I was out one evening last month with a friend of mine who is also a Realtor. We drove in his $50K Mercedes SUV, which, at two months old, still had the new car smell. He had written up two Buyer deals that day and remarked to me that he thought his new sled was helping his real estate business. “How’s that?” I asked.
He said he thinks the nice car establishes credibility and evidence of success and expertise. He senses that when he meets Buyers for the first time and takes them out looking at homes in the Benz, they seem to be predisposed more than before to trust and believe in his advice and opinions. Following the purchase of the new Mercedes, he’d been doing better than before. He thinks it’s because buyers take him more seriously than when he drove his older Chevy Truck or Honda Sedan.
I then asked, “How do you know Mercedes doesn’t just make you feel better about yourself, and it’s your positive attitude and elevated self image that is causing you to do better, and not necessarily the car?”
He conceded that I might have a point, but he thinks the car definitely creates a positive impression with buyers which translates into more written deals. I remained skeptical.
A few days later I ran into one of the most successful and well respected Realtors in the U.S., who works in my Keller Williams office. I asked what kind of car she drives. She said, “Mercedes”. “Do you think that matters?” I asked. “Absolutely”, she said.
In her opinion, our vehicles are part of our attire, just like the clothes we wear. “What you drive says something about you, just like how you dress.” she says. I’m not going to argue with someone I admire so greatly, so I started thinking about this.
I guess I’ve been ruined by reading the book The Millionaire Next Door. As documented in the book, many people with nice cars and homes, and other evidence of a high consumer consumption lifestyle, are probably flat broke, in debt up to their ears, and have no savings. Not always, of course, but more often than not this is the case. Knowing this, and having seen proof of it within the thousands of tenant credit reports I’ve seen containing high late-model car payments with modest income, nice things don’t impress me much, especially cars.
Frugality and simple living, on the other hand, combined with smart investing and living debt free are things that matter to me. Had my friend with the Mercedes bragged that the nice shirt he was wearing was picked up used at Goodwill for $5, I would have been more impressed with that than the Mercedes. Had he pulled up in a 3 year old Toyota that he purchased used for cash, I would have been more impressed than with the new Mercedes. I’m weird that way about money, and I can’t help it. I like buying things that go up in value (like rental property), not down.
Nevertheless, I decided to take inventory of mine and Sylvia’s vehicle situation. The 7-year-old minivan with 129,000 miles has carried many of mine and Sylvia’s buyers all over Austin these past years, and helped us sell many homes. This is a base model, no frills Dodge Grand Caravan Sport that we purchased used when it was 3 years old. It was a typical penny pincher purchase straight out of the book of frugality. If you’re one of our past buyers, you’ve probably ridden in this blue van. It runs good and the A/C blows cold. What else matters, right?
But when the transmission went out again this week, it was two days later that I drove out of Howdy Honda in Sylvia’s new 2007 Honda Odyssey EX-L. Not the top of the line Touring model, but the next notch down EX-L with the navigation system and XM radio, leather seats, power doors and all the other bells and whistles, including a DVD system I doubt we’ll ever use. This purchase goes against every grain of my being. I’d rather spend $30K on a down payment on another investment property than a new car which has already depreciated thousands of dollars in 3 days.
Will we sell more houses driving a nicer vehicle? I’m still not convinced it matters, but we’ll see. One thing is for sure, the Odyssey is one awsome sweet ride compared to the old Dodge, and I have a very happy wife.