Real Estate Ideas That No Longer Make Sense
Realtor Magazine recently published a very interesting article regarding methods and ideas that have become outdated. The article is at once targeted to the real estate professional and the non-professional. The magazine questioned leading people in the industry to determine which assumptions and dogmas should be reconsidered, omitted, or changed entirely.
1. Many people both in and out of the industry are under the mistaken impression that with the explosion of information available on the internet, people would be more likely to try to sell their homes on their own. But this is categorically not the case. Apparently, even with all of this information readily available, the overwhelming majority of sellers and buyers still think that hiring a skilled professional will pay off for them in the end and avoid costly mistakes. If we examine the news reports about the rise in the rate of “for sale by owner” (FSBOs), those reports are inevitably published by companies that have a personal stake in a rise in FSBOs and are designed to mislead. These reports come from websites with names like FSBOhomes.com, owners.com, etc. According to Lawrence Yun, chief economist for the National Association of Realtors, “Despite the prevalence of online viewing, FSBOs are at historic lows.”
2. Another widely held misconception is that new windows make a home very energy efficient. But, in reality, it is only a very minor part of energy efficiency. In fact, the Federal Trade Commission has filed more than a dozen charges against window manufacturers to ensure their marketing is truthful. While some of the manufacturers claim the purchaser will receive a 50% return on investment, the facts are that that return is more likely to be around 3%. The best way to cut energy bills is better insulation and a smart thermostat.
3. There is also a fallacy that members of a given generation (the boomers, millennials, etc.) are the same or very similar. This is false. While it is convenient to stereotype generations, it is also an example of lazy thinking. For example, there are countless millions of baby boomers who are not intimidated by technology. And not all members of generation X are stuck in homes they purchased during the boom. The best way to serve clients is to treat them as individuals.
4. Many real estate professionals think that during busy periods there is no need to spend money on marketing. This common assumption is an example of flawed reasoning. After all, business won’t always be brisk, and the best time to invest in your business profile is when business is booming. During busy periods, for example, more buyers and sellers are in the market place – but some of them will fail to complete a transaction. So, this is the perfect time to expand your rolodex of people to reach out to when things slow down.
5. Traditional zoning must be rethought. The idea of separating commercial and industrial space into specific, isolated areas are not in line with the way many people want to live and work today. For example, workplaces and factories are no longer the polluters they once were. Mixed use is on the rise, offering the obvious advantage of greater proximity of home, work, and recreation.
6. Another fallacy is that successful malls must rely on big department stores. As some of the major retailers are faltering, mall owners are seeking out grocery stores, restaurants, fitness centers, health clinics bowling alleys, and entertainment venues to replace the once mighty, large retailers as the draw to bring folks in.