The First Time I Lose I Drink Whiskey.
“Well, the first time I lose I drink whiskey. Second time I lose I drink gin. Third time I lose I drink anything ’cause I think I’m gonna win.”
– Gram Parsons
Many years ago, I purchased Cisco stock. I read about it in the New York Times and Wall Street Journal. The $10,000 purchase became $5,000. How? To quote Hemingway: “Gradually and then suddenly.” I thought I was knowledgeable. I wasn’t.
A math truth? At times, 50% of the population is below average. Guess which ½ I belonged to when I bought Cisco? Post-Cisco fiasco, and because money was involved, I started to ask questions of an investment advisor and got smarter.
I thought of Gram Parsons when I read recently of an agent who touted she had gotten an Offer accepted for her client on a home sight unseen. Yes, the buyer made an Offer without physically seeing the home. Maybe the buyer missed out on a home once (whiskey) or twice (gin).
Buy sight unseen? “The third time I drink anything ‘cause I think I’m gonna win.”
No doubt the buyer was following a contagious narrative (drink anything.)
A contagious narrative is something that excites the imagination (HGTV, traditional real estate selling agents) to the point that you arrive at a basis for valuation without much thought because everyone else accepts it. Be careful, this is true in life beyond real estate decisions.
 Anything involving money, especially the purchase of a home, should follow a process, using a business approach, absent contagious narrative. How do narratives begin? One example is a recent Wall St. Journal Headline:
“HOUSING MARKET SWINGING TOWARDS BUYERS”
Is the headline accurate? Partially. As I sit for a brief time in Sanibel, Florida, I’m reminded that real estate is local. Nationally reported real estate stories need to be taken with a grain of salt.
(Pliny the Elder, roughly 2000 years ago, described an antidote to poison as adding a grain of salt.)
It’s difficult to sell a Sanibel home because the market is saturated with homes for sale and few buyers. Buyers don’t have to settle for “swinging,” they can hit “home runs” if they want to take on the risk of hurricanes.
It’s difficult to buy a home in the 4-county Milwaukee area because the market has many buyers and few homes to buy. Buyers “swing” in Milwaukee and often “strike out.”
 So the headline is true in Florida and false in the 4-county Milwaukee area, but the narrative is contagious.
I read recently about an athlete who said he had to “run to truth” before he could become his best self. Let’s run to some real estate truth.
A. Are you starting the homebuying process from a position of a contagious narrative? Forget the narrative and ask questions. If you ask us, we’ll give you straightforward and direct answers. You might not like the answers, but they will be truthful.
Truth:#1: You are better off long-term financially if you rent a home rather than buy a home but only if you invest the difference between owning and renting.
Truth #2: No one invests the difference between owning and renting.
Truth #3: Buying a home is a forced savings account that helps build wealth, if you buy right.
Truth #4: It’s difficult for young buyers to buy a home and build wealth.
B. If you’ve delayed purchasing a home or selling and moving up while waiting for the 4-county Milwaukee area market to change, that delay was probably a mistake.
The market has not slowed. I don’t believe you can time the real estate market any more than you can time the stock market. Fool’s gold each. You may not be able to time but you can ask questions, get educated and make informed choices.
C. Don’t ask how big a home can you afford. Ask what kind of home will sustain the kind of life you want.”
 Be attentive to the contagious real estate narrative sold every day by the industry. Channeling Pliny, If you don’t ask the right questions and question the answers, your real estate purchase may be poison.
Avoid the blind acceptance of contagions, ask questions – get answers and you’ll avoid real estate poison.
(Sketch photos are from the Book “Your Money” by Carl Richards.)
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Having helped over 1,800 homebuyers you learn a lot about the selling side. The goal: Make educated and informed decisions.
Thanks for reading,
Michael D. Holloway
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