.Two old noble men

I had a difficult time believing that any business was noble. Growing up in the 70’s and 80’s the culture had a built in skepticism for corporations. Corporations are given a “personal” status in our system of government, but they have no “soul”. As a freshman in college I really pondered if I could reconcile my desire to be in business and also be a “real” Christian. I wrestled that to be “all in” meant I needed to be in clergy. I was not called to preach. I loved and still love finding future “opportunities”.

I realize now that I was not “called” to be “in real estate”. I was called to serve. My heart is that of service. My wiring is that of quickly solving a problem and researching solutions. Real Estate happens to be an excellent venue to pour out my calling to serve.

My first job after school besides the Army was working in the manufacturing systems consulting world. I enjoyed solving problems and serving in that arena. I did not enjoy time away from my young family. Moving to Chattanooga and being a part of a family business solved the travel problem.

When I did jump into commission sales, I had a heart struggle with my perception of the what other’s thought of Realtors. Realtors in movies are often portrayed as greedy shallow people driving “nice” cars. One developer told me early and often, “real estate is a slimy business”.

I did not realize that part of my struggle is a cultural shift that has been demonizing most all business as “evil” and profit is bad. Coming from a manufacturing perspective, I could not understand the relative value of “service”. I was not building a car, rocket or even a cabinet.

I think Realtors struggle with some of these concepts because our culture does. Rabbi Daniel Lapin makes a good case for this in his book, “Thou Shall Prosper”.

My response? My first response is to focus on my Maker and seek His guidance on how I should serve. God is changing my heart in preparation to serve in a noble way. Writing this blog on a daily basis is forming a seed of dignity of giving and serving others. Corporations are built, maintained and run by souls. This soul owns a corporation LLC that is dedicating itself to the dignity of serving others in the high calling of real estate “sales”/”service”. Serving real estate customers is a noble calling.

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Over 50 percent of Chattanooga homes sold by top 10 percent of Realtors. That is a very compelling fact that there are 145 hustling agents selling half of the sales. Perhaps a bigger story is 963 agents sell the other half, while twenty five percent did not sell anything in the last year. So what does this mean?On Stage

The most important factor is a trusted relationship in real estate. Skill, service, and care are close behind relationship. Why do I say this?

The story here is the 963 agents who participated in half of the sales. If advertising trumped relationship then the number would not be that high, because the top 10% of agents spend a large portion of income on advertising, teams, and employee support, etc.

Relationships built on trust create word of mouth referrals. Referrals from friends and work mates generate real estate sales.

Let me tell you a story. I recently sold two homes for friends of mine I have known for years. They also happened to be former clients from years ago. There word of mouth referrals have helped me close 4 homes and 1 commercial building in the last 12 months, with one in possibly 2 more before the year ends.

As an agent, a broker, husband, father, I can tell you that I have way under estimated the value of relationship.

A relationship that is built on trust. Caring enough to go beyond expectations will simply propel a decently skilled Realtor to success.

Serving people with a heart believing in the dignity of the profession of sales as a noble and caring calling that respects earned trust with others is all a person needs to be wildly successful in real estate.

Over 50 percent of Chattanooga homes sold by top 10 percent of Realtors (145 agents), but they cannot buy the loyalty away from the customers that chose 963 others.

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Where Did You Grow Up?

Where did you grow up?

I like to ask this question as a buyer’s agent. It gives me a perspective and context so I can serve more effectively. The questions you ask will allow you to gain understanding of a buyer and their needs but also help them make a decision as well. This is a sales business. Realtors need feedback.

Here are some questions you should ask when working with buyers:

Prior to Showing:

1. Will you be paying cash or using a loan? The first gate to qualify purchasers is their ability. Nail this one at the front end. They do not pass GO if the answer is NO.

2. When are you needing to take occupancy? Need to know when the need for shelter is priority.

3. What are you imagining your commute to work to be like? Distance does not equal time. Especially at rush hour. Most people talk in time not distance. Time is more important.

4. Describe your ideal home, neighborhood and community. A great open ended question designed to get them to talk.

At the property:

5. Can you see yourself living here? If the answer is “Yes!” Shut up and Skip to Number 8. This question is designed to start the buyer on an imagination journey.

6. Where would you place your furniture if you purchased this home? Take the imagination process to a deeper more specific level. People will tell you if grandma’s dining room suite will not fit and it is a requirement.

7. What would you change about this house to make it fit your needs? This is a very important question because people are generally truthful about it. Take in what they say and apply it to next showing. Only go here when you are not getting buying signals during the showing. Notice that I used the word “house” not home. Home is used when buying signals are strong.

8. Would you like to buy this home? Seems obvious, but I have worked with agents who use the “wear out” method. That is what I call showing as many houses to someone and “wear out” the buyer, you and your car until they buy something. Very similar approach to the joke about the Bible salesman who stutters. He stands on the porch and says “Ma’am I .. I .. I can stand here here here and read read read you the Bible or you you you can just buy one one one and read read read it yourself.”

These are basic questions for a buyer’s agent toolbox. Where did you grow up? The answer may tell you much about the meaning of “home” for the buyers inner child. Listen carefully. That will serve you well.

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Water Impacted 3 of the 4 Homes We Owned

Water impacted 3 of the 4 homes we owned. Learn from my experiences so that you can save time and money with your home.

Our first home was in Franklin, TN. Franklin is just south of Nashville. It is a great place. We lived there in the late 80s. We bought a brick rancher and an acre lot. Unlike the new homes our Realtor showed us, this home had apple trees. I am convinced now, we bought it for the apple trees. We stayed there a few years. We put the home on the market. We got it under contract. I remember the agent calling us and telling us we had a problem with the buyer’s loan. The lender paid FEMA for an updated flood map. Our property had moved into the flood plain because of new development in the area. The buyer’s lender was requiring flood insurance and the buyers were considering backing out. We purchased the property without flood insurance. We never had a problem with flooding. Only the corner of the property was included in the map. I considered donating the corner to the county and making it a public park. The buyers were able to get an elevation certificate from a surveyor and a release from their lender of the requirement.

The second home was at the foot of Signal Mountain, TN in Spring Lake. (Note to purchasers: always have a good water drainage guy look at your property if a water name is in the name of the neighborhood – like Glorious Geyser Estates, or Wild River Homes). This was not a bad problem, but we had wash draining down the yard from a neighboring property. The home builder installed a dirt berm in the upper corner of the yard.

The third home was on a mountain. Signal Mountain. We purchased another brick rancher over a full unfinished basement. No apple trees here. This house had a sloping yard. It also had broken concrete drain pipes on the high ground side of the lot we could not see. We had lived there a few months when I noticed a small trickle of water on the basement floor. As the rain kept coming, the water quickly became a small stream through the basement. It was then, I really started noticing the rust marks on the steel supports and heating system. I had simply overlooked them as age and not due to potential water in the basement. This fix required a back hoe, rock, water proofing, and upper and lower drains. You can definitely have water problems on a mountain. Especially one with little soil and lots of rock formations where water can run and damn up against a block wall. The sustained slow pressure of water will force its way into your home at the base above the footer.

Three times a charm, the 4th home is well graded and has a bed of gravel as well as a vapor barrier. There are drains on all corners taking the water 20-25 feet into the yard at lower points.

Water impacted 3 of the 4 homes we owned. Consult your agent for good guidance on how to mitigate potential water issues with your home.

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Chattanooga Choo Choo took Aunt Bell to New York City

Chattanooga Choo Choo took Aunt Bell to New York City.

Had lunch with my Mom today downtown Chattanooga at Bluewater. We had a wonderful time talking. She remembered her visits into the city of Chattanooga as a young girl. She grew up in Sequatchie valley in a more country setting. She recalled her visits to Aunt Bell and Uncle Bass who lived in an apartment just up the hill from downtown Chattanooga. Mom would walk downtown to the soda shop and wait on them to get out of work.

Mom’s Father was the youngest of 12. One of the older sister’s of the dozen was Bell. Bell was born was born in 1896. Aunt Bell worked at Miller Brothers Department Store as a millinery (hat maker, designer). She was not fond of air travel. She traveled by train to New York to make purchases for the department store. A trip to New York City may take a 2-3 days, one way. I can imagine Mom and Uncle Bass waiting on Bell at what is now the Chattanooga Choo Choo.

Mom recently traveled to New York City. She visited Grand Central Station. So she was able to visit where Bell traveled years ago as a hat designer.

Afterward, I realized that trains and transportation have really shaped our city for years. The recent Civil War re-enactment is a reminder of how important Chattanooga was as a transportation hub to the entire South.

Volkswagen made a reference of jealous envy that the Chattanooga Choo Choo had a world famous song but alas their Beetle is best remembered only as a Love Bug in a movie.

The story of their Chattanooga manufacturing plant is a huge transportation event in history.

Trains have a rich history in Chattanooga. Some of the stories are told at the Tennessee Valley Railroad Museum. Others are told all over the region regardless of the steel tracks laid.

Aunt Bell and Uncle Bass retired and moved to the country between Jasper and Whitwell, TN. I do remember hat boxes on the shelf in the back room.

Not sure hats will make a great comeback, but thankful of the impact that Aunt Bell had in a positive way of encouraging my Mom to explore and venture into the city.

I am writing this in Lookout Valley, just outside Chattanooga. In the morning I will be able to hear a distant train whistle echo off Lookout Mountain.

Chattanooga Choo Choo took Aunt Bell to New York City, and it helped shape my family’s history, lady’s hats, and helped connect people and cities crafting a legacy of moving people forward.

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What is a Broker's Price Opinion?

What is a Broker’s Price Opinion? Simply stated it is the opinion of a licensed real estate agent of the most likely sales price (value) of real property. The National Association of Realtors states a Broker’s Price Opinion (BPO) should contain 7 things in writing. They are as follows:

1. The identity of a subject property
2. The date of the opinion
3. A defined price or value
4. Limiting conditions (Statement of Purpose and Intended Users)
5. Any interest of the agent including Agency Relationship to Owner
6. Basis for Opinion and sources of Information
7. If not an Appraisal by licensed Appraiser then state the fact

On a practical level, number 3 is the most important. So, what determines a good value?

Ever watch Antiques Road Show? People are so surprised or sad when the “expert” tells them the value of their heirloom. One common theme I hear from the evaluator is “in recent auctions, similar items sold for $3,500”. They are referencing what someone else was willing to pay for a like item.

The same concept applies to homes. Recently sold properties (last 3 months) of nearby comparable properties provide best indicator of value. Value is so deceptive relative to square footage, floor plans, construction, and land. A good agent will make many adjustments for differences.

Another factor I consider are the comparable homes that did not sell. Failures can bring out features the market is rejecting.

I was with a seller today who knew what the adjacent homes sold for. She was curious why I did not give the same value to her home. Her home did not have re-finished hardwood throughout, or tile in bathroom, etc. Her home was roughly the same overall size but on 2 floors instead of one. All of these factors must be considered in the equation.

Is a Broker’s Price Opinion (BPO) the same as an appraisal? No, it is not. An appraisal is made by a licensed professional Appraiser. Although they also look at recently sold properties, they are also looking at replacement construction value and perhaps income as well if investment property. Appraisals have specific formats generally for the benefit of lenders. Appraisals are great tools. BPO’s are great tools as well, because they will pick up on many subtle details that pertain to the current “buying public”. As an example… appraisers generally do not affect value based on aesthetics like colors, etc. Realtors are sensitive to those things because we listen to buyers constantly giving feedback. Realtors know that a seller’s specially decorated walls may only reach a small amount of buyers’s tastes.

The best way to determine the most accurate value of a property is to hold a well advertised absolute auction. That will bring out the competition to level the marketing playing field. Most people are not comfortable with that approach, because the buyers may not think so highly of your place as you do. So the next best thing is to ask a Realtor for a BPO or broker’s price opinion. What is a Broker’s Price Opinion? The best professional determination of what your house is worth.

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Buyer’s Agent or Listing Agent? Which One Do You Want To Be?

Real estate is a service business. The consumer wants service during evenings and weekends. That is the most convenient time for buyers. Sellers have a need to relocate. They need a consistent campaign. So how do Realtors focus and choose which of the two main areas to work on?

A listing agent is a more traditional path to Realtor success in the long run. Realtors like this path for the following reasons:

1. More structured schedule. You set the plan with the seller when you call for feedback. You schedule Open Houses and marketing events.
2. Marketing yourself is a self perpetuating machine for additional listings down the road.
3. You will be good at marketing to your fellow professional as well. You will need their buyers.

A selling agent serves the buyer. Here are characteristics of a good buying agent’s business.

1. The buyer is more demanding of your schedule. The Doctor that is coming into town and may or may not get the job wants to see 10 houses over the weekend. You gladly do this because your contact will continue to send you referrals and one will get the job.

2. There is generally less overhead associated with advertising expenses with this model. (As a general rule)… Note : I have seen some buyer agents (with sophisticated marketing campaigns) who have spent big bucks to find steady streams of buyers.

3. You see lots of inventory and know your negotiating skills. You also have formulated good questions to ask everyone.

Of course there is a balanced approach and do both. My experience has been that people tend to choose one route more than another.

As an overall observation, I would say that Buyer’s Agents tend to be savvy negotiators, frugal, and generous with their time.
Listing agents tend to be more promotional, marketing driven animals.

Buyer’s Agent or Listing Agent? Which One Do You Want To Be?

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How To Rent Your Chattanooga House

How to rent your Chattanooga house. With careful minded sober thinking and fear.

I attended a wedding Saturday. A young man named Todd asked me, “so … how is the real estate market?”

I told him and his father-in-law my observation of the market, as I did in this blog post. He then went on to tell me they had been trying to sell their home for 6 months. They were thinking about renting it out and going on to their next home.

I urged him to carefully consider 4 things as he was thinking about renting his personal home.

1. Do not treat this as a band-aid. Treat this as a business venture, because it is! A serious business move. You may have already invested in this for several years now. Some of the biggest landlord regrets: A. Business with family, B. Shallow screening of tenants, C. Poorly written agreement, D. Lack of understanding of Landlord/Tenant Federal and State law.

2. Place ability to monthly “inspect” property to spot check maintenance, and upkeep. Savvy landlords put monthly air filter maintenance scheduled in their agreements. Treat the tenant with respect for their right of enjoyment of the property, but retain the right it visit for monthly “inspections”. Phrase it to tenant as a service for them.

3. If you are not planning to purchase additional rental properties, there is no need to start a corporation or LLC. It is not worth the expense.

4. Ask a few professional landlords who they use in your county for eviction and collection attorneys. Also ask them who they use as an insurance agent for landlord risk insurance and umbrella coverage. You also need some good CPA and tax advice.

The biggest mistake I see people make when they “rent their house” is not understanding the liabilities of starting a business venture that is dealing with the public. You are held to the same Federal, State, County and City laws as the big boy landlords.

This is a good market for renting your property. But for heaven’s sake, please treat this home and your time with respect. Because renting a home is a business. If you are not prepared to take on a part time property management business, then consider dropping your price and selling. If you are wanting to take this challenge then perhaps you need to consider taking on a few more after cutting your teeth on the first one. Pretend you are starting a new business, that is how you rent your Chattanooga house.

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