Shrinking Wallets, Shrinking Homes: The 4 D's of Real Estate

In my book, I devote a chapter to what I call the 4 D’s of Real Estate. They are Desire, Debt, Death, and Divorce.

The 4 D’s come in waves. Sometimes I’m dealing with many clients whose real estate move is a result of a divorce. Other times it seems like death is the cause for several clients to buy and sell homes.

In today’s market, for reasons that I don’t need to explain to you, I’ll focus on Debt.

The real estate market is cyclical. A few years ago we were riding a wave that seemed to have no crest. Experienced agents knew that the party would come to an end, we just didn’t expect it to wrap up so badly.

Presently, you’re dealing with clients whose lives are being affected by tough economic times. At the moment, they have the home of their dreams, complete with a pool, a large lot, and a view of the city. Now they’re looking for a condo that’s half the size.

Remember to treat your clients with compassion. It’s tough to downsize once you’ve lived large—just ask MC Hammer.

Maintaining an upbeat attitude will go along way to earn your client’s trust. So always present a silver lining. For example, your clients may express sadness with having to give up their home and move into a smaller one. But there are upsides to downsizing.

With a smaller home, your clients will have more freedom. There will be less to clean and less to manage. This is especially the case if they’re moving from a detached single unit home and into a condominium or townhouse. There will be considerable cost savings when they don’t have to hire gardeners, house cleaners to clean a large house, and fill rooms with expensive furniture.

Some of my clients have homes so big that their children and they can lead separate lives if they wanted to. With closer quarters family members will spend more time together.

Another benefit of condominium life is being able to lock and leave—if they want to take a vacation, it’s much easier to do so when a homeowner’s association is taking care of upkeep.

In the next post, I’ll provide an example of how I worked with a client who had to downsize as a result of a dip in her savings.

♦Digg it   ♦del.icio.us   ♦Add to Technorati Faves