Malcolm Gladwell, a writer for The New Yorker and author of Outliers, famously wrote that to be an expert at anything, you need to practice that task for around 10,000 hours. This would apply to Michael Phelps being a great swimmer just as much as it would apply to someone being a great real estate developer, dentist, table tennis player, spelling bee champion, magician, on anything else. To put 10,000 hours into context, assuming you work 8 hours a day, 5 days a week doing something, 50 weeks a year doing something; it would take 5 straight years of doing just that to become an expert. I thought about this in context of real estate. What if someone wanted to say they are an expert at negotiating real estate deals? How do you define someone as an expert?
Unlike swimming or practicing for a spelling bee, it is extremely difficult to do things relevant to negotiating for 8 hours a day. Think about all the other things a Realtor would do besides negotiating during an 8 hour day:
- Prospecting for listings
- Showing properties
- Continuing education in areas besides negotiating
- Blogging, online marketing, Twitter
- Email inbox management
- Meeting people, letting people in properties (like inspectors)
- Dealing with bureaucracy
At the same time, has the person on the other side of the real estate negotiation table (such as the other Realtor or a buyer), spent 10,000 hours negotiating or doing tasks directly related to negotiating? It seems doubtful in most cases. Unless they’ve previously spent years in a field where you spend the majority of your time negotiating (such as a commodity manager for a semiconductor manufacturing company or a sports agent), are they really an expert? So if someone has 5,000 hours and the other guy has 500 hours, is the guy with 5,000 hours an expert, or is neither one? Should the 10,000 hours include all time in real estate related activities? There are quite a few activities that you do where negotiating is no the main focus, but it might still be relevant. Going through a homebuilder’s models seems like it has nothing to do with negotiating, after all, they mostly have fixed prices for everything unlike your typical resale where all kinds of different things are negotiated (price, earnest money, closing date, possession, what stays, etc.); however, it might be relevant down the road for someone selling their own home. There might be a comment made during a negotiation, about how the buyer could buy something comparable brand new for a similar price. Someone who is always thinking about negotiating might say, I understand what you are saying, but this house has a superior location and there are five things in the kitchen (granite countertops, beveled edges, trim above cabinets, sink in island, and pot filler) that would be considered upgrades and would add on to the new home cost (thus my house is a better deal). Even if you can’t amass 10,000 hours negotiating, you can pay close attention to the real estate market and gain practical knowledge that is helpful down the road; even if you don’t know exactly when it will come into play.