How good are you at making decisions?
Some of you have met my sister. For some time, she has wanted a new car. She mulled over her choices, test drove some, negotiated with a little bit of my help and got herself exactly what she wanted.
We're constantly faced with big and small decisions. In real estate, decisions need to be thought through as it involves a lot of money and comes with significant life changes. Whether you're a buyer, seller or investor, the ability to make good decisions is paramount.
As a Realtor, I have the privilege of working with a wide range of people and I get to observe all kinds of decision making styles. Everyone is different and it takes me some time to learn each client's style.
Here are some statements I've heard from clients over the years. Which of these resonate with you?
I like to evaluate all the data. I research, research and research some more.
I know my priorities and I want to stick to them.
I'm the shopper but I need to make the final decision with my husband.
I like to ask my family for input before deciding.
I don't like risk. I like a sure thing.
I'm okay with risk. The bigger the risk, the better the return!
This month, I thought I'd offer you my 5 steps for better decision making in real estate. Folks who skip over some steps usually find themselves caught in a loop and get frustrated in the process. It also means a lot of time and money can get wasted.
1. Clarify your goals and priorities.
If you're making the decision with someone else, make sure your goals are aligned. I recently spent a good chunk of time on a deal (representing the buyers) that never came together. Why? The sellers were a divorcing couple and they couldn't agree on some vital stuff. It's difficult to go where you want to go if someone is actively trying to take you in a different direction. And sometimes we do it to ourselves unknowingly.
Do you care a great deal about the architectural style or does location come first?
Do you absolutely need a yard or will a decent sized patio be enough? How big is big?
Do you want to be near shops and restaurants or want to be in a quiet neighborhood? Those two are harder to mix.
2. Explore your options.
In this phase, the goal isn't so much about the details but it's more to do a brain dump. Brainstorm all the possible options out there. Do this step with your Realtor. If it's about your investments, consult a financial planner. If you're getting a mortgage, pick a loan officer who has a consultative approach. If not offered, ask for scenario planning. It's all part of our service.
3. Narrow down.
Now it's time to narrow down your list using the process of elimination. Think of the pros and cons of each option and cross off the obvious deal breakers first. Focusing on "would be nice to have" items will likely keep your mind muddled. It's okay to be unsure. Sit with it, talk it out until you have enough clarity. When people feel impatient and rush through this step, they're likely to find themselves going back to step 1. If you find yourself going back and forth, be gentle with yourself and give yourself the space to think. It's especially challenging with real estate because unless you buy a brand new cookie-cutter home, the options are difficult to compare against each other. You have to know what you want and what you're not willing to live with. As a Realtor, I take great care because my clients are unique and all have different needs and wants. You'll also want to weigh each choice's risk, consequences and feasibility. When to sell, how to sell can be complicated. This is where the professional should be adding a lot of value for you.
4. Start implementing your decisions.
Good communication within your team is critical at this stage. Your team includes all decision makers and professionals serving you. Sometimes the decision makers change over the course. One family I worked with started with the elderly couple and three adult children as decision makers. As I gained more of their trust over time, each child relegated the tasks more and more to me and by the end, the sole decision makers were just the elderly couple. Another case, I represented a divorced couple and each spouse had an attorney. So I had to communicate with all 4 of them equally.
Are you clarifying your assumptions with all your team members? Are you just assuming everyone is on the same page without confirming? Has anyone changed their minds about something? When was the last time you checked in with your loan officer? How much have the rates gone up since last time you chatted?
5. Assess progress.
Have you reached your goal yet? If not, it's important to keep communicating with your team. If you've worked with me, you might have gotten a "we should set aside some time to chat" email. These chats are often very brief but it gives us an opportunity to sync up and clarify our goals and strategies. What needs to be realigned? Is it a goal or strategy? Taking a bit of time to readjust at this point will save you frustration, time and in real estate, most likely a lot of money.
So what made my sister's car purchase process so breezy? First of all, she took the time to think which exact car she wanted. She consulted our friend who reviews cars professionally. After a few months of looking around, she decided she wanted a very specific shade of blue. That eliminates so many options right off the bat. She also set a reasonable range for her budget. This allowed some flexibility while offering her comfort that she won't get carried away and spend more than she intended. Then she employed some of my negotiation strategies to seal the deal. Next month, I'd love to share my negotiation philosophy and strategy.
As always, please feel free to contact me with any of your questions!