February 11, 2013 by Benji
It’s not uncommon for people to be categorized as either “street smart” or “book smart”. I was told pretty early on in my real estate career that in this business we are paid for our street smarts, our “knowledge” not of maps and topography, but the formulaic pieces we pick up on around us which holds more value to our clients then just the knowledge of an available listing.. Like a mathematician, we analyze our “data” and piece together potential opportunities for clients. The way that we choose to combine or equate these markers can actually make or break our ability to put deals together and close. Success comes from hard work and a combination of:
1) Market Knowledge: What is the current market landscape? Who is in the marketplace? Where are their locations? What are market asking rates and what is currently available?
2) Transaction Knowledge: Literal contract jargon is just the beginning of what we need to be familiar with. What potential situations could cause the transaction to go wrong? How is that prevented? Who is looking to buy right now, who is looking to sell? Knowing as much as possible about the buyer, the seller, the market, the broker, the bank, or a tenant ready to move in can make a real estate broker a fortune.
3) Contacts: Who are the people at companies that manage real estate transactions? Who are their attorneys, accountants and lenders? Or to sum it up, Who are the deal makers in your market?
4) People Knowledge: When all else fails, knowing how to read people and adapt to situations is the simplest, but hardest sales tool and the basis for many a successful broker.
When you get started in the real estate business, you have little to none of any of these 4 types of knowledge. When I began my career, one of my mentors told me to go out and soak up as much market knowledge as possible, because it would get me in the door and help me gain credibility on my sales calls. I started with a bunch of small deals where I gained Market and Transaction Knowledge, deals that I broke my teeth on, but was able to learn from. I also got the opportunity to build my list of contacts with each transaction. People Knowledge, well that’s a lifelong endeavor of, building relationships , experiences, and having old fashion people skills.
A local Detroit company is making both Market and Deal Knowledge in Wayne County more accessible to everyone. The first time I saw Jerry Paffendorf was at the first TEDxDetroit event. He had moved to Detroit a few years back to be a part of the change and was speaking about his company Loveland Technologies. Loveland purchased vacant land in Detroit and sold it off one square inch at a time to “Inchvestors”. As he has continued to come up with interesting ways to entrench himself in the Detroit Real Estate market, he launched www.WhyDontWeOwnThis.com. The website tracks every piece of property in Wayne County, giving the global community the ability to search properties, find their owners, tax liens, and foreclosures. WDWOT (as the site is referred to by its users), also allows users to provide notes and information about properties, crowd sourcing information about entire neighborhoods. For the last year or so, I’ve watched the site evolve as Jerry and his team have continued tweaking and adding features to the site – seeking ultimate perfection for the community of Detroit.
Last week, Jerry announced that for a mere $25/yr members would have access to some previously unreleased features of the site. The “members only” features include a drastically improved zoom feature, ease navigating between zip codes, asking questions and leaving notes on parcels, access to “new features as they are rolled out” but above all, the access to aggregated information is key.
With the announcement of the new memberships came understandable buzz about the company, including a spread on CurbedDetroit and The Free Press. The latter included concerns by community members who feel that the site offers a disservice to the underprivileged, opens the door to scammers, as they scoff at the site’s outdated data pulled from the city’s records.
In all fairness, there has been a history of scammers using information to buy properties from vulnerable homeowners. However, Loveland’s technology doesn’t enable these corrupt individuals, it actually levels the playing field by allowing anyone to become an expert about their community. Everyone can now access the same information, and there are plenty of people on the Internet with Knowledge that are willing to share it – just look at the Wikipedia model.
As for the claims about the outdated records, well that’s more of an issue to take up with the city, however the fact that the site is crowd sourced will actually improve accuracy of properties. Using Loveland’s system, I recently looked up a number of properties that I was already familiar and knew had been traded in a tax auction. I can confirm that the information wasn’t up to date, but again, it’s a reflection of the cities poor records, not of the website. I will be making notes to help out people trying to find out what “the deal is”. I believe in the coming years this crowd sourced model will become the standard for major cities. This tool is the future, and is changing the landscape of Deal Knowledge and Market Knowledge. We’ve already watched as Technology changed Transaction knowledge, and embracing this type of new information is part of Deal and Market knowledge today.
So if you live in Detroit and want to know about your neighborhood, check out the site, look around and if you happen to know anything about the house next door, fill it in! If you are a rookie in Detroit real estate, get an edge on the old dogs, and pay the $25 for a membership.… And use it! If you are a veteran of the real estate business in Detroit, I urge you to embrace this technology, because your competition is going to be!