Lesson 1 – Real estate is a great servant and a terrible master.
Just like money or other forms of wealth, real estate is a great servant and a terrible master. Owning a home, investment property, or a real estate business can provide great spaces and resources for fulfilling our purpose, but owning and maintaining a beautiful home, accumulating a high-yield portfolio, or making a ton of money by closing lots of sales doesn’t make for a great life. If real estate success starts running our lives rather than our higher callings, that “success” can undercut true happiness.
At various times, I have fallen prey to the temptation to put our real estate business at the center of my world, which caused me to neglect my relationships with my wife, children, God, friends, and neighbors. I have also observed people make house-hunting the center of their worlds with endless research on available options for fear of missing the magic house, which leaves them stressed out and unable to enjoy the process or anything else in their lives during that season. Still others make getting the best deal and maximizing their investment the most important thing, which can easily lead to exploiting or mistreating others to make more money in a real estate deal.
Real estate should serve people, not the other way around. Those who keep the perspective that real estate can support the most important things rather than being the most important thing tend to be happier and more peaceful in their real estate endeavors and their lives as a whole. They are able to honor others in negotiations while still making wise choices. If things don’t turn out as expected in a deal, they are less likely to feel like their world is falling apart because their lives are anchored elsewhere.
Lesson 2 – Your mindset has an enormous impact on your real estate outcomes.
Your mindset about yourself and what’s possible for you has an enormous impact on whether or not you succeed in owning a home, investing in real estate, or running a meaningful and profitable real estate business. While some people have a head start due to their circumstances or natural abilities, I’m convinced that anyone can own a home, invest in real estate, and run a meaningful and profitable real estate business, and it starts with understanding for yourself that you have great potential and capacity. Sadly, I’ve watched many people accept the lie that they can’t do it because they are convinced nothing they do will change their current situation.
Lesson 3 – Trust enhances everything.
Trust makes pretty much everything easier and better, and distrust makes pretty much everything harder and worse. Stephen M.R. Covey captured this idea really well in his book The Speed of Trust. After a decade in real estate and experiencing lots of both high-trust and low-trust situations, I whole-heartedly agree with him that we should do all we can to cultivate trust with other people. This applies in lots of real estate spaces. If you can’t trust your real estate agent, you’ll have to spend lots of hours checking every detail on your own, and while you’re busy doing that, you’ll likely miss good opportunities because you’re not available to actually making a decision. If buyers and sellers don’t extend trust to one another, it’s nearly impossible to create win-win negotiations. Without trust, people spend huge amounts of time, energy, and money considering all the possible bad things others could do to them and building protections against them, but in an environment with healthy, genuine trust, that energy is available for finding opportunities, creating solutions, and taking productive action. If you want to succeed in real estate or anywhere else, invest in building high-trust relationships by being trustworthy yourself and extending opportunities for people to earn your trust.
Lesson 4 – Caring about others is a good negotiation tactic.
Caring about others is a good negotiation tactic. Above all, people want to be seen, heard, understood, valued, and respected. When people perceive an attack that devalues or disrespects them, they will most likely respond with either a counter attack of some kind or retreat for protection. Negotiations often fall apart because one of the parties gives up on the character of the other party. They say, “If that’s how they’re going to be, just forget it. I don’t want to work with someone like that.” Even if it’s financially better for them to work it out, they might still give up because they feel ignored or disrespected. Thus, communicating that you see, hear, understand, value, and respect the other people involved in a real estate deal or any other negotiation maximizes the potential for creating a win-win.
Lesson 5 – Your habits exert the biggest influence on your real estate results.
Your habits exert the biggest influence on your real estate results. Some people have habits that steadily move them toward earning and saving money, which eventually makes it possible for them to own a home and invest in rental property. Others have habits that consistently sabotage earning and saving money, which torpedoes their opportunity for owning a home and investing in real estate. Similarly, running a better real estate business has required me to develop new and better habits. Many people see their parents, their kids, their spouse, their boss, their company, or the government as the main reason they can’t achieve what they desire in real estate and in life as a whole. At various times, I’ve believed this kind of thing because it’s easier to blame someone else than it is to take responsibility for my own bad habits. In truth, my bad habits are the greatest limiting force in my life, and my good habits are my greatest success multipliers.
Lesson 6 – Get started somewhere.
Many people considering buying their first home feel excited by the prospect of living in their dream home that’s so much better than the apartment they are living in now. It’s got three bedrooms, two bathrooms, no stairs, and a nice yard in a prime neighborhood that’s just a short commute to work. They contact a lender to find out what they can afford, and it turns out that they can really only afford a home that’s a lot less cool than their dream home, like a condominium with no yard; or a small, 2-bedroom home; or a home that’s a long commute from work. It seems crazy to make the biggest purchase of your life and not get a big upgrade in lifestyle, so they wait in hopes that the market will change to make their dream home affordable with their current resources. Unfortunately, many people end up waiting for that so long that they just give up and never get started, and I have watched people spend hundreds of thousands of dollars in rent when they could definitely have bought a home and made significant financial gains for their own lives rather than for their landlords.
In our own family, we couldn’t afford a dream home in the area where we wanted to live, so we bought the 3-bedroom, 2-bathroom condo we could afford. It took most of our savings to get it, and the payments were a stretch too. Then, we watched the value drop by 12.5% as the market continued declining. At the time, we had two young daughters, and Hannah’s brother was living with us too. We ended up living there for six years and had two more daughters. Hannah homeschooled all of them, so we had four children in our condo with no yard who did not leave for school five days a week plus Hannah’s brother still living with us. While that was intense, the condo rose in value and our payments made our loan balance lower over time, which made it possible to sell the condo and put a 20% down payment on the single-family home that we live in now. We would never have been able to save that kind of money while renting.
If you’re just waiting, I encourage you to find a workable place to get started in owning a home because time generally helps you gain financial ground when you own, while renting tends to keep you on a financial treadmill.
Lesson 7 – Your home doesn’t determine your happiness.
I’m blessed with the opportunity to interact with lots of people in all kinds of homes and neighborhoods. Remarkably, I find people living happy, fulfilled, meaningful lives in all kinds of homes and neighborhoods, and I also find people living unhappy, unfulfilled, and seemingly meaningless lives in those same neighborhoods. I highlight this because many people buy a home that’s really too expensive for them because they are convinced they couldn’t be happy living in a more affordable home. Others don’t buy a home at all for the same reason. As happiness researcher Shawn Achor shares in his books The Happiness Advantage and Before Happiness, your level of happiness is mostly determined by your perspective and the quality of your core relationships, and little if at all by your socioeconomic status. You can be happy or unhappy in just about any home depending on what perspective and what kinds of relationships you cultivate. We lived a wonderful six years in our condo even with seven people living there together, and you too can live a wonderful season in a wide variety of homes.
