Articles by Nicolai Kolding

The days of the single-office, generalist, residential brokerage may soon be over.  Those who survive this down market will most likely have done so because they will have made the choice between getting bigger or becoming a specialist firm, a boutique.

This is a common theme within any industry facing the kinds of historic challenges that we are.  It’s the choice between growth or specialization.  If there is little differentiation between your firm and the many others in your marketplace, there is little reason for consumers or agents to choose you over another.  Now more than ever you need to either establish a dominant market position or find your niche and own it.

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I’ve attended more industry conferences than I can readily count.  With my destination-shopper mentality, I tend to grumble a bit under my breath about the less-than-perfect efficiency of these events when I can’t just get what I want and move on.  While I believe they are necessary, I also see them as a microcosm for what is both great and frustrating about this industry so many of us call our own.

Last week in Orlando I attended both the REALTORS® Conference & Expo and a session from BloodhoundBlog Unchained.  There was no escaping the tremendous amount of excitement, enthusiasm, cooperation, collaboration, and innovation, yet I still flew home daydreaming about what I would do differently.  So here are the seven things you would find in this young curmudgeon’s perfect conference:

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“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness.”
-The Declaration of Independence (1776)

“A little revolution now and then is a good thing.”
-Thomas Jefferson (1787)

“Values have shrunk to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; and the savings of many years in thousands of families are gone.  More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return.  Only a foolish optimist can deny the dark realities of the moment.

And yet our distress comes from no failure of substance.  We are stricken by no plague of locusts.  Compared with the perils which our forefathers conquered, because they believed and were not afraid, we have still much to be thankful for.”
-Franklin Delano Roosevelt (1933)

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Another Better Homes and Gardens Real Estate exclusive!  Can we outdo our Crossword Challenge?  You be the judge!

To get started, input the answers to the clues below into their appropriate boxes (for example, if the answer to the first clue is “8″, you should place the number “8″ into both e9 and a8).  Filling in the numbers from all the clues will be enough to allow you to finish the rest of the puzzle in traditional Sudoku fashion.  Since it has a five-star difficulty rating, there are a couple additional clues to help you if you’re stuck.

The first person to email or fax (973.407.8801) a correctly completed puzzle gets massive adulation, a measure of pride, and a one-year subscription to Better Homes and Gardens® magazine compliments of us.

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A couple weeks ago, my colleague Jason Steele wrote an article describing the odyssey he and his wife had survived in selling their home.  For me, that article began a series of misunderstandings that could only happen in our socially-networked age as a number of friends (and some family) falsely believed that I had suddenly been forced to sell my house due to the difficult economy.  Since my parents and two of my three brothers live in various corners of Europe, this seemed entirely plausible; as serious as things are for many, they seem to somehow be getting an over dramatized version of the news.  For all they’ve heard and read, our entire economy has screeched to a complete and utter standstill.

How did this misunderstanding happen?

As part of a conscious effort to “spread the word”, many of us at BH&G RE link our social networking sites to this blog.  For example, when a new blog article posts it is automatically populated onto our “News Feeds” on Facebook.  This is one way to reach a broader audience.  The update only shows the title of the post (without indicating who the actual author is).  If someone wants to read more, they simply click on the hyperlink and follow the story.

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As an industry, we are all suffering right now in large part because too many people over a long period of time checked their ethical compasses at the door.  Whether we like it or not, we are all caught up in this mess and few people are differentiating the players - since we are part of the system, we are perceived by many as therefore being part of the problem.

At this point in time, confidence and trust in all aspects of our business are challenged.  Simultaneously, the financial environment for many brokers and agents has never been more difficult and the temptation to compromise company and personal values has never been higher.  As brokers and agents, this is the time to stand up in defense of your ethical principles.

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Posted by Nicolai Kolding

A few days ago I offered the idea that the direction of the residential real estate market is driven first by transaction sides then by price.  The basic theory that the market is cyclical is obviously not unique.  There are several different views on this; my cycle has eight phases (with Phase I being Paradiso to Phase V’s Inferno).

To support this, I gathered national and regional (Northeast, South, Midwest, and West) figures on closed sales and average price from the National Association of REALTORS® for each month dating back to January 1999.  I then compared the rate of change versus prior month, quarter, and same month of prior year to analyze how the data fit the phases.

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Posted by Nicolai Kolding

In trying to decide how to respond to the Merrill Lynch, Lehman Brothers, and AIG debacles, I’ve concluded that the best answer is to remind all of us to focus locally, where real estate really matters.  This isn’t to say that the news isn’t important but (a) this shall pass, and (b) I believe the men and women who are on the front lines each and every day are better served focusing on the forces that they have some control over.

The basic question that everyone is asking is, “Where is the market headed?”  Any broker or agent who tries to answer that one had better know his or her market inside and out.  And if you believe that real estate is cyclical, then understanding what phase of the cycle you’re in is critical.

There are a number of different takes on this, but here is one version of the phases of a typical real estate cycle:

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Photo by JOE M500/Flickr.com

Posted by Nicolai Kolding

I’m an insomniac.  That hardly makes me unique around here - it’s a bit of a running joke in our halls as we see each other in the morning:  “So, how many times did you wake up last night?!”  On many nights there are just too many ideas spinning around in our heads to allow for a peaceful sleep so we’re up like a flash at 3 a.m., reaching for pen and paper to write them down before trying to doze off again.

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Posted by Nicolai Kolding

Today I was invited to speak on a panel at the RISMedia Leadership Conference.  The topic was “5 Ways Where You Can Cut Costs-and Profit.” My five suggestions were:

1)  Index Commission Plans.  This is about properly resetting the thresholds at which higher commissions are paid out so that the schedule is aligned with inflation.  This idea also works with desk fees or other fees so you should apply it there, too.  For a detailed explanation, see my indexing post from earlier this year.

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