Thursday, 24 December 2009

House Move Creativity

This example is based on the template provided in the previous example. This is more or less the same model, but with the agents changed to reflect the factors prevalent in the situation of buying a house.

The situation is one many will relate to. Attention is drawn to the box highlighted in blue, the compelling event for this change; a new job in a different city. The current house/location is now harmful as it's too far to commute. The plan is therefore to sell the house, buy a new house, and move. However, the market is not moving - this could prevent sale of the current house. The situation is made more challenging by the need to have a big deposit to buy the new house. This is offset by the relocation package provided by the new job. The pay increase also enables purchase of a house in this area - perhaps a bigger one, that will lead to a short commute, and a better work/life balance. There is a risk, however, that in order to make the move a compromise of buying a smaller house with the idea of extending it later leads to ongoing disruption and cost which counteracts the sought-after improved work/life balance.

The same creativity rules are used as in the previous example.

Lets see what happens when we click around this model:

Clicking on Market not Moving yields the following creativity suggestions (numbered). The idea is these are used to drive brainstorming of specific solutions that you can use to overcome the challenges faced in this situation. Some example solutions have been filled in against each of the suggestions generated by the rules.

1. What's the root cause of Market not moving? How can we avoid that?
There is a lack of liquidity, but also some fear prices will come down and those with cash are waiting for good deals. So its a question of balancing how urgently we need to move house and setting a low price accordingly. We can offset this by making a low offer on the house we are buying.

2. Prevent the Market not moving from impacting the Move House.
Negotiate a deal with the new job to cover the cost of the second mortgage until the house can sell. Or buy a house with one of the agents that is accepting other houses as part of the collateral in the sale.

3. Isolate the part of the Market not moving that is impacting the Move House and remove it.
If the issue is sale price, then face reality and reduce the price early. Sustaining two mortgages or delaying the move for months on the dream of a high sale price could cost more in the long run than cutting the price now.

4. Convert the Market not moving into something useful before it has a chance to impact the Move House
Negotiate hard on the price for the new house. Whatever you can knock off the purchase of that you can afford to knock off the sale of your current house. Also, if the market is not moving, and estate agents are not selling the houses, then there is more competition between estate agents to be involved in the deals that are going down. Use this to negotiate a lower fee for brokering the sale.

5. Protect the Move House from the Market not moving.
Consider taking out a bridging loan to make sure once you find the house you want, you will not be stopped by failure to sell your house in time. Consider the difference in work/life balance this will make together with how much you can afford now you have that new pay rise.

11. How can you get the Move House to intensify the Living in New House without causing the Risk of negative equity if house prices fall further?
Drive a hard bargain on securing the new house to minimise the risk of negative equity. Remember the new salary and the reduced work commute may mean that some negative equity is acceptable.

12. How can you prevent the Market not moving from producing the Current house not selling.
Do the house up. Reduce the price. Place it with multiple agents.

13. Put measures in place to deal with the Current house not selling.
Rather than sell the house, look for options to rent it out to gain additional income and sell it later once the market has stabilised. The estate agent may do this, as may the local council.

14. Isolate the part of the Market not moving that is producing the Current house not selling and remove it.
This one is probably out of your control...

15. What's the root cause of Current house not selling? How can we avoid that?
Consider whether its really the market making the house not sell, or whether there is an issue with the house. Get another opinion. Fix the issues with the house - make sure price is the only issue left.

Lets look at another example - here are just a few questions generated from clicking on Improved work/life balance:

1. How can we realise the Improved work/life balance more quickly?
Move into a rented house. Get the new firm to pay for this until you find a new house. If you get an unfurnished house and move your stuff down, this could also make it clear to buyers of your old house its ready for them to move into with no forward chain.

3. How can you get more of Improved work/life balance from Living in New House?
Think about what you will do with the extra time now you have a short commute. Would this affect where you would want to locate the house?

4. How can you increase the ability of Living in New House to create Improved work/life balance?
If this is the real goal, then think about what qualities the house itself should have over and above being nearer the new office.

5. How can you intensify the Improved work/life balance without relying on the Living in New House?
Make sure you're not kidding yourself about the house being the magic bullet that will restore your work/life balance... what else do you need to do? Plans are all very well, but achieving them is useless if they are the wrong plans.

6. How can you ensure that the Improved work/life balance will be an outcome of the Living in New House?
Well? How can you?

8. What else is needed to achieve Living in New House? What are the pre-requisites or necessary pre-steps?
Finding appropriate schools in the area with easy commuting distance to the house. Reducing your commute is not going to help if you lose an hour a day dropping the kids off because you failed to think of school location or bus routes.

As with the previous model, its possible to generate creativity ideas by clicking on any or all of the agents or effects in this model. The total number of suggestions available from this rule set with this model is 156. You can extend the rule set, and you can extend the model. That's more creativity each time you do either of those things. The key is to use this as a way of opening up possibilities - to be as rigorous or as quick-fire inspirational as you want to be. The rules just encode general creativity ideas and how they apply to agents in a model. The model describes your situation. Together, they produce many new ways of looking at the situation - ways you may not have come up with yourself, even though you maybe created the model and the rules!

1 comment:

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