Sunday, March 13, 2022

On Chronic Lateness

Lateness is a signal

Here's a rule for you.  If someone is late, the first time accept their excuse.  They will always have one.  If they are late a second time, it becomes a red flag.  Start watching for personality flaws.  If someone is late a third time, cut them loose.  No exceptions.

And note, I do not mean three times in a row.  I mean three times over a lifetime.  Sound harsh?  Well, let me tell you what is worse:  Dealing with someone's chronic lateness over that same lifetime.  Remember, it's your lifetime we're talking about.  Surely you have better things to do than sit around waiting on someone else.

People are chronically late for one primary reason:  Deep down, they believe that their time is more valuable than your time. Period. This is why your doctor is always late. But it is also why your friend/co-worker/client/vendor is always late. You just have to decide how much you are willing to put up with Because it will not end.

Chronic lateness is a signal of a deeper personality issue. Most often narcissism. The lateness is bad enough, but the personality flaw will show up in everything they do and everything they touch. Just to take one example. If your real estate broker is a narcissist, and many of them are, their negotiation skills will be extremely poor. But of course, these people actually believe they are the world's best negotiators. And they're happy to tell you so.

I learned long ago to cut toxic people out of my life, and certainly out of my business. And sure, people can be toxic for a variety of reasons. But one thing I noticed is that the toxic often suffer from some degree of narcissism. The narcissist loves nothing more than keeping other people waiting. Lateness is a signal. Spare yourself. Cut them loose quickly.

Now, will this rule sometimes backfire? Sure, you will apply the chronic lateness rule to some people who otherwise would be beneficial for you. The question is, what are the odds? And how much of your life are you willing to waste to find that one in a thousand?

Lateness as a cultural norm

Now what about the argument we often hear, that lateness is a cultural phenomenon? That is, some cultures do not value punctuality as much as others. And this somehow means that we should be more accepting of their rudeness.

Which cultures? Well I most often hear Latin America.

But I'm not buying it. Why? Because I have noticed that the people in those cultures who actually get things done are not late. They do not suffer from this cultural affliction.

Brief story. I once had a client who was the recently retired CEO of one of the largest food companies in Mexico. Americans may not know the corporation by name. But they would know it by its brands. They are the market leader in their categories and can be found in every supermarket in America. The man was never late. In fact, early on I noticed that, just like me, punctuality was extremely important to him.

Anyway, it made me question the cultural norm argument. Sure, perhaps many people in some cultures are more elastic with time that I am. But not all of them. And certainly not the ones I choose to deal with.

One other point on the cultural thing. The countries that care the least about punctuality? They are the poorest countries in the world. The countries that care the most? Switzerland, Britain, Germany, Holland, Japan, the Scandinavians; they are the richest. No doubt there are other cultural factors at play. But again, lateness is a signal.

Be on time.
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Sunday, January 16, 2022

How Many Brokers Are Dishonest?

Two out of three?

Sounds low to me.  This is from Canada, but it could be ANY US market.


Someone should write a book about this sort of thing.
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Wednesday, May 5, 2021

How to Be a Top Producer

What is Important to Real Estate Brokers


I have no doubt that Tina Caul is correct about everything she says.  She is a master of client acquisition and script reading.  She calls this video Secrets to Becoming a Top Realtor.  But there is not one word about conveying real property in it.  Not one.

Message:  Becoming a top real estate broker has absolutely nothing to do with conveying real property.

At the end she says:  If you are a brand new agent, the first thing I would say to do is go learn a listing presentation script.  Not go learn the contract – Rather, go learn a listing script.  Not, go learn a neighborhood, study an appraisal or home inspection, take a technology or accounting class, attend a local re-zoning meeting, read a book on negotiation, etc.  You know, the whole range of knowledge and experience and expertise that is useful and helpful for serving clients.

No, no:  Go learn a script.

Why?  For these agents it is simply not about conveying real property.  For them, the entire business is client acquisition.  This is the ball game.

So I would argue that the reason brokers need scripts is because they are completely incompetent at conveying real property and have no desire to become competent.  Think about it:  If you are only marginally competent (at anything), you don't need a script to have a conversation about it.  Scripts are a crutch for the pretender.

Wondering where she turns for scripts and so-called coaching?  These guys.  Yes really.  Sure, they seem like a parody of everything wrong with the real estate business and how brokers conduct themselves.  But sadly, it's not parody.  Brokers use these methods because they work.

This says as much about American consumers as it does about real estate brokers.  In polling, Americans don't think very highly of brokers.  But I submit that the reason they think so little of brokers is directly related to the type of brokers they tend to hire.  If you hire a shallow, low-substance, script-reader, do not be surprised if you have an unsatisfactory experience.

Here, I would like to say, You get what you pay for.  But that tried-and-true adage does not work in the real estate business.  Because what brokers charge is totally divorced from their value proposition.  And if a broker uses a script to gain your business, they will almost certainly use a script to justify a high fee.  So in fact, the six-percenters are much more likely to be script-readers.

And the success of the client acquisition brokers does not go unnoticed by their colleagues.  As a consequence, transactional competence suffers industry-wide.  There is just no room for competence at conveying real property.

I do love Caul's honesty, but find myself asking:  Why is she giving away her store?  I mean this is not the first video of her's that I have shared.  I can think of no other broker who is willing to talk about these things in a public forum.  And I do not believe that she is being naively or inadvertently honest; she is way too clever for that.

I can only speculate, but it appears that Tina Caul is attempting to transition from real estate broker to real estate coach.  And evidently she believes that she must give away some free samples to make the move and recruit...er, clients.

In any case, it gives us a peek behind the curtains.
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Thursday, April 22, 2021

Home Buying Today

My friend Richard sent me this last night.  Hilarious.  And not far off....
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Friday, April 16, 2021

Ray Dawson Reviews The Competent Broker

Another Broker's Perspective


From his video I think you can tell, if Ray Dawson did not like the book, he would have no qualms about saying so.  He describes the book as:  How to make money by being competent.  I like that.  Thank you for your kind words.

Find a detailed synopsis of the book here.

Ray mentions that he is going to do a separate video on dual agency.  I look forward to that.
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Tuesday, April 6, 2021

Shameful Artificial Urgency

I can just about understand the buyer frenzy.  They are losing houses because of tight supply and competing offers.  Competing offers that are stronger than their own.

It seems to me that the way to win the house is to make the highest and best offer.  Period.  But they've put together their own highest and best, and they fear it is not enough.  So they look for other things they can do.  Unnecessary appraisal addenda, dodgy letters to the sellers, poorly crafted escalation clauses, game-playing offer deadlines, and whatever else they can dream up.

Like I said, I can just about understand it.  But I don't think most buyers are getting very good advice as the business is absolutely rife with incompetence.

As for the sellers, it seems to me, what we have going on is various levels of artificial urgency.  The typical home in this market will get a double-digit number of offers, some of them even sight-unseen.  Well over the asking price and with five-figure nonrefundable Due Diligence Fees.

The sellers are clearly in the driver's seat.  There is no rush.  Take your time, let the offers flow in.  Too many showings one day?  Add a day.  Add an open house.  The sellers truly have all the time in the world.  Those buyers are not going anywhere, because there is no where else to go.

But that is not what we see.  Rather, what we see is the house goes active Friday morning and the sellers demand highest and best offers by Sunday evening.  Why?  WHY??

And that is assuming they leave the house on the market for an entire weekend.

Because worse yet, we see houses go active and then pending in hours.  We see houses sold during the Coming Soon period, where the buyer pool is severely limited.  Again, why?

This urgency is entirely artificial.  It is contrived.

And I just do not believe that this is coming from the sellers themselves.  In this market, no sentient being would accept the first offer.  Or even one of the first few offers.

No, this urgency is contrived by the brokers involved.  As a listing broker emailed me a couple of days ago:  Great bird/offer in hand, take it.

As if there will not be another, better offer tomorrow.  Look, I'm not talking maybe a better offer in a few weeks (those are never better).  No, I mean tomorrow.  And if not, that bird in hand remains in hand.  Give it a day or two.  Please.

That same broker went on to make the very astute observation that:  Selling is very stressful for sellers.

Well let's see.  Ten or more offers in hand, all above asking price, five-figure due diligence.  Hmm, that does not seem very stressful to me.  Rather, the sellers are in a most comfortable position.  But to be fair, I think what he meant is that selling is a hassle.  Especially with so much buyer interest.

I have long viewed open houses as a sham.  But in today's market they finally serve a legitimate purpose:  To get as many potential buyers in the door in the shortest time possible.  Yet many brokers still insist on individual viewing appointments creating and insuring more hassle for the seller.  My advice in this market is to have an open house every day, and if the hassle of selling is too much for the sellers, limit viewings to the open houses.  Problem solved.

But my guess is these brokers do not really care about the seller's stress or the seller's hassle.  The brokers have their own agenda.

Last week, I wrote about a couple of intentional reasons that brokers encourage this artificial urgency.  And if not intentional, we're back to incompetent.  I have always been amazed when brokers proudly scream:  Sold in one day!  As if it is something to be proud of.  But they are indeed so very proud of it.

It is incompetent and shameful.
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Monday, April 5, 2021

Bubble Questions

Are we in a bubble or is this the new normal?

How long will the current real estate bubble last?
Buy now and risk overpaying?
Or, wait it out?  Wait for how long?
And if we do wait now, do we not risk that the market will be even worse later?

As John Templeton famously observed, "The four most dangerous words in investing are, This time it's different."  And if we recognize that, we must assume that the bubble will burst...eventually.  Right?  But these things can go on longer than we anticipate.  And longer than some people can afford to wait.

We all know some of the causes, like record low interest rates and easier lending standards.  A record stock market.  Lots of cash sloshing around and an influx of foreign capital.  These are the usual suspects contributing to bubble inducing behaviors.

Less recognized and considered is the influx of millions of illegal immigrants and a government that tolerates and even encourages this.  This is not meant to be a political point.  But no matter what you think about immigration, nationwide our resident immigrants do use a portion of our housing stock.

But there are a few other factors that make me revisit the dangerous question:  Is it different this time?

Note, these are factors for my market, the greater Research Triangle Park area of North Carolina.  I cannot speculate as to what is going on anywhere else.  But here they are:

  • Under-built housing stock.  This will take many years to correct.  And that is assuming that there is the political will to correct it, which I do not see.

  • People fleeing high tax and high expense states and metro areas, looking for affordability, more responsible government, and quality of life.

  • The extended lockdowns finally demonstrated that offices are no longer really necessary.  Meaning that people do not have to live within commuting distance of an office.

These are not mere bubble factors.  These are long term and perhaps permanent changes in the real estate sector.  They will certainly affect the real estate market for a generation.

Will the bubble burst?  Well, it always has in the past.
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Friday, April 2, 2021

Brokers and Time and Supply and Demand

Do brokers understand supply and demand?

So today we have extremely low inventory resulting in multiple offers for most residential properties.

And what do the brokers do?  They leave the homes on the market for just a few days.  The median days on market (DOM) count for my area is three days.  But you would be surprised how many houses go under contract in zero days.  That's right, the house is on the market, not for days, but for mere hours.

Why?  And, how?

Demand takes time.  That is, for all potential buyers to see a property, it takes time.  And if a seller wants the highest and best offer, you've got to give buyers an opportunity to see what they are buying.

But here's the thing.  While the seller may very well want the highest and best offer, the broker not so much.  It is not that the broker does not want it, it is rather that the broker does not care.  To the seller, a $10,000 higher offer is a vacation to Hawaii.  To the broker, it's three hundred bucks, tops.  Why wait through the weekend?  Just talk the seller into an acceptable offer and get back to your primary job, prospecting (client acquisition).

And worse, if the broker has lined up a buyer himself, where he makes substantially more money, often double, he has a perverse incentive to limit the access of other buyers.  We call this dual agency, and I would argue that it is impossible to get the highest and best offer in these situations.  I know Mr. Seller, we were going to leave the house on the market for the weekend, but I have this buyer with a solid offer, today.  These days, this often happens because the broker refused to cooperate with other brokers and their buyers.  We call this Coming Soon.

The end result is that brokers work less and/or get paid more.  Either way, the brokers intentionally limit demand.  It is not that brokers do not understand supply and demand.  I think they do.  It is that they are using it to their own advantage rather than to the advantage of their client, the seller.

Now, what is a seller to do?  Well brokers behave this way because you allow it.  Don't!  Tell your broker that you will be leaving the house on the market for a week.  Or at least, through the weekend.

As for dual agency, ask about it before you sign the listing contract.  And disallow it.  If your broker argues in favor of it, you are dealing with someone unethical.  Period.

Find yourself another broker.
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Sunday, March 28, 2021

The Foggy Question of Broker Competence

Why incompetence is rampant in our business


When I first got into the business I did not understand.

To my naive eye, the brokers who did well did not seem to know or care much about real estate.  While this is not one hundred percent true, I noticed that the more successful a broker, the less competent they tended to be.  How could this be possible?  It just did not make any sense to me.

So I spent years observing, trying to figure it out.  And what I discovered led me to the distinction between client acquisition and conveying real property.  Here are the first three paragraphs from The Competent Broker:
Real estate brokers have two primary jobs:  Client Acquisition and Conveying Real Property.  These two jobs involve entirely different skill sets.  In fact I would argue that the type of person who is good at either one of these jobs, that has the skill set to make them good at it, is almost always not the type of person who is good at the other.  Many very successful brokers are quite brilliant at client acquisition, but not terribly competent at conveying real property.

To be successful in the real estate business, it is vital to have, or to generate, a stream of potential clients.  In fact, this is so important that brokers will concentrate their time, effort, and money, on this aspect of the business to the detriment of all others.  What you find is that the people who are most adept at this, do best in the business financially.  And this does not go unnoticed by their colleagues.

As a consequence, transactional competence suffers industry-wide.  Why become a better negotiator when you can make more money prospecting?  In fact, why learn basic accounting, why keep up with contract and paperwork changes, the law, best practices, building techniques, technology, etc.  The whole range of knowledge and experience and expertise that is useful and helpful for serving clients.
I think any discussion of broker competence must address this distinction.  Because when it comes to conveying real property, brokers see little correlation between this competency and success.  You see, conveying property is the expense side of the business; it does not make the broker any money.

There is however a direct correlation between competence at client acquisition and success.  Client acquisition is the revenue side of the business.

So the 20 percent of the brokers doing 80 percent of the business are focused on client acquisition.  This is real reason why incompetence is rampant in our business.

NAR points to other reasons, but I am skeptical.  For example, would more pre-licensing instruction help?  Maybe, maybe not.  But unacceptably low entry requirements are not the real problem.  This is perhaps even an intentional misdirection by NAR in order to justify high commissions.  Raise pre-licensing instruction to one thousand hours, and the same brokers will still seek out Mike Ferry types to coach them on client acquisition.

Plus, there is just no way that NAR can admit that its 250,000 top producing members spend the bulk of their time chasing business and very little of their time actually conducting business.  Stop and think about that.

To really understand this problem, we have to look at the incentives.

Competence is a choice.  In the business of real estate brokerage, this is an absolute.  Brokers have a duty to their clients to be competent.  A duty of competence.  And that competence must be purposefully acquired.  So competence is a character trait and a function of integrity.  If you want to claim integrity, you must first work on your competence.  You must choose to be competent.  It is not that brokers choose to be incompetent.  But they do choose to focus their attention elsewhere.  Competence simply falls by the wayside, unnoticed and unattended.

Making this choice, brokers demonstrate a complete lack of regard and respect for their clients.  I can think of no other business where so many of the so-called professionals hold their customers and clients in such low regard.  Surely this, too, is a question of integrity.

And you know what?  Regardless of what they proclaim, they do not care.  They’re making the bucks and there is precious little penalty for incompetence.

Since most of the revenue flows into these hands, the remaining eighty percent of the brokers scramble around for the crumbs.  Some are competent at conveying real property, some are not.  Competent or not, most don’t make it.

This leads to Gresham’s Law for Real Estate:  The incompetent, low integrity brokers drive out the competent, high integrity brokers.  Those brokers who focus on client acquisition drive out the brokers who focus on conveying real property.  Incompetence rages.

Whenever I write about these issues, I am met with condescension and derision and indignation.  Realtors absolutely love talking about their ethics and their professionalism and yes, their competence.  It is vital for them to maintain the illusion of these qualities.  So sincere discussion is rare.

And I do understand:  They are competent at what is important to them, client acquisition; they follow a Code of Ethics which allows single-agent dual agency; and they memorize scripts to mimic professionalism.  Their whole business model is dishonest.

Since consumers don’t enter the market very often, they can be terrible judges as to the competence of their broker.  As an example, I recently wrote about a neighbor who thought her daughter had a fabulous broker because the broker sold the daughter’s house in four hours.

So what’s the answer?  The only answer I know is to shine a light on the issue.  But that is far from sufficient – Because brokers immediately fill the arena with the fog of deception and misdirection.

The Game of Thrones tag line is:  Winter is coming.

I think that works great for the real estate business as well.  But perhaps we should tweak it just a little:


They can’t get here soon enough.
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Friday, March 26, 2021

Scripts For Superstars

Mike Ferry wants to help me with my scripts

Got an email from the Mike Ferry Organization today:
Do you need to know what to say?  Do you want to learn how to effectively internalize the scripts and dialogues?  Do you want to learn how to set more listing appointments and get the contract signed?


I was reminded of the greatest real estate video of all time:


If you have read my book, you will already know, Number 4 (at the 4:54 minute mark) is my favorite.

Dear readers, before you dismiss these videos based on their sheer truffery and ridiculousness, please know this:  Real estate brokers eat this stuff up.  This is how they spend their time.  They are not experts on conveying real property.  In fact they care very little about it.  Rather, they are experts at client acquisition.  And they cannot even be genuine about that.
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