Jay Markanich

I have had clients over the years who bought houses that were well within their financial means. There were others who bought way over their means. Their motivations are not my call.

Similarly, I have had clients buy houses that were in excellent condition. Others bought properties thoroughly trashed and probably expensive to repair. They will sometimes ask me if they should buy a fixer-upper. My answer – it depends! It depends on so many things – their skills, their energy, their time, their finances, their ability to see beyond the mess, their contacts, their, their… But there is a terrific market out there for handy-man specials. I salute those who take them on! Such buys they are not right for most people. And, they can be real hardships for even the most talented.

There are many clients who have stuck with me for many years through many inspections (total masochists apparently). One young lady who has called me many times is a great example of prudence. She started years ago with a small one-bedroom condo. The market made her money. She went from there to a larger two-bedroom condo. The market made her money but she also fixed it up. She moved from that to a townhouse, which, after market improvement and fix ups, she sold for another gain. At that point she married and bought a single-family home. Now they have two children. This young lady has always been well situated and well within her budget. They have steadily improved on this house. Is the current market downturn bothering her? No.

I get questions all the time – Is this house a good investment? I don’t know, but the house has great bones. Is this a nice neighborhood? I have been in here many times and it seems nice to me, but ask a few neighbors. Is the house in good enough shape that you would buy it? I would be comfortable with my mother living her, if that is what you are asking. Is this a good house? That is up to you – does it feel right? Will we like living here? I don’t know, but I hope you are never satisfied with the house and always try to make improvements. Call me when you do!

One thing a real estate agent or home inspector cannot tell you is if the house is a good fit. Those variables are too many to know. But I find that most clients just feel right about a house. They can somehow tell if it fits.

And if the house fits, wear it!

This time of year the furnace becomes a very important appliance. Checked it recently? What kind do you have - gas, oil or electric? Do you have an annual service contract? Do you need one? Replaced or cleaned the filter recently? Can you even get to your furnace?

A gas or oil furnace or boiler needs an annual tune up, particularly if it is older than 5 years. Newer units are more efficient than older ones. The new code requires a more efficient system, so if you are thinking of replacing your system you should understand that. The old code required systems with a minimum of a 10 Seasonal Energy Efficiency Rating (SEER). The new code requires a 13 SEER minimum. A 14 SEER is not much more money than a 13, but about 8% more efficient! I tell my clients to consider that...

Note: IF you are thinking of replacing your unit, consider the entire system, heating and AC. But do your homework. Find out estimated savings or monthly/annual costs. Calculate what you are spending now (based on your fuel costs per gallon or therm or kilowatt) and how much the new system will cost. Then you can calculate your savings. Divide those savings into the cost of a new system to figure out how many months or years it will take to break even. If you intend to stay in your house, the savings become a dividend! If you are selling your house, the new system becomes a feature!

A heat pump may not need an annual service contract, but it should be checked at least every other year. The same energy savings apply to them as to other units. Calculate your benefits of upgrading!

The most important maintenance you can do for your system is your air filter!! It should be replaced or cleaned monthly. There is some debate about whether to use the high-efficiency filters or just the blue ones. You will have to answer that for yourself.

My opinion is this: you can almost read a book through the blue filters. They filter anywhere from 8 - 15%. That means your system will need cleaning more frequently. The high efficiency filters capture more from the air. HVAC professionals do not recommend them because many people are not diligent about cleaning or replacing them monthly. If you use a high-efficiency filter you must be supremely diligent about replacing or washing it monthly...! The cheap filters are just that - cheap. The good ones do cost, some $22 each. That adds up!

I use the washable electro-static filter advertised on the radio (99% filtration). I have three in my house, and installed them when we moved in 10 years ago. They are diligently washed. My HVAC guy says that my units are exceptionally clean. The filters cost $65 each when I bought them and we have used them now for 122 months. That's only $.53/month. They were a great deal!

Don't pile stuff around your furnace (or water heater). You may need to get to them fast and they want to breath. If you can't see it, you will probably be less likely to remember the filter routine.

My recommendation: do some investigation. Do some math. Figure your benefits. The old adage, "If it ain't broke don't fix it," might not apply!

I have posted something similar to this on other home inspection sites. I have been asked to tweak it a bit to apply better to real estate and post it here.

In business development, there are lots of keys, all under the heading of organization and marketing. Here is what we all should market:

1. Yourself - consistent contact with clients - or other agents, brokers, loan officers, home inspectors, etc. - personal contact during the sales process, monthly emails like newsletters, blogs, websites, mailings. The key word is consistent. Personal grooming and how you dress should NOT be underrated. How you speak generally and with clients is certainly NOT to be underrated. If your vocabulary lacks, work on it. If you use the words "like" or "um" or "you know" or "I mean" a lot, alter your phraseology.

2. Your company - as an agent, diversify your services. Make it known to your clients, other agents or brokers everything you do and demonstrate that you do them well. Real estate in general offers a wide array of service possibilities.Your company may have a reputation locally or nationally. Make that a part of your marketing plan.

3. Your abilities - if you aren't learning and growing, you aren't learning and growing, and constantly falling behind those who are. This should be obvious. One of my favorite quotes, hanging in my office, is from Michelangelo, written when he was 87 (he died at 93), "I am still learning." If you aren't familiar with his bio you should be. And HE wanted to grow more. The real estate business is a GREAT way to develop abilities. A general education is important too. Education is useless if not shared. If you don't know how to do something, find someone who is good at it, learn from them, and work at it.

4. Your product and presentation - my opinion is that only about 30% of the real estate business is real estate knowledge. Another 30% would be your ability to communicate, educate and inform your clients during a sales or listing process. If you don't do that well, believe me, the clients and other agents will notice and it will get around their office tomorrow. Another 30% would be the quality and thoroughness of your record keeping - easy to understand yet comprehensive so someone else could step in if you get sick or go away for some reason - this is very, very important not only to the client but to YOU. The last 10% would be people skills, which are hard to teach.

5. Anything else that sets you aside from the pack. My previous post, The Slight Edge Principle, should not be under rated. Tiger Woods has an average score that is less than 2 strokes ahead of #100 on the PGA Tour. Can you name #100? You may not have ever heard of him. ANYTHING slightly different about you can work to your favor and impress.

If you don't think marketing is important, there are 20 mountains in North America higher than Pike's Peak. How many can you name? As to organization, there are as many kinds of organizations as there are people. You need to start one or find one that complements you and who you are. The old adage about a shoe fitting does not really apply in business. Find the shoe you like, or cobble your own, and make sure it fits before you wear it!

A long, long time ago, in a galaxy far, far away, in a marketing class at MBA school, I learned a principle that has stuck with me:

The Slight Edge Principle.

It is simple and a marketing idea that needs to be employed.

This is it: try to make yourself slightly better than the next competitor. It doesn't matter if you are a real estate agent, loan officer, home inspector, whatever. Just slightly better. How do you do that? There are many ways. You offer a product - you. How do you differentiate that product from the pack? Services? Certifications? Continuing education? Experience? Website? Blog? Whatever it is. Is it slightly more or better than the competition? Does it set you apart? Do you market it?

Consider this slight edge: In 2007 the number one golfer, in terms of average score, for the year, for 18 holes, was Tiger Woods. His average score was 69.1. Pretty good! The number 51 golfer for the year, for 18 holes, had an average score of 70.9. His name is Tim Clark. He was only 1.8 strokes, per game, different! Number 100 was Craig Bowden, with an average score of 71.2 - just 1/3rd of 1 stroke more than Mr. Clark!!

How many of you have heard of Tiger Woods? How many have heard of Tim Clark? Or Craig Bowden?

This is NOT to slight Mr. Clark, or anyone - he is only 1.8 strokes, per 18 holes, in the long run, different than Tiger Woods! Yet he is 50 positions away!! Imagine! That is only 1/10th stroke different, in the long run, per hole. Tiger Woods has a slight edge, but look at the final results!

How is Tiger Woods different? Ability? Practice? Attitude? Determination? Self study? Coaching? All of those things? How much more money did Tiger Woods make in 2007 than Tim Clark or Craig Bowden? And from what sources - golf, endorsements, TV commercials, print ads, etc? Yet, he is, in reality, only slightly better than the rest of the pack. He offers a different, more marketable product...

How can you make yourself slightly better than your competition? One more sales call per day is over 350 a year. Ten a week is over 500 per year. How much more business would those calls bring in? One more open house would result in how many more buyers? One more of this per week, or that per month, would result in how much more business? Do you speak another language? Or stage your homes? Or have more resources? Belong to more groups? Do more networking? Use more tools and testers? And how would these small things set your services, your product, apart from the rest of your competition?

I am always trying to do something more or different than my competition. On days that are not completely full of inspections, I am doing something slightly more in terms of marketing, or whatever, to fill them up. And in this somewhat "down" market, I am fairly busy. Really, the fittest survive. Or those slightly fitter...

If you don't think marketing is important, there are 20 mountains in North America higher than Pike's Peak - how many can you name?

Now, if only I could make my blog header slightly better...

This is the final entry for Buyer Red Flags. Of course, the list could probably go on. But these three lists together are short enough that if you wanted to keep an index card in your pocket while walking through the house you could! Most you already have on the tops of your head anyway. You remember what a Red Flag is:

A Red Flag is any visual sign or indication of a defect in structure or property. Certain visual signs may or may not indicate a problem. If observed in multiple numbers, especially in the same approximate locations, many indicators can point to a Red Flag condition. A rule of thumb - the newer the property, the redder the flag!

• Cracks in the slab or foundation larger than 1/8". This greatly depends on the age of the house. An older house with such cracking may not be a problem. On one inspection there was an unfinished basement floor with a 1/4" crack, perfectly straight, which ran wall-to-wall, the length of the basement, about 45 feet! I had never seen such a thing and called an engineer friend. His answer was that it is normal cracking. Normal I thought?! "The basement floor is a slab," he said, "usually without expansion joints. If it needs to crack it will." Well, it did...
• Boxes piled against the foundation wall, especially if only in one area. The courts call that "artfully concealing" a known defect. It has happened to me! Once, a lot of boxes were piled against one concrete block wall, but only to a particular height. When my clients moved in the boxes were gone, to reveal a long, horizontal crack. The sellers said that we had our opportunity to do an inspection and that I should have caught it then. Hmmm... I found many items of minutia but just happened to miss a large foundation crack! We all remembered the boxes. My clients petitioned for, and got reimbursed, the costs of repairing the "artfully concealed" crack.
• Synthetic stucco. Especially the older stuff, without the drainage system used with stucco today. Look especially for stucco that is deteriorating near windows, bubbling or has lifted creases like a crumpled shirt.
• The seller is present and diverts your attention. Once, during an inspection, the seller decided that that particular afternoon was the perfect time to clean an oven. The process took up the entire inspection. It turns out the oven did not work.
• Strange things goings on!! A huge, spongy puddle in the back yard. Incense in one part of the basement. A "sleeping" tenant in one locked bedroom. Once we saw a BIG stump in the back yard with recent, large shavings all around it. In the basement there were V-shaped cracks in the foundation walls at the same point of the house front and rear. The two center rooms above had new carpet. In the attic I finally noticed an entirely new roof structure in the middle third of the house, above the cracks and carpet. Conclusion - said stump was from a tree, which had fallen on the house! The kicker -- the seller was a real estate agent, who showed up with HOA paper work. When I asked her about my diagnosis (NOT rocket science!!) she said, no kidding, she said, "Oh, yeah, I forgot to tell you about that. I was going to let the buyers know..." Oooookay!

My recommendation - make your own list. What things do you commonly see in your area? Rely on your experience - you have a lot of it. You know when things don't feel right or look right. Suggest to your clients that they look for same!