7 Real Estate Ideas That Deserve to Die
Conventional wisdom dies hard. Popular perceptions may drive the decisions you make about your real estate career, from how you market your business to what your office should look like. But longstanding beliefs—these days amplified by social media bubbles and spin—can be flat wrong. Through research, crowdsourcing, and interviews with industry experts known for their skeptical eye, we uncovered some of the most questionable dogmas, along with reasons they should be dismissed. Reconsidering these ideas may embolden you to challenge other dubious notions you encounter as you serve clients and manage your career.
1. DIY tendencies will lead to more FSBOs.
Today’s do-it-yourself culture—driven largely by the explosion of information available on the internet—is not causing more people to try to sell their homes on their own, despite fears to the contrary. If you examine the news reports about the supposed rise in FSBO sales, the “evidence” for the trend usually comes from people running websites with names like Owners.com and FSBOhomes.com. In fact, National Association of REALTORS® Chief Economist Lawrence Yun says the reality is quite the opposite. In recent years, the national FSBO rate as a percentage of all sales has held steady at 8 percent: “Despite the prevalence of online viewing, FSBOs are at near historic lows,” Yun says.
2. New windows make a home energy-efficient.
While a boon to curb appeal, new windows are unlikely to be critically important to a home’s efficiency. The Federal Trade Commission has warned or filed charges against more than a dozen window manufacturers to ensure their marketing is truthful. Some companies were promising up to 50 percent return on investment thanks to energy savings; Laura Stukel estimates that number to be closer to 3 percent. “A window is basically a hole, and a hole is never efficient. You can have a slightly better hole, but it will never be a major factor,” says Stukel, green, an agent with LW Reedy Real Estate in Elmhurst, Ill. She tells owners who want to cut energy bills to start with insulation—likely a third of the cost of new windows—or just get a smart thermostat.
Three Irksome Ideas
Here’s what some of our social media followers said about the conventional wisdom they find most irritating.
Calling a client “my buyer” or “my seller”
From Facebook: Kevin L. Batdorf, GRI, broker-owner of Batdorf and Associates Inc. in St. Petersburg, Fla.: “No one owns a customer.”
The “see six homes, revisit three, and choose one” model of buying a home
From Facebook: Michael J. Fischer, managing broker of Homestead Real Estate Consultants LLC in Atlanta: “Too many agents still want to control every aspect of their client’s experience. These days, we’re still a critical part of the transaction, but clients also want to hunt comps, research neighborhoods, and learn about the purchase on their own. It’s up to us to understand the information that’s out there and arm our folks with enough to make a good decision. … Our customers are informed, knowledgeable, and skeptical. A good agent understands how, when, and where to add expertise.”
Seller’s agents and buyer’s agents can’t work together
From Twitter: Sinead DeRoiste (@DreamSeeLive) of Better Homes & Gardens GO Realty in Raleigh, N.C. “Yes, we represent opposite sides, but we are not in opposition. #MutualRespect”
3. Members of generational groups are all the same.
Not all millennials want microapartments. Not all baby boomers fear technology. Not all seniors want to age in place. Not all members of Generation X are stuck in homes they bought during the boom. Researchers group generations together to better understand trends, but agents and brokers serve clients best when they park stereotypes at the door. “We get it: Millennials are everywhere. Connected boomers act and think just like millennials,” says Nobu Hata, NAR’s director of member engagement.
4. There’s no need to spend money on marketing when homes are selling quickly.
During hectic times, it can be easy to overlook the reality that business won’t always be so brisk. Busy markets represent the best moment to invest in your business profile, according to Hata. “Now is the time to spend the money and build a portfolio of work. You need to have the right tools in place to be able to attract business when the market tanks,” he says.
5. Brick-and-mortar real estate offices are a burden.
Brokers surveying thousands of square feet of empty cubes may be tempted to close their physical offices as a cost-saving move. “Moving away completely from brick-and-mortar is a mistake,” says Chris Lim, president of CLIMB Real Estate in San Francisco. “What owners and brokers need to do is really understand agents’ needs.” That’s why CLIMB’s in-house designer is constantly reexamining how salespeople use the company’s varied spaces and testing out new configurations for meetings and collaboration. CLIMB’s main, 2,500-square-foot office serves as a test lab and hub for smaller offices and co-working spaces. An important aspect of the brokerage’s physical presence is ensuring the CLIMB brand is present where consumers gather. The company’s 500-square-foot “condo store” on a bustling street entices shoppers to visit new multifamily buildings all over the Bay Area using virtual and augmented reality. A custom Airstream trailer offers a unique presence at community events and open houses.
6. Traditional zoning is always the answer.
The idea of separating residential, commercial, and industrial space into separate pockets of land no longer fits with the way many people want to live, work, and play today. And some of the reasons behind this type of zoning aren’t applicable anymore (workplaces and factories are no longer the major contributors to pollution they once were, for one). Form-based codes offer one regulatory alternative where a community plan sets the development agenda and where mixed-use is the norm. Learn more at formbasedcodes.org.
7. Successful malls must rely on big department stores.
As longtime mall anchors J.C. Penney, Sears, and Macy’s falter, shopping mall owners are looking to grocery stores, restaurants, fitness centers, and even health care clinics as chief drivers of foot traffic. Experiential entertainment—encompassing everything from improv theaters to bowling alleys to karaoke bars—are also promising tenants for retail centers because they can fill large spaces with activities conducive to in-person engagement, a difficult element to reproduce online.