Sociology Lessons for Real Estate Pros

I get asked all the time... Andy... is the Florida market really as bad as they say it is? and my answer is a resounding NO. However the people that Im trying to SELL my houses TO believe that it is, so therefore it is. (If youre not in Florida, just insert your state here, were all experiencing about the same thing right now!)

Does that make sense? The market is NOT that bad! Rates are ridiculously low, sellers are getting realistic on their prices, banks are dumping houses left and right, now is a GREAT time to buy a house, whether you are an investor, a first time buyer, or a move-up buyer. But most of America BELIEVES that it is a bad time to buy, partly because all of the morning news shows keep bringing on guests that say rent for one more year, prices will be lower. By the way, if everyone rents for one more year, will prices be lower? YES! Because sellers will HAVE to lower prices to get things sold. So peoples BELIEF that the market is bad and prices will go even lower will LEAD to that happening! Got it?

Driving back from Atlanta on Sunday, I was listening to a CD that talked about the Pygmalion Effect: when you expect or want something so strongly with so much conviction that it does become true. They were talking about it in terms of goal setting, but all I kept hearing in my head was: thats EXACTLY whats happening in our market!

The CD also spoke of a sociologist named Robert K. Merton, who in 1948 coined the term self fulfilling prophecy which is defined as an expectation or prediction which is initially false, which initiates a series of events that causes the original expectation or prediction to come true. (sound familiar to real estate?) The phenomenon has 3 basic phases:

1. A belief in something which is false at the time
2. You behave in a way that you could not have normally done in the absence of that false belief in your mind
3. The behaviors displayed in phase 2 actually create events which make the belief then come true

He gives a hypothetical example of the collapse of a solid and solvent financial institution:

Phase 1. Rumors spread that the bank was on the verge of bankruptcy (which was not true at the time)

Phase 2. Which led to massive withdrawal of savings by panicked depositors

Phase 3. Which led to the collapse of the bank
Wow! Sounding more and more like the real estate market, doesnt it? The media started talking about a bubble bursting and next thing you know people were dumping property so they didnt get caught in the bubble, then the bubble really did burst. We as the real estate professionals need to start a Phase 1 rumor ourselves, that the market is GREAT! Now is the time to BUY! Rates are at one of the lowest points in HISTORY! Oh, wait, thats not a rumor, its TRUE! We need to be as diligent spreading the POSITIVE message about the market as the nay-sayers are, then we will create our own self-fulfilling prophecy where the market takes off again! Yayyy!

Heres a parting thought from Einstein (he was pretty smart, wasnt he? Maybe we should listen to him!)

By: Ben Needles

Article Source: http://www.directorys.uniquearticles.info

About the Author (text)

Andy Tolbert has been in the real estate industry for over a decade and has been training others in the real estate industry for over 5 years. Tolbert\'s specialty is investor financing water dispensers

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