Mood of the Market
Mood of the Market
If you follow the news, you might have heard that American motivational speaker Steven Covey passed away from complications of a bicycle accident last month, at 79 years old. Covey's magnum opus was his 1989 book, "The 7 Habits of Highly Effective People," which has sold more than 25 million copies since its original publication.
As I see it, the success of the "7 Habits" book and the cottage industry it spawned lies in the simple but profound insights Covey delivered about how to effect change in our own lives and our world -- insights he broke down individually while also showing how they interact to create a powerful, holistic way of seeing and being in the world. This approach seems less groundbreaking now than it truly was when Covey crafted it more than 20 years ago.
In honor of Covey and his contribution to millions of lives worldwide, let's take a look at how homebuyers, facing the often overwhelming task of making smart, sustainable decisions in a volatile real estate marketplace, can put Covey's "7 Habits" to work. We'll cover the first four habits this week, and the last three next week.
Habit No. 1: Be proactive. First, let's define success or "effectiveness" as a homebuyer as successfully closing escrow on a home that then meets one's and one's family's needs, for as many years as they want or need it to, without ending up in mortgage distress.
Highly effective house hunters know that the ultimate responsibility for their success lies with them, not with their agent, mortgage broker, the home's seller or the market. So, they are proactive: They run their own household financials; they are careful not to overextend themselves; and they are diligent when it comes to viewing homes, reading inspection reports and following up on things, during and after the transaction.
Habit No. 2: Put first things first. When it comes to homebuying, the very first step effective homebuyers take is the step of ensuring that they are financially ready for homeownership. That looks different for different people, but if you've struggled with debt or saving money, putting first things first in the context of your homebuying dream might actually involve nothing more than paying off your excessive debt, changing any dysfunctional financial habits you may have (like overspending) and creating good habits around putting money away.
For other homebuyers, it might be as simple as obtaining a loan approval before they actually start the process of house hunting in earnest.
Homebuyers who jump into looking at houses before they have handled their financial matters often end up taking on unsustainable or otherwise unwise mortgage obligations they might not have if they had put first things first.
Habit No. 3: Begin with the end in mind. I've long believed the best way to approach the homebuying process is to sit down and devote an hour to writing out your personal "Vision of Home." The aim is to avoid jumping right into the granular details of how many bedrooms, bathrooms and square feet you need, but rather to invest some energy into cultivating true clarity on what you want your entire life to look like after you own this home.
Buying a home is, in my opinion, the most wholesale opportunity to intentionally design nearly everything about your life that most people will ever embark on, given that it has potentially massive impact on nearly every area of your life, including:
Homebuyers who want to be effective should consider beginning with their endgame, their post-homebuying vision of how, where and with whom they will live, spend their time, work and play.
Habit No. 4: Think win-win. Nowhere does it say that for the buyer to get a good deal, the seller must leave the transaction utterly dejected and depleted. In fact, many of the great brokers and agents in the world look at things precisely the opposite way: A seller wants to move on to the next phase of her life by selling this property, and the buyer wants to move on to his by buying it.
Many highly effective agents see their role as facilitating both of these aims in a single transaction (while protecting their own clients' interests in the process). Further, many sellers truly, deeply care about their homes and neighborhoods and relish the thought of passing it to someone who will care for it and thrive there.
This doesn't mean you should overpay for a property or otherwise fail to take advantage of market dynamics when they are in your favor. Rather, it means that effective house hunters often approach sticky negotiations with respect for the folks on the other side of the table and a willingness to be creative and flexible where they can to help get to a set of deal terms that works well for both sides.
Next week: the final three habits of effective homebuyers.
What's Your Home Worth?