By knowing when to be ruthless and when to be realistic. How does this translate in the real world of real estate, work & business?
If you’re buying:
Look for troubled properties in good areas. Most buyers can’t see beyond the ugly carpet & dead lawn; if you can, you’ll reap the benefits at a reduced price. You’re on the right track when the property’s been for sale longer than its neighbors. With your agent’s help, figure out what similar properties are selling for. Add the cost of repairs, then offer 25% less. Buy at 20% under market price. Don’t get emotionally involved in the property or the outcome. If one property falls through, go to the next similar one.
You’re not a buyer at the bank. Loans require great credit (credit score >650), hefty down payments (15-20%) & patience. For this you’ll get a fixed rate of 5% for 30 years.
If you’re selling:
Unless the lender’s going to foreclose, don’t sell. If you can’t afford the payment, and you’ve economized as much as you can, rent a cheaper place and lease out your home until the market stabilizes.
If you absolutely have to sell, you’ll be competing with bank-owned properties. A smart buyer doesn’t care if your home is in better shape than the bank-owned properties; he’s looking for the best deal.
Can’t make the payments? Contact the lender to arrange a deed in lieu of foreclosure or short sale.
If you’re hiring:
Now is the time to hire the staff of your dreams. The market is flooded with competent people looking for stability. Post an ad that specifies what you’re looking for and watch the résumés pour in. If you don’t want to pay too much, offer benefits like insurance or vacation days. Or set the base salary low and tie increases into company profitability. Applicants who want guarantees & demand high salaries and benefits are ignoring the new rules.
If you’re applying:
Look at compensation differently. Prioritize what you want, starting with salary but including health insurance, stock options, paid vacations, etc. First get hired, then make yourself indispensable. Look for ways you can transition from employee to consultant.
Goods & Services
If you’re buying:
It’s the perfect time to get that car, sofa or phone; as long as you really need it. Don’t buy just because it’s a great deal and buy nothing on a credit plan. Shop around, ask for discounts and don’t buy it if it’s not on sale. You shouldn’t pay retail for anything.
Many retailers will offer 0% financing (or 3, 4 or 6 months same as cash) on expensive items like big screens & appliances. Do it, but obviously, pay off the balance before they start charging interest. Have the money in a money market account the day you buy.
Car dealers are offering everything from company stock to 0% financing. Still, watch out for extended warranties, undercoat protection, security systems, etc. Buy with as few options as possible – add them later if you want. The easiest way for a dealer to upsell you is by “not having” a basic car on the lot. Tell him that’s okay, you want to order a car. Then watch the discounts fly. The one thing a dealer wants least is another car in his inventory.
If you have to sell a car, calculate the loss into the price of the new vehicle. And of course, don’t trade your old car in. Sell it on eBay Motors, Cars.com or Craig’s List.
If you’re in long-term contracts for services (cell phone, long distance, cable), renegotiate. Tell your provider you might have to cancel if you can’t reduce your expenses by 10-15%. While you’re at it, do you really need 87 channels of HBO?
When aren’t you a buyer? Health insurance premiums rise as coverage shrinks. Shop around and change carriers annually if it means keeping your premiums low.
If you’re a seller:
You don’t have to be the cheapest if you’re the best. We’ve all experienced bad service, so much so that when we’re treated with respect it stands out.
1) Being placed on terminal hold, being transferred to too many people who can’t solve the problem, never getting to speak to a live person, never getting a call returned.
2) Inconvenient appointments, cancellations with little or no notice, being kept waiting.
Solve these issues and you’ll see repeat and referral business. If you can’t pinpoint your weakness, create a customer feedback system.
When a problem does happen, prove your commitment:
-Address the problem immediately
-Take responsibility to fix it
-Tell the truth even if it makes you look bad
-Fix the problem quickly even if it costs you money or time
-Keep the customer in the loop
Position yourself. It won’t be a buyer’s market forever.