Barry Owen

My news feed from the Nashville Business Journal yesterday had this title:

Terrazzo To Slash Prices, Auction Condos

Terrazzo is a high end Luxury high-rise condominium building in the heart of Nashville and is one of several which are struggling to find buyers willing to pay their prices.

Below are a few excerpts from the article . . .

"Facing sluggish sales of its 117 luxury units, up to 30 units in The Gulch’s $68 million Terrazzo will be sold at auction next month.

Bill Barkley, president of Crosland’s Tennessee division, which developed Terrazzo, said the event “offers Terrazzo the opportunity to sell a significant number of condominium homes and instantly build the growing community at Terrazzo — all in a single day.”

Since sales began this spring, 13 Terrazzo units have sold.

Minimum offering bids will range between 40 percent and 50 percent of list price . . .

' . . . the event is designed “to offer buyers the opportunity to establish the purchase prices for these selected residencies.”

In a market where there is virtually nothing to hang your hat on with respect to "Basis of Value", your choices are:

to hold'm and wait for a better day . . .

Fold'm . . . Throw in the towel and file for bankruptcy or step aside for foreclosure

or get creative to find the price that'll actually get the job done.

This is not an issue that faces only high end condo buildings in Nashville, TN.

We have several market slices in which ALL of the available inventory of available homes are priced above what the Buyers are even willing to entertain . . .

And all the Sellers are sitting on the market at those prices because to them "It's not fair that I paid $400,000 for this house 3 years ago, and the Buyers keep offering $360,000. Don't they understand?"

Hello Sellers!

It's not the Buyers who are failing to understand, it's YOU!

There's no level of fancy incentives or schmancy staging (although Staging helps) or marketing or secret voodoo that will overcome pricing objections in a market that has no established basis of value.

Several months ago, I called such a market a "Zero Basis" market ... meaning that there have not been enough sales to justify ANY price. The only thing we know in such markets is that the Buyer's opinion of value is significantly lower than the average Seller's opinion.

What's the magic number?

This move by Terrazzo is an effort not only to reduce their inventory and add some liquidity to their coffers but also to find the new value basis for future sales.

My rants months ago were a pleading for Sellers to "Get" this concept.

Terrazzo understands that they've gotta set the bar pretty low (40-50% of current pricing) to generate enough attention to get some real action.

They are already getting some REAL action ... I heard about this auction through my REALTOR network a long time before the story went to print.

Whether it's a true auction or not . . .

a "zero basis market" calls for drastic action . . .something that will cause an "auction effect"

It's the sellers who are ready, willing and able to plunge their prices 25-50% who will provide the "buyers the opportunity to establish the Purchase Price".

The risk is high . . . What if you drop the price 25% and nothing happens?

You will have learned something . . .

You can't create Buyer motivation . . .

You can only FIND MOTIVATED BUYERS!

and they are crafty little fellas who know how to hide in an inventory laden market . . .

The Terrazzo is banking on their strategy to bring the Buyers out of the woodwork and woo them into fessing up to their REAL opinions of value.

Like it or not . . . This is what needs to happen right now to move some of this inventory.

I'm just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!

Did cave man write all the people he knew on the wall of the cave?

Then stone tablets . . .

Papyrus . . .

Paper . . .

Index cards . . .

Computers with spreadsheets . . .

CMS - Conatact Management Software . . .

Now, Social Networking sites - Facebook, Linkedin, Twitter etc

and now it seems to be melding into a hodgepodge of most of the above - excluding the cave wall, stone tablets, and papyrus.

Efficiencies have been changing over time.

"The Why of having a database" hasn't changed in all of this time - To create a "book of business" for your business. The database is where the value of your business lies.

The database appears to be not much more than an amalgamation of names and contact information, but what it really is is a shorthand version of all of the relationships in your personal and professional worlds.

The challenge throughout time for most business people is the organization of all of these people they know.

The truth is, the database and organization and utility thereof is a way of expanding your personal "Span of Influence" . . . Because it offers you a way to systematically communicate with all those folks who contribute or receive VALUE to/from YOU.

Of all of the iterations of the database, I am intrigued by the simplist form . . . Just moving about your personal sphere of influence on a regular basis results in the "touching" of the people of the database.

In large part, Facebook, Linkedin, Twitter check this box for many folks . . . whereas as recently as 12 months ago, the conventional wisdom of communicating by direct snail mail and direct email was the "way".

Now, we are learning from those Generation Y "kids" who are ultra connected to each other because they have electronic devices of every type graphed onto their bodies at all times and live in a world of incessant communication through texting and gaming . . . Electronic interaction.

The exhasperating part of this change for all of us "Old Farts" is that these young Bucks seem to be literally ROCKIN' with their businesses.

How do they keep in touch with everyone without any apparent organization or system?

The answer (I think) is that they are ALWAYS connected . . . Hmmm . . . I'm not sure I buy that as a long term strategy for success because I am still relatively attached to the concept that we need periods of FOCUS to be most effective.

So . . .

My Database is morphing into a different thing than it was just months ago . . .

It has become an assemblage of all of the people I have connections with in Gmail, Plaxo, Facebook, Linkedin, and Twitter . . . I now see "categorization" of all of these folks as being essential . . . so that I can systematize my communication with the folks who are "most important" to my personal and business relationships.

My Inner Circle of @ 275 folks will still get my intentional 33 touch (Managed with Task Lists on Gmail).

My targetted geographic Sphere will get the 12 Direct by Post . . .

Everyone else is in this swirling cacophony of social networks.

Next week, it'll probably all change again :-)

I'm just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!

As we approach the end of the first third of the last third of 2009 officially marked by Halloween, BEWARE!

Many folks begin conjuring up many reasons to take their "eye off the ball" of their business thereby putting it to sleep for a long, winter nap.

This lack of activity is especially easy to justify this year.

After all, it HAS been a very challenging year, and I know everyone is TIRED, TIRED, TIRED.

"Seasonal depression" offers a good solid reason (The best antidote for that is to get out there and stay busy)

Thanksgiving, Christmas, and New Years are all just around the corner, and these all provide myriad distractive opportunities . . .

I call this "REALTOR Holiday" because independent contractors seem to be the WORST at shutting down their businesses in the "off season".

This is lunacy for anyone who intends to make a career out of this business because it stop the train, the momentum . . . and your financial obligations actually INCREASE during these 2 months.

I have children and "get" the real truth that they will be out of school for over 2 weeks in December and January.

I also understand that there will be many parties and details to attend to . . . Carving pumpkins, decorating the house THREE times (Halloween, Thanksgiving, Christmas), Celebrating Thanksgiving and Christmas and all of the travel to visit with friends and family that may ensue during this time.

I ain't no Scrooge . . . I know because I live in the same world that you do.

so . . .

There's ONE thing you are NOT off the hook with . . . LEAD GENERATION!

No matter how busy or distracted you are with the holiday activities, you MUST continue with your goal to have 15 conversations EVERY day (5 days each week) about real estate.

Doesn't matter to me who these people are . . . as long as at the end of the conversation, they are more aware of how YOU can best serve them, their friends, family, and work associates in your business capacity.

The holidays are THE NUMBER ONE opportunity for the year to build your database and initiate communication with every person in it . . . after which, you simply must continue to communicate with these folks in a systematic way throughout 2010.

So . . .

no excuses . . .

While the other bears are sleeping, you'll be raking in the relationships (Because ALL relationships are available to the folks who stay in touch) . . .

and when Spring springs and the others are working feverishly attempting to awaken their businesses and whining and complaining about the mountain of debt they now have after 2-3 months of excessive spending and nominal income, you'll be chugging along completing deals right and left.

Business really IS simpler than most folks make it . . .

Gary Keller put it into a VERY short "list"

Know your BIG WHY!

LEADS, LISTINGS, & LEVERAGE

Lead Generate EVERY day - Set Appointments, get referrals, & Build relationships that lead to business

Build a database.

Feed the database every day

Communicate with the people in that database in a systematic way.

Service all leads that come.

Lead with REVENUE! You'll "win" the financial part by keeping costs low.

and Mo adds:

"BE NICE!"

I'm Just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!

When you make an offer on something - ANYTHING, I understand your desire to KNOW an answer ASAP.

After all, you want it or you would not have gone to the trouble to make the offer.

Instant gratification seems to be an often expected result these days.

So we have this little "instrument" we call the "Time Dead-line", and it goes something like this:

"Here's my offer ... RESPOND to this offer no later than 3:00 tomorrow, OR ELSE!"

My first question is:

What's the "OR ELSE"?

Are you going to send Guido over to break my knees if I don't respond in time?

Will you scream and yell at me and call me bad names and question my professionalism?

Will you rant and rave and tell me I'm not following the rules?

Are you gonna "Tell on" me? (To the Manager - or Mommy)

Here's my take on this,

Time deadlines have their place as what I would call "creating inherent Urgency".

They often do what they are supposed to by adding a measure of urgency that might not otherwise be present.

The down side is that some folks don't RESPOND to tight time deadlines . . .

They REACT!

Do you really want to rush through a negotiation fueled by a series of reactions?

What will you really have at the end other than a bundle of nerves on both sides of the negotiation?

Some folks get REALLY ticked off when the offer they get isn't what they're looking for and to add insult to injury, there's this time deadline gun pointed at them . . .

They come out of the corner FIGHTING!

or they refuse to respond at ALL.

Think carefully before you impose your time-line on other people (unless you really DO have an emergency).

In case you haven't figured this out yet, other folks aren't particularly tethered to YOUR schedule.

I've figured out there's this interesting breed of Buyers out there I call "One hit wonders".

They shoot a LOW offer with a 6 hour deadline for response . . . If they don't get what they want, they RUN!

Hmmm . . . Go ahead and send Guido . . . I think I'm going to take the time I need to respond intelligently.

I'm just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!

There's a Swine flu of sorts hitting "Motivated" Property owners these days.

My suspicion is that this particular strain is as dangerous to the successful completion of a sale as H1N1 is to an immunity deficient child.

When the entire market is over-priced, the ONLY way to win is with price . . . PERIOD!

A bit of research yesterday on Lots available in a section of my market shows @ 150 MONTHS of inventory.

HOLY SHIMOLI!

What's that . . . about 13 YEARS worth of inventory at todays' rate of sales?

So . . . not surprisingly, many of these properties are owned by banks and are listed on the market at "fair Market Value."

When questioned as to how they determined this "Fair Market value", the asset managers have replied that they have "Recent appraisals" that support these prices.

So I go back to my computer to see how this could be.

Ah Yes!

300 properties available - 3 Pendings - 21 closed in the past 12 months . . . The closed ones "support" the value.

This is delusional thinking if I've ever seen it.

Here's what wikipedia says about Delusions of grandeur.

"Megalomania denotes an obsession with having and/or obtaining, grandiosity and extravagance (especially in the form of great fame and popularity, material wealth, social influence or political power, or more than one or even all of the aforesaid). It may be a symptom of manic or paranoid disorders.^{[citation needed]} However it is not considered a distinct mental disorder of itself according to the Diagnostic and Statistical Manual of Mental Disorders.

Delusions of grandeur, commonly seen in psychosis, may be seen as distinct from megalomania: a megalomaniac's overwhelming and excessive preoccupation with his or her own importance, though it may be considered pathological, is not necessarily delusional. A delusion of grandeur, if it is a true delusion, must meet the psychiatric criteria for delusion."

It's a wee stretch, but their motivation to recoup their initial investment is pure denial.

It simply makes no rational sense whatsoever to imagine that in this sea of available properties, theirs will magically rise to the top of the 150 choice heap for Buyers.

Just had the same conversation with a Seller who was very adamant about what he NEEDS for his property,and that he not accept a penny less . . . and what he NEEDS is @ 8% more than the market has demonstrated a willingness to pay.

hmmm . . .

Guess what folks!

(and shame on you banks who don't "get" this - YOU should know better)

If you want it SOLD, you don't get to put on your blinders and/or hermetically seal yourself in your own little hallucinized fantasy world in which you can create your own market just because of what you think you NEED.

You cannot ignore the reality.

You have 2 choices . . . Find the price point that will actually get the attention of the Buyers . . . or hold on to your property and wait for better weather,

A little tough love this morning, eh?

I'm just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!