What should I eat for breakfast? What should I wear to work? What are my top priorities for the day? We all make scores of decisions on the daily.
And the decisions we worry about most are those that will leave lasting impacts on our lives and financial health.
As real estate agents and brokers, we have the added responsibility of worrying about not only our own financial well-being, but also that of our business, anyone who works for us and our clients.
Below, we’ll talk through strategies for making good major decisions.
1. Define the question accurately
This is the hard part. Realtors see the failure to ask the right question at work every day. Clients show up and announce how much money they want to spend and what kind of house they want, where.
That prospective homebuyer might be a young single man who works 12-hour days and parties with his friends at every opportunity. He has only a modest amount saved for a down payment, doesn’t even know closing costs exist and isn’t prequalified for a loan. He’s never done laundry, never hung a picture and certainly never attempted to trim shrubs or clean out gutters.
The last thing he needs is a house. The first thing he needs is answers to fundamental questions like:
- How do you want to live?
- What does each day look like?
- How do you want to spend your evenings and weekends?
- What are your financial circumstances and your long-term goals?
Once the answers to the right questions become clear, the type of housing that supports his desired lifestyle becomes obvious to everyone.
Most decisions are like that. You make them most effectively only when you define the fundamental issues underlying the decision at hand.
2. Decide who should be involved in making the decision
If you lead a large office, your decision might affect everyone. But consulting everyone is likely to be unwieldy and unhelpful, especially if the decision-making timeframe is short.
However, you can consult key members of your organization who have their fingers on the pulse of subgroups for their insight on specific issues that may help inform your decision.
If you have partners or a board, they will generally expect to be included in any major decisions and long-term plans, at least at a macro level. The micro stuff is up to you and the people who work for you.
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3. Define the timeframe within which the decision must be made and why
Consider, first, whether a decision really needs to be made. And, if so, does it really need to be made by you?
If it does, find out what factors are driving the timeframe.
If your team manager has given you until Thursday to create a new marketing strategy for a big listing, find out why Thursday is the magic day. It might be a completely arbitrary selection, or the client might be expecting a dazzling new concept outline by Friday.
Knowing what’s behind the deadline can make a difference in what you decide to do and how well you need to do it. Major decisions that require split-second responses should be anticipated to the greatest extent possible and strategies developed in advance for low risk/high reward, moderate risk/moderate reward and high risk/low reward opportunities. (For example: Can I beat that train? Answer: Not worth finding out.)
Most major decisions don’t fall in the split-second category and, thus, deserve to be thoughtfully examined. That takes time. Decide just how much time each decision requires, and allocate and assign the time and tasks essential to get it done in a timely way.
4. Outline possible options
Gather key players, and develop a blue sky list of all imaginable options to address the problem at hand. For maximum creativity, welcome all ideas and reject none — no matter how wild — out of hand.
For example: Imagine your agency is suddenly informed that the office you occupy has been sold and the new owner expects your firm to vacate the premises within 30 days or to immediately start paying double the current rent.
The two obvious options are pay more rent or move out. Don’t let outside forces make you take an action you do not believe to be optimum. Starting with the two obvious responses, gather your forces, and brainstorm what other options might work in this timeframe.
If permanent quarters can’t be found quickly, what temporary measures might be workable? Or could increased rent be paid temporarily to buy the necessary time to find optimum new office space? Invite input. And realize hasty decisions are usually not the best ones.
5. Research and winnow the options
Divide up potential solutions among your key people, and research all viable options as quickly as needed. Include, in most cases, the option of doing nothing.
Have each participant calculate the likely outcome and cost of each option they’re researching. Doing nothing is a decision in and of itself. Unfortunately, it’s often the most costly and least effective option.
Yet indecisive people pay the cost of doing nothing daily without recognizing how expensive it truly is. Cost it out. In researching all options, note the reliability and biases of your data sources.
For example, a listing of all available offices for rent pulled from online sources by a top local commercial broker would be a reliable and relatively unbiased source. A colleague hearing about an office that may be available soon is neither.
Keep track of the findings of your research in a format that you can easily share if there are multiple people involved or that you can view simultaneously if you’re working alone.
Photo by Jens Lelie on Unsplash
6. Rank the options researched
Choose any scale you like to rank each remaining option first on its feasibility and next on its desirability. Paying significantly higher rent, for example, may be 100 percent feasible (if only on a short-term basis), but it might rate an F on desirability.
Hopefully, your ranking exercise will provide two or three options that are about equally feasible and desirable.
7. Run a cost-benefit analysis
Define the risk and potential reward of the most feasible and desirable options. This requires utilizing some variation on the old two-columned pros and cons evaluation list.
Thanks to technology, we have access to better analytics and more sources of data to help with information-gathering. But, this step still comes down to ensuring that positives outweigh the negatives or that you have the ability to minimize the negatives and accentuate the positives of any decision you make.
8. Test the most feasible desirable options if possible
If your decision involves the purchase of a company car, you can test drive it. You may even be able to rent a similar vehicle for the weekend to get a better feel for its suitability.
If the landlord permits it, you could have an open house for your agents to assess new space before you sign a new office lease.
If you take on major clients about whom you have reservations, set up a trial period as “standard practice” before you commit to representing them or their property.
9. Do a gut check
Although we like to consider ourselves wholly rational beings, this is the step where most decision-makers start.
A gut reaction is not useless, but it’s also not rational.
If you’re weighing two equally desirable approaches to a decision, however, a gut check is useful in picking the final one. Your head and your gut need to be in sync for decisions to get your total commitment. And it’s that commitment that makes a decision work.
Photo by Justin Luebke on Unsplash
10. Do a ‘morals’ check
Whatever your own standards for doing business with integrity are, as a final step, ask yourself if the decision you’re about to make reflects your values.
Is it one you’d feel OK about seeing printed in the local newspaper? One you’d want your family to know about? One you could defend without shame if called upon to do so? If not, are you willing to take the fall if you’re discovered?
11. Pick one
Once you’ve done all the homework, just decide, announce the decision, explain your thinking, and get as much buy-in as possible.
12. Create a plan B
Good event planners always ask themselves (and their team) “What could go wrong?” And they make provisions for predictable possibilities (like stockpiling umbrellas in case there’s rain during outdoor events).
Do likewise. Even if your decision is correct, its application may require tweaks, so monitor progress and implement backup provisions as needed.
No decision is without flaw. But doing nothing is only rarely the right call. By following a thoughtful process — as slowly as feasible but as quickly as necessary — you can rest easy knowing you did everything right, including planning for everything going wrong.
Nicole Solari is owner and managing broker of The Solari Group in Solano and Napa Counties in Northern California. Nicole runs one of the highest producing brokerages in all of Northern California.
