• Trim property taxes. If a house has lost value, have it reappraised by the municipal assessor. Consider petitioning — or even suing — to get back taxes overpaid in the last few months.
• Deduct a home office. Some people avoid the home office deduction because it requires deducting depreciation, but if the property has lost value, this isn’t an issue.
• Sale-leaseback with a relative. If you're convinced your property is due for a big price correction and you have equity in the home, then sell now. For example, if you have a $1 million home that has been appraised at $1.8 million, you can sell it and take home $500,000 of the $800,000 gain tax free — due to an exemption on profits from the sale of personal residences. Sell the property to a trusted friend or wealthy relative and then become a tenant and pay the buyer rent at market rates — a much more attractive amount than Treasury bonds are paying now. When the housing market corrects, buy the property back.
• Invest in housing futures. The Chicago Mercantile Exchange sells investment instruments that trade based on house price indexes for each of the 10 largest U.S. cities. You can sell futures, buy puts, or sell calls on this market to hedge losses in the value of your home.

By Joe Cooke

RISMEDIA, August 28, 2007-If you have never been in this situation, you will be, so let’s get it over with. You’re in a seminar with a hundred other agents and brokers when the discussion leader asks, “How many of you have a business plan?”

A few hands go up.

“How many of you have a written business plan?”

Most of the up hands go down.

It doesn’t matter right now if your hand is up or down. The truth is that everyone is working on some kind of plan. In general, these plans can be grouped into three categories:

(a) A visual plan (the first group of hands that went up)
(b) A written plan (the hands that remained up)
(c) A plan by proxy (everyone else)

The Visual Plan

There are agents and brokers who have their goals and systems so clear in their minds that they don’t need them written down. These people are easy to identify, because every action they take is leading them toward some goal, and every move they make is efficient. They can tell you how many appointments they need to make in order to get a listing, and how may contacts they need to make in order to get an appointment. They are driven, intense and dedicated to their mission, but they never get tired or burnt out.
If you ask a visual planner why they are doing a particular task, he or she would be able to connect that task in a reasonably linear fashion to a long-term objective like retirement, time freedom, business ownership, wealth or community service.

We all imagine ourselves in this category, because it sounds easy. However, successful business people with this kind of focus, knowledge and energy are rare.

Planning by Proxy

The most common type of plan is the proxy. To plan by proxy means that you give your power to another person. In other words, you look to your broker, your mentor, your loved ones or someone else’s plan for guidance.

Here are three reasons why you would plan by proxy:

(1) You have complete faith that your broker, your friends, your relatives and your competitors will see to your success
(2) You are willing to leave your income to chance
(3) You are willing to devote all of your waking hours to your business

Absent your own clear goals and objectives, you will naturally fall into activities and tasks that someone else determines. Marketing guru J.R. Ridinger, owner of Market America, says it like this: “If you are not working toward your own goals, then you are working toward those of someone else.”

The Written Plan

If you fancy yourself as a visual planner but you are suffering with time, money, health or relationship issues, then you might want to take a shot at a written plan. If the very thought of planning makes you shudder because a plan seems inflexible, irrelevant and difficult, then approach the process in a flexible, relevant and easy way. In fact, national real estate trainer Carla Cross sees the planning process as a key element of the plan.” The planning process is just as important as the plan itself,” says Cross. “The process gives you a way to think through your business.”

The first step in the process is to get to high ground. Turn off your cell phone, sit down with a journal and a pen and start writing a statement of intent. Write down what you want to achieve and why. Don’t worry about the number of listings you want to take or sales volume or awards or any other external objective. Take some time to get right down to the core of what you want. You might even try writing out your epitaph. Hopefully, it won’t look like this:

“Suzie was a real good real estate agent. She took two listings a week and never missed floor time.”

Once you have your ultimate goal in mind, let it go. Focus instead on the daily tasks-the things that you have control over, like the number of open houses that you will hold, how many people you will add to your database each week, how often you will touch base with your client base and what you will send or take or say. Don’t focus on outcomes-concentrate on the activities that will produce outcomes. That’s an important distinction.

“Too many new agents set a goal to get a dozen listings but don’t have any logical action steps to get there,” says Cross, who coaches agents on business planning.

Without a plan, our activities tend to be random. Bob Smith got a listing by advertising in the paper, so we take out an ad. A salesperson calls us and we buy into an Internet lead service or we put our name and face on hole #10 at the local public golf course for $250 a year. We knock on doors, we hand out cards, we hold open houses, we hold client appreciation parties, we create newsletters and we send out mass mailings. All of these can be good if done for the right reasons. These activities can also eat up all of your valuable time, and time is your most valuable and most limited resource.

“You don’t manage time,” Cross says. “You manage activities.”

Your Plan in Action

In the end, whether your business plan is visual, written or adopted by proxy, it answers two basic questions:

(1) What am I doing?
(2) Why?

Here’s an example: Let’s say you are scheduling an open house for Sunday morning.
Ask yourself, “Why am I doing this?”

If the answer is, “Because my broker told me to,” you might want to rethink your planning process. You are working on your broker’s plan.

If your answer is, “Because I am making contacts to build my database.”
Ask again, “Why?”

“So that I have a database of 200 names by the end of the month.”

“Why?”

“Because I want 1,000 names in 90 days.”

“Why?”

“So that my business is based on referrals, Internet leads and follow-up.”

“Why?”

“So that I have more time to spend with my family and a steady stream of business.”

“Why?”

“So that I am making a six-figure income within two years without working 24/7.”

Keep asking the question, “Why?” until you get to the final answer, whatever that is. Perhaps you want to sell your business in five years so that you can spend all your time with your family and travel. Whatever the ultimate reason, every task should fit into the model. Even down time. Why are you relaxing right now? So that you can be more effective when you are working. Why are you golfing? To refresh your body and your mind. Why are you reading this? To become more effective and efficient with your time. Why? To reach your ultimate goal, whatever that is.

If your answers lead you to your own, personal mission in life, then you have a plan that will get you up in the morning, fire you up through the day and keep you going through the hard times. RE

Joe Cooke is an author, speaker and entrepreneur with over 25 years of experience in marketing and management. In addition to earning a master’s degree in Taxation and a law degree, he has held real estate licenses in both Washington State (as an agent) and Oregon (as a broker).

For more information, visit www.joecooke.info.