The Speed of Trust in Real Estate

 

Image courtesy Franklin Covey (2007)
Image courtesy Franklin Covey (2007)

 

Real estate is a team sport. How well a team performs as a whole depends on the quality of contributions made by each individual member, as well as how each key player functions within the context of delivering results for a successful outcome; on time and under budget. The cost and speed of success depends heavily on a key ingredient that can make or break the efficiency of a team and–in turn–the success of a project. That ingredient is trust. More specifically, that ingredient is smart trust.

In a book entitled The Speed of Trust (2006), Stephen MR Covey points out that although trust is largely misunderstood, it is critically important to learn the “how” and “why” of building trust to increase good will and efficiency of the team. A compelling excerpt from Covey’s book reads as follows (Covey, 2006, p.1):

 The One Thing that Changes Everything

“There is one thing that is common to every individual, relationship,  team, family, organization,  nation, economy,  and civilization throughout the world–one thing which,  if removed, will destroy the most powerful government,  the most successful business, the most thriving economy,  the most influential leadership, the greatest friendship,  the strongest character,  the deepest love.

On the other hand,  if developed and leveraged, that one thing has the potential to create unparalleled success and prosperity in every dimension of life. Yet it’s the least understood,  most neglected,  and most underestimated possibility of our time.
   That one thing is trust.” 

When placing this idea within the context of the real estate industry, it is apparent that trust is rare; if not altogether missing.  Covey explains how trust can be established, developed, and nurtured by constantly getting better at what we do, and aligning our actions with behaviors that embody trustworthy character and competence.

Trustworthiness and credibility become self-evident. When combined with the energies of people who can see and focus on the same vision, team synergy can produce results better than the sum of all parts.

The High Cost of Low Trust

Trust has an economic impact on all areas of life and business; a trust “tax” when trust is low, and a “dividend” when trust is high (Covey, 2006, p.13). It directly affects the speed and cost of making things happen.   To illustrate the point, Mr. Covey dedcribes how the events of 911 impacted the speed and cost of the check-in and boarding process at airports worldwide, as well as the effects of the Sarbanes-Oxley Act that was passed in response to scandals such as WorldCom and Enron. (Covey, 2006, p. 13-14).

When trust is broken, it significantly raises costs and adversely impacts the speed of getting things done.  Low trust slows down the pace of accomplishing things, while increasing the cost of accomplishing those things significantly (Covey, 2006, p.13). This applies to all areas of life and business; including the real estate business.

The Process of Rebuilding Trust

Building or rebuilding trust boils down to consistently demonstrating 13 trustworthy behaviors within the context of four categories,  also called the “4 Cores of Credibility” (Covey, 2006); namely Integrity,  Intent, Capabilities, and Results (p. 43):

These 13 trustworthy behaviors (Covey, 2006, p. 136-222) include:

1. Talking straight
2. Demonstrating respect
3. Creating transparency
4. Righting wrongs
5. Showing loyalty
6. Delivering results
7. Getting better
8. Confronting reality
9. Clarifying expectations
10. Practicing accountability
11. Listening first
12. Keeping commitments
13. Extending trust (smart trust)

Relating the 13 Behaviors to Real Estate

Overall,  these 13 behaviors can be used as benchmarks to measure all kinds of situations; whether it means evaluating a contractor, a coach, or any other member of the investment team. In fact, after benchmarking against these 13 behaviors,  stark realizations may come to light. You may discover and realize that you don’t have the right people filling key roles in your organization; or on your team. When such a discovery has been made, it becomes imperative to replace untrustworthy people as soon as possible with people who strive to be trustworthy, reliable, and dependable. If not, the dynamics common to low trust cultures will adversely affect performance; increasing operating costs, decreasing the pace of progress, and ultimately devastating the outcome of the best laid plans.

In the coming weeks, I will be featuring a blog post about each of the 13 behaviors as they relate to real estate investing, as well as building a high-performance team of trusted advisors and professionals.  It is a way of educating the market in an effort to raise the bar in an industry that typically functions in a toxic low trust culture; where most are in it for themselves at the expense of others. In this respect,  educating the market is key.

As the market becomes more educated about trust and its 13 behaviors, the more power there will be to use benchmarking tools that will facilitate the process of building highly effective teams in the real estate sector. People will finally understand how to consciously nurture and build effective teams upon a foundation of high trust, mutual respect, and consideration starting with ourselves.

Real Estate Coaches: Three Signs that Separate the Good from the Bad

 photo photodune-3520393-value-s_zpse7b7b5e7.jpg

Real estate has become quite a circus with the latest and greatest strategies and “proven” processes hitting the inbox at the speed of a mouse click.

Anyone who has been in the real estate business for any amount of time has experienced the barrage of gurus, coaches, and programs that promise results; but only end up generating maximum sales for themselves. Many are good at delivering information, but fail to deliver tangible value in the form of a personalized customer experience that helps businesses identify and implement solutions to pressing business problems. As a result, intellectual capital without support is ineffective and value-deficient.

Customer Experience is Key to Creating Customer Value

In order to realize value, coaching programs and services must deliver a personalized customer experience that  meets the customer where THEY are in their businesses. It does not force customers into a cookie-cutter style program that may or may not address the customers current situation, or that duplicates a customer’s existing base of knowledge.  A personalized customer experience provides solutions that are relevant to the customer’s unique situation. Such products and services improve the lives of its customers in terms of solving business problems; whether it concerns improving operations, systems, or processes. A personalized customer experience goes beyond group coaching calls and receiving automated mass mailings.

A good coach takes a vested interest in the success of their clients and customers individually, because it becomes a direct reflection on the quality and effectiveness of their service. Customers invest resources in order to gain a benefit. The expected benefit is a solution that solves a business problem. Often times, coaches sell their wares and then forget about customers after the sale. Ideally, coaches remain present and engaged in order to provide support to help customers and clients realize their end game.

Good Coaches Do Not Disappear

Good coaches do not disappear when times get tough or challenging. They are truly present and they have a moral obligation to help customers and clients work through the issues that prevent them from realizing their goals. Bad coaches disappear, disconnect, and only re-connect when they want to sell something else. Once a bad coach or guru has revealed themselves as such, it is better to cut losses and disconnect immediately upon detection; because if a coach cannot deliver products and services in a way that is relevant to the customers’ business then that product or service is ineffective; thus, a waste of money.

Effective Solutions Produce Effective Results

Effective coaching services are results-driven, and should begin with an assessment of the customers’  business situation. Cookie-cutter programs are not designed to do this; therefore, they are a waste of money. Every coaching experience should build trust, credibility, and should drive results in a customer’s business to be considered a good investment.

Here are three signs that a coach is good or bad:

1. Good coaches take a personal interest in the success of their customers, and they personalize their solutions to fit the customers’ individual business needs.

It is not enough for a coach to say that they have a vested interest in your success. They must–in fact–prove this by their actions, through their behavior, and in their attitude.

Some questions to ask when evaluating a coach:

Are they proactive? Do they make it a point to reach out to you personally (not just through mass mailings)? Do they work to keep you accountable and on track to accomplishing your goals, or are they suddenly missing in action and unresponsive?  Do they make excuses for not being present, or do they own up to their short-comings and work diligently to make things right with individual customers? Do they offer customers full support, or do they leave out critical pieces of information in order to induce customers to buy another product or “higher level” of service later on?

2. Good coaches are responsive and communicative.

They don’t leave you hanging, and they don’t treat you like a pest whenever you have a question, or you are seeking their support. Good communication is critical to good relationships whether personally or professionally.

3. Good coaches are results-driven.

With a vested interest in the success of clients and customers, good coaches know that their success is tied directly to the successes of their customers and clients. As such, they will work diligently with customers and clients to identify and troubleshoot problem areas, work towards designing a plan to solve the most pressing business problems, and then proactively hold customers and clients accountable for completing the steps of the plan until they have achieved their goals. Anything less than this level of service is ineffective and a total waste of time and money.

In Summary

The three considerations mentioned above forms the basis of a litmus test that can be used to determine whether or not using a particular coach is going to be a good investment. A good coach is a great investment that adds to the bottom line; a bad coach is a liability that drains from it. To be successful, businesses must be careful to choose the former and avoid the later; or they will find themselves depleted of working capital and eventually out of business entirely.

On a Final Note: A Brief Word About “Gurus”

On the lowest end of the totem pole, “Gurus” are nothing more than over-glorified information peddlers that use deceptive practices like posing for pictures in front of mansions they do not personally own in order to induce a sale. Save your money, and avoid them.

Be smart. Choose wisely.  Take out the garbage, and save your money for only the best.

 

Association Seeks to Standardize Single Family Rental Operations

The National Rental Home Council, a new association of institutional single family rental housing operators recently released a set of operational guidelines for the standardization of operating single family rental housing. The NRHC is first of its kind formed to raise the bar in a growing industry of single-family owner.

Click here for a copy of the new NRHC Operational Guidelines.

 

NY Times – U.S. Economy Grew at 4% Rate in Second Quarter, Beating Expectations – NYTimes.com

JULY 30, 2014 – Dionne Searcey, NY Times | The United States economy rebounded heartily in the spring after a dismal winter, the Commerce Department reported on Wednesday, growing at an annual rate of 4 percent from April through June and surpassing economists’ expecations.In its initial estimate for the second quarter, the government cited a major advance in inventories for private businesses, higher government spending at the state and local level and personal consumption spending as chief contributors to growth. Economists, who had been hoping for a full reversal of the first quarter’s decline, were cheered by the second quarter’s numbers. The consensus forecast for G.D.P. was 3 percent.

via U.S. Economy Grew at 4% Rate in Second Quarter, Beating Expectations – NYTimes.com.

Fed, Confident in Economy, Details End of Bond-Buying Program – NYTimes.com

WASHINGTON 07/09/2014  — The Federal Reserve said on Wednesday that it planned to stop adding to its bond holdings in October, in a sign of its confidence that the economy is gaining strength even as the central bank gradually withdraws its support.

via New York Times  Fed, Confident in Economy, Details End of Bond-Buying Program – NYTimes.com.

Eye on Housing | National home builders association discusses economics and housing policy

Housing starts exceeded one million for first time since last year and housing permits were over one million for a third consecutive month. The increases were almost entirely in multifamily rental construction.

Multifamily construction soared 40% to 423,000 starts, the highest since January 2006 and permits also rose 20% to 478,000, the highest in almost six years. Multifamily starts were particularly strong in the Midwest where they more than doubled from an unusually low 42,000 to 100,000.

via Eye on Housing | National home builders association discusses economics and housing policy.

REUTERS | U.S. housing bill passes Senate panel but unlikely to become law | Reuters

BY Margaret Chadbourn, Reuters

(MAY 15, 2014) – A Senate panel on Thursday approved legislation to wind down Fannie Mae and Freddie Mac and redesign the U.S. mortgage finance system, but sparse support among Democrats means the measure is unlikely to make it into law.

via U.S. housing bill passes Senate panel but unlikely to become law | Reuters.

CNBC | ‘Shell shock’ bond move sends yields to pre-taper low

BY Patti Domm, CNBC

[MAY 14, 2014 ]Global bond yields are in a deep slide, taking the 10-year U.S. Treasury to a level not seen since October—well before the Fed began winding down its easy money program.

The common themes are accommodating central bankers and concerns about growth. In the U.S. a short position in Treasurys continues to support the market as investors are forced to cover with each notch higher in price and lower in yield. Yields were lower across the curve, but the 10-year yield broke below a range that it has held since the end of October, touching a low yield of 2.52 percent.

via ‘Shell shock’ bond move sends yields to pre-taper low.

Phipps Conservatory Center for Sustainable Landscapes | Living Future

via International Living Future Institute

Phipps Conservatory and Botanical Garden’s mission is to inspire and educate all with the beauty and importance of plants, advance sustainability and human and environmental wellbeing through action and research, and to celebrate its historic glass houses. The mission of the organization is evident in the Center for Sustainable Landscapes (CSL). A restored brownfield is now a productive place that takes what it needs from what is available to it, and provides a healthy environment for life to thrive. True to the Phipps mission, the ongoing work at the CSL is based on recognizing vital and positive connections between people, plants, beauty, health, and focuses on awakening children to nature and encouraging sustainable, healthy lifestyles.

via Phipps Conservatory Center for Sustainable Landscapes | Living Future.

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