Real Estate in Uncertain Financial Times

There’s always something to make us go “hmmmm”.  These days, watching the news makes me hide in my closet.  This is going up, this is going down, debt ceiling is being raised beyond sight, no it’s not, yes it is.  OMG America is running out of food, building supplies, clothes are getting so thin you can see through them because fabric is so expensive (that’s funny, isn’t it?).  Stock market is going up, it’s going down, buy, sell.  Interest rates are going up….are they?  Yesterday this house was active, now it’s pending.  Why did the price go up?  Are they really stabilizing?? I thought I saw some go DOWN in price.  I can’t keep up.

So let’s just assume we are going into uncharted territory yet AGAIN, and put on our thinking caps.  Why?Because there’s not a doggone thing we can do about the financial ‘climate’, but we can absolutely navigate it.  Listen, I have stocks, and I’m not selling.  I’m buying, in fact.  But I do look at analysts’ reports as a guide.  These reports are educated guesses, right?  But there are a couple I trust and they are my true north on the rare occasions my charts don’t guide me exclusively.  Yep, I’m a chart person.  Don’t really need to know what the  stock is; I just look at the chart and go from there.  It works, too.

But REAL ESTATE, I sigh.  Okay there are some charts you can use, a lot of them in fact.  But listen, these days you also HAVE TO HAVE A STRATEGY, a strong one.  It becomes more and  more complicated as the weeks go by, and you MUST have an agent who understands ALL of the moving parts and how they fit together or bump against each other; and your agent HAS TO KNOW how to maximize your financial asset goals in light of these influences.  In other words, better grab some experience, folks; this is serious business.  And you’d better put on the big person (can’t say girl anymore) panties and learn how to handle some risk.  That’s just plain fact.  If you don’t have the stomach for it, then wait it out.  But waiting it out?  The real estate train is going to leave you in dust and diesel fumes, ladies and gentlemen.  You get the point.

So your agent should ask you: “What is your financial strategy?”  Now listen, we are not accountants, but if your goal is to buy a cheap house and flip it, that’s WAY different than finding the most house you can buy so you can stay there until you die.  There was probably a better way to say that, but you get the idea.  Still, and regardless, your agent SHOULD KNOW what you really aim for financially, with respect to this real estate transaction.  And by the way, a good agent can give you some good recommendations for lenders BASED on these goals.  It’s a good hand-off between strategists and guess what?  You need that.  It’s called experience and depth of bench in the career.  Ya gotta have connections.

The thing about uncertainty financially is that we are, I believe, at a critical point in real estate (oh yes, AGAIN).  If you are trying to buy and can’t find your price point house, then I strongly recommend adjusting your ‘requirements’ or your ‘dreams’.  Why?  Because there isn’t time for a stroll through the homes for sale. Remember the dust and diesel fumes?   I think we may soon see some inflationary effects, and that will effect your interest rate, your price point, whether or not you have a screened porch AND a patio and fire pit…you get the idea.  Don’t ever forget that real estate, now more than ever, is in flux.  Don’t nail down ANYTHING.  Keep your options and your mind open.  Every day is the time to review your strategy to make sure it still make sense.  Your agent should be driving that effort, by the way.  And if this makes you feel better about ‘flux’, almost ALL buyers end up with a house that was NOTHING like what they first tell us to search for.  NOTHING.  The best clients actually realize and laugh about that once they find their home.

I have always worked 24/7, and that’s really a good thing for you.  I wake up at 3 am, thinking about your house.  Really, I do.  And IF you have been straight with me about your strategy and your financial goals, then I had BETTER be thinking about your transaction 24/7.  It’s that complicated.  If we viewed real estate transactions BEFORE as a train running on the rails, rumbling along, now, it’s a bullet train and the cars are bumping together as they fly down the tracks.  People are using your due diligence money as THEIR due diligence on the home they want to buy while you buy THEIRS.  So if one falls through…I can’t bear to think about it.  The housing shortage rages on; therefore, so does desperation among would-be buyers.  This doesn’t have to spell disaster; it just means your agent has more and more COMPLICATED work to do.  Remember when I wrote about creative problem solving?  Well it’s not just a good idea anymore.  It is MANDATORY.

And ‘thinking outside the box’ is not the same thing as creative problem solving, folks.  Creative problem solving involves integration of your STRATEGY into the process, and you must have one.  If you talk to an agent who never says ‘strategy’, RUN.  Or, take 10 grand out of your bank and throw it in the fire.  Same result either way.  Agents have to UNDERSTAND the world of transactions well enough to navigate you through the rapids, because that’s how it feels.  And it feels like that because that’s how it IS.

I describe it as being like riding a tricycle up on one wheel.  Now, it’s like riding a tricycle up on one wheel REALLY FAST.  But the moment all three wheels are on the ground at once?  It feels great.

So, in this uncertain economy, choose a wise and nimble agent who understands how to move quickly when things change and will TALK you through the initial pathway (it’ll change many times), be sure that agent knows what she’s talking about, and for goodness sake do these four things: 1) Choose your agent with care and intellect (not emotion); 2) Have a deep conversation about strategy and get that understanding well into your heart and mind; and 3) Put on those big person panties I talked about because you must expect some stress and be able to handle it; and 4) Do NOT ask your agent to reduce her fee for you, because you have NO IDEA of the value you are getting.  None.

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