Funny how music can be so relevant. Right now two tunes are swirling around in my head as Hurricane Earl charges northward. The first is Bob Dylan’s line, “Come in she said, I’ll give ya shelter from the storm.” I, for one, will be thankful for the shelter my home provides as the winds and rain pick up tonight. The second is from Joni Mitchell. “Don’t it always seem to go, that you don’t know what you got til it’s gone.” Because for some, that precious thing called home could be left in shambles in the storm’s wake.

Storms, fires and other natural disasters are often good reminders that our homes are not just a collection of payments, insurances and fees. Nor are they solely investments we shy away from if they can’t beat the S&P 500. Homes are our shelter, our comfort, our warmth, our safety. Sometimes it takes a little wind and rain to give us perspective.

in Las Vegas…and about every other city in this country. Americans are a contrary bunch. We buy when stocks are high and then sell when they are low. History always repeats itself. So now, when prices are at rock bottom, builder incentives are high and interest rates are at an unheard of 4.5% or better, prospective buyers are again sitting on the sidelines. Waiting for that perfect home that just might come on the market next week…for that rate to drop maybe just another 1/4 point…all in the face of ample evidence that now is the right time to buy. It appears that many of these folks still side with Stephen Colbert’s notion that, “The facts may change, but my opinion stays the same!”

So what drives this peculiar trait of ours? It can be summed up in one word: Fear. Fear makes us do all kinds of crazy things. Good and bad. Housing is one of those big ticket items that brings out of a lot fear. Fear of the wrong decision, when the risk is huge. So how do we react when we’re afraid of making a big decision? We lose any sense of urgency. It’s seems safer not to make a decision at all. We keep looking just to make sure the somewhat better deal isn’t just around the corner. We seek ever more information and widen the circle of people who influence us. Our friends, family, co-workers, fellow church-goers. And, if we’re smart, our REALTOR. Now that first group of influencers would seem to be those who we could trust the most. After all, they know and care about us. The problem is, they don’t have any skin in the game. There’s little to no risk for free advice givers. But we tend to listen to those “trusted advisors” who keep telling us to wait. Sure, 4.5% is great, but wouldn’t 4.25% be better? Yea, it’s a great deal, below appraisal with an incredible closing cost package. But there’s that little short sale down the street that really looks like a bargain. And as we’re bombarded by more and more free advice, we move further into indecision.

But there are professionals in the game – builder’s site agents and general brokerage REALTORS. What about their advice? Well, because we’re already afraid, we don’t want to trust them. After all, aren’t they just trying to sell us something so they can make a commission? Perhaps, but from my experience, these are the very people you should be listening to. They study the market, understand the impact of waiting too long for that perfect house and incurring a rate increase that is much more financially impactful than grabbing that deal that saved you a few thousand bucks. They have experience with short sales and can better advise you if waiting months for the bank to respond to your offer makes more sense than the great deal you could nail down this weekend.

If we understand our buyer’s fear and understand how our roles as professional consultants might be diminished in that environment of fear, how can we overcome that and help our buyers move to a decision that is the right one for them? Several things hit me. Become teachers and consultants…not salespeople. Dress appropriately to project a professional image. Clothes still make the man…or woman. Use fact, not just persuasion. Rather than tell your customer that rates are great, show them a 30 year history of rates that proves it. Break out that quote from the Federal Reserve where they tipped their hat at where rates are headed. Sure, neither you, nor I nor the Fed knows exactly when, but we all know the direction is up. Sit down and pencil out the impact of a 1% increase in rates compared to a $10,000 decrease in the sales price if you thought you could get it just by waiting a bit longer.

There’s no easy fix to any of this outside of an improving economy, jobs and a return of consumer confidence. But between now and then, many people will still need a home. Do you understand why your prospective buyers are afraid? Or do you just go home at night and blog about how dumb they are that they can’t see the great deal right in front of them?

Thanks to the small handful of you “faithful” who read my somewhat random blog posts. If you’ve noticed (and I’m hoping you have!), I haven’t posted much lately. I’m not sure if it’s just a serious case of writer’s block, or just my resisting the temptation to write a snarky comment about every nuance of the human existence. And sometimes when I try to be topical about the machinations of the new homes industry, I feel like I’m just plowing old ground. And it makes me wonder if I’m really capable of outputting something that’s worthy of your time-starved attention.

So I watch with a certain envy for my daily email from Seth Godin. Somehow he manages to “ship” his blog every day. Admittedly, he’s a more interesting guy than I am, so I don’t consider this any sort of competitive challenge. But his admonition to ship ahead of delaying for perfection has started to resonate with me. I can’t promise this has inspired me to jump into the daily blogosphere. But I had long ago set a goal of trying to blog at least weekly. I’m going to get back to that. So if you have something you’d like me to talk about, how about letting me know? Sometimes that’s all it takes to get the wheels turning and the fingers pounding. And I’ll try to make it make it worth your time.

I did a couple of quick internet searches the other day. The least expensive pair of new shoes I could find ran about $7.99 (and I’m sure I could have done much better!). And a Google search on cheap new cars uncovered a brand new Hyundai Accent for $10,690. So why was I in search of these things? Well, I wanted to get a sense of just how many people I ran into that were wearing the least expensive shoes or driving the cheapest new car on the road. Either will get you where you are going – either by foot or by motorized vehicle. But everywhere I turned, I saw almost everything but the very least expensive in shoes and cars. And I started to wonder…

Let’s start with a quick self-evaluation. Are you wearing flip-flops today, or perhaps a nice pair of Nine West pumps? Are you driving a Hyundai, or perhaps tooling around in an Acura or Mercedes? Think back about the choices you made when you plunked down your hard earned dollars. I’m guessing you were really thinking about things like durability, lifespan, repair costs and perhaps even social status. As we often heard from our parents, “you only pay for quality once.”

So why has housing seemingly spiraled into nothing more than a quest to secure the cheapest home on the market? These days, it seems it’s all about price. Don’t get me wrong, I understand the function of price as one of the components of value. But it seems to me that we have lost sight of the real meaning behind the word value. It’s probably tempting to believe that we serve our customers best by using price as the most compelling search parameter and demonstrating our expertise by then trying to drive the seller into an even lower price point. We can then rant and rail against those sellers who have the arrogance to suggest there may be more to their home than just the cheapest price.

…but as I said, I wonder. Wonder if we don’t need to step back and help our customers approach their home search with the same criteria we would use ourselves. Without dismissing the importance of price, I’d hope the real value in a home lies in areas both tangible and intangible. Are the materials, systems and components being used by the builder capable of rendering a more comfortable, durable and less-expensive-to-operate home than perhaps that short sale down the street? Is there a chance that the investment the developer made in creative land planning and stunning architecture will result in stronger appreciation than a more poorly-executed competitor, once the market returns to normal?  Can more costly, lower-maintenance materials pay dividends beyond the paltry few dollars of mortgage expense in these times of sub 5% fixed rate financing? Is the enjoyment of walking trails or active amenities worth a few dollars more than the cheaper home that offered neither?

Certainly investing in these things costs more, and results in a higher price. But few people these days are purchasing with the notion of flipping their house in the next year or two. We’re probably back to the days of staying in a home 5-7 years. So my plea is a simple one. Treat your customers as you would treat yourself. Look beyond pure price to things like life-cycle costs, maintenance repercussions, and the impact on design and even ownership styles (read: condominium) on long-term value sustainability. You’d do it for yourself, wouldn’t you?

Builders have always had that reputation…you know…I probably don’t have to explain. But time after time, we see evidence of their humanity.

The other side of that “cigar-smoking, Cadillac-driving profiteers” as I once heard us described. I mean, come on, who doesn’t tear up at Extreme Home Makeover? Who hasn’t put a few hours behind a paintbrush at a Habitat for Humanity home?  Deep down, I think most people probably don’t think quite so badly about builders. But it’s still fun party talk.

But somewhere deep down, there’s a special connection to “home”. While housing has occasionally become the investment du jour, more times than not when we’re thinking of plopping down our hard-earned dollars for a piece of the real estate pie, it’s with thoughts of Thanksgiving dinners crammed around a too-small table or the look of a child’s face as they come downstairs on Christmas morning, and not the ROI we anticipate on the flip. Housing does that to us. It touches us in a very deep and personal way, all the way down to where our fond memories lie.

The word “home” certainly means something different to everyone. But there’s a special home that I think deserves some recognition. It’s the St. Mary’s Home for Disabled Children in Norfolk, VA. The work they do there is probably not work you or I could do. And they do it with such a deep level of caring and compassion that you can’t help but be moved when you witness it. That’s what happened to Scott Crumley of the Crumley Group. After laboring for many years as one of the region’s top custom builders, one who rarely sought the limelight or public eye, Scott decided it was time to do something different. He was moved by seeing the great work done at St. Mary’s and he wanted to help. So he did something he hadn’t done before – he dove in and committed to HOMEARAMA 2010 at East Beach. And then he went a step further – he committed to building the Charity House, with proceeds to benefit St. Mary’s Home for Disabled Children. And I’ve never seen him more excited about a building project!

I know Scott well enough to know that not only will this be one of the premier craftsman homes in the show, but it will be a home built with love and commitment. Because he knows what’s at the end of the line. Not just a very happy future homeowner, but some more lives enhanced, and changed, at St. Mary’s. I’m hoping you’ll take just a minute to go to the St. Mary’s website to get a feel for the good work they do there. Then I hope you’ll ask yourself, “How can I help?”. Well, I have an idea for you. Help us spread the word. If you are on Facebook, search for Crumley Group’s 2010 Charity House at East Beach. Become a Fan. And spread the word to everyone you know to do the same. I’d like to see us hit our goal of 1,000 Fans by the time the show opens.

There’s an old adage in this business that rings truer today than ever: nothing happens until something gets sold. My meager contribution to this worthy endeavor is to see if I can expose enough people to Scott’s creation that a buyer will come forth. Not only will they get their dream home in one of our area’s most impressive neighborhoods, but they’ll go to sleep at night knowing they’ve helped beyond measure. The kind of night’s sleep we should all get to experience now and then. So come on, lend a hand – with that mouse sitting there to your right – and spread the word. Thanks!

This topic holds a lot of fascination for me, as I see it play out every day. Where I live in Virginia Beach there have been three tragic deaths in the last year from people coming out of bars at 2:00 a.m. and crossing Shore Drive, where they met their demise.  As I said, tragic. But I’m guessing alcohol was involved and I know these folks weren’t crossing at a marked cross-walk or traffic signal. An unfortunate game of human dodgeball and we all know who wins that. So how did the City respond to the outcry for “Shore Drive Safety!”. Well, of course, by punishing the 50,000 drivers who travels this road daily by lowering the speed limit from 45 mph to 35 mph. Was it a popular move for grieving families and all who are concerned about safety? Sure. Was it the right move where even a modicum of investigation would have failed to show a link between the 45 mph speed limit and drunk people being killed at 2:00 when trying to cross in the wrong spot? I think not. But more times than not, this is what we have come to expect of our elected officials.

But I’m not here on a political rant. This is, after all, a blog about housing and things related. So what’s the connection? Too often I see this very concept played out in my industry. On a micro level, we are all trying to find the key to generating traffic and attracting more qualified buyers to our sites. Too often what is popular is to beg the builder for another ad, a bigger ad or some other “creative” play that has little real connection to solving the challenges we face. But let’s face it, it’s easier to scream to the builder, “We need traffic – run an ad!” than to do the hard work of digging deep to understand our buyers, what problems they were solving that led them to our sites and what methods they used to get them there. It requires research, analysis and, yes, a lot of gut. But I’ve rarely seen a problem in the last four years of this difficult downturn that could be solved by just running the right ad.

Difficult challenges require people, and thinking, up to that challenge. A lot of doing what’s right, and not what’s popular. The examples are countless. But Linchpins are up to the task. Are you one?

I guess after awhile, you get used to it. Or maybe that’s just what they’re hoping for.

Just as nearly everyone was sensing a leveling off of the housing market decline…dare I even say…perhaps enjoying a modest recovery, the government steps in with their, “We giveth (tax credit) and we taketh away (read on!).” Their favorite whipping boy again? Condominium. Somehow the root of all evil.

On May 17th, the Veteran’s Administration issued a circular – not widely distributed, as we just found out about it on June 2nd and the majority of lenders and REALTORS haven’t heard about it even today – stating that effective immediately no more VA condominium loans could be closed until the builder had submitted for separate VA Condominium Project Approval. Just this past December, they reaffirmed their long-standing position of accepting with reciprocity HUD’s Condominium Project approval. But then a short four and a half months later, apparently with great introspection, the VA now claims, “We’ll still accept your HUD Condominium Project approval, but only if you don’t plan to add any units to the condominium by Amendment after December 29, 2009 (read: additional phases).” Really? Sorry, but that’s how condominium works. You record an initial phase and then as you create sales you expand the condominium with Phase Amendments until you hit build-out. So with only a handful of exceptions state-wide, this new ruling affects all condominium developers/builders.

And with no notice, no phase-in period. Oh, and did I mention…VA admits they only have one person for the Commonwealth who does the cumbersome job of reading through about 300 pages of documentation that represent such a submission.

I don’t know about you, but I have nineteen VA loans set to close in the coming 40 days. The majority are veterans who are expecting their $8,000 tax credit check if they close by June 30th. Not to mention that they are also looking for a place to live. With utilities set up. Movers scheduled and hopes and dreams high. So assuming we shut down our company for any other function (like, say, building these nineteen homes) than focusing on getting these packages put together and FedEx’d to Roanoke (which will take about 5 days of solid work), perhaps we can save about 1/2 of these closings. I would think my four community submissions alone would tie up this poor lone wolf at VA for the balance of the month (the VA has promised us “expedited review”, but normal HUD turnaround on Condo Project approval is 90 days). But I’m guessing I’m not the only builder in the Commonwealth who is doing condominium.

Do you want to be the one to tell your very excited buyer (and many are first time buyers) that, oh yea, the VA determined you shouldn’t get your home after all as they decided to change their rules with no notice only 45 days before the deadline for closing these homes. I’m hoping the VA can add some staffing at their phone center to make those calls for us. But I’m not holding my breath. I’m afraid this is going to get ugly.

And now the “rest of the story”. I had previously talked about my frustrating experience in recently purchasing a big-ticket item: my new car. But here’s the coup-de-grace: at the end of the process, the “hospitality” girl reminds me that I’ll be surveyed soon by Kia and that anything less than a perfect “10″ on any question represents failure for them. In fact, she told me that anything less than a “10″ actually costs them money. The dealership takes money back from their commission.

Now…what am I supposed to do with that information? I liked my saleperson just fine. So now I’m going to take money out of his pocket as I rant about the dealership’s bad processes (including survey baiting)? Probably not. So they’ll get their “10′s” and think they are genuinely pleasing their customers and will continue on.

I’m not sure I’ve experienced anything this disturbing in the arena of customer satisfaction. Sure, I’ve been told, “We strive for a “10″ and hope you’ll let us know if somehow we failed to meet that goal”. Fair enough. But this survey baiting takes this to a whole new level. And what does it accomplish for the dealership? Virtually nothing as it stymies all constructive feedback. I left that day with my new car and already a clear picture that the dealership really didn’t care all that much about me to begin with. So I’m not sure this final blow was that unexpected either. Just bold beyond reason.

Regardless of what business you may think you’re in, you’re in the customer satisfaction business. At least if you want to remain in that business. A small piece of advice. Solicit honest feedback. Listen. Improve where you need to. And pay attention to how your customers want to consume your product. There’s gold there.  But only rusted metal in the process I experienced.

There is a difference in how people buy an expensive product versus how they buy an inexpensive product. And the difference is risk. Buy a $20.00 Veg-o-matic and it doesn’t live up to the hype…you toss it and move on. But when there is huge risk involved (such as the risk that surrounds an expensive purchase like a car or home), you tend to slow things down. Evaluate the risk of the wrong decision. Seek more counsel from parents, friends and co-workers. You engage in the pursuit of the “perfect decision”, or at least as close as you can come to it. And therefore the processes we use to sell big-ticket items have to be, by their nature, different processes than the ones we would use to sell small-ticket, virtually risk-free items. One of those things we have to do differently is to set expectations for the customer as the how the process will move forward, since it’s a more complicated purchase than, say, buying a pizza. Customers hate surprises and by eliminating them, we gain a lot of credibility and respect that might just turn into a sale.

I experienced much of this last Saturday as I threw in the towel and went out to buy a new car. Now, having done this before, I had a pretty good idea of the less than pleasant experience I might have. To his credit, the salesman I worked with did a pretty good job. While I didn’t particularly need a test drive (don’t all new cars drive wonderfully on your 5 mile test drive), the salesman was smart enough to get me into the car, point out some benefits and let me soak in that new car smell. But after I agreed that this particular vehicle would suit my very basic needs for transportation, the game was on. And maybe because I had bought a car before, the salesman didn’t figure he needed to tell me what to expect over the next two-and-a-half++ hours. But I would have liked to have known as maybe I could have saved us both some time and grief.

First came the expected back and forth and the inevitable, “My manager would like to move this car today, but can only come to this number. Can you get there with us?” dance. Expected. And, yes, we got there. Frankly, I don’t like to haggle and especially in this process. So I probably was an “easy sale” in the scheme of things. But it’s what came next, with my impatient nine-year old running out of battery life on the sixteen game apps he had just downloaded to my smart phone, that would have been nice to have known about. To have had the proper expectation set of the “remainder” of the sales process and the time involved.

First came the hospitality girl with the up-sell on the undercoating, paint sealant, acid rain protection and some other malarky. Sorry, not interested. I know it’s her job, but I had already told the salesperson I was looking for basic transportation with no bells and whistles. My time wasted. My agenda ignored. And more waiting. More paperwork (all manual – didn’t these folks hear about computers?). Then, as I really thought I was getting to the end and just had to sign the financing paperwork and would be off to feed my now fed-up child, came the next sales pitch. Added car protection. Life insurance. Gap protection. No, no, no. Just let me get my new car and get out of here. And I finally did…at 8:00 p.m. in a process that had started closer to 4:00 p.m. Exhausting. Unnecessary at least in my view. And probably not my salesman’s fault. He was nice enough and apologized frequently. It wasn’t in his control. But I think it was just a bad process designed to milk the most out of the customer as possible.

Was my expectation met? Probably so – in an unfortunate sense. But was it an experience that thrilled me? Turned me into a Raving Fan? Not so much.

If you’re reading this, you’re likely in the real estate business. See any lessons here?

We’ve long known that information is now ubiquitous. It’s out there in large quantities, always just a few clicks away and, best of all, free. Selling information is no longer such a good way to make a living. It’s dime a dozen stuff. But taking that information and mixing in a healthy dose of expertise…I believe people will still beat a path to your door.

After a seminar the other day, I spoke with a long-time friend of mine, David. An expert in matters of real estate and someone in whose opinion I place stock. I put the question to him: “When you think about the great experiences you’ve had in selling new construction…what made the difference?”

His answer was pretty simple. The site agent had a high level of expertise in the product, and the processes, surrounding the new home purchase. There were little to no surprises.The myriad decisions to be made were organized and not run like a fire drill. Communications were proactive and predictable. And when something went south, as it almost always will in this business, the information was delivered truthfully and in a timely manner.

If you take our rambling ten-minute conversation and distill it down, it came to this: he already understood how new construction worked (he had knowledge), but his expectation was that the new home agent still knew more about his/her product and processes then he did and could skillful apply that knowledge (expertise) to make it a wonderful experience for his buyer.

Seems simple enough. Yet in this brief dialogue lay so much insight into those characteristics and traits that separate the new home superstars from the also ran. Having a headful of information simply isn’t enough. You have to overlay that with a healthy dose of “expertise”, which is an entirely different skill set. So…are you peddling information or expertise on your site??