All I want to do is buy a house!

There was a time not long ago when it seemed as simple as a desire to buy a house. Sure you still had to apply for a loan, but that seemed to be a breeze, even it the person didn't have "it" all together, e.g., many lenders "bent" the rules a little here and a lot there -- remember? Well, now with all that has happened with all this mortgage mess, the foreclosures, the "underwater" homes, essential, the bursting of the proverbial housing bubble, this has done a 180 degree turn, and to buy a house nowadays you have to be ready to show the lender "the money," literally.

I have had to explain the procedures time and again to buyers who keep reminding me that this isn't the way they did it just a few years ago. The odd thing about these constant reminders is that people who bought a few years back seem to have grown used to just having the paperwork to sign, and are a bit miffed by the simple suggestion that they need to provide proof of just about everything. "Why do I have to do that?" came back a question from a reluctant buyer not long ago. Well, the rules to buy a house have gone back to the "normal" way it once was. In other words, you have to show the bank all that you say, and then, you have to be able to prove as much, e.g., where is your money for the down payment, why you have so many inquiries on your otherwise perfect (780 fico) credit report, or why your salary checks (stubs) have any discrepancy -- oh, and let's not forget that your w-2's and 1040's have to be "audited" too!

These requirements are nothing new. As a matter of fact many of these same requirements were in place before, albeit relaxed because everyone wanted to make a deal, and the deal-makers (the lenders), wanted the loans to pass certain audits to be able to package them into mortgage-backed securities that someone else (investors) would be buying/investing in. Well, that pool of investors virtually dried up, and now the only game in town is a pseudo-governmental secondary market, and this one is checking all the paperwork, and making sure the "i's" are dotted and the "t's" crossed -- literally.

So, you want to buy a house? The best thing you could do, as a buyer, is to be ready, willing and ABLE. And this means having the money in the bank -- you ought to have at a minimum a 3.5% of the purchase price for the down payment (for FHA program), plus another 3% of the same purchase price for the expected closing costs. Sure you will be able to negotiate many things, and in some cases "Homepath" sales, you might even get your closing costs paid (credited), and some bonuses if you close during some of their promotional periods. But, don't be too surprised if you have to have everything "squeaky clean" in regards to how you provide your details and the paperwork to support it.

Buying a house isn't any more complicated than it once was, it is now more rigidly reviewed, so, be prepared to give as much as the lender wants, wait as long as the lender takes, and work with all that is put on you to do. You want their money to buy; you now have to play by their new rules. The flip side is that you'll get fantastic values and the best interest rates available for mortgages. So, don't fret, just grin and bear it, oh, and put it in perspective – you’ll buy the house you can afford and enjoy for years to come!

Advancing Your Brand Through Diversity

As the U.S. continues to diversify, the real estate industry becomes increasingly fragmented and specialized. However, just like the country where you can have a Native American, Asian American, African-American, Hispanic American, or any other combination of ethnicity followed by "American," any well-run firm would benefit to have a diverse staff to operate well in a diverse community. Diversification is a natural progression and not an option, particularly where it prevails.

Here in San Francisco, California where Anglo (or Euro-Americans?) represent a slight minority, and the rest of the population represent the proverbial melting pot of ethnicity (the diversity that makes this area an exciting microcosm of cultures, languages, traditions and international flavors), companies embracing diversification tend to thrive, while those that don't, with the exception of bigger companies with a history, are either adapting or will disappear under the weight of the economic changes that continue to affect our industry.

For instance, those firms that have adapted typically have teams of one ethnic group or another, e.g., one office in the geographic area popular among Asians have a contingent of agents that not only speak the language but share the culture and are effective at serving that community, thus creating alternative income flows to the firm as a result. They accomplish this by specifically targeting both the public as well as the agents they need to attend to that public. Some companies embracing this mindset in the heyday of the first-time buyer, no money down frenzy established groups deliberately catering to buyers that were targeted by the language or the ethnicity, rightly or not. The idea of diversification isn’t to single out a community for questionable purposes, but rather to cater to the existing needs of the same.

As a former manager in a firm in the San Francisco bay area I witnessed how the company’s culture would spill over to the clients they attracted and served, albeit in a hap-hazardous fashion as opposed to a planned strategy. However, a company must establish a clear objective in undertaking any strategy to reach a specific niche, and what it is prepared to do to make inroads therein.

For starters, a company with such a marketing plan would do well to determine the size, customs, nature and shopping trends of the target group; not unlike the demographic studies done by any major franchise organization prior to undertaking a new location. Alas many real estate companies leave most of these sorts of investigative steps to random samplings, if done at all. A good broker/manager or company leader reviews where business is coming from and goes about creating paradigm shifts either in the recruitment or in the outreach, e.g., marketing, promotions, etc., for such endeavors.

One company where I witnessed this type of insight was a firm that catered to the Latino community in their midst by hiring predominantly Latino agent, in spite of the owner of the company being of Asian decent! Another firm that was located in a predominantly Asian community focused its marketing campaigns in that community by placing strategic billboards in the language of choice and attracting that populace to the firm. Another firm run by a middle-eastern gentleman attracted his client base through television advertising catering to “his” community through targeted ads in the language of choice.

This is a smart approach, albeit, as I pointed out earlier, hap-hazardous. A firm looking to stay viable in a changing economy needs to create an environment where such creative outreach isn’t left to whim or accident or worse, to the imagination of a well meaning agent or group of agents in the office. I recall a major franchise attempting to do something along these lines early on. They went about it in a way that seemed to be right – they even bought a magazine in the target market’s language! However, without a guiding principle, or someone who understood the niche well enough, this quickly went down a predictable path. The company shut down the magazine and all but abandoned their drive to attract the community they targeted.

This diversification isn’t solely about producing marketing pieces in the native language – something that can backfire due to poorly translated concepts if not wording. Rather it is about developing a complete strategy and creating the right venue to accomplishing this – from marketing materials to appropriate dissemination points, e.g., radio, print, fliers, to telecommunications and websites and having the right, trained personnel, including a leader, to complement that effort.

If done properly a company will reap a greater benefit from this type of diversification and keep greater control of a changing market and the niche it is creating or attracting. And it isn’t about leaving any one agent or group of agents to their own devices because this leads to losing control of the very vehicle that is being developed.

Presently there are numerous companies following this trend. However, many of them are doing so through the efforts of an agent or two, who, with some insights have stumbled upon virgin, and potentially lucrative territory. Lets face it, many non-traditional markets lack of information and leadership that is prevalent elsewhere, so it isn’t too difficult to see that one well heeled agent can capture a greater share of a given market. A company could do much more if they created the right approach with the right resources – and it isn’t about investing a great sum of money, after all, look around and see how many banks; title companies, home warranty companies, and other service providers now provide gratis many marketing materials in different languages. What it does require is someone to take the lead to create the right blend of resources, facilities and opportunities to attract the (untapped or under served) group(s) you see, through your investigations, as a viable source of your future business. Oh, and remember to bring on the right people to help you serve them properly – in their language where ever possible.

There are numerous example of how effective this strategy is throughout the country. Some companies have grown to become larger firms just following a simple approach – find a need and fill it, oh, and you don’t have to speak the language, but having the right key people who do is the way to go

Where Have All The Gurus Gone?

There was a time when getting a real estate license was a formal affair where you would go to licensing school, participate in a classroom setting, took a series of exams, studied -- really studied, then prepared for the dreaded state exam, with all the horror stories of how hard it was to pass it!

And yet, looking back at this from where we are today, facing the inordinate challenges brought on by calamitous lending practices of late, and the mounting foreclosures, pondering the question "...is it time to get a 9 to 5 job?" because the business isn't working the way it is supposed to, we put things in a different perspective.

Some even consider doing something more creative like getting a coach, mentor, or guru to beat them over the head with, "do this," "do that," "do it this way," "don't do it that way," "buy this special high intensity training," etc.
I thought Mike F., Floyd W., Roger B., Joe S., or even Tom H. had strategies to make this business simple, fun and easy (or even "exciting"). Well, if that is the case, what happened? Where have all the gurus and their instantaneous success strategies gone? Obviously, it isn't working if...

1. Agents are leaving the business
2. Licensees are resorting to work two jobs just to make ends meet
3. Dreamers keep thinking this is just a phase and the sun will come out
tomorrow (without doing much to change anything)
4. Folks are looking for an economic cushion while they figure out a better way to do this business, and
5. Some are venturing into enterprises such as, multi-level marketing

Where have all the gurus gone? What happened to the promises of "million dollar" production?

Someone out there is making money on the downside -- it is a given. I just finished re-reading a book by Robert G. Hagstrom, Jr. ("The Warren Buffett Way") on, whom else, Warren Buffet, you know, the billionaire investment "Sage of Omaha".

Well, he says that the shrewd investor invests in the down cycle, and avoids economic indicators, forecasters, so-called experts, analysts, and the likes. Hmm, doesn't that sound like he's saying, he avoids the gurus?

So what makes him so successful (and rich, the richest man on the planet by some accounts)? How does he do it? For starters, he isn't selling real estate! Moreover, he's buying. But what exactly does he buy?

In addition to real estate, which he buys indirectly (when he buys majority stakes -- stocks -- of companies, e.g., Washington Post, Coca Cola, Time-Warner, Sees Candies, etc.), he's buying IT -- the company, the people, the brand, the real estate, etc.

Warren Buffett buys what he, himself, through careful and methodical analysis, determines is the appreciable and potential value of under valued, under performing companies (in spite of the analysts advice to the contrary), and he succeeds because of this.

Now if we are to take this as a basis for someone whose advice we might want to follow, what lessons can we extract from this advice? Might we consider Warren Buffett a good guru to follow in our real estate endeavors? Let's see.

· Is he rich? Yes.
· Does he know how to make money? Yes.
· Is he happy? (By his own account), Yes.
· Does he know what he's doing? Yes.

And believe it or not, in spite of his enormous success he admits to making mistakes along the way. Imagine that!

Well-meaning as many of the real estate gurus may appear to be, too many of them are only in it for the money! There's nothing wrong with that. Who of us wouldn't want to have a successful business that thrives on someone buying what we're selling (even if what we're selling is "common sense")? Imagine if you could package (and sell) this:

1. Teaching sales scripts
2. Reminding people to practice drill and rehearse sales strategies
3. Extolling the benefits of knocking on doors daily
4. Detailing how to create a simplistic business plan
5. Showing how others create marketing pieces to copy from
6. Reminding people to specialize in a given market
7. Promoting the work by referral principle
8. Selling sales tapes/CDs., etc.

Sound familiar? How many of us haven't bought that bit of that common sense? I know I have participated in dozens of such nonsensical presentations by well-intentioned presenters who might have sold something at some time but now devote their livelihood to selling Realtors “common sense”.

So what, if anything can we take from this? Simply put, yes, it is important to learn from someone who knows more than we do. However, it isn't necessary to pay $2,000 or more (per event), as a couple of these gurus charge only to get common sense or some pseudo "coaching" designed to get you thinking or working effectively.

If you're smart, and obviously you have to be in order to have gotten your license, or explore the possibilities, then you're also smart enough to know how to find useful information through the many forums available (including this one). Heck, if you're even applying a little common sense, you'll save some money and pick up training materials or books or tapes or whatever from your public library or from the REALTORS resources -- FREE!

I for one am not downplaying the importance of education or training. However, I don't believe that many trainer's good intentions are worth as much as some of them want to charge, and believe me, some of them know how much the top agents make (millions?) and therefore figure, I want a little of that too!

Wherever the gurus are, God Bless them. For the rest of us, let's get practical -- we're all business people, let's make our business work with an effective plan, with a consistent work ethic, with a positive approach, with a good crew, and with the end in mind.

Along the way, if we do want to visit a guru, let's go to the library and check out their book first before making an investment.