Downsizing Is Not for Everyone! — a guest post by Jack Falvey

From the blog of Walter Boomsma, instructor. See his blog.

Jack is a longtime friend and colleague… one of the things I love about him is the way he shakes cages and challenges traditional thinking. The following piece is his Daily Investor Brief published by St Anselm College on December 14, 2015, challenging some of the traditional thinking often touted by the real estate industry.


Jack-F-Headshot

Jack Falvey

Just because everybody is doing it is no reason to do it! You’re allowed to be who you are and to plan your financial life as you please. “I’ll never have to cut the grass again!” is a poor reason for uprooting your life. Roots are worth a lot.

When the grass is cut by a condo association, you pay to have it done. You can pay to have your grass cut in the house in which you live. Think a little bit about the devil you know versus the one you don’t. Things change, and you may want big changes in your life at any time, but don’t let convention dictate your life.

In doing financial planning, your plan dictates your finances. If you want to fund a downsize move, so be it. Think through your goals and objectives, plusses and minuses, and then see what you can realistically finance. Your finances, of course, limit your plan, but get first things first. What do you want to do and why do you want to do it?

Many people live in the same place for many years and suffer no adverse consequences. Others have wanderlust and enjoy gypsy genes. Following children and/or grandchildren is not a bad strategy.  Think through your reasoning and then test the waters. What looks good in your imagination may not be ideal in practice. Then again, it might be far better than you ever imagined. Your reasons, whatever they may be, are the right reasons. Make sure they are your reasons.

Going home to the home you’ve lived in for forty or fifty years is not a bad place to go. Your investment in a home can also be an investment in a community. First it might be for schools. Next it could be for a religious congregation. Neighbors might become lifelong friends. All of this factors in. Next time you are cutting the grass, think about all this.


Jack Falvey is a widely published freelance business writer, contributing to Barron’s, The Wall Street Journal, and The New Hampshire Union Leader and Sunday News in the areas of sales, sales management, and marketing. He teaches professional sales and sales management at both University of Massachusetts Boston and at his alma mater, Boston College.

Falvey is currently a fellow at the New Hampshire Institute of Politics & Political Library at Saint Anselm College in Manchester, New Hampshire where he offers daily Investor Education Briefs.

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What Worries Real Estate Buyers – – do you know what your clients are worried about?

Written by Walter Boomsma, instructor. See his blog.

According to a recent study by Redfin, buyer’s worries have changed slightly. Of course, that makes sense because we all know the market changes constantly. Last year (2014) buyers were most worried about inventory. This year “prices” are in the number one spot. Actually, the worry seems to be more about prices rising and affordability becoming an issue.

Some will suggest that reflects an improving market with good news for sellers. Others will suggest that buyers are showing a lack of confidence in the general economy.

According to the survey of 3,500 buyers, the top five worries this year are:

  1. Prices (prices are rising or too high)
  2. Competition from other buyers
  3. Inventory (there aren’t enough houses to choose from)
  4. Selling my current home first
  5. Having enough for a downpayment

You might find it interesting to compare that with the top five worries last year. It will not take too much creativity to support your current opinion of the state of the market and the direction it’s taking. But you’ll have to rationalize some things. For example, the fourth worry of buyers last year was that mortgage rates might rise before they could buy–that didn’t make the list this year. Another concern last year that didn’t make the list for 2015 was “fatigue” — referring to buyers finding the process difficult and tiring.

Most know that all generalities are false. In this case, that’s especially true because “worries” are very personal. So while how those 3500 people felt is mildly interesting, real estate licensees should be much more focused on a much smaller number–the number of clients you are working with.

You want to know a lot about your client. Most of those things are basic and concrete. The questions you ask probably include things like, “What is your price range?” and “How many bedrooms?” and “How much land?”

Those are certainly important conversations. But why not ask “What are you worried about?” Some will say, “Nothing,” partly because they are overwhelmed with excitement and haven’t thought about the concerns. It might be tempting to accept that answer. But aren’t there some things a buyer should be worried about?

One of the saddest listings I ever took involved a couple in the middle of a divorce. The short version of their story was they visited Maine and fell in love with our great state. They spent the last few days of their vacation finding a real estate licensee and then a house. It was a very smooth and speedy transaction–their agent handled “everything” while they went home to pack. The realities started showing up after they were settled in their new home. One spouse was forced to return to their home state to find employment that wasn’t available in the vacation area they’d bought. The other found work, but it involved a long commute with resulting childcare and expense issues. Thus began the breakdown of the family. The home they purchased was not an “easy sell” so by the time they realized their mistake, the market was not in their favor.

A little “worrying” during the process might have made a world of difference in the outcome. Personally, I think the licensee who represented them in the purchase should have noticed there were some things they weren’t worried about and raised some of the issues they weren’t seeing.

Of course, licensees also find themselves representing worriers. Folks in the real estate business like to focus on “making it easy” and “getting to closing.” If that’s the case, remember that it’s easier to smooth the road if you locate the bumps and potholes. No matter how you cut it, a discussion of worries with clients (buyer or seller) just makes sense.

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When Should I Take the Associate Broker Course? –the answer might surprise you!

Written by Walter Boomsma, instructor. See his blog.

take_a_walk_150_clr_8169At first, this seems like an easy question. But there are a number of factors contributing to the answer. Let’s review some basic facts.

A sales agent license is non-renewable and is valid for two years. In other words, you must be prepared to apply for and receive your associate broker license upon expiration of your sales agent license. (There are some circumstances which allow for a one year exemption, but they are exceptions. You should plan on becoming licensed as as associate broker at the end of your two year license term.)

An associate broker license includes two important qualifications. First, you must have been licensed as a real estate sales agent for two of the past five years. Second, you must complete the Associate Broker Course. (MRS Title 32, Chapter 114, Section 13199) In other words, you must successfully complete the Associate Broker Course before your sales agent license expires. But you still can’t become an associate broker until you’ve completed two years as a sales agent.

So an “easy” answer is “You should take the Associate Broker Course while you are licensed as a sales agent.” It would also be an accurate answer, but it doesn’t tell the whole story. A good follow up question is “Should I take the Associate Broker Course soon after I get licensed as a sales agent, or wait a while?”

The answer to that question depends on several important factors:

  1. How much practical experience are you gaining as a sales agent? The Associate Broker Course is designed to be more about experience and application than the Sales Agent Course. In fact, the Associate Broker Course is based largely on case studies and scenarios. Until you’ve been involved in an actual transaction, the course simply won’t have full value. In addition, completion of the Associate Broker Course includes a requirement you submit a completed Documented Field Experience Form. This form is completed in partnership with your designated broker or mentor and is designed to insure you’ve had some “hands on” experience.
  2. How available is the Associate Broker Course in your area?  The course is 60 hours long and is not something you can complete at the last minute in a few days. In the Bangor area I tend to teach it twice a year–spring and fall for the Arthur Gary School of Real Estate. That means there are three opportunities to chose from during your two year term as a sales agent. Note, however, that we alternate between weekday and weekend courses. If your schedule limits when (day of the week) you can take the course, that limits your choices.
  3. How certain are you that you are going to remain licensed? There are many different reasons that someone might decide not to pursue a career in real estate. Since taking the Associate Broker Course is an investment, it might make sense to wait until your second year as a sales agent.

There simply is no one answer to the question–you have to consider the factors. I have had students get licensed as a sales agent and come back to take the Associate Broker Course within a few months. Their explanation is “I want as much education as I can get as quickly as I can get it.” How can you argue with that?! (Again, understanding you’ll gain the best education if you’ve had at least some hands on experience.) I’ve also had students procrastinate taking the course for various reasons. Unfortunately that sometimes means I get a frantic email or phone call when they realize they are facing expiration of their licenses next month. It really is easier to plan ahead.

Let’s take a hypothetical student named Suzie who gets licensed on March 15, 2015. Her license is set to expire on March 15, 2017.  Using the “Spring/Fall” schedule I teach, that means Suzie can plan to take the Associate Broker Course in in fall 2015 at the earliest. She’ll have a spring and fall opportunity in 2016. She might have an opportunity to take the course in spring 2017 but will need to have completed it by March 15th.

Remember that the Bangor course I teach with the Arthur Gary School of Real Estate alternates as a weekday or weekend course. The spring course is typically a weekday course and the fall course is a weekend course. If Suzie is working full time and can only take the course on the weekends, she’ll need to take it either in the fall of 2015 or the fall of 2016. There are, of course, other courses available from other providers and instructors. I just happen to like having students return! I wish I’d kept track, because I know there are a number of students who have completed all of their licensing courses with me from sales agent through broker.

If you find this confusing or are uncertain what will work best for you, don’t hesitate to give me a call or email. We can talk through your options and figure out what works best!

–Walter Boomsma

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Study To Understand!

Written by Walter Boomsma, instructor. See his blog.

bored_reading_paper

As we begin another season of licensing courses, it’s a good time to consider our study habits.

“If you study to remember, you will forget. If you study to understand, you will remember!”

Truer words were never spoken—at least for most! This course is intense and for most students will include new concepts, new vocabulary, and require some basic math skills. While there will be some things that require memorization, much of the course is about applied learning and understanding how you will be using information once licensed. Most people underestimate the difficulty level and commitment it will take to succeed, but most people also end up getting through the course and passing. Failure is certainly possible, but it is the exception.

If you’ve been out of school for a while, you’ll want to develop a plan for studying. Most students will affirm, you can’t simply sit in class and expect to pass the course. Some successful techniques students have used:

 

  • Create a daily study plan or routine, regardless of the time between classes. Even if it’s only 15-30 minutes, review at least some portion of your notes every day. Remember that studying isn’t just about going over material. Think about how you will best learn and remember. People “chunk” information differently. Consider how you’ve learned things in the past and plan your learning. I remember one student who created a second notebook and quite literally re-wrote (in long hand) her entire notes after every class. I wouldn’t learn that way, but she surely did!

 

  • Hone your note-taking skills. Remember they are your notes and they should reflect how you best learn and remember. Attempting to take down everything the instructor says verbatim may not be most effective. I’ve seen students draw pictures and diagrams or concept maps. One memorable student needed extra space for her multicolored highlighters and stick on flags. While I never fully understood her system, it did seem to work for her.

 

  • Flash cards can be a great study aid—particularly with vocabulary. As part of your study plan, use index cards to record a word on one side and the definition on the other. You can create them from your notes. You’ll have quite a pile by the end of the course, but you want to flip through them, testing yourself. When you find yourself getting the answer right consistently remove the card from the deck so you are working on the concepts and definitions necessary. (You should probably review all your cards before the final exam!)

 

  • Consider finding a “study buddy.” While a classmate can be ideal, it can be someone who actually doesn’t understand the material. One student gave her young daughter her flashcards and had her ask questions during a long trip they made together while Mom was taking the class.

 

  • Where you study can be important. It might go without saying, you’ll want a place that allows you to concentrate. You should have everything you need and nothing you do not need. Turn off the smart phone. In general, avoid distractions and create a block of “quality” study time. Although I remember one student who was struggling until she decided to spread her flashcards on her kitchen island. Every time she passed the island she’d pick up a random card. You have to discover what works for you and remember that how you study may be more important than what and for how long.

 

  • Avoid studying to the quiz (or test). As the quotation at the beginning of this article suggests, study to learn and understand. When you focus on a quiz or test it can create additional anxiety. Shift your thinking from “I’ve got to pass” to “I want to learn.” Relax! Give yourself breaks and rewards and try to stay positive. If you find yourself getting anxious and confused, take a short break.

 

  • Teach the material you’re trying to learn. It’s generally accepted that a very effective learning technique is to teach the material. You can do this with your study buddy from class or even someone who knows nothing about the topic. He or she may not know if you are correct, but if you can get them to understand it, you probably understand it as well!

 

  • Talk to your instructor if you are having difficulty in general or with a specific aspect of the course. He/she understands there are different learning styles and sometimes a “one on one” conversation can create an “Aha! Now I get it!” that may not be possible in a group setting.

Picasso said, “I am always doing that which I cannot do, in order that I may learn how to do it.” Focus on the doing. Challenge yourself! There may be times when you feel you aren’t getting something, but just keep doing. Don’t think, for example, “I can’t do cap rates!” Do them. You will learn how.

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Getting Ready To Get Ready…

Written by Walter Boomsma, instructor. See his blog.

“Necessity never makes a good bargain.” –attributed to Ben Franklin

Ben was a rather practical fellow and in this case I think he wanted to remind us that necessity can reduce our leverage and make us too impulsive. During the sales agent licensing course, I often describe “pop-tart” agents–usually newly licensed, they sit at the “up desk” waiting for the phone to ring or someone to walk in with at least a remote interest in real estate. They then “pop” out of the chair thrilled with the opportunity to demonstrate their new skills. “Let’s go look at some houses!”

But are they demonstrating their skills and value, really?

I recall some years ago watching this happen. In less time than it takes to tell, a newly licensed agent took a highly motivated buyer on a showing, wrote an offer and got it accepted. You can well imagine her excitement. But she only had twenty-four hours to celebrate her luck and skill before the designated broker found himself negotiating cancellation of the agreement after it turned out the buyer was afflicted with oniomania or CBD (Compulsive Buying Disorder). CBD is characterized by an obsession with shopping and buying and is believed to affect nearly 6% of the population. Fortunately, the seller was sympathetic and understanding.

We can certainly dissect Ms. Poptart’s performance and come up with a number of places where she probably went wrong. It would make for an interesting case study or group discussion and I suspect the answers would include comments about qualifying the buyer, asking for proof of funds, etc. All good points.

But note that those types of answers are actually defensive in nature–geared to avoiding something (such as a failed contract). While preventing problems can be an important part of the role of the agent in a transaction, it’s actually a very narrow focus. A comparison: do we use a GPS to keep from getting lost?

Many agents come to understand this difference after a few transactions. They learn to love calls from buyers or sellers that come way in advance. That’s when they can do their best work for their clients. That best work is to devise a pre-buying or pre-selling action plan. These agents start their client relationship with questions like

  • “Have you bought and sold real estate before?”
  • “What did you like best about the experience/transaction?”
  • “What did you find least enjoyable about the experience?”

These are data-gathering questions that allow the agent to work with the client in a relatively unhurried and relaxed environment and build an approach everyone can work with. One of my personal favorite questions is “Have you considered how you are going to go about this?” More often than not, the client doesn’t understand the question which suggests the answer is “no,” and this points to the need for a plan. You may be good at preventing and solving problems, but you should be even better at planning!

Everyone benefits from good planning. I recall an agent telling me she had shown a potential buyer sixty properties. I’m guessing the buyer had a plan that didn’t really include buying. Clearly the agent did not have a plan–other than to go with the buyer on showings.

There’s a difference between a motivated client and an impulsive client. Impulsive clients can sound very appealing, but they can also be a nightmare to work with… and are often prone to the dreaded “buyer’s (or seller’s) remorse.” Another observation you’ll hear in my classes is “You never want to get a call from a client that starts with ‘You never told me…‘”

Unhappy clients rarely blame themselves for what happened. Since you are the likely target of blame, why not accept the responsibility for what happens by creating a plan? Just remember, it’s not your plan. It’s a shared plan, developed with your client. You may slow down those impulsive clients. You may speed up those unmotivated or fearful clients, but it’s all part of the plan. Necessity never makes a good bargain, but intelligent planning often does.

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Confused About the Core Course?

Written by Walter Boomsma, instructor. See his blog.

door_decision_pc_400_clr_2583-300x218The Maine Real Estate Commission recently introduced a new core course. Well, more accurately, TWO new core courses. This means a lot more options for licensees but it also means a lot more potential confusion.

Let’s start with the basics. Most know that 21 hours of continuing education are required to renew a real estate license and those 21 hours must include a core course.  The confusion often comes about when there is more than one core course being offered. This newest release means that for a few months, there will actually be three core courses available. Which one do you take?

The answer lies in knowing when your license expires and what type of license you will be renewing. If your license expires on or after April 1, 2015:

  • If you are renewing an Associate Broker or Broker License, you’ll need to take the Core Course for Brokers and Associate Brokers – I.”
  • If you are renewing a Designated Broker License, you’ll need to take the “Core Course for Designated Brokers – I.”

It’s really that simple–on or after April 1. Just understand, the course required is based on the license you hold. Designated Brokers must take the Designated Broker Course. If you are a Designated Broker, taking the course for Brokers and Associate Brokers will not satisfy renewal requirements. Likewise, Brokers and Associate Brokers must take the Broker and Associated Broker Course. Taking the course for Designated Brokers will not satisfy renewal requirements.

It may well be that the best approach is to take both courses! You’ll still get three hours of credit for the course that isn’t required. For example, a Designated Broker must take the “Core Course for Designated Brokers – I” and would earn three credit hours.  That Designated Broker could then take the “Core Course for Brokers and Associate Brokers – I” and earn three credit hours for a total of six towards the requirement of 21.

What if your license expires before April 1, 2015? In an attempt to keep it simple, all that happens is you have one more option and this third option is the same for all licenses.

The two courses already mentioned work the same–you would take one of those two courses based on what license you are renewing. All licenses have a third option of taking theWorking With Buyers – What Have We Agreed To? Core Course”

In other words, if your current license expires before April 1, 2015, here’s how you could meet the core course requirement:

If you are an Associate Broker or Broker:

  • Take either the Working With Buyers – What Have We Agreed To? Core Course” or Core Course for Brokers and Associate Brokers – I”

If you are a Designated Broker:

  • Take either  Working With Buyers – What Have We Agreed To? Core Course”  or Core Course for Designated Brokers – I”

On or after April 1, 2015 the “Working with Buyers” course will NOT satisfy the core course renewal requirement.

This really sounds harder than it is, but you do need to be certain you “get it right.”

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Should I Take The Designated Broker Course?

Written by Walter Boomsma, instructor. See his blog.

Many associate brokers somewhat automatically take 21 hours of continuing education and renew their licenses time after time perhaps because they think, “I never intend to be a designated broker.” Of course situations can change quickly and there are probably more than a few DB’s who did not arrive in the position intentionally. But this course is about a lot more than being a designated broker. In the words of one student,

“I learned so much from the instructor and other students… very interesting… it showed me what I didn’t know!”

You’ll learn what you don’t know and gain a whole different perspective about the business of real estate. The course requirements established by the Maine Real Estate Commission changed significantly in 2013 and I am proud to be a significant contributor to the development of the course offered by the Arthur Gary School of Real Estate.

“(I liked) the instructors approach to teaching with examples and (how) he encouraged lots of discussion during class.”

This is truly a course about the practice and the business of real estate–not just law, vocabulary and theory. Upon completion of the course and two years practicing as an associate broker, students become eligible to apply for a broker’s license and are then eligible to fill the role of designated broker. But even if you have no interest in being a designated broker, you’ll want to consider taking this course.  You’ll develop a new understanding of the business as we look at some of the management issues and opportunities that exist in the increasing complex business of real estate. You’ll learn about things like business planning, ethics, and risk reduction–topics only touched on briefly in previous licensing courses.

“Walter is an excellent instructor! Can’t wait to take another class with him!”

Many students have indicated that taking the course will help them build their personal real estate business as they apply sound management and business

You get the keys for people buying houses, how about for your career?

principles. They discover the benefit from exploring some basic training techniques and consider the role of policy in building their business as an individual as well as a company. How about “risk management” strategies? Are there ways to minimize your exposure to complaints and law suits as while practicing brokerage?

If you’ve held a broker’s license for a while, you might also consider re-taking the course as a refresher and see how much things have changed since you were licensed. As a reward for doing so, you’ll receive 18 hours of continuing education credit! (You’ll still need to take the current core course to meet the full CE requirements.)

The course is offered alternatively as a weekend course and weekday course each fall and spring in the Bangor area. Details for the next course are available on the Arthur Gary School of Real Estate website.

Of the three licensing courses one must take, this was by far the most interesting, the most useful and incited the most thought.”

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