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I was just thinking...

The Value of Down

By: Mike Farmer
Tuesday, January 22, 2008 9:40 AM

Yes, the market and the economy are down. It’s not the first time and it won’t be the last. The market goes up, the market goes down, and sometimes it goes sideways. There are economists who can explain it in eye-glazing terms, but even a tyro can see the signs in time to say – Hey, something’s changing.

The first tip of a down market is a far off high-pitched sound that you recognize the closer it gets and becomes almost deafening – whining! The second tip is that pundits wake up, put on their out-of-date suits, crawl out from musty caves to predict the end of America – no more apple pie. Then, of course, there is the blaming – the Republicans blame the Democrats, the Democrats blame the Republicans, liberals blame conservatives, conservatives blame liberals, free-marketers blame statists, statists blame free-marketers, the poor blame the rich, the rich blame…well, the rich hunker down with their money and go on world cruises.

Is there any value to down? Bears seem to like down; they have a strategy for it. I’ve never mastered the strategy because I’m afflicted with the terrible disease of optimism and hold out in hope until the carnage has been picked clean. This time, though, I did pick up a nice little deal while peeking at a few wounded prices.

But aside from the economics of it all, I’ve found some value in down. I’ve found lately, although I’m still busy with leads who are waiting for the last breath and no-pulse, that I have time to re-organize. As bad as 2007 was in many areas, I was busy last year and became very un-organized. My files are like a treasure hunt. There is something purifying about organizing, it makes me feel clean and well-dressed.

Down also gives me time to reflect. Am I a good person? Where am I going with my life? Do I spend enough time with my family? Is my haircut out of style? With reflection, I have the opportunity to get centered and re-energized for the next up. I also have time to see my mistakes from the previous year and make adjustments.

I AM NOT going to overspend on advertising this year. I got a call for the chance to be vain for 50% off in a sleek local magazine the other day and I said – NO! It felt liberating. After I hung up, I just sat there relishing the reverberations of – NO!

I also have time to read and catch up on the trends in real estate. I didn’t know so much was going on. I've been surfing RE blogs and it’s amazing all the great information out there. I even learned that buying low and selling high is still a good strategy. I think that one will be around for a long time. I've grown to love the internet, the useless and the useful.

I’m in the process of planning for 2008: cutting expenses to the bone, advertising in low cost ways, creating systems to help organize, strengthening conversion of leads to sales – this year everything that is not making money is going. So, down has its value. It gives time to breath, to plan, the reflect, to get a new hairstyle, and, most importantly, to appreciate (this type is controllable).

 

Mike from Savannah

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Comments

Corie Seymour
Member Since '06

Corie Seymour said:

Mike... Not only could I not have written that lesson, I couldn't have thought it. I can however learn from it.

Thank you for taking the time

January 22, 2008 10:01 AM
Patrick Milligan
Member Since '06

Patrick Milligan said:

Cutting your advertising to the bone is likely the same effort most other agents are taking.  Are you going to be more effective and known by not advertising in the same places others are not advertising?  It's even less effective than being one in a magazine full of real estate ads.  You may want to consider this as an opportunity to show yourself as someone who shines and si being successful.  Don't be afraid to adverise like everyone else, and you'll be the only one the qualified buyers and sellers see. Being the only good ad is far superior than being a good ad among others.

January 22, 2008 10:03 AM
Mike Farmer
Member Since '03

Mike Farmer said:

Thanks Corie and Patrick.

Yes, Patrick, I am looking at effective, low cost advertsing, mainly on the internet. I no longer believe in print advertising. I will probably do some well thought out direct mailing.

I might even, depending on my budget, do another billboard campaign -- it is expensive, but it is has been effective with a simple, catchy message.

I MIGHT even do print, if I can create something different and effective that sticks out.

January 22, 2008 10:23 AM
Sharron and Steve Lobman
Member Since '06

Sharron and Steve Lobman said:

Mike- you need to send some of your blogs to the local newspaper. You really really really should have your own column. You have the wonderful ability to connect with people in an entertaining way. I would compare you to the best--Carl Hiaasen and Leonard Pitt.

I am glad that you finally "learned that buying low and selling high is still a good strategy."

You really are thinking of a billboard campaign? How many billboards does it take to run a campaign?

January 22, 2008 5:26 PM
Mike Farmer
Member Since '03

Mike Farmer said:

Thanks Sharron, I really appreciate your support.

The billboard locations are changed every three months to make it look like you are all over town, but it's just one billboard ad.

January 22, 2008 6:43 PM
Nate Covington
Member Since '07

Nate Covington said:

Mike, you always seem to have insight on the ever changing world of real estate.  I personally spend 75% of my advertising on Internet ads, website and the like. Approximately 75% of my business comes from the Internet, 20% from word of mouth/repeat clients, 4% from signs, and .9% from a monthly magazine, and .1% from the local paper.  Two months ago I dropped the monthly magazine (for a while, protesting because they raised their rates) and received more calls because people had the old magazines and wanted to find out info on the old adds.  So now I think I might advertise every other month in that one.  The local paper netted me one deal last year so I guess it's worth it???  The signs are paid for, I just have to replace the ones that get damaged each year, and change the reader ones from time to time.  The Internet, I think is the best buy for now and in the future.  It is green in more ways than one.  No large tracts of trees cut down to make one deal!  No signs polluting our view on our drive along the highway.  The only problem I have with the Internet is sometimes you get inundated with junk email and foreign offers that are not viable, also sometimes the spam blocker blocks out the wrong thing.  In a nutshell, I guess we got to do what works for us.  So good luck Mike, with the billboards, but maybe you should also work at the local paper as a Writer; they might discount your ads? :)

January 22, 2008 9:17 PM
Gregory Bain
Member Since '03

Gregory Bain said:

Mike, maybe in Savannah people like to pay $3.50 for a cup of Joe at the local Starbucks and whip out their laptop to see the latest real estate postings. But, in my neck of the woods they whine about paying $1.25 at the local convenience store for their coffee. And, they grab a "free" home magazine to thumb through while they suck down the hot beverage.

I'll bet when you travel to some place new you too grab a free magazine and check out the prices of homes in that area. And, if you see something that really jumps out at you, you call the real estate office to see if you can see it - immediately.

Later, when you are back at your home, you start searching on the internet for other homes in that town. You may even continue to look for homes in that area for a year or more. And, then bang - it hits you. You hook up with the third real estate agent who takes you out and sells you the place of your dreams.

When the agent asks you what made you buy the house? You tell him you saw it on the internet. So, you are right! Most of your buyers are coming to you by the internet.

But, I think you may want to be the first agent and not the third. Just a thought.

January 22, 2008 9:39 PM
Kim Haun
Member Since '07

Kim Haun said:

Mike -- Very insightful & very funny!  WHINING is so common right now that I don't think I'm going to be able to keep a straight face tomorrow when I'm confronted with the "woe-is-me" brigade.

Thanks for that blog - definitely worth the time!

January 22, 2008 11:41 PM
Carey Tufts
Support Staff

Carey Tufts said:

I second Sharron's assesment - Mike, if you had a regular column, I'd definitely subscribe.

Effective print real estate advertising is about to be nothing more than a fond memory - like WHAM! and fanny packs and Edgeio.

There is a very large market segment that prefers to look through real estate listings in the paper - it's that physical, tangible interaction with the medium, which I most certainly understand.  

The problem is that advertisers drive the newspaper business and advertisers absolutely, unequivocally do not care about that market segment.  They care about the market segment that includes me (25-40, likes toys, spends beyond his means).  And I would never . . . ever . . . look at "listings" in the real estate section of the paper.

Now, in terms of the free real estate supplements - they'll be around for a little while longer, because they don't rely on non-content-provider-advertisers.  But as their value has diminished rapidly over the past few years, it will continue to do so rather rapidly until it just doesn't make sense to produce them any longer.

It's not an "us versus them" thing - the publishers are acutely aware of this (I talk to them quite regularly), and are working hard to 'port' their offerings to flourish despite the shifting paradigm.  Some are doing it quite well.

There may still be some value to doing print real estate advertising, but in my most humble opinion, if you want to see that value, you'd better hurry . . .

January 23, 2008 12:31 AM
Mike Farmer
Member Since '03

Mike Farmer said:

I search for EVERYTHING online, even phone numbers (goodbye Yellowpages big heavy book).

Gregory, most of the people I see here, and talk to, come to town to search, stay downtown, bring their laptops and search online. If I was in a new town looking for a home, I'd have my laptop in a bag over my shoulder. I don't know about 1st or 3rd, but I want to be the agent seen online with a good website presence and info that can't be put into a magazine.

Thanks everyone for the compliments. Im working on the weekly column thing with an online RE player. I gave this site as a reference, so keep up the kudos. :)

January 23, 2008 7:35 AM
Lindsay Pendleton
Member Since '07

Lindsay Pendleton said:

I am a newbie, so please don't laugh if this question is the 'obvious'. So, it's a bad idea to basically advertise when the market is down? Since the market is down, it basically doesn't make sense to spend money on advertising?

January 23, 2008 3:05 PM
Mike Farmer
Member Since '03

Mike Farmer said:

Lindsay, no, it's just that you want to get the most bang for your buck. When times are good it is easy to throw money around trying this and that. During a tight market when money is tight it pays to be more frugal, smarter.

I think you need to advertise, just find the advertising strategies that give you the best return, i.e., actual business.

January 23, 2008 3:29 PM
Mike Farmer
Member Since '03

Mike Farmer said:

That should be true in up markets and down markets, actually. I am developing the discipline during this down time to keep my marketing focused and result-based, whether the market is up or down.

January 23, 2008 3:31 PM
Gregory Bain
Member Since '03

Gregory Bain said:

O.K, Mike. I see P2A is trying to sell us the spot light advertisement for the internet at $25 per listing. That's 30 days on spotlight for one advertisement. I think you can get a page in the local "free" homes magazine for less $200 in today's market. I think you can get at least 12 homes on a page that would look good and satisfy the client that listed their house with you. That would be 12 homes at $200 for 30 days of "print" advertisement.  My budget is tight. The broker of record will split the cost of "print" advertisement with me 50/50 if I have complied with all the restrictions. He will pay me nothing for my internet advertising. Hmmm. What to do? Do you think those computer geeks at Starbucks will buy a house from me if I post on "spot light", or, do you think my money is better spent on the homes rag?

January 24, 2008 8:15 AM
Mike Farmer
Member Since '03

Mike Farmer said:

I think the computer geeks will more likely buy from the spotlight. They don't know how to operate a magazine.

However, there is still a market for print, so if you think it's effective for you in your market -- go for it.

I'm putting my limited marketing dollars mostly on the internet -- but not just spotlight (that's not the only online comparison to print).

Don't mess with me, Gregory, I'm a busy man.

January 24, 2008 9:30 AM
Mike Farmer
Member Since '03

Mike Farmer said:

Speaking of P2A, it's been very quiet the last couple of months -- I grew to expect release after release of new technology and changes -- now, I only hear crickets.

January 24, 2008 9:36 AM
Gregory Bain
Member Since '03

Gregory Bain said:

I wasn't messing with you, Mike. I was just trying to see if Carey was going to offer me a better advertising rate. Doesn't it seem a little high priced? I mean the "free" home magazine posts the listings on their web site, too. And I'm told they rotate the featured home every time someone hits the site, it's a new featured home. What will they think of next?

January 24, 2008 4:10 PM
Mike Farmer
Member Since '03

Mike Farmer said:

I think you and I ought to get free spotlight ads for all our hard work here at Relib.

January 24, 2008 4:35 PM
Carey Tufts
Member Since '06

Carey Tufts said:

For you Gregory?  Special price: Only twenty-five dollars :-)

My emphasis is on the fact (yep, it's a fact) that the reach and efficacy of print advertising is declining _overall_.  Is it still effective in some markets?  Oh yeah.  

I have zero doubt that in many markets, your advertising dollars are better spent in print than online.  I was only speaking to a general overall trend.  

I don't care who you advertise with.  I want you to spend your advertising budget wherever it will benefit you the most - and only with P2 if that's the most beneficial place - so that you continue to be successful and continue to work with us.

January 25, 2008 1:17 AM
Gregory Bain
Member Since '03

Gregory Bain said:

Carey, that's the message I was hoping you would send. Peace be with you.

January 25, 2008 10:52 AM

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