Wednesday, February 20, 2013
Paint Brush Policy
My grandfather Edward (he made us call him "Ed") was a painting contractor -- and his tools / paint brush policy was something like this ... when a new painter was hired, Ed supplied the painter with a set of brushes. The painter was 100% responsible for their care.
On his nickle, Ed replaced any painter's brushes when the painter presented Ed with a full worn out set of brushes.
If the painter lost the brushes or otherwise mishandled them, Ed again supplied a new set of brushes -- and reduced the painter's wage for the cost of the new set and the cycle began again.
If the painter quit without returning the set of brushes, the cost was deducted from the final paycheck.
--
It was all agreed to upfront ... Ed told me he used that policy for 30 years and it worked like a charm.
Prof. Mike
Prof Mike • Class Star offers two, 3-hour core courses and several live courses. www.ClassStar.com Your business and referrals are appreciated. The Porch weblog and all contents herein are © 2013 Mike Ballif. All rights reserved.
Wednesday, July 18, 2012
Mike's Marketing Axioms
I really am a professor and I teach marketing courses. Just for fun, I herewith present to you...
Axiom No. 1
Marketers have all the fun and make all the money.
Axiom No. 2.
Never, ever, try to fool your customer.
Axiom No. 3.
Entrepreneuring is marketing at its finest.
Axiom No. 4.
Don’t just keep your customer satisfied. Delight your customer.
Axiom No. 5
Don’t ever let a machine answer your phone, unless a machine is phoning you.
There’s a customer on the phone that spends money that pays your salary. Answer the phone. Talk to the customer. Listen to the customer.
Axiom No. 6
Always include the janitor and the receptionist and loading dock part-timer in the marketing plan. They know what's going on at least as well as the boss. Innovation rarely if ever occurs in the boardroom or CEO's office.
Axiom No. 7
Talk to your customers regularly and ask them for feedback.
Axiom No. 8
Give something back to your customers regularly.
Axiom No. 9
Finance folks, engineers, economists, managers, education administrators, production folks, and accountants receive their paychecks from marketers.
Axiom No. 10
Never put economists, accountants, or production people in charge of your marketing and and your humans, e.g. your top line.
---
'Have you any I ought to put on the list?
Prof. Mike
Prof Mike • Class Star®ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com
Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009-2012 Mike Ballif. All rights reserved.
Mike's Marketing Axioms
Axiom No. 1
Marketers have all the fun and make all the money.
Axiom No. 2.
Never, ever, try to fool your customer.
Axiom No. 3.
Entrepreneuring is marketing at its finest.
Axiom No. 4.
Don’t just keep your customer satisfied. Delight your customer.
Axiom No. 5
Don’t ever let a machine answer your phone, unless a machine is phoning you.
There’s a customer on the phone that spends money that pays your salary. Answer the phone. Talk to the customer. Listen to the customer.
Axiom No. 6
Always include the janitor and the receptionist and loading dock part-timer in the marketing plan. They know what's going on at least as well as the boss. Innovation rarely if ever occurs in the boardroom or CEO's office.
Axiom No. 7
Talk to your customers regularly and ask them for feedback.
Axiom No. 8
Give something back to your customers regularly.
Axiom No. 9
Finance folks, engineers, economists, managers, education administrators, production folks, and accountants receive their paychecks from marketers.
Axiom No. 10
Never put economists, accountants, or production people in charge of your marketing and and your humans, e.g. your top line.
---
'Have you any I ought to put on the list?
Prof. Mike
Prof Mike • Class Star®ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com
Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009-2012 Mike Ballif. All rights reserved.
Tuesday, July 17, 2012
Paul is Dead. The Boy in the Curtains. Classic Coke vs New Coke. Public Sex & Other Paris Hilton Marketing Manuevers.
Paul is Dead. The Boy in the
Curtains. Classic Coke vs New Coke. Public Sex & Other Paris Hilton
Marketing Maneuvers.
Again, and
probably permanently -- I’m going to diverge from the real estate industry. You
all have more than you can possibly read about the trade and how to manage a
career in it.
So, just for fun …
Coke released "New Coke" with
more sugar in it a few years ago...to compete with sweeter Pepsi. The public
"hated" it, and demanded the original Coke...which Coca-Cola rushed
back to the market, re-named as "Classic Coke," which it is still
named today. NewCoke has quietly been taken off the market...and Coke enjoyed a resurgence
in market share.
--
It's my
conspiracy theory you know... The Coca-Cola "disaster." I've never
heard of anyone else talking about it. I've just sort of looked between the
lines on it and I think the outcome was sheer genius. So I've wondered if it
was deliberate and a planned marketing maneuver, based upon the premise you
speak of--there's no such thing as bad press--or if it was just luck on the
part of Coke.
I've never
heard of a Coke officer getting canned for the snafu, although that really
isn't a necessary outcome of an executive making an error...but sometimes it
is.
--
I know of
two instances of both
accidentally-on-purpose-will-probably-generate-some-publicity scenarios--one
planned and one coincidental: in the movie “Three Men And A Baby,” there is a boy standing in the curtains
that supposedly is the boy, [who's real life room the show is filmed in]
supposedly fell out of the window and was killed (in real life). The boy's
death was initially a rumor; but then the story became juicy gossip and we all
went and rented the movie a second time -- to see if there really was a boy
standing in the curtains. We never saw a boy in the curtains before.
There was
a boy standing in the curtains near the window.
Later on,
the show's producers (one of which is Leonard Nimoy, aka Mr.
Spock from “Star Trek”)
admitted to the marketing gimmick.
The other
example is the Paul Is Dead
rumor about Paul McCartney of the
Beatles. Everyone found a lot of "he's dead" clues in the Beatles'
album art and also in the music. We all went out and bought new copies of the
albums, and all the radio stations started talking about it and playing Beatles
tunes -- years after they were released. It was however, coincidental and
purely rumor. The Beatles' management
spokesman said they wished they could have been that clever..."but sorry;
[they] weren't."
--
Do you think
Coke did it deliberately, or was it purely luck?
--
Does Paris Hilton continually have a
continuing succession of unfortunate events--purely at random?
Consider
....
Naughty
daughter, heiress to a fortune...
Accidentally
(on purpose?) a boyfriend releases a video tape to the Internet of the two
"in the act" for all to see.
Her dog gets
stolen. Later returned.
She has a
horrible falling out with her TV co-star Nicole Ritchie (no one knows what the
fight was about)...
Her T-Mobile
Sidekick cell phone with nude photos of herself and celebrity phone numbers in
it, was stolen (don't we all pose for, edit, and then regularly store nude
photos of ourselves on our phones?).
Paris does a
bikini-clad hamburger ad slithering about on a very expensive car being
washed... but Carl's Jr. pulls it because it's too controversial. Carl's Jr. itself determined it was too
controversial ... after the company had paid for its production.
Lots of photos and smiles and headlines.
Mother's Day
gifts stolen from her car. Later recovered.
DUI
Goes to jail
for a little while.
Reconciles
with TV co-star Nicole Ritchie (still, no one knows what the fight was
about)...
Cries
publicly on David LettermanShow
Announces
she's visiting Africa. Reason unknown. But pending trip to Africa is publicly
announced. Lots of photos and smiles and headlines.
--
Someone
ought to calculate the statistical probability of the above events occurring at
random to the same person. They are pretty much, random, aren't they? ;-))
All the
foregoing was continually front page news.
Mercy.
No such
thing as bad PR indeed.
Prof.
Mike
Prof Mike • Class Star®ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009-12 Mike Ballif. All rights reserved.
Monday, May 21, 2012
Jackson Browne & Brian Wilson
Just Talkin ...
Again, and
probably permanently -- I’m going to diverge from the real estate industry. You
all have more than you can possibly read about the trade and how to manage a
career in it.
So just for fun …
If you
haven’t listened to Jackson Browne’s album “Timethe Conqueror” … you should. It’s excellent. It’s not the latest by Browne ... I think “Timethe Conqueror” was released in 2008…but it’s worth repeated listening. The first time through I wasn’t paying attention;
and just sort of listened for the chord changes.
Then a few
more times the riffs and the lyrics started combining and now it’s hard to put
it away. There’s classic Jackson Browne
guitar and singing—some of his best, I think.
--
In the lower
rows of the Special Events Center at the University of Utah, I shook hands with
Carl Wilson and Dennis Wilson of the Beach Boys in the 1980’s. The Beach Boys had just played Salt Lake;
and this time the concert was partly my promotion and my former partner and I
stood together, meeting these two legends.
Dennis had
surfer’s hands. He was a tough guy.
This concert
had the classic Beach Boys touring personnel:
the two Wilson brothers, Mike Love, Al Jardine, Bruce Johnston plus the
backing band including Billy Hinche and Blondie Chapin. Hinche was a pain for us that night, by the way.
Brian Wilson
has not toured with the Beach Boys for quite a while. In recent years Brian’s made some valiant
attempts at improving his health, and has made some remarkable albums. For years the Beach Boys members couldn’t show up to
band meetings unless their personal lawyers were in tow…
The word was
Brian’s craziness made him vulnerable to many forces, including some of the
boys in the band who wanted to cash in on Brian’s song writing. Over the years it has alternately been painful
to watch and then incredible to watch -- when any of the band would play live or on television. A few years ago the “Beach Boys” played Weber
State University and for the first time [it ever sunk into my head], there were
no Wilsons on the stage. Carl and Dennis
had passed and Brian’s was too fragile to tour. I still love the band and the guys and always
will.
A few nights
ago the Beach Boys did two or three songs on Late Night with Jimmy Fallon. Fallon interviewed Mike Love and Brian Wilson before the band played. Brian’s not looking too good. He needed Love’s help to walk up a couple of
steps and get to his seat – unsure of his footing. Brian didn’t have much color in his
face.
Love complimented
Wilson repeatedly and it was good to see and hear it. Love and Wilson said the Beach Boys including
Wilson are touring this summer.
Prof Mike • Class Star® ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com Your business and referrals are appreciated. The Porch weblog and all contents herein are © 2012 Mike Ballif. All rights reserved.
Thursday, April 12, 2012
They'll All Know if we Just Play
Stephen Stills
Prof Mike • Class Star®
ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009- 2012 Mike Ballif. All rights reserved.
I’m going to diverge from the real estate industry. You all have more than you can possibly read about the trade and how to manage a career in it.
--
Talk to me about Stills or music and what it puts in your soul.
So just for fun …
Stephen Stills, the guitarist originally from Buffalo Springfield, then solo, then Crosby, Stills, and Nash and sometimes Young, was playing on my iPod this morning. Someone told me recently they heard Stills playing and singing somewhere, and simply due to his age it seems his voice wasn’t what it used to be.
The first intense impression I had of Stephen Stills was Crosby, Stills and Nash together on the stage at Woodstock (I wasn’t there. I watched the movie 10,000 times). The group was just tuning up to play their first song, and Crosby said, off-mike (but could be heard anyway); “tell them who we are.” Nash said, “they’ll all know if just play …“ and so Stills began picking “Suite: Judy Blue Eyes.”
We knew who they were. Stills' guitar was all it took.
On Thanksgiving night probably 1970, Crosby, Stills and Nash played the Salt Palace in Salt Lake City. Santana opened the concert. The entire show was amazing. I was very late getting home and the parents were not happy with me. It didn’t matter. I was still floating on the most amazing music since the Beatles.
Stills sounded good that night. He always sounds good. On a televised show a few years later, Stills walked onto a stage with an acoustic guitar and began playing and singing … and for an hour; one guy with one guitar captivated an entire huge theatre. His music and voice filled every available space. Stills touched all senses in his audience.
--
It had turned cold with a slight drizzle in the air at the base of a ski run on Big Mountain in Whitefish, Montana on an early-summer-June evening. Stills was playing. And he was in full stride. He played right through the cold and rocked on for a long time. He played loud for us and he didn’t miss a beat and he completely ignored the temperature. Such a master.
The night after a few dirt bags stole our jets and crashed them into the World Trade towers, Crosby, Stills and Nash showed up on the Tonight Show with Jay Leno to sing for us…to find some common ground to somehow hold onto something meaningful. I needed that one.
Stills and his buddies sounded great.
I’m not a singer…I always wished I could sing like these guys. I don’t understand vocal cords or how they change with age or why some of them stay the same. Paul McCartney’s voice is not the same as his Beatle voice. Glen Campbell, in his mid-70’s, sounds nearly identical to his 20-year old voice.
Stills’ voice has changed. He sounds great.
--
Prof. Mike
ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009- 2012 Mike Ballif. All rights reserved.
Stephen Stills
I’m going to diverge from the real estate industry. You all have more than you can possibly read about the trade and how to manage a career in it.
--
Talk to me about Stills or music and what it put in your soul.
So just for fun …
Stephen Stills, the guitarist originally from Buffalo Springfield, then solo, then Crosby, Stills, and Nash and sometimes Young, was playing on my iPod this morning. Someone told me recently they heard Stills playing and singing somewhere, and simply due to his age it seems his voice wasn’t what it used to be.
--
The first sight I had of Stephen Stills was with Crosby, Stills and Nash together on the stage at Woodstock (I wasn’t there. I watched the movie some 10,000 times). The group was just tuning up to play, and Crosby said off mike (but could be heard anyway); “tell them who we are.” Nash said, “they’ll all know if just play …“ and Stills started playing “Suite: Judy Blue Eyes.”
We knew who they were. Stills' guitar was all it took.
On Thanksgiving night probably 1970, Crosby, Stills and Nash played the Salt Palace in Salt Lake City. Santana opened the concert. The entire show was amazing. I was very late getting home and the parents were not happy with me. It didn’t matter. I was still floating on the most amazing music since the Beatles.
Stills sounded good that night. He always sounds good. On a televised show years ago, Stills walked onto a stage with an acoustic guitar and began playing and singing … and for an hour, one guy, one guitar captivated an entire huge theatre. His music and voice filled every available space.
--
It had turned cold with a slight drizzle in the air at the base of a ski run on Big Mountain in Whitefish, Montana on an early summer June evening. Stills was playing. And he was in full stride. He played right through the cold and rocked us for a long time. He played loud for us and he didn’t miss a beat.
The night after a few dirt bags stole our jets and crashed them into the World Trade towers, Crosby, Stills and Nash showed up on the Tonight Show to sing for us…to find some common ground to somehow hold onto. I needed that one.
Stills sounded great.
I’m not a singer…I always wished I could sing like these guys. I don’t understand vocal cords or how they change with age or why some of them stay the same. Some singer’s voices change as they age. Paul McCartney’s voice is not the same as his Beatle voice. Glen Campbell, in his mid-70’s, sounds nearly identical to his 20-year old voice.
Stills’ voice has changed. He sounds great.
--
Prof. Mike
Prof Mike • Class Star®
Your business and referrals are appreciated. The Porch weblog and all contents herein are © 2012 Mike Ballif. All rights reserved.
Thursday, June 30, 2011
Short Sale and Foreclosure and Disclosure
Should foreclosure be disclosed?
Foreclosure means the lender has started a legal procedure to have the property on which it holds the mortgage sold at auction.
This may be a short sale, and it also may not be a short sale. A short sale is not a foreclosure but obviously the two situations can be related.
What is confidential here?
Say a property on Adams Avenue “under foreclosure” is presently worth $375,000 and the mortgage balance due is $300,000. Perhaps the seller lost his job…or a divorce has caused the mortgage payments to go unpaid. If the property is sold for $375,000 or is sold for any amount that exceeds $300,000 plus costs of the sale, there is no need to disclose that the property is in foreclosure as it not a “material fact.”
It does not affect the seller’s ability to perform on the proposed purchase contract and it is a confidential situation.
-----------------------
If loans on a property on Maples Street are $430,000 and Maples Street is presently worth less than $430,000, then the property and the situation can be considered a short sale. In this situation, there is a “material fact;” the seller’s potential inability to perform. This fact needs to be discussed with the seller; consent obtained from the seller and probably disclosed to the transaction.
Confidential information cannot be disclosed without your client’s consent. If it’s not confidential information…just go one more step and get consent to disclose information about the seller in writing anyway.
---
This is a discussion of market conditions and various real estate, lending, and legal procedure. I’m not offering legal advice. I’d suggest legal assistance if you have questions about the legal stuff. In Utah, an attorney is required to obtain a real estate license if she or he regularly processes real estate transactions on behalf of clients.
from The Porch…
Prof Mike • Class Star®
ClassStar offers two, 3-hour core courses a new Utah Law series, and several live courses. www.ClassStar.com. Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009-11 Mike Ballif. All rights reserved.
Saturday, May 8, 2010
Just Talking ... with No Words
Hello, All ...
Here are a few methods and maneuvers you can use to help in your negotiations. Remember…the best negotiation is win-win. All parties must win, or you will be trying to keep the sale on the books forty five days later because the folks on the losing side of win-lose … will most likely be trying to get out of the loss. So bear in mind these techniques are effective, and greatly assist a negotiation.
After you read them I want you to think of an encounter or a conversation you had recently where some of these body language techniques were used and tell us about them and how they affected the communication. Preferably you can think of something that happened on the job or in a business situation...
--------------------------------------------------------
Just an FYI: Class Star.com’s live Negotiation and Persuasion course presents detailed and experiential methods to learn and practice some nonverbal techniques. I'll send more info to you on all these materials. Let me know what you would like: Mike@ClassStar.com
Mike Ballif • Class Star offers online core courses and several live continuing education courses on Consumer Behavior, Negotiation and Persuasion, Real Estate Math, How To Pick Comps, etc. Your business and referrals are appreciated. The Porch weblog and all contents herein are © 2010 Mike Ballif. All rights reserved.
A few blog postings ago we began a series of ideas and articles about “business” as a social concept. The foundations of business – when understood help you become a better agent and increase your business acumen. Your clients will immediately notice and appreciate how well you are taking care of their needs. So, we can do better business when we are better communicators…
--
Christopher Columbus’ first recorded voyages to the New World were recorded in his Diario. Columbus was surely a master negotiator and had to be a master at communications. Of course the Diario contains remarkable observations of discovery and isreplete with passion as my buddy Al Sandomir describes it. Columbus writes a lot of exquisite material and describes the real estate and biological wealth of the New Indies. Immediately and concurrently, the Spanish explorers began “winning over” the indigenous colonies of natives for loyalty to the Crown and to Christianity. Among other assets there was also a nice big piece of real estate on the table.
Columbus had to somehow begin communications with these folks … largely using body language and other nonverbal communication techniques until the basic languages began to take hold.
Imagine marketing a piece of real estate using gestures and noises only.
Sometimes we agents also talk in a foreign language with our clients. Real estate—just as many other occupations has a specialized language that can be daunting to the public. Doctors, lawyers, engineers, and stock brokers for instance all have a specialized language just as real estate practitioners use. As a result we can use knowledge of nonverbal techniques to our advantage and improve our business communications and to also determine what the natives really mean or want.
Many times clients won’t express verbally what they want to communicate, but rather do it with other mannerisms and gestures – body language. In fact, it can be so predictable -- timeshare sales folks have an established floor routine for analyzing what prospective clients are “saying” to each other, under the table or out of sight of the salesperson. A floor manager watches the body language and then steps in to “win over” the prospects.
Here are a few methods and maneuvers you can use to help in your negotiations. Remember…the best negotiation is win-win. All parties must win, or you will be trying to keep the sale on the books forty five days later because the folks on the losing side of win-lose … will most likely be trying to get out of the loss. So bear in mind these techniques are effective, and greatly assist a negotiation.
After you read them I want you to think of an encounter or a conversation you had recently where some of these body language techniques were used and tell us about them and how they affected the communication. Preferably you can think of something that happened on the job or in a business situation...
Just Talking via Body Language
If you are strolling along an arcade or the county fair in the summer, and encounter a charcoal sketch artist who's drawing portraits... and ask him "how much?"
If you are strolling along an arcade or the county fair in the summer, and encounter a charcoal sketch artist who's drawing portraits... and ask him "how much?"
He says "$20."
You flinch...
What does the flinch mean—to the artist?
-----
Slight Tilt of the head. Hand going up to chin. They are paying attention.
Perfectly straight head — not paying attention. [My students are going to sleep]
Stroking the chin. Very interested.
Head leaning on the heel of the hand. Boredom.
Stroking the nose. Exaggerating.
Tugs at ear. Want to hear more.
Scratches head. Uncomfortable, nervous, discomfort. Back off, change direction.
Lays eyeglasses on table. No longer listening to you.
Something in mouth…need more nourishment. Like what they hear, but need to hear more.
Hands…"steepling." Confidence. Feel they are in a superior position.
Fingers drumming on the table top…
Tug at the collar.
Hand at the back of the neck ... all indicate annoyance.
D Determine then eliminate source of annoyance. Adjust your communication.
-----------
(C+-25.bmp)
--------------------------------------------------------
Just an FYI: Class Star.com’s live Negotiation and Persuasion course presents detailed and experiential methods to learn and practice some nonverbal techniques. I'll send more info to you on all these materials. Let me know what you would like: Mike@ClassStar.com
Mike Ballif • Class Star offers online core courses and several live continuing education courses on Consumer Behavior, Negotiation and Persuasion, Real Estate Math, How To Pick Comps, etc. Your business and referrals are appreciated. The Porch weblog and all contents herein are © 2010 Mike Ballif. All rights reserved.
Sunday, December 6, 2009
New Changes in Utah Real Estate Licensing Laws Are Upon Us - January 1, 2010
X
Utah Real Estate Licensees ...
Continuing Education - CE requirements will increase from 12 to 18 hours. Licensees will need to complete 9 hours of core education and 9 hours of general education / electives to renew a license effective January 1, 2010.
If your license expires in January 2010, you may renew your license in December 2009 and instead complete the current 12 hours of Continuing Education.
Sales Agent Pre-licensing - Pre-licensing education will increase to 120 hours on January 1, 2010.
Utah Mortgage Licensees ...
Mortgage Loan Originator Pre-licensing - license applicants are required to complete a 60 hour pre-licensing course, effective January 1, 2010. If the licensee applicant completes the licensing process on or before December 31, 2009, current criteria will be acceptable.
S.A.F.E. Requirements and Testing - Mortgage licensees in Utah must create an account on the NMLS website by May 31, 2010. All licensees must pass the S.A.F.E. exam by December 31, 2010.
RESPA ...
New Good Faith Estimate and Settlement Statement forms are required on all applications taken on or after January 1, 2010.
ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009 Mike Ballif. All rights reserved.
Utah Real Estate Licensees ...
Continuing Education - CE requirements will increase from 12 to 18 hours. Licensees will need to complete 9 hours of core education and 9 hours of general education / electives to renew a license effective January 1, 2010.
If your license expires in January 2010, you may renew your license in December 2009 and instead complete the current 12 hours of Continuing Education.
Sales Agent Pre-licensing - Pre-licensing education will increase to 120 hours on January 1, 2010.
Utah Mortgage Licensees ...
Mortgage Loan Originator Pre-licensing - license applicants are required to complete a 60 hour pre-licensing course, effective January 1, 2010. If the licensee applicant completes the licensing process on or before December 31, 2009, current criteria will be acceptable.
S.A.F.E. Requirements and Testing - Mortgage licensees in Utah must create an account on the NMLS website by May 31, 2010. All licensees must pass the S.A.F.E. exam by December 31, 2010.
RESPA ...
New Good Faith Estimate and Settlement Statement forms are required on all applications taken on or after January 1, 2010.
From My Porch ...
Prof Mike • Class Star®
ClassStar offers two, 3-hour core courses and several live courses. www.ClassStar.com Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009 Mike Ballif. All rights reserved.
Sunday, November 29, 2009
Commissions Are Good… I think
This is a series of ideas and articles and quotations about business.
My profession and my training is in business, and of late we are reading about the worst of the bunch of us - those "business" folks that take billions from taxpayers in bailout … and reward themselves with bonuses for sub-par and failing work product.
Enron execs go to jail after manipulation of energy markets … taking more money than they earned… and further misstating it so they could personally profit further - aided by a certified public accounting company.
Financiers rip off their friends and family and ruin lives.
Geeezzz ...
As real estate practitioners we are doing business, too. I believe most of us are honest and work hard to make a good living and so then, based upon my own training plus a book by a couple of guys I work with by the same title ("Foundations of Business Thought" by Cal Boardman and Alan Sandomir) and who have nothing to do with this blog...I'm going to sort of pinch the title of their text because I can -- and it rightly indicates the subject matter ahead -- let's talk about this stuff. Surely business is not built on dishonesty.
How do we … how ought we do … business? And so, here I go to explain why and hopefully how … and please note this is not a big bunch of theory or pontification or an altruistic scolding. It will help you understand your profits and make them even bigger. Commissions are good.
"Commissions Are Good …" or "Foundations of Business Thought"
To get started, please read the following selections from "The Business Guide," J.L Nichols self-published it in Naperville, Ill in 1883…
------------------------------------------------------------------
How to Do Business
Business, in every age of the world, has been the chief pioneer in the march of man's civilization. Blessings everywhere follow its advancing footsteps. It travels over no bloodstained fields to secure its noble ends, but everywhere brings man into friendly and harmonious intercourse. It removes local prejudices, breaks down personal antipathies, and binds the whole family of man together by strong ties of association and of mutual and independent interests.
It brings men together, and towns and cities are built; it makes men venture upon the seas in ships, and traverse continents on iron pathways, and wherever we go, whether abroad or at home, it is business that controls the great interests of the world, and makes the affairs of men mighty.
1. Keep your health good by adopting regular and study habits.
2. Never be afraid to say no. Every successful man must have the backbone to assert his rights.
3. Remember that steady, earnest effort alone leads to wealth and high position.
4. Be not ashamed to work, for it is one of the conditions of our existence. There is not a criminal who does not owe his crime to some idle hour.
5. Never covet what is not your own.
6. Remember that time is gold.
7. To industry and economy add self-reliance. Do not take too much advice, think for yourself. Independence will add vigor and inspiration to your labors.
8. Don't be selfish. Selfishness is the meanest of vices, and the parent of a dozen more. Selfishness keeps a penny so close to the eye that it can't see a dollar beyond.
9. Never forget a favor, for ingratitude is the basest trait of a man's mean character.
10. Never taste or touch that which befogs the mind or dethrones the reason. A drunken man is always at the mercy of his enemies.
--------------------------------------------------------------------
This is a good place to stop and think about it all, I think.
I like the "do not take too much advice" in no. 7. If the truth be known, I think there's an overabundance of advice in any particular office on any given day.
We will continue.
From My Porch
Prof. Mike • Class Star®
ClassStar offers two, 3-hour core courses. Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009 Mike Ballif. All rights reserved.
My profession and my training is in business, and of late we are reading about the worst of the bunch of us - those "business" folks that take billions from taxpayers in bailout … and reward themselves with bonuses for sub-par and failing work product.
Enron execs go to jail after manipulation of energy markets … taking more money than they earned… and further misstating it so they could personally profit further - aided by a certified public accounting company.
Financiers rip off their friends and family and ruin lives.
Geeezzz ...
As real estate practitioners we are doing business, too. I believe most of us are honest and work hard to make a good living and so then, based upon my own training plus a book by a couple of guys I work with by the same title ("Foundations of Business Thought" by Cal Boardman and Alan Sandomir) and who have nothing to do with this blog...I'm going to sort of pinch the title of their text because I can -- and it rightly indicates the subject matter ahead -- let's talk about this stuff. Surely business is not built on dishonesty.
How do we … how ought we do … business? And so, here I go to explain why and hopefully how … and please note this is not a big bunch of theory or pontification or an altruistic scolding. It will help you understand your profits and make them even bigger. Commissions are good.
"Commissions Are Good …" or "Foundations of Business Thought"
To get started, please read the following selections from "The Business Guide," J.L Nichols self-published it in Naperville, Ill in 1883…
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How to Do Business
Business, in every age of the world, has been the chief pioneer in the march of man's civilization. Blessings everywhere follow its advancing footsteps. It travels over no bloodstained fields to secure its noble ends, but everywhere brings man into friendly and harmonious intercourse. It removes local prejudices, breaks down personal antipathies, and binds the whole family of man together by strong ties of association and of mutual and independent interests.
It brings men together, and towns and cities are built; it makes men venture upon the seas in ships, and traverse continents on iron pathways, and wherever we go, whether abroad or at home, it is business that controls the great interests of the world, and makes the affairs of men mighty.
Practical Rules for Success
1. Keep your health good by adopting regular and study habits.
2. Never be afraid to say no. Every successful man must have the backbone to assert his rights.
3. Remember that steady, earnest effort alone leads to wealth and high position.
4. Be not ashamed to work, for it is one of the conditions of our existence. There is not a criminal who does not owe his crime to some idle hour.
5. Never covet what is not your own.
6. Remember that time is gold.
7. To industry and economy add self-reliance. Do not take too much advice, think for yourself. Independence will add vigor and inspiration to your labors.
8. Don't be selfish. Selfishness is the meanest of vices, and the parent of a dozen more. Selfishness keeps a penny so close to the eye that it can't see a dollar beyond.
9. Never forget a favor, for ingratitude is the basest trait of a man's mean character.
10. Never taste or touch that which befogs the mind or dethrones the reason. A drunken man is always at the mercy of his enemies.
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This is a good place to stop and think about it all, I think.
I like the "do not take too much advice" in no. 7. If the truth be known, I think there's an overabundance of advice in any particular office on any given day.
We will continue.
From My Porch
Prof. Mike • Class Star®
ClassStar offers two, 3-hour core courses. Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009 Mike Ballif. All rights reserved.
Wednesday, November 18, 2009
Real Estate Math Primer
Hello, All:
This is a primer on real estate math. For many of you this is quite familiar and basic and for others it can be a good refresher.
This primer is on how to calculate appreciation, equity, and the difference between the two metrics. I’ve also included some HP financial calculator keystrokes. Please note Hewlett-Packard Co. has no idea who I am. It just makes the best calculators. For Texas Instruments fans, I will soon develop the corresponding keystrokes for TI financial calculators.
How to calculate appreciation
Values in real estate are caused by appreciation. Real estate value tends to go up over time - which is called appreciation. It doesn't just happen, and it is a result of various market factors such as other homes on the property and the number of buyers in the market. It can also be based upon current economic conditions which as we all know right now is causing perhaps flat values or reduced values, and some loss of value in some cases. We've lost some appreciation from prior years which the experts are telling us perhaps were not real anyway, but nonetheless we have still experienced a positive average increase in value over time.
When more buyers into the market and start competing for the available properties, which is a market force, and as those buyers purchase available inventory, causing the supply of those homes to reduce -- prices will tend to rise. Basically this is simple demand and supply macroeconomics.
The U.S. Census Bureau says the median value of a home in the US from years 2002 to 2005 averaged a compound annual increase of 7%. In other areas of the United States, for example California -- the median home value increased at a compound rate of 20.1% during that same period.
Let's say in Utah right now we have, in lieu our current flattened economy, over the last five years have recorded an average of 7% appreciation. Let's also say we bought a home for $225,000 three years ago.
So what is the home worth -- starting at $225,000, three years ago, at 7% appreciation annually?
Here is one equation to do it;
$225,000 X (1.07) X (1.07) X (1.07) = $ 275,634.68. This is the correct amount.
Why can't we just multiply $ 225,000 by 21%? 21% would be three years of 7%, wouldn't it? Here's an incorrect equation:
$ 225,000 X (1.21) = $ 272,250. That's less than the first answer, isn't it?
So, no: just using 21% won’t work. It’s not the correct equation because it doesn't compound the first or second year's appreciation in its calculation. It just calculates 21% of $225,000 and doesn't include the value achieved after year one and year two.
------- Fast Calculator Maneuvers Instead -----
But let's just use our trusty HP financial calculators and calculate this quickly and quite screwing around with equations. Here are your calculator keystrokes to do the foregoing problem quickly…
Turn on your HP calculator...
Press CCCCC [ CLX ] ...to clear your display.
Enter CCCCC225,000 [ CHS ] ... change 225,000 to -225,000*
Press CCCCC[ PV ] ... outflow of $225,000 is our present value - the amount spent on the house.
Press 7 CCCCthen press [ i ] ... The appreciation rate for one year from the example above.
Press 3 CCCCthen press [ n ] ... which is the numbers of years since we bought the house.
Press CCCCC[ FV ] ... the FV keystroke will calculate the future value of the house = 275,634.68
* Hewlett-Packard and most financial calculators use the minus symbol to indicate the value (money) left us -- we spent it -- we placed it outside of our wallets so to speak. Notice after pressing the Future Value key, your answer is positive -- meaning that's what your value is now -- to you -- your asset - your good.
So, if we bought a house for $225,000 three years ago and it appreciated at an average rate of 7% each year, it is now worth $275,635.
How much appreciation is ours in dollar terms?
The dollar amount of appreciation is the ending value less the beginning value:
275,635 CCCCCEnding / market value
225,000 CCCCCBeginning / Purchase price of the property
50,635 CCCCCAppreciation. Nice.
But...$ 50,635 is not equity.
How to calculate equity…
Equity = Market value - Debt (the mortgage)
$ 275,635 = Market value after the appreciation is added in.
225,000 CCCCCPurchase price.
202,500 CCCCCMortgage: $225,000 - $22,500 (10% down)
73,135 CCCCC Equity
Applause. We’ve properly calculated appreciation and equity.
Off the top of your heads….what does the dollar difference between equity and appreciation represent?
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‘Glad that real estate prices cycle and will come back.
This business will certainly teach us patience, eh?
From My Porch
Mike B. Class Star®
ClassStar presently offers two, 3-hour core courses. Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009 Mike Ballif. All rights reserved.
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