Are We Outsmarting Ourselves?
Denver Dwellings would like to welcome a guest columnist, Greg Polashock. Greg is a mortgage lender who enjoys answering the challenging call of the consumer. Please welcome Greg by sharing your thoughts in the comments section below.
Sometimes I wonder if we are just incapable of learning “the lesson.” In the real estate industry five years ago we
pretty much collectively acted in a way that shouted, “I want it now, I want it free, I want it my way, and no matter what history teaches, I expect things to turn out the way I want.” As Dr. Phil would say, “So… how’s that workin’ out for ya?”
Many people got a very hard lesson on the exercises of self-indulgence. And, too many people failed to listen to voices of reason and moderation, instead flocking to squawkers who simply said the things people wanted to hear, in spite of a lack of soundness and reason.
It seems the same thing is happening again, only different. Everybody is now gun-shy of risky mortgages (hurray for finally having gotten THAT message), but it seems like many people still are making financial mistakes when it comes to making real estate decisions.
I see the current phenomenon as a meeting of what I’ll call “analysis paralysis” with an attitude of “I know more than the experts.” I’ll analogize it to people deciding to waste a gallon of gas to find the station that will sell it for ten cents a gallon less. (Think about it for a moment if you’re not getting it immediately.)
I expect Yogi Berra would say something like, “we’ve all gotten so smart, we’re now stupid.”
It doesn’t seem to matter who I talk to – realtors, financial planners, builders, bankers, mortgage professionals… the stories I hear and the personal experiences I have seen indicate that the consumer generally seems to think that they know better than the professionals. A sarcastic aside – I am curious to see how well this mentality goes over once it bleeds over into their relationships with doctors and lawyers!
I am at a bit of a loss as to how to help consumers these days… I really am! And it is taking a toll on me. It bothers me to see people hurt themselves financially. They would have been better off listening to good advice early on. It concerns me to see someone walk away from a great transaction after the realtor has negotiated in an exemplary manner only to have the client dicker about the inclusion of the refrigerator, but not see the $60,000 in equity they’re getting because of the realtor having gotten the contract as such a bargain price. It REALLY burns me at the failure of ethics when a client, through actions, basically shouts, “Thanks for that excellent, free advice that nobody else was smart enough to tell me about… I’m gonna take your great advice and now go over to ‘XYZ Mortgage’ so I can save $13 a month on my housing payment.”
While we seem to have learned a lesson over the past year about risky mortgages (and we probably wouldn’t have learned that one if the marketplace had not been absolutely forced by economic necessity to teach it to us); we still haven’t seemed to learn the lesson about prudence and the need to listen to sound professional advice. As I look around these days, the underlying issue I really see is that the lesson to have been learned from five plus years of shady real estate trickery (where everyone from consumer to title company and everyone in between was complicit) is that we must apply ethics and morals in how we interact with others and in how we represent ourselves. I am concerned that that most important lesson has not yet been learned.
From the desk of:
Greg Polashock
Home Mortgage Consultant
Cherry Creek Mortgage
w) 303-887-0672
Greg@GregisFinancingSolutions.com
Gregis Financing Solutions
Comments
9 Responses to “ Are We Outsmarting Ourselves? ”
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This site brought to you by Kristal Kraft, a licensed Colorado Real Estate Broker
Happens all the time. People go to an expert for advice, listen to them and promptly do what they were going to originally do anyway.
People will be people. I find 80% will listen to you if put in the correct framework. However you cannot make it easy for all. People are allowed to make it hard on themselves.
It would be nice to think that with the proliferation of real estate search engines and information sites, a lot of the mistakes that were made even a couple of years ago, will not be made today.
Charles ~ I agree. Guess it’s human nature to look for support in your decision, but when it’s not found you do what you want to do. As a professional who has seen people make mistakes over and over again, it gets hard to sit and watch.
Eric ~ Very true! Sometimes consumers don’t consider all the angles. IF you explain to them the “why” of what can happen, they can benefit from your perspective.
Denver Real Estate Guy ~ History does repeat itself…
Let’s stop and put ourselves in the consumers’ shoes for a moment.
How many trusting real estate consumers put their faith in Realtors, mortgage brokers, appraisers, and title companies only to find themselves in devastated financial condition?
Can we really say; “Oops, our bad. Things are all better now. It’s o.k. to trust us again, really!” and expect them to drop their guard?
Those of us who have always put our clients’ best interest first never let them overpay for a home, allow them to commit to risky loans, “persuade” appraisers that the value was there, or take bonuses/incentives/kick backs.
Acting as true, professional AGENTs, rather than commission driven industry salespeople, our clients haven’t lost their homes, or found themselves “upside down” in their mortgage.
If you want consumers to trust you and value your service, show them how you have protected your past clients. Show them that you didn’t contribute to this crisis.
Wow Shannon, blaming the industry for “devastating financial condition” of consumers is rather a broad stroke. I prefer consumers never drop their guard. I prefer to educate the consumer so they know what they are getting into. A large part of the present problems are arising from consumers who have decided of their own free will to purchase a home without the proper resources. That in itself is a risk.
As we all know there are no guarantees that the real estate market will increase. In fact the very definition of a “market” relates to the ebb and flow of “supply and demand.” Predicting or promising the value of a home will never drop would be a vicious lie. All we can do is review the past, look around and analyze the present and hope for the best.
Kristal, I think you’re adding more intention and content to my post than is actually present.
I was agreeing with Mr. Pollashock’s assertion that “too many people failed to listen to voices of reason and moderation, instead flocking to squawkers who simply said the things people wanted to hear.” The “Voices of Reason” being those of us who “educate consumers” and take our fiduciary responsibility very seriously. “Squawkers” being shady Realtors, appraisers, and mortgage industry players.
I was also attempting to speak to his comment about not knowing how to help consumers now. My suggestion was to demonstrate the “voice of reason” with anecdotal evidence from past client experience.
Instead of blaming victims, the “Voices of Reason” need to show consumers that not everyone was complicit in the “five plus years of shady real estate trickery.”
Gottcha! Your intent wasn’t clear to me. Thanks for explaining…
I thought I would weigh in on some of our guests’ comments. First, thank you all for your input regarding my article on Kristal’s site. Comments and feedback are always welcome.
Shannon, I absolutely agree with your opening comment. I have long prided myself on maintaining a point of view from the perception of the customer. It seems that business in general, while acknowledging that the customer is vital, too often actually acts in a manner contrary to, and not supportive of that core tenet. The thing with our industry is that we have, collectively, commoditized ourselves and the consumer now believes that we, as professionals are no different from each other and, therefore, the only thing that really matters is “price.” Price is important, but what really matters is not the price of the transaction itself, but the value over time to the customer. Too often, they don’t see that, to their detriment. That’s where our individual capability comes in. We have to communicate the real value of what we, as an individual, bring to the customer. Our mission, in part, has to be to prove to the customer that we are NOT just a commodity. The other difference has to do with “company.” I have personally experienced rejection because a partner or client has had a prior negative experience with someone else in the company for which I worked. Customer service is not a corporate issue; it is an individual capability. When a customer closes his or her mind to a capable individual just because of the corporate banner, the client runs the very real risk of causing him/herself great financial and aesthetic harm. Keeping the customer first means effectively conveying the real value that the customer will receive from the service we personally bring. And we should be appropriately compensated for the value we create because the compensation we personally receive pales in comparison to the value the customer receives from doing business with us.
The market today is very different than even from a year ago. The market seems to be propagating “fear” in the consumer and part of our professional obligation is to use the real facts to demonstrate the benefit the client will receive by working with us. We must be vigilant to steer far clear of anything that may not represent the customer’s best interests.
By carrying ourselves in such a manner, we rightfully instill confidence in the client, avoid any action not in their best interests, shine a light on the truth of the situation, which is that our services should not be commoditized, and that, while “price” is important, that view should be subordinate to the greater value that we bring.