Turning 2’s Into 10’s — Learning In Interesting Times

by Jeff Brown

Real Estate Investments Broker

Author website

It’s been an interesting year, in the sense of the old Chinese proverb about interesting times. Interesting in this context meaning hard times. Mortgage brokers are scrambling, trying to give great service while simultaneously discerning between serious borrowers and serious time wasters. Real estate agents, many of them in he business since 2000 or later, never having experienced even a normal market, are being harshly introduced to reality. I’ve recently learned some of the agents with whom I’ve become friendly during the great times, have taken 8-5 jobs. Many of them are wondering how long they can hang.

Turns out real estate, lending, blogging, marketing, and all the other jobs, require expertise and hard work. Go figure.

Another surprising development has been how experience has also quickly risen to the top as a quality attribute the last couple years. (Think my tongue almost penetrated my cheek on that one.)

Because there is not nearly as much business going on these days, the small things are creating big problems. I don’t mean by themselves though. It’s because, in my opinion, people are reacting poorly under pressure. A small problem, a 2 on the 1-10 scale, will arise. They respond though, as if it’s a 10. They do this because even a small threat to their acutely reduced income, scares them silly. Over time, their credibility suffers, as nobody around them takes them seriously. No matter how it’s framed, a problem worthy of only a 2 rating, doesn’t become a 10 just because it’s treated that way. People aren’t stupid — they notice — sometimes. In an alternate scenario, others become infected by this overreaction virus. Now all around are behaving as if the 2 is in reality a 10. I’ve seen easily solvable problems become deal killers — they died from the dreaded, ‘2 into 10’ fever.

It can get ugly when that happens. Egos get involved, emotions take over, and before anyone realizes it, the elevator has crashed thunderingly into the basement.

My first really tough market when everything went to hell in a hand basket, began in the last quarter of ’79.

I’d been a full time college student my first years in the business. The recession of ’74-75 was also my first two full time years. I was so naive I didn’t realize times weren’t stellar. I just kept knockin’ on doors and makin’ a living. Then great times hit, and like many agents in the most recent boom, thought I was a genius. What a knucklehead. Then everything ended in what is best described as a train wreck. Inflation at give or take 20%. Interest rates in the mid to high teens. (FHA hit 16% or so.)

Dad’s advice? Quit yer whining and figure a way to get it done. And that’s what we did. From ’80 to ’83 every year was a race to see if I’d earn more than my wife, who worked at a bank — not as the president. 🙂 Each of those four years though, we made an honest living. The income was a mere fraction of what we’d made in the mid-late ’70’s, but we slogged through. I came out of those three years vastly more experienced, and far more confident in my ability to stay calm under fire.

As if I had a choice. You either stayed calm, or filled out the Ralph’s application. Clients, and surprisingly I soon learned, other agents, appreciate someone who remains serene and relatively tranquil, when the what the dog leaves is hitting the fan.

When the ’90’s arrived with the whole S & L thing, I was discouraged, but thankful for the previous hard times.

Here’s the #1 lesson I learned: When folks see you standing tall and strong in the midst of the storm, giving direction and stability to the situation, their confidence in you grows almost exponentially. When they see others begin to take on your demeanor, they become believers. When they see it demonstrated over and over, they become evangelists

We’ve been fortunate, in that we deal with those for whom pressure is just another fact of life. It’s not that they don’t feel it. It’s how they respond to it — with a cool demeanor and force of will. They aren’t cowed by circumstances — or make things worse than they are by treating a 2 as a 10.

It’s times like these we find out who are producers of results, and who are producers of excuses. (Like some cheese with that whine?) It’s not that anyone is protecting a perfect record — that’s silly. Deals go south occasionally.

Do your best not to be the reason.

The last couple years have truly separated the wheat from the chaff in real estate. Those who survive this correction will not only be stronger and more confident in the future, but secure in the knowledge they’ve been there and done that.

Ask any loan broker or real estate agent who has made it through at least one of these down times — Has their confidence in succeeding during this correction been boosted by their previous bad market experience? I’ll bet they’ve been significantly more confident through the last couple years, because of their experience. They learned, some the hard way, turning 2’s into 10’s isn’t the fast track to success — especially in hard times.

Be honest. How many of you pros out there, have had transactions or loans go down the drain because someone not in your camp, decided some little glitch, a 2, was in reality a full frontal attack by Godzilla himself? (An 11?) 🙂

This has been on my mind lately because of how fortunate we’ve been in terms of the folks with whom we’ve aligned ourselves. There are many real estate agents and mortgage brokers who run teams. We do too, but several, and not only in different cities, but different states. It turns out the picks we’ve made for team leaders and members were propitious. If it hadn’t been so, well, we don’t allow ourselves to think about that.

The last two regions for which we deemed a team necessary, Idaho, and recently Texas, circumstances have not always been peachy. 🙂 By that I mean the markets are still fine, our team is stellar, but those with whom we’re obligated to work, aren’t uh, at the level we’d like to see. Both regions are gonna be super, long term. Problems crop up no matter what though. Without exception, our teams have performed like Brett Favre behind by six with two minutes to go. We rely so much on our team leaders on the ground to stay cool under pressure.

Our Idaho team leader has been nothing short of studly. The Texas leader? First time in the barrel and if you can imagine something going haywire, it probably did. The guy in charge on the ground, without exception, took care of everything Murphy threw his way. (Some might call him a genius. 🙂 ) To my knowledge, neither guy has ever known bad times in the real estate business — not even close. Both moved from other industries into real estate — you guessed it — when the big money was flowin’. When the market turned vicious, they just got tough. That’s probably incorrect. They no doubt were tough going in. My bad, guys.

Like I said, we’ve been fortunate.

They haven’t fallen into the trap of turning 2’s into 10’s. As a result, they get things done, while others are in panic mode. People now look to them for leadership, often unconsciously. Why? They are leaders. True leaders tend to, at least mentally, turn 10’s into 2’s. That doesn’t mean they don’t get mowed down by that 10. It means every now and then, they knock the 10 on it’s posterior.

If you think about it a bit, turning a 2 into a 10 is more than a little crazy. Who likes crazy? Not long ago, in Boise, a listing agent began to show signs of 2 into 10 fever. We instructed my Boise team leader to let her know we were gonna pass on her listing. When she asked why, my guy there replied, “Sorry, but Jeff and Josh just don’t do crazy.” How do ya not love that guy?

To be honest here, he was quoting Josh and me directly.

Be honest with yourself, and recall the times you’ve lost transactions or loans because somebody decided they had to turn a silly little 2 into a full blown Godzilla 10. If they work with you — avoid them. If they work for you — fire them. If they’re on the other side? Get out early if possible — or tell them straight out — you don’t do crazy.

In any case, we’re living in interesting times. Treating 2’s for what they are will increase your bottom line, while turning them into 10’s might have you filling out that Ralph’s application after all.