Real Estate advice for 3500 years

For those that thought that when Moses went up on Mt. Sinai that all he came down with is 10 simple instructions, you are sorely mistaken.  Know what else he got from God?  Real Estate advice.  No, not just the "I am giving you the land of Milk and Honey" type advice, but the kind of advice that would have prevented this entire housing crisis we have experienced over the last 4-6 years.  Who knew - it's been written down for 3500+ years, and we all missed it.



Here's your chance today - buried in Leviticus 25 is God's real estate picks.  From Fair pricing methods to valuation guidelines, it's all there.  Yep - God, from his perch on high, was even the first to put a premium on a property in a gated community - (v.29-31) - over a property in the suburbs.  Other than the birds, He had the only available topographical view at the time, so it probably was painfully obvious!

For valuation guidelines - my real point - Value in Leviticus was to be determined by the number of years since the "Year of Jubilee".  Why?  The Jubilee was every 50 years, and was tied to the crop yield of the land.  Israel had 7 cycles of 7 years - 6 years of crops plus one year off, 7 times.  The 50th year was the year of Jubilee!

Let me break this down for you - replace "crops" with "economy".  Value of real estate was to be determined by the predetermined state of the economy!  Land was not just for living, it yielded revenue.  And it's value was predictable based on the foreseen economic yield.  In modern times, we have divorced the value of the home and the value of other things.  In 2007, homes were overpriced compared to the general economy, creating the housing crisis.  Now, in most markets, homes are underpriced compared to the economy, due to the surplus of inventory by Mistake #1.  This has now contributed to the delay of a speedy recovery.  If housing was moderately priced based on its proximity to the city (gated walls) and the state of the economy, we wouldn't actually be in a housing crisis right now.

OK, enough nirvana.  What's my point?  Stepping out of our current situation and referring to 3500 year old logic makes our current benchmarks for valuation seem silly, which is why they caused problems in housing, for instance.  Take a look at the benchmarks for valuation of YOUR current product that you are selling (or buying) and see if it passes the timeless valuation test.  Use timeless wisdom to demonstrate to your buyer why they are doing business with the right person.  Can you demonstrate the value of your current asking price using a point of reference outside your organization, other than traditional internal margin requirements or goals?  It is helpful to go through this exercise, it should help you gain confidence in what you do, or challenge upward where it is mismatched.

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