The 95/5 Principle

I know you have heard of the 80/20 principle, “The Pareto Principle”, and I agree with that principle for the general work environment. 20% of the effort for 80% of the results.  And Pareto may have even found a scientific way to prove it.  

As a real estate agent, I watch lots of folks make decisions, and I get to watch others decision making processes. I have the pleasure of opportunity for observation.

And what I see often enough leads me to come to this principle –  that people often make decisions based on something that is actually a small part of their lives.

In general application, the 95/5 principle is in effect when people buy a house where a major focus of what they want is something they will seldom use.  For example, they have to have a dining room for 2 family gatherings per year.  They require a dining room for 60 hours out of the 8,760 hours they will live there in a year.  I know, that is less than 5%, but let’s go with it.  Maybe they will have a few dinner parties.  The result of this is that they rule out houses that may actually work well for them, or even better in other situations they use more often, but they hold out for the house with the large dining room.  I call that  95/5 decision.  It is neither wrong, nor right.  It is a consideration that I want my buyers to recognize.  Once they recognize it, they are then deciding it on purpose, rather than letting an emotional need drive the decision making process.

We frequently see this also as a factor for seldom-played grand pianos, extra bedrooms for unborn grandkids, and a large yard for kids who don’t play outside.  Again, if a buyer can afford it, they can, of course, buy for things they love and wish for.  If they cannot afford the larger home, it is my desire that they’d be realistic in their usage of their house.

Certainly, the choice is the buyer’s and they can and will buy for the 5%, and that is fine.  House buying is mostly emotional anyway.  But for those of you on a budget, do you want to buy for the 5%?

Happy Shopping! You can read about the personal side of this principle here.

Discussing Dementia and Tiny Houses – Join us!

Are there any people aging in your family?  Are you aging?  Okay!  We are all aging.  If we are honest with ourselves.  I have seen some pretty good cases of denial in my classes.  I get it.   Well, whether honest or in denial about ourselves, we all know our parents are aging.  

One of my favorite classes I teach is the Senior Real Estate Specialist Designation course for the National Association of Realtors.  This class helps agents prepare for the situations that come up uniquely with our elder clients.  Surprisingly there are many – situations with stuff management, legal concerns, health issues that affect housing, and financial needs.  Many of these require other professionals to help them, but Realtors are often the first point of contact for the client and it is hugely helpful when the Realtors have contacts to help their client.

Barbara Drum

 

The Boomers are changing the face of retirement and aging – not a surprise.  There are new options, challenges, and opportunities for agents working with Boomers and their Elders.  I am attaching a link to a webinar interview I did with Barbara Drum, a resident and Marketing Manager for The Village of Wildflowers near Asheville, NC.

 

 

Barbara lived out many of the things we discuss in our SRES classes.  We had a great interview about her life, which includes working in a Memory Care facility for patients with Dementia and Alzheimers, caring for parents with Dementia, and moving to a Tiny House community as an effective financial decision for a place to live in semi-retirement.

Enjoy this hour-long interview from a woman who has been on these journeys and shares them with great perspective, interest and laughter.

You can see the Tiny House Community she lives in at http://thevillageofwildflowers.com.

Here is the link for the webinar if you are interested.  I hope you enjoy it and learn some great things.  

Effective Negotiating begins with Education

And is perfected (if there is such a thing as a perfect negotiator) in daily life. Negotiating skills are only improved with use. I try to use them every day. With my kids, the salespeople at the store (1 for 2 today) and for my clients. We had a great class in Murfreesboro with the Middle TN Association of Realtors on the 20th. Thanks to Debbie Mann and the Women’s Council of Realtors in Murfreesboro for sponsoring the class.