I Wish I Would Have Spoken Up Sooner, But It’s Never Too Late To Start
By Jay Lieberman
There’s nothing worse than having to watch someone make one of the most important decisions of their lives without a plan, expecting gold to come spilling out the other side.
And then, having to watch them fail.
Toward the beginning of the year 2000, when I was working with a real estate development firm, the shopping centers we owned were always fully occupied. Big box retail stores would climb over each other to expand in our properties. The usual cast of characters – Barnes & Noble, Borders, Dick’s Sporting Goods, Sear’s, JC Penny, Bed Bath & Beyond, Linens N Things, etc.
Growth. Expansion. Superstores. Monster super centers! It was a complete frenzy. And this went on for years.
But things changed. Rapidly. And they didn’t plan for it.
Let me take you back to one particular time many years ago that I will never forget. It was a slow motion type moment when I saw the future of what things would look like for those making multi-million dollar decisions – without a plan.
The year was 2004. We owned a center in Lacey, Washington, about 2 hours south of Seattle. Our largest tenant was Fred Meyer, the Costco of the Pacific Northwest.
One day, they came to me in an effort to expand in our property. They already had 150,000 square feet. About the size of three football fields.
But, they wanted more space. A lot more.
As any reasonably diligent Landlord would do, I asked the following question and was shocked to my core by their answer, “Can I get a copy of your business plan for the expansion?” Without missing a beat, their head of real estate shot back with, “We got this. Don’t worry about it.”
No one seemed to care. A lot of folks at these large retailers were getting big salaries and bonuses based on blind growth. All eyes were fixated solely on increase, profits and stock price.
However, something was glaringly absent … A Plan. An Approach.
It seemed to be a pure case of gluttony run amuck. And, I sat back, silently, knowing it was going to crush them. Why didn’t I speak up? Why didn’t I throw cold water on their face to shock the senses of these people making chaotic and rash decisions without a plan. A budget. Nothing.
I dismissed my concerns with the thought that they must know something I don’t. Well, was I ever wrong.
To be honest, I was excited at the same time. This expansion would increase the value of our property dramatically.
But something inside me was scared to death. Not for us, but for the industry as a whole. A train was coming down the tracks and I was the only one who could hear it.
Fast forward to today and the result…
Sear’s/Kmart/Macy’s/JC Penny…continue to close stores at a record pace.
More than 3,000 locations will be closing this year.
Over a dozen large retailers have filed for bankruptcy just in 2017 so far.
Even Toys ‘R Us. There goes my childhood down the drain.
And that’s just a sampling. Most of the major retail chains are in a state of chaotic retraction.
Check out this image. This is the stock price change for just a smattering of these retailers over the last 12 months. Notice a trend?
This is what it looks like when careful planning and research are not used – carnage and decimation.
And the same thing is happening right now to the real estate brokerage industry.
The vast majority of real estate agents are using one of the most outdated methods of pricing a home for sale, relying merely on comparable sales to determine the value of your home.
This method is no approach at all.
Anyone with two minutes of free time can go online and find out what other homes have sold for.
Just like the retailers that blindly wanted more and bigger, the majority of real estate agents blindly want more listings and clients. No research or planning required to get there; ‘Here is what your neighbors house sold for, sign here!’
I can’t understand why anyone would base the value of their home merely on what other homes sold for. You never know what the story was with the other properties. What was the inside like? Were the parties under the gun to sell? Getting divorced? Relocating? Structural problems? Roof leaks?
A mixed bag of unrelated events is being used by most agents to price homes haphazardly.
Any seller being subjected to this comparable sales method is being injured. And will be led down the path of price reductions, longer time on market and vastly reduced profit from the sale of their home.
I still feel terrible that I sat back and said nothing while these retail tenants in my past bloated themselves up in our properties. I feel complicit in their continued demise. That painful feeling still exists in me today, and was and continues to be the driver behind the development of our unique approach to selling property, The Value-Driven Approach.
Simply put, we treat a property as a company with a stock price. We diagnosis the condition of and all areas we can increase the perceived value of the property in the eyes of a buyer. We bring in our team of experts to develop a customized strategy to position the property correctly under current market conditions. The steps of the approach ensure our clients have the best possible outcome, every time.
The difference between no plan and having an approach can clearly be seen with our recent clients John and Abby. They wanted to move from their townhome into a home with a yard. They met with another agent before us and this agent presented them with a full size book of comparable sales and pretty pictures.
And, as John showed me, a really nice glossy picture of that agent standing next to a shiny black Ferrari.
When I asked John if the agent offered him a ride at least, he laughed, telling me he didn’t see any Ferrari in the front of his house the day of their appointment.
That agents approach was a doctored picture of a rented sports car. That’s it. Comps and a fake selfi-photo.
John and Abby got a hold of our book, The Value-Driven Approach, from a friend and they immediately called us.
We then got to work applying the steps of the approach. No comparable sale was ever discussed.
Comps cause injury, not success.
Our team began diagnosing specific areas of improvement the home required. After many hours with our design and video team, our experts and consultants, we hit the market. Their home sold in 8 days with multiple offers for $17,000 over asking and $32,000 over any of the comps the other agent presented.
Unlike many of the closing retailers around the country, who did not follow a strategic approach to their growth, we rely on the scientific steps of our well-researched approach to achieve superior results time and time again. We have case study after case study of success stories.
If interested, we would be happy to ship you out a free copy of our book.
I will never again just sit back and watch someone make an important decision, especially our clients with the sale of their homes, without a researched and documented plan beforehand.
I learned my lesson from 2004. And I will never sit back silently ever again.
ABOUT THEM – Jay & Michelle Lieberman have been called “provocative and entertaining,” but also “committed philanthropists”. Entrepreneurs and relentless innovators of the real estate industry, creators of the “Value-Driven Approach to Sell Real Estate”, founders of the Conejo Valley Teacher Only Program, hosts of the Conejo Valley Advice Givers Podcast Show, and attorneys and real estate brokers at Keller Williams World Class in Southern California. They feel honored and blessed every day they are able to serve their clients, their family, friends and their community. You can reach them at info@TeamJayMichelle.com.