• Tips To Avoid Buying Mistakes Radio Show with Brian Mudd

Tips to Avoid Buying Mistakes

This is the Treu Real Estate 911 Podcast with Lisa Treu. Lisa will share up to date real estate information with you that you need to know.

To listen to the show, click here. 

Brian Mudd:       

Welcome to Treu Real Estate 911. It is Brian Mudd along with your local real estate pro, Lisa Treu, and this is the show about local real estate to get you well positioned for all of your considerations, whether you're thinking about buying, selling. If you just have questions about real estate in Palm Beach or Martin County, and as we get going today, if you're not already at treurealestate911.com, well, go there because you're going to find the best local resource for real estate information available to you including the ability to search the MLS in real time just like the real estate pros do. It’s really neat to see, and better information than you can obtain even on sites like Zillow, for example.

Also, if you are thinking about real estate, well, the Treus are always ready to help you. Again, if you're buying, if you're selling, if you have questions, 561-972-8326. 561-972-8326. Treus are ready to help you. Lisa, before we get going today, here we are, hurricane season. Oh, yay. As we hit the stretch of the real estate season, what are you seeing this year coming off this super hot spring you've been telling us about?

Lisa Treu:             

Well, it’s still super hot, and if you have been waiting for any reason to sell your single family home, you need to stop waiting. The buyers are still out there. They are still really looking for a home, looking for a home this summer. We’ve even been able to sell some properties and do some post-occupancies for some of our clients that had dates that they couldn’t move before, so don’t let a condition really stop you from at least calling us and let’s having a conversation about is this the time, when is the right time to make sure that you're getting what you're looking for.

Brian Mudd:       

Well, this much, I know. Taking your advice works out. It’s not just a level of expertise. It’s also a process with the Treu group, and that’s some of what we’re going to talk about on today’s show, the difference when you have the right people in the right places doing the right things, and then also, the proper process to go along with the expertise.

Now, we’ve seen a lot of different things over the years. I've seen a lot of them with you as we began the show during the housing crisis and the changes that had taken place in local real estate over that period of time, but the one thing that’s been consistent, which is success where they were talking about short sales and foreclosures or avoiding foreclosures, if we’re talking about selling luxury properties or affordable properties, all the changes, as you take a look at the changes in real estate, which are pretty constant, how is it that you've gone, over the course of time, being able to adapt to be able to maximize success for the people that you're working with?

Lisa Treu:             

Well, I think it starts with the concept of mastery. Mastery, the definition, is that it’s 10,000 hours put into anything, so whether it’s golf or playing an instrument or your profession, it takes time to have mastery. Even with a degree, you come right out of college … We’re looking for team members right now and many of the applicants are recent college graduates, which is great, and yet when you really add up the number of hours they spend in their specialty, maybe marketing as an example, they're not even close to 10,000 hours.

One of the things at our company is that all the key positions are held by people that have mastered that skill. We run our company just like every other company except real estate and many lenders out there, and that is everybody’s a specialist. There’s somebody who’s making key decisions that has mastered that at a very high level. I control marketing, and people say to me, “Well, who makes the decisions on where you advertise?” I do. Who makes the decisions on Facebook and what’s working today? I do. Why? Because I have the most expertise and I spend hours and hours and hours reading, learning, going to great conferences, spending time.

I've had the honor to be with Gary Vee. He’s brutal, smart, and yet honest, and has given me great advice about our business, which of course, I took back and implemented. The other thing that I think that we do very well is we look backwards but we look forwards. We are looking at trends, trajectory, and I think since I've been on the show, every prediction that we pretty much have said has occurred.

Brian Mudd:       

Without a question.

Lisa Treu:             

It’s because we’re looking at great data, and we’re looking at what that means because that’s, I think, what’s missing many times, is okay, yes, there’s data. There’s a lot of data out there. The question is what does it mean? Unfortunately, a lot of the data is looking backwards, and so you have to also look at the trends of what’s coming forward and what the past and present is going to cause for the future. We do that at a high level. Then, we’re also talking to a lot of people every day, so we hear the changes in the buyers’ feelings. We hear the changes with the appraisers. We’re going to hear how maybe the agents are feeling because we are talking to so many people on a daily basis, and so we feel the tremor of change sooner than maybe somebody who’s maybe higher up the mountain per se. We’re closer to kind of the ground to fee it quicker.

Brian Mudd:       

When you talk about all that coming together, I was envisioning a typical real estate agent that means well, who’s trying to have success, but the difference between your expertise and the mastery process that you've just described and the average person who is simply trying to get a listing and then trying to sell a listing, now the difference there, we’ve depicted this over the course of time, it’s significant, seven to 10% more, for example, in terms of price. You're talking about, in the average property in Palm Beach County, that’s over $30,000 with the difference, a very big deal, and then, also the time spent on market and the difference there as well. I mean, that’s ultimately what you're talking about, right, is it’s not just a matter of, well, can I sell a property or can I help someone find a property. Ultimately, the level of detail within the success in that process is the difference.

Lisa Treu:             

Yes. I mean, to give you an example, I’m always watching what goes into my mouth from a food standpoint, and so I use a lot of food analogies. Imagine that. It’s kind of like the real estate market especially today is like if I gave you a cupcake or I gave you a muffin. If I handed you a muffin and you like sweets, you would be very happy and enjoy that muffin and be grateful for it, right? Well, the muffin represents the typical agent that may … Yes, they're going to probably get it sold. If you have a hot property, they're going to get it to the closing table. What we offer is the cupcake. Now, I, if I have the choice, I’m going to choose the cupcake with all the pretty icing and the little things on top.

Brian Mudd:       

If we’re not counting calories.

Lisa Treu:             

You know what, there’s no calories in these. They're absolutely calorie-free, and so what we do are the extras. The frosting might be selling over asking price. The frosting may be being able to negotiate a post-occupancy. For years, I've been doing 40 … About 40% of our transactions have some sort of post-occupancy, rather it be a week or I've had them as much as four months, and many of those are unpaid for. I have a client right now staying a month for free in their house. Think about that. For free. For years, I would get the question from the team, “Who do you think you are, Lisa Treu?” I would go, yes, because it became so normal that we could negotiate these extra things when it matters. It doesn’t always matter. If you have a vacant house, who cares? For me, if I can have my clients close, get their money, and then put their stuff on the moving truck, as a listing agent, I’m much happier because there’s less risk of something happening last minute that’s going to cause panic.

There’s a lot of things that we do that are extras. Then, I always say who we are is, I think more important than what we do because what we do, yes, is important, but who we are, having the four Treus that can come together and when there’s one challenge with one of our deals, it is not one agent on your side. You have the four of us on your side and we’re going to come up with a solution. Many times, it takes two or three of us to come up with that perfect solution and to bring all of our expertise together, it’s daily that one of us is seeking, “Hey, what do you think about this?” or, “Hey, have you considered that?” or, “Hey, I’m negotiating this deal. What would you do to bridge the gap?”

It just brings new energy to the solution. Everything isn’t about the problem. It’s about the solution. For me, that’s irreplaceable, and it’s one of the reasons why we’re so picky about who we let into our company. I’m not about just throwing a bunch of agents out there and hoping they sell something. It’s not who we are. We want the best of the best of the best because honestly, my clients deserve it. Every single one of them deserve that level, and we care about them as an extension of our family.

Brian Mudd:       

The analogy that comes to mind as you're talking about that, you'll hear about players who leave everything on the field. At the end of a game, there is nothing else they have left to give. You can trust that with people that might have talent, but you can tell the people that might take a play off here or there, or the people who maybe hold a little something back. Having worked with you on three different properties personally, it’s the leaving everything on the field approach. I have no doubt that any time you’d take on a client, be it on the buy or sale side, whatever the potential outcome is, are we getting the absolute best deal possible under the circumstances that were agreed to? Those are the types of conversations that I often think are not taking place in most real estate discussions.

Lisa Treu:             

We wear these bracelets, everybody at the company, and they're not forced. It’s certainly something where when I came up with this word to define kind of our position as a company, I offered it and said, “I’d love for you to wear them as a symbol of your buy-in to this philosophy.” There wasn’t one person that said, “No, I don’t want in.” I made it very safe that if they didn't want or didn't buy it or didn't believe in it, then let’s talk about it. The word is committed. The definition that came to me … It’s actually came to me when I was looking at our corporate story. Why are we in business?

When I looked at this word, I said, all right, what this means to me is there’s nothing we won’t say, nothing we won’t do, and nowhere we won’t go. Then, you have to add, and shouldn’t have to add this, as long as it’s legal and moral to help our clients achieve their goals. As a leader, that’s the same commitment I have for my team members, to help them achieve their goals. Every day, that’s what brings us to be ready to defend our client’s equity or to help that client have whatever their goals are achieved. For us, it’s just that word committed means a lot to us. It is not just showing up when you feel like it. It’s showing up when it’s needed, and honestly, showing up when you don’t feel like it because it’s easy when it’s easy.

Brian Mudd:       

I've seen it out of you firsthand. I will never forget 11:37 on a Saturday night when you were working on a deal for us, you sending over documentation because you had been working on it that late on a Saturday night to try to get success as quickly as possible. I mean, that’s what you're ultimately talking about here, whatever it takes.

Lisa Treu:             

It’s whatever it takes. Every Treu has that commitment and every team member that joins us also needs to have that commitment. One of the things that I look at is if I am that committed for my team members, then they will once again be that committed for our clients. That’s how somebody wins with me. Take care of my client because every one of my clients is everyone’s client’s company. There’s none of this, “Oh, that’s not my job. That’s not my client.” It’s what drove me crazy about real estate. It’s why we decided to open a team based brokerage because I think I know it serves our clients best, period.

Brian Mudd:       

The difference in being able to create your own company and your own culture independent of another agency ultimately, which the overwhelming majority of real estate agents are tied into, they’ll have their license with a particular agency that they have to adhere to ultimately.

Lisa Treu:             

Well, one of the things that people don’t understand, buyers or sellers, is that there are very few opportunities to have somebody represent you as a person in a transaction. We talk about this a lot, and yet it is something that because it’s by default, the agents representing the transaction … We had a deal that we’re doing with another agent, and he said how refreshing to have an agency actually representing their client. This is another agent. Now, not all companies, most companies today won’t allow that because it’s a higher level of service, expectation, legal fiduciary, and I’m thinking I believe everybody deserves that. I believe you deserve to have somebody on your side looking out for you. It’s kind of the difference between the litigator and the law and an arbitrator or a mediator. I just think somebody needs to have the ability to say, “Look. If I were you, this is what I would do.” We learned a long time ago, it doesn’t matter what I would do because it really matters if I were them, what would I advise them to do.

Brian Mudd:       

Well, and there is something that becomes that much more important with that fiduciary responsibility you're talking about within the real estate process. For many people, not everybody, but for many people especially non-investors, there is a huge emotional process that’s plain out during the process of buying or selling or certainly if you're doing both. It’s very easy to be led by emotions. Statistically, over 90% of the time that you make emotional decisions when it pertains to money, you will make a mistake. We talk about the difference in the seven and 10%, for example. If you have asked somebody, “Hey, how hard, how much time do you put in to work to earn $1,000?” Well, to the average person, that’s going to be significant at a certain level.

Lisa Treu:             

Sure.

Brian Mudd:       

One percent in terms of a mistake on real estate, now, you're talking about an excess of $3,000. If you're talking about luxury properties, you can be talking well beyond that, just a 1% mistake. Having somebody that is that engaged, that’s trying to get that last 1%, let alone the other six to nine, that is huge in ways in which the average person when they're emotional and just wanting an outcome might not necessarily appreciate in the process.

Lisa Treu:             

Yes. I mean, one of the things that we are always looking to do, which is first of all, to help the person achieve their goals but also, to help them position it so that they are happy long term. If you can put more money in your pocket or if you can get the deal structured in the right way, then it’s a better deal, right? We will never put ourselves in a position of needing the deal more than being able to say to somebody, “This isn’t the right deal for you.” We have to be okay that we may need to say, “You know what, this isn’t exactly what we thought it was going to be. This is maybe not the right one.”

In the past, we have said that. Our clients appreciate our ability to separate ourselves from the transaction. So many times when we’re negotiating, I’ll hear one of the agents talking on the phone with the other agent. When they get off, I’m like, “That agent needs that deal. They need that car payment.” You actually have an advocate for your client, not them advocating for their client, which is great. To be honest with you, that’s wonderful for us, and yet that other client doesn’t understand that. They think their agent is there representing them, and really, they're looking to get a deal done so that they can make their mortgage or their car payment.

Brian Mudd:       

For the average real estate agent who makes under $40,000 per year, that absolutely is the case. Then, you can see the different version of a somewhat similar thing on the other side, mistake that’s commonly made with luxury agents that tend to be specialists in certain communities. You'll have people that assume, well, I mean this is the go-to for whatever the reason happens to be. Maybe that real estate agent, they might not need that transaction in a timely fashion but then you also see the byproduct of what happens when people just take listings.

 Just taking a listing especially on a luxury property, how many do we have that we talk about in so many shows that are a million plus listings that had been sitting on the market for a year, two years? The average length of time to sell one that’s listed is over a year. The impact of the people looking to sell that point, I mean, nobody wants to have people that are looking at their home in perpetuity, and yet that’s the reality, let alone not getting the desired outcome.

Lisa Treu:             

One of the interesting things that, once again, I think it’s a misconception of our industry is that a brand does not sell a listing, a company doesn’t sell a listing, your agent that you've hired sells a listing. The world we live in, and most people don’t understand this because when you're hired for a company, the company, you're an employee for most parts or many people, in real estate, what’s called independent contractors and so a company cannot say as long as the agent’s legal and moral cannot say you must do anything. You may have one company brand agent that’s excellent, and you may have one that’s not excellent. Same company, right?

Brian Mudd:       

Yeah.

Lisa Treu: 

The company … and I've been with many. One company I was with for 10 years, my first 10 years in real estate, changed brands five times. I've been with a lot of companies and the company does not sell a listing, period. The individual agent that you choose, and many people are making assumptions because they're a brand, certain brand that they must all be luxury agents and successful. Look at things like Zillow. Look at their sales record. Look at what others say about them. Look at independent information because honestly, what an agent says … When we talk to somebody about selling, we validate everything we’re showing them because otherwise, it’s just my opinion of myself. I want people to read what other people say about me. I want them to see demonstrations of my marketing. Here’s my plan. I give you a written plan. This is what I’m going to do to sell your home.

Don’t just assume, because it’s a luxury name, that they’ve got a luxury plan for your home because otherwise, every property would be sold, every luxury home would be sold. It’s just not how this world works. It’s how the real estate world works. It’s really important to know what the agent’s plan is, and don’t buy buzz words like, “Okay, show me what that means,” because you deserve it because you're signing.

Here’s what people don’t understand. They’ll say, “I’ll just cancel it.” You're signing a contract, and many of them are not cancelable. Now, you're in a six to 12-month contract and you're not happy. Do your research on the frontend and say, “Exactly what are you going to do? Show me how you've done that in the past.” Here’s a thing people don’t understand. 87% of first year real estate agents are out of business.

Brian Mudd:       

Wow.

Lisa Treu:             

87%. Now, why do you think that is?

Brian Mudd:       

They definitely do not have the skills and experience to have success.

Lisa Treu:             

Well, and many of them are not told the truth about what real estate is. First of all, they watch reality TV shows and they look so easy and so much fun. I don't know. I don’t really think they make it look fun but whatever. They make it look like it’s easy. We’re all selling $10 million homes or $20 million homes and driving around expensive cars and going to parties all the time, right? Just like my day every single day and yet the reality is it’s a sales job, it’s a consultive job, it’s a customer service job, and if you don’t understand that going into it, and you just go, “Oh, I like houses,” then you're going to have a little bit of a disappointment to realize that, “Oh, I actually don’t have any of the skills I need, and oh, by the way, how many hours am I going to work?”

This is not a hobby because think about it, your clients deserve somebody who’s all in because this is, for many people, one of your larger financial decisions you're going to make in this year period, and so you need somebody who understands how to maximize that opportunity for you.

Brian Mudd:       

The website is treurealestate911.com. If you're not there, go check it out, treurealestate911.com and again, buying, selling questions seven days a week. The Treus, they're ready to help you. Call 561-972-8326. 561-972-8326.