July 3, 2015

Weekly Book Scan

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Updated: 26 min 9 sec ago

Bringing Humanity Back to Business

Mon, 06/29/2015 - 15:22

There’s an app or a website for just about any service nowadays, which seems to make person-to-person contact obsolete. Why would I call a car service when I can just get an Uber driver to come pick me up with the push of a few buttons? Or why would I hire a personal trainer when there’s thousands of workout videos available online for free?

Credit: Ryan McGuire/Bells Design

But just because it seems more convenient to e-mail or text someone rather than talk in person doesn’t mean it’s the best strategy for communication, especially in terms of running a business. That’s the foundation of Peoplework: How to Run a People-First Business in a Digital-First World (2014, dotloop), written by Austin Allison and Chris Smith. Technology can enable companies to be more efficient. But Allison and Smith urge people in any type of business to take advantage of the “people revolution”: valuing personal interaction above all else. Both authors have tested a Peoplework business strategy within their own companies: Allison is founder of dotloop, a company that facilitates online real estate transactions; Smith is co-founder of Curaytor, a marketing firm for real estate agents and companies. Allison and Smith enforce the idea that going back to basics, which involve human interaction, is the best way to run any type of business.

The book outlines 10 principles on how to run a Peoplework business among constantly changing technology, ending each chapter with examples of companies that have successfully used these principles. Apple is a reoccurring example throughout the book of a company that values people first—customers and employees. The company treats its customers as friends from the moment they walk in the door, and that’s what Peoplework is about: putting the humanity—including humility, honesty, and respect—back into your business. Peoplework businesses are interested in long-term relationships with their customers as well as their employees in order to network, or create an exponential “people grid.”

“First, you must understand that since the beginning of time, and forever into the future, people just want to work with other people and will more often than not choose people who they know, like and trust. No matter what the business model or product is, it is always people on both sides of the transaction.”

Peoplework generally focuses on how to manage a business, though the 10 principles can easily apply to just about any entrepreneur. The first seven chapters of the book focus on how employees, not just employers, can capitalize the business they work for through the way they treat their customers. The “Quality Creates Quantity” chapter, for example, emphasizes how every customer should be treated as a lifetime employee would be. This may restrict a company’s customer outreach initially but focusing time and energy on each customer leads to loyalty and virality, which in turn lead to more and more customers. Allison and Smith even break down an example of how to obtain a $120,000 salary in the real estate market through Peoplework, based on the model Starbucks uses, called the Lifetime Value of a Customer (LVT). The last three chapters focus on the business person as an individual: how a Peoplework business starts with the passion, motivation, and ability of each employee and employer. Allison and Smith don’t hesitate to show where specific companies have gone wrong or explain that sometimes you just need to get rid of employees that don’t fit your culture as soon as possible. Peoplework is meant to inspire readers to see their business through a unique lens, though, where change is always possible.

An 800th Birthday for Property Rights

Fri, 06/12/2015 - 09:55

On Monday, June 15, historians across the world will celebrate eight centuries of a dusty old document. So, what does that mean to you, a modern real estate professional? Everything.

The King’s Great Seal, which was attached to the Magna Carta as proof of his assent to the agreement (Credit: British Library).

The Magna Carta was the first agreement in the modern age to guarantee certain rights to individuals and ensure that leaders obey laws. The tyrannical King John, who ruled England from 1199 to 1216, exhausted and frustrated the landowners of his kingdom to the breaking point. He’d levied massive taxes, known as scutage, to pay for his costly foreign wars. When folks didn’t pay, he’d seize their property or lock them up. By 1215, the so-called “rebel barons” had had enough. They renounced their allegiance to the king and captured London in May. At that point, the king had no recourse but to negotiate, finally agreeing to meet them at Runnymede, on the River Thames in the south of England, in June of that year. After some negotiating, King John granted the Charter of Liberties, which became known as Magna Carta, at Runnymede on June 15, 1215. Though many provisions were eventually stripped and the document was reissued several times throughout the coming century, the main idea of individual rights and liberties reverberated for centuries, especially those contained in this passage (emphasis mine):

No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgement of his equals or by the law of the land.

This sentence is often cited as the inspiration for constitutions and declarations of rights around the world. Most importantly for real estate professionals in the United States, it’s perhaps the oldest source for the fifth amendment of our nation’s Bill of Rights:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Of course, it would take a while for both England and the United States to extend said rights beyond landowning elites, but the notion did set a standard for property rights that had not been officially expressed in the modern world. Sometimes the wheels of justice and human rights turn slowly, and in this case we’re talking centuries.

I had assumed that back when NAR was founded, around a century ago, property rights were still a major concern. But after talking to Managing Director of NAR’s Information Services, Frederik Heller, I learned that Americans had a moment of security—albeit brief—about the issue of property rights around the turn of the century.

“Property rights weren’t seen as being threatened or limited in the ways they are now, so I think it just wasn’t a major concern,” Heller says. “That changed pretty quickly, though. Beginning in the 1910s, the right to own property popped up in the National Real Estate Journal more and more often, as zoning ordinances took hold to put limits on what owners could and couldn’t do with their land. Then in the 1920s and 1930s, property taxes became popular ways for municipalities to generate income.”

And though the idea of preserving the right of property ownership wasn’t mentioned as one of the goals of NAR in its Constitution and Bylaws until 1961, the idea was securely planted in the preamble of the Code of Ethics, written in 1924. It was the first time NAR officially identified property rights as an idea for REALTORS® to uphold & protect:

Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization…

As we all well know, the issue of preserving property rights is now key to a number of important initiatives at NAR. So, as members of an association that clearly sees the importance of property ownership, I hope you’ll join me in a salute to one of the most famous documents in history, and one that at least started us down a path toward the relatively fair and free society we enjoy today. Happy birthday, Magna Carta. You don’t look a year over 350 to me.

Learn more and watch an animated video about the story behind the Magna Carta at the British Library’s website.

The Gentle Art of Asking

Thu, 06/04/2015 - 09:58

Every day we ask for help. It could be as simple as asking for a referral or it could be as complicated as asking a broker to join your franchise.  Either way the ask not only depends on what you ask, but more importantly how you ask it.

In Edgar Schein’s book, Humble Inquiry: The Gentle Art of Asking Instead of Telling (Berrett-Koehler Publishers, 2013), he shares the process of influencing others depending on the level of trust that exists in any given relationship and gives concrete examples of the type of questions you might ask in each case. These apply in all areas of business, personal situations, and every day conversations.

Are you close enough to ask the big questions? Credit: Alejandro Escamilla/Unsplash

I’ve laid out the four types of questions that Schein defines below. Let’s explore each one in detail and see how it relates to your real estate business. That will help us figure out the most appropriate time to use them.

Humble Inquiry

When trust has not been established yet, it’s important to ask yourself, “How can we get the other person to share what’s on their mind in their words, not ours?”  Questions like, “What is happening with you” or “go on; tell me more” express a sincere desire to learn what the other person is thinking rather than assuming you know their issues and exactly what they need. Humble inquiry is ideal for initiating conversations with customers, building relationships at networking events, and deciding if/how you can help the other person.

Diagnostic Inquiry

Now that you have a general sense of who the person is and what they would like to communicate, you can dig a little deeper. But not too deep! You might not have established a strong enough foundation of trust yet. Ask, “Why do you feel that way” or “what do you think caused that to happen?” Here you want to keep the other person talking by asking a question that allows them to share their issue in more detail.

Process-Oriented Inquiry

Once you have developed some rapport with the other person you can then ask process-oriented questions that involve your role into the mix.  Let’s say a customer asks, “How much should I price my house for?” You could reply, “What answers do you want to know from me about pricing your home?”  This way you can keep them talking and in some cases they will answer their own question simply because you asked them to share it with you.

Confrontational Inquiry

Starting off a conversation with a seller with: “If you couldn’t get $XXX,XXX for your house today in 30 days, would you still sell it?” won’t be as effective unless you have an existing relationship or you took the time to build trust properly over time. The time to consult with a client is when you have earned the right to consult. Be careful about using confrontational questions too soon otherwise it might jeopardize the sale, and more importantly, the potential relationship.

So now I have a question for you: Which end of the question spectrum do you use most when communicating with clients? Are you overly confrontational, or do you stay in the humble safe zone even after establishing a steady rapport?

A Source for Summer Reading Lists

Tue, 05/19/2015 - 13:51

With Memorial Day weekend coming up, our minds turn to the unofficial kick-off of summer. While the market heats up in many locations across the country, real estate pros may be too busy to consider what reading material to pack in their beach totes.

Credit: Refe 2015

However, that doesn’t mean you won’t have time for a new book in your mental arsenal at some point this season. Below is a quick look at the business section of the most recent New York Times Best Sellers list for your consideration. I could see No. 1 being helpful for folks looking to hone in on the senior market. The second on the list is perfect for you international types looking to take advantage of the surge in interest in U.S. real estate from foreign investors. And there are certainly several meaty selections for brokers looking to redefine how they operate their businesses.

But how about you: See anything worth picking up?

  1. GET WHAT’S YOURS, by Laurence J. Kotlikoff, Philip Moeller and Paul Solman. (Simon & Schuster.) A guide to deciding when to claim Social Security benefits and to getting all you’re eligible for
 when you do.
  2. DEALING WITH CHINA, by Henry M. Paulson Jr.. (Twelve.) The former Treasury secretary and onetime head of Goldman Sachs
 discusses how American business and political leaders can work 
with China.
  3. BECOMING STEVE JOBS, by Brent Schlender and Rick Tetzeli. (Crown Business.) How Jobs, who started out as a brash young genius, developed a more mature management style.
  4. MONEY: MASTER THE GAME, by Tony Robbins. (Simon & Schuster.) Seven steps aimed at finding financial security and creating an income for life.
  5. THE POWER OF HABIT, by Charles Duhigg. (Random House.) A Times reporter’s account of the science behind how we form, and break, habits.
  6. WORK RULES!, by Laszlo Bock. (Twelve.) A Google executive’s insights on team building and improving company-employee relations.
  7. THINK LIKE A FREAK, by Steven D. Levitt and Stephen J. Dubner. (Morrow/HarperCollins.) How to solve problems creatively, from the authors of “Freakonomics.”
  8. THINKING, FAST AND SLOW, by Daniel Kahneman. (Farrar, Straus & Giroux.) The winner of the Nobel in economic science discusses how we make choices in business and personal life.
  9. OUTLIERS, by Malcolm Gladwell. (Back Bay/Little, Brown.) Why some people succeed — it has to do with luck and opportunities as well as talent.
  10. DO THE KIND THING, by Daniel Lubetzky. (Ballantine.) Ways of weaving compassion into your business dealings and personal