Zuzu's Petals

I love the holidays. It means time honoured classics appear on every channel of your TV. You pick the ones that mean the most to you and your clan and plop down for your very own holiday tradition.

If your family is missing any of the following from your list of favorites, you may want to add them.

National Lampoon's Christmas Vacation (which made it's way into this blog already). The coming of age for Clark Griswold learning to screw up the family Christmas like only a Griswold can.

A Christmas Story. The best Christmas movie ever (not to mention the large Canadian connection). A story told through the 4 eyes of young Ralphie Parker on his quest to get the ultimate present. The Red Ryder Carbon Action 200-Shot Air Rifle.

Rudolph the Red Nosed Reindeer. The longest continuous running Christmas TV special). Join Rudolph in his journey to the island of the misfit toys. I am not giving away the ending but let's just say Santa has a bright idea!

It's a Wonderful Life. The immortal Jimmy Stewart as George Bailey. As I sat this year and went on the journey of his life in Bedford Falls it had a whole new meaning for me. George was a second generation owner of a small town Building and Loan company. The lessons are many in this amazing piece of American film like George's lack of extravagance. Although he always wanted to travel the world he always choose the good of those close to him over his own dreams. He didn't take the big payday that Mr. Potter offered. Will you remember the importance of what you have? Family, friends, drafty old houses?



This year as watched, as if for the first time, Mr. Potter buy up the town through the woes of the Depression, it struck a chord with me. Thinking about the coming year and it's importance to our economy's strength or weakness. Will 2009 be the year that the Potters of our world take over or will the everyday man power through the struggles? Will you let other's prosper at your expense or will you decide to Pay Yourself?


I wish you a happy and prosperous New Year and look forward to more real estate thoughts through 2009. I hope that when you look into your pockets in the coming year you find Zuzu's Petals, I know I will.

M

Real Estate Market Analysis

Get that brain geared up for the ride. This one is a roller coaster to the sky!

Buyer's market, seller's market or balanced market, how do you know? Most information points to anything over 8 months active inventory is a buyer's market and anything under 6 is a seller's market. The grey area in the middle is boring ol' balanced. In a seller's market prices increase and in a buyer's market they decrease. In the lifeless balanced market they generally hold flat with moderate increases due to inflation and costs of selling.

Here in Waterloo Wellington we are holding our own versus the troubles being yelped about across the country. KW is showing the best of the three communities with 4.44 months of active inventory but there was a massive drop in the active listings in November as expired listings that did not sell came off the market. Guelph is up next with 6.18 months of active inventory and finally Cambridge with 6.88 months. Balanced market, sounds humdrum.

But wait, there's more....

To understand today's numbers lets put them into perspective. Last year KW was 2.22, Guelph was 3.33 and Cambridge was at 3.61 months inventory based upon solds versus active homes in the market for November 2007.

The real estate market is at a point now where it has reached such a height it has nowhere to go. This roller coaster ride has been a long one. Here we are perched at the top of a colossal hill looking back and wondering "Now what?"






Let's ride the balanced market for a bit. The foreboding drop makes balanced seem a little less mundane.



M

WOW! She REALLY Loves Her Job!!

WOW did I get a lot of comments through email and on Facebook about our "I Love My Job" video posted last week.

That original video was 1:48 and was taken from nearly 1 hour of video shot with Brian. There was so much great footage that we decided to do a more in depth look at the job. One that showed where Sue came from and how that passion grew within her.

The result is "I Love My Job - The Sequel"



We are lucky enough to have five really amazing Private Sale Consultants working for us here in Waterloo Region and Wellington County. Their level of passion and excitement grows everyday with every client they meet. The stories of the clients paying themselves thousands of dollars fuels them. To know that you were the reason they saved $15,000 is very rewarding. Here is what Ian and Ana Luxton of Cambridge had to say:

"PropertyGuys.com has been an invaluable service for us. We sold our house in just over two weeks and saved a ton of money! Our local Sales Representative ,Christine Menard, was wonderful at guiding us through out the process of selling our home privately. If we ever sell a home again, we would not hesitate to use PropertyGuys.com once again. We have also been recommending this service to all of our friends, several of which have gone ahead and listed with PropertyGuys.com as well."

Our aim for these videos is to extend this passion out to people that may not have had the opportunity to work with us as a client but have an interest in what we do. To light the fire within that "real estate junkie" that always wanted to get into real estate but didn't agree with the traditional agent role.

Are you that person? Is your passion burning? Did these videos throw gas on your fire within?

Send us an email.

November Statistics and other thoughts

Is this the bottom?

Stats for all areas (KW, Guelph and Cambridge) show dramatic declines in the sold properties over last year. This is an expected slow time of the year but year over year would take that into consideration.

It seems that across the country things are bad. CREA just announced that in November prices dropped by 10% and sales are down 42% at the national level. Mackenzie Walsh, an agent from Calgary, comments in this CTV News Story. She explains that real estate is a cyclical industry and when things are up they are up and when they are down they are down. Right now she is trying to reassure her clients that things will pick up. For her sake I hope it happens before her contracts run out.

One thing that has always bugged me about traditional real estate is their exclusivity to your house for 3 months (the most common term in a listing). Once you sign that listing you are theirs, no matter how poorly their service. You can get out of the contract if both parties agree. Since the agreement is generally not with your agent but their broker you may find it difficult talking the broker into releasing you.

As a home seller I want more flexability in the sale of my home. I want to be able to change things when I need to. If someone is not living up to their end of the bargain they need to move on. As a home seller I want the flexability to take my listing down over the holidays or if I feel that I want to wait for a few months till the market is a little stronger. As a home seller I don't want to be tied to paying a set commission rate. If an agent brings a buyer through my home I am sure to want to work with them at a resonable rate. As a home seller I want fexability to market my home in places that I look. Not just where an agent decides he/she might want to advertise it.

As we head into the unkown and watch the market correct, take control of your flexability so you can adjust to fluxuations in the market as needed.

M

Tiny Bubbles Made Him Happy

If tiny bubbles make you happy than it could be said that GIGANTIC bubbles would leave you in mind numbing bliss.

There is plenty being said about the real estate bubble these days. With the intrusion of the US media in our lives it is hard not to ignore their problems and sometimes shoulder them as our own.

Fact is our housing markets are very different. The issues that have been plaguing their bank and mortgage industry are not ours. We were protected from smart government and ethical bank executives (yes there is such a thing).

Do we have a "housing bubble"? When you examine the market across the country it sure does look like things were falsely inflated. Cities like Edmonton, Toronto and Vancouver are showing substantial drops in their average price. A "market correction" is in place but nothing to the extreme our neighbours to the south are experiencing.

So where exactly did this "bubble" come from? When my son is in the bath, I may not see where the bubbles come from but using all 5 senses I can come to a hypothesis. If we look beneath the surface we can see things that we may not have been able to see due to our viewpoint.

You purchased a house for $200,000 3 years ago. Your life has changed. Things are moving and shaking in your life, better job, new family member, hey time for that bigger house. You find the house that you want, listed in the neighbourhood perfect for that little bundle of joy of yours. $350,000, Hefty increase in mortgage but that is what you were expecting. You have been watching the market and know that house prices have gone up. Your estimation is around 5%. The agent that you bought your house with comes in to give you a free "market evaluation". He tells you you are lucky because in the 3 years you have owned the house it has increased by $15,000. More than you expected! Problem is when he takes his cut ($10,750 + GST) your increase is less than his commission. Not to mention all the other costs like legal and Land Transfer Tax. You decide to list for $225,000 in order to get your increase you need.

This situation happens over and over in city after city. As people sell homes with agents the market increases on an intangible, unsubstantiated, overblown cost associated with the sale. Anytime the market is falsely increased it will correct. Ask anyone that had Nortel stocks in the last 15 years.

I came across this video and could not ignore it's strong message.



Mind numbing bliss is the stink coming from those popping bubbles.

M

"Honey The Lights Are Up"

Sometimes we would prefer to not have to do the work.

If you are thinking about listing your house in the spring, now is the time to start the work. No matter how you plan to market your home, through an agent or privately, you have the same work to do. Let's work our way through a list of things that you need to start considering now.

• Product - Do you know what staging is? There is more to presentation then just a quick tidy up and vacuum. An outsider, or 3rd party can come in and look at your home with a keen eye. Sometimes it's as simple as moving some furniture and changing a room colour.
• Curb Appeal - This is an off-shoot of product. The warmth of the sun may not be gracing your gardens in the coming months but that does not mean you can't start planning what needs to be done with the exterior of your home. Make some plans, visit some landscaping websites, or talk to a contractor.
• Renovations - Another off-shoot. Are you in need of a new kitchen? Did you ever get the deck put on? Think about ROI (return on investment) if you are considering any major investments.
• Maintenance Items - How old is your furnace filter? Do your windows need caulking? If you have a maintenance schedule for your home keep it handy. A prospective buyer will be impressed with your diligence.
• Pricing - You need to start watching the market now. What are houses on your street selling for? Are they sitting for a long time? Do you see "New Price" stickers in the neighbourhood? Watch the market and keep in tune. If you are really uncomfortable with this area talk with an appraiser.
• Exposure - This is the last part of the Home Selling Trifecta. Although you may not be ready to put your house on the market it does not mean you shouldn't neglect this now. If you are considering and agent first consider the cost associated. If you are OK with the big spend then interview. Don't take someone's word for it. Find out what your money is going towards, where are they spending their time? If you are thinking of selling privately make sure you look at a company to help you with both the marketing and the process. Look for a local Private Sale Professional that can assist you through the entire process.

Now that you have your work cut out for you I am going to show how your hard work can turn out, thanks to Clark Griswold.

Happy Holidays and watch out for cousin Eddy!

M

She Loves Her Job

As a Private Sale Consultant there is no better feeling than getting that call. It often goes like this:

Ring Ring Ring

"Good Evening PropertyGuys.com. This is Chelsey, how can I help you?"

"Chelsey it's Leanne on Activa."

"Hey Leanne. I was just thinking about you. How are things with that offer?"

"We SOLD! I can't believe it!"

"That's awesome, congratulations! We'll make sure to get the SOLD sign up first thing tomorrow. I am so excited for you!" "Do you want to mark it SOLD on the website yourself or do you want me to take care of that for you?"

"Can we? That would be great. We'll do that tonight." "Chelsey I just want to say thanks. You helped us out so much. When we were doubting things you gave us the confidence we needed. Because of you, we just saved like $14,000"

"Even better Leanne, you paid yourself for the work you put into it."

As a private seller you can find yourself in an area you are not confident in. There maybe terms you are unsure of or situations your not sure know how to handle. It sure is nice to have someone there that you can count on. Someone that has the knowledge you need. Someone that is as excited as you are when you sell your house. Not because they are getting paid for it, but because they were with you every step of the way. Someone that you leaned on when the times were tough, like the time you did that open house. The weather was so bad only your noisy neighbour came over.

A resource like this is key. Not just to a home seller but also to a company like PropertyGuys.com.

Want to see just how passionate a Private Sale Consultant is?




Are you stuck under those fluorescent lights? Are you looking for some freedom?

Get feisty, drop us a line.

M

Pricing. Don't Screw It Up!

I think everyone I know has gone to that school.

Human nature is to screw up and learn. Those that don't will fall pray to making repeated mistakes and die in the jaws of Darwinism.

Keith Church, Broker of Record for the local Prudential brokerage in Cambridge, sheds some light on a situation that we see all to often.

People that over price their homes will usually blame their selling mode ie:specific agent or marketing company. The one area that agents really have an advantage over a private sale marketing company like PropertyGuys.com is that they will push to lower the price of your home with such passion, such fury. They will even use old fashioned guilt so that you feel obligated to lower your price. Sure it depends a lot on your circumstances, but we all have a budget to work within. The agents, they just want to get paid.

As Keith points out, if this person had priced their home properly they more than likely would have sold. Being $285,000 over priced is not going to get you what you want, trust me on that.

Sure you can find an agent to take your listing at a ridiculously high price. Sure you could list it with a company like PropertyGuys.com. Sure you could throw that hardware store sign on the lawn and wait for someone to drive by. Until you have it priced right you are waisting your time (and everyone else's for that matter).

Get an appraisal done, have multiple agents come through to give an opinion on value, do your own serious investigation. What ever you do don't just throw darts. Do some digging. Price is not everything, you have to pay attention to the Home Selling Trifecta for sure, but PRICE IS KEY.

Even the "stupidity" of $399,000 vs $400,000 is something to think about. Here an agent "dumbs it down" for all of us.



M

Show Me The Money!!

"If we can't tell you how we spent your money, we don't deserve it."

Ever been to the dentist? When you leave you get an itemized bill explaining exactly what was done and how much you were charged for each procedure. Imagine your bill just read

Dental Visit - $1,243.78


Now imagine the letter that would come back with your insurance claim.

DENIED - Insufficient Data


When you get a bill from your lawyer take a close look. Everything is itemized, right down to faxes, phone calls, and photocopying.


On your next real estate transaction look at the line related to commissions, assuming that you are not in the 25% of people buying and selling privately.

How exactly was the money spent? Is his golf membership listed? What about the Porche and Range Rover? Maybe her spa and manicure day? No no I am sure it cost plenty to put that crooked sign on your lawn. Ohh and the listing on the internet with the WONDERFUL photos of your kitchen table and the railing of your deck must have cost big! Did you see your house in the paper? It was just under the part that said he was "Top 1% in the world" and how he has "sold over $400 Million in real estate".

Let's be honest, if I am going to cut you a cheque for $15,000 I want you to justify it. The real estate model that my parents knew is archaic. The 5-7% commission system was built to feed a hungry machine. If only 30% - 50% of homes are selling then the few that sell are paying for all the others to try.

If you price your home right and it sells then the guy up the street decides to "try the market" and over prices by $20,000. You just paid for his advertising. Hope he said thank you.

Next time you sell a home and are thinking of using an agent ask for a detailed break down of how your commission is to be used. Tell them to include the dollars and cents specific to your house. Tell them to "Show You The Money!!"



I promise. No more Tom Cruise this week!

M

You Can't Handle The Truth!!

If it walks like a duck it probably is, right?

Real estate agents are really nice people. They come over to your house, hold your hand through a stressful situation, explain all the complicated terms like closing costs, land transfer tax and conditional offer.

If you ever feel the need to talk with an agent, list your home for sale privately. They will be falling over themselves to get your attention. Calls, emails, letters, bottles of wine (Thanks Mr. Brown!).

Agents are the first to tell you all the scary issues that are looming without them. Even their ads in the paper likening themselves to surgeons. Maybe you've seen it? "Sure, you could sell your own home. You could also do your own appendectomy." I love that one.

In A Few Good Men, Jack Nicholson immortalized Col. Jessop. Remember "You want me on that wall. You need me on that wall."



How dare we live in homes within the very market that agents provide and then question they way in which they provide it. Just pay your 5% and say thank you and go on your way. Otherwise pick up a sign and put it on your post.

Either way you'll sell.

M

Winter Real Estate: Can You Sell a Gift Wrapped House?

Door bells ring, are you listening.

It's the elusive winter home buyer!

We often hear that the spring is the best time to sell a house. If you try selling in mid winter you are crazy......nutty.....looney. Fact is many homes continue to be sold through this time. December - February accounted for 18.16% of all the property sold in Waterloo-Wellington over the last 12 months. In contrast March - May equalled 31.07% of all home sales over the same period. No one would claim that the winter would be better in the summer right?

Why not?

Your house is decorated nice, it's practically gift wrapped. It smells like turkey and pine half the time. Most people are feeling rather festive with the holidays around.

Don't discount this time of year. Almost 1/5th of all homes sold last year were sold during this time. For the buyer it is a great time to shop as well. People that went on the market after the summer hoping to catch a wave are now anxious to sell. They are adjusting their prices and looking for the right hook to draw in the buyer.

As the houses grow stale the buyers look for that new property, fresh on the market. Like a child bounding towards the impending mess of the presents they leap and hastily put in an offer on the "new house" up the street from the one they have been watching.

Is it your house being unwrapped this holiday season?

Give the gift of real estate.


Just make sure you dig out your sign!

M

The Big 0%

Hurry up it is today only!!!

So you listed your home privately. Congratulations, it was probably a big step for you.

If you are like most of the people we see you have not ventured into the arena of Private Sale before. You had looked around the internet, checked out a few different sites, weighed the merits of private vs. MLS, then measured the merits of a few different companies and then finally decided on the one that offered you the biggest bang for your buck. Maybe it was the one with the most experience or the most listings locally. Either way you made your choice based on VALUE.

Your home was then listed on the internet with professional photos, virtual tours, plenty of details. It makes MLS pale in comparison (trust me I've seen some bad photos and virtual tours on MLS).

You are getting some phone calls, doing some showings, hosting some open houses. All things you were expecting to do. But then the craziest call comes in. Some agent calls you and says he wants to list your home for free. Yeah right, free. Anything you had ever heard about agents was all about money, money, money. Why the heck would an agent list your home for free?

If an agent is going to list your home for free there is going to be something in it for him. Here are some of the common situations our clients have run into.

It all comes clear when she states that in order to do this you have to do your new mortgage with them. They are also mortgage brokers. That they are going to get paid from a lender (bank) and that you will only be required to pay the 2.5% commission for the buyer's agent. Hmm, so who exactly is this agent working for?

Another instance we have seen is where an agent comes in and says he will list your home on MLS for a flat fee of $695 (+ or - $100). You can continue to do sell privately. Issue is that the agent's contact info is what goes on MLS so any interested buyers are going to call him, not you. He then shows up with an interested buyer and says he needs 2.5% to facilitate the deal. Hmm, so he gets paid up front and then still collects a commission.

What about this one. "I will list your house on MLS I just want to do Open Houses so I can get some new clients". OK so his whole objective of YOUR open house it not to sell your house but to get some listings that he can get paid on. Seems to me that if an agent is this desperate to get in your door they may not be too good at what they do. There are plenty of successful agents that have built a reputation of service over the years. Do you think they did it by spending every Saturday and Sunday in a non-paying client's home trying to get other people locked into contracts?

Don't be fooled by smoke and mirrors. Best case scenario for you is that you still end up spending 2.5% of your $300,000 house or $7,500 for something you can easily do yourself. I am not saying that you won't have to work a little for your $7,500. We all expect to work for our money, don't we?

Let's figure it out by the hour. At $100 and hour this works out to 75 hours of work. While you are slaving away for the man at your job for just under 2 weeks (hopefully you are making $100 an hour) you could have been selling your home. At a more reasonable $20 an hour you can afford to put 375 hours into the sale of your home. Based on a 40 hour work week that works out to just over 9 full work weeks. Would you expect that an agent is worth $20 an hour (just over $40,000 a year)? Would you think that you will get 9 - 40 hour work weeks for the sale of your home? And that is only if you get one of these "deals". Double it if they are your traditional 5% listings.

Here is a broker in NYC that is looking at a different value model for his agency


M

What is Real Estate?

When some one says to you "I'm in Real Estate" what exactly do they mean?

I own a house. Am I not in Real Estate?

Whether you live in Cambridge, Guelph, Kitchener or Waterloo you are lucky enough to be living in an area that is predicted to to be sitting on top of the worst of this pending storm. So your mutual funds are down 20%, your stocks in the tech and auto sector are not worth too much these days, but that little nest egg you have been slowly building on over the last 10-15-25 years is now prime. The market is at an all time high and you are ready to cash in and downsize. Are you not in Real Estate?

What about you, the guy that owns a few properties around the University. You're in Real Estate, right? I mean you have actually been earning a profit over the years. Sure there has been the odd kegger that got out of hand and some set backs in the "maintenance" of the property but they are all paid off and awaiting liquidation so you can buy that ever so cheap Florida condo on the beach. Sounds like Real Estate to me.

You're a lawyer. You have many clients that have relied upon your expertise in their transaction to ensure everything went just right. Every once in a while it didn't go according to Hoyle, but you got it straightened out, as always. No doubt, that's Real Estate!

I can go on. Stagers, appraisers, home inspectors, movers, duct cleaners, framers, electricians, appliance sales people, real estate agents, furniture sales people and of course Private Sale Professionals. There are many people that rely on Real Estate for something in life. The Real Estate industry is far reaching. Don't think that your decision to move or not move is changing just your life. When you make that decision you set the economic ball rolling. It is your hands that hold the economic house of cards.

We are not in the same boat as our friends to the south, or at least Mr.Harper keeps saying so. Watching a video like this sure makes me think that a slow down in our market here in Guelph or KW or Cambridge seems like small potatoes.

If you are looking at downsizing your home or selling off one of those rental properties, be sharp with your pencil and pay attention to what the market tells you. You don't have to sell, you don't have to give it away, just watch your costs!.

M

Fly in a Think Tank

Like Superman when you wear glasses you are incognito.

As a private home seller I had the luxury to sit in a marketing study this week-end. I sat around a table with other like minded sellers. We were there to look at the new advertising campaigns of the real estate industry and their focus on howrealtorshelp.ca.

We looked at two campaigns and six separate commercials. All were working on using humour and exaggeration to make their point.

The first campaign was entitled "Realtors know what you don't" and focused on 3 situations.

1. A lady is seen thrashing paperwork around her desk. She "comically" picks up a potted tree and whacks papers off her desk. A voice over says "Sandy has just spent the last 5 1/2 hours trying to figure out the the details of the offer. There are many terms that Sandy just doesn't know. Terms like "in propria persona" which means acting on her own behalf. The voice over says "Find out how a Realtor can help you. Visit howrealtorshelp.ca to find out more."


2. A man is seen jumping up and down "comically" on his bed. He is dressed in nothing but Bart Simpson boxer shorts and one sock. He is throwing a temper tantrum. A voice over says "Brad seems a little upset. And he should. When he bought the house he didn't use a Realtor that would have told him the flight to Spain flew 850m over his pillow every 47 minutes". The voice over says "Find out how a Realtor can help you. Visit howrealtorshelp.ca to find out more."


3. A man is seen in his house coat running threw his a garden knocking the tops off the flowers with an inflatable pink guitar. A voice over says "John is a little upset. He didn't realize that for what he just sold his house for he could have bought a Tahitian Mud hut. Neither did his wife, but she does now." The voice over says "Find out how a Realtor can help you. Visit howrealtorshelp.ca to find out more."

The second campaign was geared towards getting bad advice. There were 3 commercials here as well:

1. Outside of "Dunky Do's" donut shop. A voice over says "Do you know what Land Transfer Tax is? Let's ask Angie down at the local donut shop" they cut into a friendly woman that talks like she has know you her whole life "You see Land Transfer Tax is when you have something in your backyard that you want to transfer to your new house. I live in a condo so I don't have to pay for land transfer, I pay condo transfer tax." The voice over says "When you need professional advice look to a professional. Visit howrealtorshelp.ca to find out more."


2. Outside of "Wailing Ed's" Pub. A voice over says "Do you know what closing costs are? Lets ask Brian, local bar man." They cut to a late 30's barman that talks like he has know you his whole life "You see the closing costs are what you owe when you close the door of the house you are leaving and open the door of the one you are moving to. You don't pay until you open the new door. You can avoid them by climbing in the window. That's how you stick it to the man." The voice over says "When you need professional advice look to a professional. Visit howrealtorshelp.ca to find out more."

I really wish I could remember the 3rd one but by this time all I heard was Charlie Brown's teacher. I do remember that it was a hair dresser telling us some overly exaggerated obviously wrong advice. You see the Realtors have been using this same message for a while now. You may recall seeing the commercials with the mother-in-law showing the young couple a home or the one with a young couple coming to the door to see a home and the home owner is waxing his chest.

Here I am sitting at a table with 5 people. Male and female, young and old, single and married. All here for one reason. We all chose to sell properties privately. The lady conducting the event was rather surprised at how much the group didn't like these ads. Hmm let me think about this. Am I going to be drawn to an ad the tells me I'm stupid?

I know my thoughts, but what are yours? Am I missing something? Are these ads hitting the mark? Would you decide to call a Realtor based on these ads? What would it take to call a Realtor?

I look forward to your comments.

Economy Starts With Real Estate?

OK so let's examine this.

I read a blog with an interesting point of view the other day. Most of the points seem very valid to me. Our economy is driven by many things. It is my belief that it all starts at spending. There is no doubt that the purchase of a home catapults one into a spending spree.

I have a friend that recently purchased a home and they have spent thousands in changes and upgrades in the few months they have been there. With many more projects planned on the 80 year old house they are economy drivers in their small community. My wife and I are looking at purchasing a home closer to my son's school. In the homes we are looking at there is work to be done. New kitchen here, detached garage there. We are recession busters!!!

Where this previous blog looses me is the innuendo that real estate agents are the ones driving the economy. If all of the real estate agents were to disappear off the face of the earth does that mean our world would end as we know it? People would not be able to buy or sell another property? That without these precious soles that the great unwashed would not know how to proceed with the transaction? It would be like cats and dogs living together, mass hysteria!



Why should I spend 10% of my hard earned equity to pay for them to go to school when I could use it to send my son to school? As a home seller I know that by keeping as much of the equity I have in my home as opposed to floundering 10% to an agent I can stimulate the economy in either one of two ways. I can afford a more expensive house (or one with more potential and fix it up) or the other side is have a smaller mortgage going forward which will allow me more expendable cash or savings. Just think now when you look at your mortgage what an extra $10,000 off of that would do for you long term. Now I am not saying that you can take $10,000 off your mortgage but you sure can avoid adding it on.

That leaves me with one question. How much will you add on your mortgage before the day comes when Felix moves in with Marmaduke?

Culturally Iconic?

The Popemobile is something everyone knows in any context.


In real estate there are some that we all know. The hot air balloon, the gold jacket of the 70's and 80's but nothing has stepped up and lead a revolution. Where is the real estate Che Guevara to lead the revolution? Where is the Real Estate Cultural Icon that stands for change?

"Just like the golden arches represent fast food, we believe this round sign will be the ICON for the private sale industry."
Ken LeBlanc, President
PropertyGuys.com National Conference
February 12, 2008

Today the journey towards icon is well under way. With franchises across the country and round signs in hundreds of communities from coast to coast PropertyGuys.com is getting noticed. With well over 400 of them in Waterloo Wellington and surrounding areas it is hard to go house hunting and not see a round sign. The agents have taken notice. Directly marketing against private sale and specifically the round sign. When the top producers start setting their sights on the round sign, you know it is making an impact.

Looking at other areas of the country things are progressing just as well. When editorial cartoonist Pat Jollimore decided to focus on the federal governments decision to sell off crown assets the round sign icon was obviously emblazoned deep with in her subconscious mind.



NOTE - Due to request from the cartoonist the original has been removed. I have replaced with my own interpretation of the situation.

Published in the Halifax ChronicleHerald Sat Nov 15th

Next time you see a round sign, remember just what it stands for.

Sell Your House. Pay Yourself.

Are Your Feet Dirty?

Even if you wipe them off you can be sure there is still some stuck in between your toes.

This week-end was the first significant snow fall of the season and I thought talking about sand between your toes might take your mind off all the cold to come.

Thinking about better times sure makes us feel better. No matter how hard we think it will not change the reality.

Truth is real estate values have escalated dramatically over the past 20 years. Truth is the traditional way things have been done have added to that increase. Think about it. If a house has been sold 4 times in the last 20 years, each time agents charged 5% on that house, how much of the increased value of that house is because the home owner selling it had to make up for the portion he was paying out?

Here we are now with average houses pushing the $300,000 mark here in Waterloo Wellington and people are finding it difficult to get mortgages. Truth is the whole sub-prime fiasco came from the fact that house prices had gotten so out of control that people could not afford the standard 5% down 25 year amortization program. The lenders started increasing the amortization period and lowering the minimum deposit. Even that was not enough.

Truth is, as a home seller in today's market, if you decide to give up 5% of the selling value of your home it works out to be a much bigger chunk of your equity. If you are lucky enough to have paid off half your mortgage you are giving up 10% of your equity ($300,000 -50% = $150,000, $300,000 x 5% = $15,000, $15,000 is 10% of $150,000).

If we are heading into a recession then why would you hand over 10% of your equity? People have just lost thousands in equity in the stock market and mutual fund arena and it makes the news daily. People throw away 10% of there equity in their house daily and it doesn't even show up on the radar.


Maybe it's not our toes in the sand after all?

M

Real Estate Statistics for October

At least Rick Astley is there for you.

I was going to throw a bunch of stats at you and show you the grim outlook. You can see that anywhere. We're different here.

There is no doubt that solds are down, listings are up and the inventory of houses available is swelling as we approach the traditional high tide. Now what? It is important to keep your head about you. If you are purchasing another home, know where your budgets lye and hold hard and fast on the bottom line.

Problem is that your spouse REALLY wants the house with the conditional offer in on it. How will you be able to purchase that house if you can't get yours sold in a buyers market? Ever consider letting your offer go and coming in with a new offer? I mean here we are in a buyers market and you have an offer in that was made when we all had a better outlook.

Take control of the market and continue to sell your house. The market will tell you what it will accept as a selling price for your house. Once you have an offer presented you generally have 48 hours to accept it. Adjust your budget, taking into account the new selling price, figure what you can now afford for the house you want and make a new offer. A firm offer in a slow market heading into the winter should have some negotiating power. Give them 24 hours to accept. If they accept, you accept.

That new house needs to know that you're never going to give it up so don't let it down

2009 Will Be.......

A time for Buyers and Sellers to meet.


Canada Mortgage and Housing Corporation (CMHC) just released their 2009 projections for KW and Guelph. They are predicting a drop of 6% in solds in KW and 7% in Guelph over the projected 2008 numbers. Interestingly they are also showing a slight increase in new listings, 1% in both markets. This shows a move towards a balanced market.

Where are you planning on living in 2009, Buyers Rd. or Sellers Ln.?

If you are living on Buyers Rd. I have good news for you. The market is moving in your favour and that usually means that prices will stabilize or drop, depending on how steep the fall is. If it falls to where the CMHC predicts then it will more than likely just be a stabilizing of the market.

Are you looking at moving on to Sellers Ln.? Don't worry I have good news for you too! The savvy home seller will know that in order to sell in an equalized market they need to be aware of their local market and be sharp with their pencil. You see the average home seller will not want to see or hear about market equalization. They will say things like "That guy across the street got this much last summer." and "No way am I giving my house away." You are a progressive thinker and you know that in order to get a leg up on that guy you need to offer a better value to the market that is not buying at the same rate as last year.

The intersection of Buyers Rd. and Sellers Ln. is a busy place to be. Value is the traffic light that gets you through safely. With out value this intersection can be costly. Sitting and waiting on Sellers Ln. with no one stopping along Buyers Rd. is a frustrating circumstance.

Value comes in many forms. Increase in product like adding in new flooring or appliances is a way to add value. Another option is to decrease price. I have spent my whole business career telling people not to sell on price. Selling on price is not a winning situation because it usually means you are sacrificing profits to do so. If you are looking at decreasing your price you need to be sure to decrease your costs as well. In looking at the costs of selling, the biggest factor that you can adjust is the costs of marketing your home.

Before you start on your journey down Sellers Ln. make sure that you will not get stuck at the intersection waiting on traffic to stop.

I've Seen A Sign!

Sometimes signs show up at just the right time.

I want to tell you a little story. On Good Friday of 2007 at around 9am I was putting up a sign on a client's lawn. My timing was perfect. You see an agent just happened to drive by the home with some clients a short while after. He choose not to show them, or even acknowledge for that matter, the PropertyGuys.com listing. They had been looking for sometime in the area for something just like this home. The buyers in the back seat could not help but notice it. They made note.

Shortly after lunch that day an offer was agreed upon and the home was tentatively sold to the couple from the back seat. The real odd part was that the agent that choose not to show the home had already been in the home. He had prepared a market evaluation to try and list the property a few weeks before. Unfortunately for the agent, the home sellers felt that he under valued their property at $295,000. They were right. These buyers paid $304,000 and there was no commission paid. A net difference of $24,200 based upon a 5% commission rate. Not bad for 3.5 hours on the market.

The for sale sign has been around for many years. They are used for many objects from homes to cars to boats to junk at a garage sale. When you are selling your home you should seriously consider what the sign will do for you. It is your beacon, your lighthouse if you will. Advising any and all the location of the port. That is it's first objective, but there are more. It will also serve as the first point of information for a ship venturing into your port. How to reach the harbour master (Phone Number). Where they can go to get more details on docking instructions (Website). Lastly, it needs to instill comfort in the captain of the ship.

You can do all this by having a professional sign with all of the important details to ensure that buyers are going to want to dock in your port. Include your main contact number, preferably local, the website where they can get more details, and ensure it is presented professionally.

One little thing not to over look. Does your sign look like every other sign? Seems a little square, no? In a sea of squares and rectangles how will you stand out?

On With The Show!

TH-TH-TH-THA-THA-THA-THAT'S ALL FOLKS!!

Showing a home is not something one does everyday, unless you happen to be a rather busy real estate agent.

When you are out shopping for a home the ideal walk through of a home is when you get to go through and discuss the good, the bad, and the pink shag, to properly weigh out the merits of making an offer on the property.

Have you ever gone to see a home and had the person showing the home shadow your every move? Ask you questions like "What do you think of the colour of this room?" Say something like "This is MY favorite room in the house". The last thing you want is to be pushed into something you don't want.

As a home seller you really need to allow the potential buyer to experience the home free from outside opinion. Point out some key features, yes. Direct them to look at something they could miss, of course. Walk them through every room and then give them a 20 minute video of you walking through the house in great detail to watch at home..... uh no (I had a client do that).

When a potential buyer is sizing up the home, offer them space, offer them light, offer them freedom.

That's all folks!

Different Perspective

Open the car door, climb into that comfort zone known as the driver's seat. Kinda fits your bum nice, doesn't it? All the mirrors are set up at just the right spot, the peddles are in that spot you know they should be. Sure is comfortable. Take someone you know for a drive around the block. While you are driving it handles how you know it will. Everything is right in the world.

NOW STOP!

Get out and get in the back seat (passenger side) ask your friend to drive the same route. You are still in the same car on the same roads but it is not the same feeling. You are not in your comfort zone. When you get back to your drive way nothing was different except your perspective.

Just because you were not doing it the way you always do it does not mean the same results could not be attained.

Sometimes you need to step outside your comfort zone to see the world in a different light. The excuse of "But I've always done it that way" or even worse "My parents did it that way" does not cut it. The world is changing and we can't settle into the same old thing.

Let me ask, have you booked a plane fair through a travel agent lately? What about taking film to the drugstore to get photos developed? Did you ask for the Beta section at Blockbuster last time you were there?

Bob Dylan talked about how things were changing over 40 years ago.

Heck, now we can watch him perform it live in 1976 or the Peter, Paul and Mary version with a click of a mouse.

Things are moving at an astounding pace. I had seen this video before, as most of you have, but a recent post on a friend's blog had me think about just how quickly things are moving.

When you decided to buy a house did your mom or dad say "Call Joe Schmoe, that's who we used 15 years ago." Did you call or did you turn on your computer?

Times they are a changin'

Real Estate Done Different

That sounds an awful lot like a sales pitch.

The fact is that things are changing at lightening speed. By the time I am done writing this blog thousands of people will think of thousands of new ways to do things. In the day and time before the www phenomenon it would not impact the world so much. Today ideas are transferring between minds quicker than Brainy Smurf could get thrown out of the village.

Information Super Highway has turned into Super Speedway NASCAR style. Facebook, Youtube, Google, Twitter, and Linkedin are today's coffee shops. Rumours and opinions are delivered on the fly with mobile technology. The kids of today do not pass notes, they text and tweet. Blackberry and iPhone are the typewriter of today's roving reporter. They are not searching out the news. Life is center stage.

When a movie debuts in New York and is pulled from the theaters in Los Angeles because word has travelled faster than the time zones you know things have changed.

Technology will be the key to getting your home viral. Post your listing on your blog. Update your status on Facebook to include your link. Tweet about your house for sale and where people can find it. Heck go "Old School" and email it out to everyone in your address book and ask them to pass it on.

When you are thinking of selling your house remember that people are thinking of buying one. Would you pay someone $15,000 to pass a note?

That's Fair, Right?

When it comes to your finances you need to ask this in many areas. I recently heard reports that "many economists felt that a .25% drop in interest rates would not suffice, that a .5% would be needed from the Bank of Canada to assure the public during these times". In this CBC article it states that 6 out of 10 wanted the .5% drop. Here is the funny part. It seems that a lot of these economists are employees of the banks. Take the economist quoted in this article, Dawn Desjardins, assistant chief economist at Royal Bank.

Why would the banks want the overnight rate dropped? Didn't they just take away all of their discounts on the variable rate mortgages? Now that they are prime plus they want prime dropped.

Here is what I know. Someone looking to buy a home that was looking at prime -1% was sitting in and around 3.75% to 4.25% on a variable rate mortgage. Now they are prime +1% and they are looking at 5% and higher even with the drop in the BOC rates at most institutions.

As a home buyer, today more than ever, you need to get shopping on your mortgage. You should always shop around. A mortgage broker is a great tool to keep the banks honest (trust me, they need it). So when hunting for that new house, call your bank, but also call a mortgage broker. Make sure that you are not required to pay the broker. They get paid from the lender.

That's fair, right?

M

There's No Crying In Baseball!

Tom Hanks immortal line from 1992's "A League Of Their Own". There is something about the emotions of this scene that I never quite got until I watched it for this post. Poor Evelyn reacted to this situation with an emotional letdown known as crying. She was only REACTING to the true emotional outburst we saw.

Emotions are powerful. If you are not careful you could end up getting thrown out of the game.






Buying and selling your home is an emotional time for most. An upheaval of your family, maybe a stretch of the family budget. Internal battles between getting the home that you want versus the sale of the one you have can turn even the sharpest negotiator into a bowl of slightly melted cherry jello.

I was once told that when you have made the decision to sell your house, once that sign goes on the lawn, it is no longer your house. You're just holding it for the new owner, whoever that might be. THAT is how we must think when selling our home. When you are planning on selling your home do your math. What do I need to net out of the transaction after closing costs? What are houses in my neighbourhood worth? Can I be realistic in my asking price and get what I want?

Once you have your costs figured out you will need one VERY important number. Your bottom line. What is the absolulte bottom line you will accept for your home? Once you have that then you are ready to enter into the world of emotionless decision making. Offers are either above or below the line. No grey area.

Making a plan like this will assist you in keeping your emotions in check. If you have the plan for the game you can avoid getting thrown out early.

Canada is Number 1, eh!

Well finally we are getting our credit. Were #1, were #1.....in banking? That's right in a report published by the World Economic Forum, Canada was noted as the most secure banking system in the world. I am sure Harper could not have timed this any better and after the blasting given by both Layton and Dion on the economy in the last weeks it was welcomed by the mouths of the conservitives like worms from a mother bird. Jonathan Kay comments in more detail about the report in this National Post blog.

For you the home owner/buyer/seller here in Waterloo Region and Wellington County, how does this effect you? Well shortly after this announcement the Bank Of Canada dropped prime by 1/2 a percent. You would think then that the mortgage rates would drop, right? Not exactly. If you were in a variable rate with a guaranteed prime less mortgage than you are good. If you are just now out looking to buy a home you are in for a shocker. The discounted variable rates that were as common as Jack Layton's rolled up sleeves are no more. Why is that, if prime is dropping? The issue is that banks are cautious in this time, mainly in lending to each other. This has them taking away the consumer discounts so they can be properly funded going forward (Canadian Mortgage Rate Breakdown).

As a buyer you are now thinking twice as the favorable mortgage rates are not as favorable and with people thinking that pricing is coming down they appear to be cautious and waiting. As a seller you have to be aware that people are being cautious. We are heading into, traditionally, the slowest time of the year and with the buyer caution out there it will take longer to sell. As previously stated the market also appears to be equilizing and prices dropping. Would be a good idea to look at finding away to drop your price with out hitting your bottom line.

So what is the plan Canada? Were number 1, now what? I guess years of record profits at the banks is paying off in the stats. What about the rest of us? Guess we'll have to sit back and continue to spend smart, spend cautious. Not sure I would resort to hugging your banker just yet.



M

Is Guelph Normal?

With the whole economic world in turmoil is Guelph any indication of what we can expect?

I had the pleasure to read about the Guelph MLS statistics on another local real estate blog and was not surprised to see what I have been expecting for some time. The average sale price is dropping. Dramatically! Average price in KW increased ever so slightly last month (year over year) and Cambridge dropped but was basically negligible (see info).

Is this the start of the housing market decline? Is it the decline of higher priced homes as people look for more affordable housing? Was it just a bad month in Guelph? Time will smack us with an answer.

Dave Weber gives us his opinion on the Guelph market which I think shows that Guelph is a leader in the market. People have often said to me they do not understand why Guelph homes are so much higher than that of neighbouring communities. Opinions usually follow the questions.

"Guelph is a university town." So is Waterloo.....OK some would say Waterloo beats to it's own drum.

"Guelph is not connected like KW and Cambridge." KW and Cambridge have an invisible wall called the 401. Anyone who knows the area knows that people from KW don't come to Cambridge, unless under duress. People in Cambridge have a hard enough time interacting with each other. When was the last time you saw one average size city have two separate Santa Clause parades?

"Guelph is just different." Knowing some people from Guelph and some people that spent 4 of the best years of their life there, I would agree. Having spent a bit of time in the downtown during the summer it has a very different feel from Cambridge or Kitchener.

So Guelph is different from a cultural feel and an overall vibe, just go to Hillside and you will know what I mean. Does that spill over into housing and economics? Not necessarily.

I expect that over the coming months we will see the average price drop in both KW and Cambridge, following the lead that we are seeing in Guelph. How far will it go? We will just have to wait for that smack of time as well.

So to answer the initial question "Is Guelph Normal?"

No.

I don't think they would have it any other way.

M

Am I Going To Lose My House?

This is a question that most people are not asking. Not out loud anyway.

There is no doubt that the economic outlook is far from rosie. From a global standpoint it is just down right ugly. I can assure you that today I am not only proud, but darn lucky to be Canadian. According to the PM we are in a good position to weather this storm.

This is not a political statement in anyway. I am still not sure who I am going to vote for so I am not leaning one way or the other. This is a statement on the housing market and the fears of buyers and sellers in Waterloo Region and Wellington County.

As mentioned in a previous post I am selling my home. I had a gentleman come through yesterday. The first question he asked me was not "How big?" or "How much?" but rather "What are your thoughts on housing with the US economy?" Seems a little strange for a home buyer to be asking a home seller about the economy in another country, no? My answer to him was based upon conversations I have had with friends and colleagues and went something like this; "The Canadian economy is closely linked to the US, yes, but our housing issues and exposure to the sub prime mortgages is nowhere near the same. The US exposure is around 40% and Canada is around 4% (I am going with stats from a CFP I know and have not verified)."

As a business owner, father and chief bread winner I to am concerned about where the economy is heading. Am I panicking? NO. In order to avoid a self fulfilling prophecy we need to continue to spend and drive the economy. Yes we should spend smart. Yes we should spend cautious. Yes we should spend. The cost of selling a home can be outrageous so if you find yourself in a situation where you need to sell, or just want to sell you need to ensure you weigh ALL of the costs.

So lets run through a scenario. As an average person you purchase an average detached home for the average price. For calculating purposes lets round it to $300,000. Let's also assume that you are moving up from your "starter home" that is valued at $250,000. What costs can you expect at closing? Now for the sake of safety I ALWAYS aim high on expenses. If you can swing things with high estimates than life is great when they come in low.

Land Transfer Tax
$2,975

Movers
$1,500 (rough estimate)

Lawyer
$1,000 (can vary depending on circumstances)

Home Inspector
$500

Appraisal Fee
$250

Mortgage Penalty
$2,000 (avoidable if your mortgage is portable)

Sundry Expense (utility hook up etc)
$250

Marketing Your Home for Sale
Now you have a couple of options with this one.

MLS
$250,000 x 5% =$12,500 + GST = $13,125

or

Private Sale
$1499 + GST = $1573.95

So depending on what angle you choose to market your home your closing costs can vary between $21,600 or $10,048.95.

As we head into the Economic "storm of the century" and the "bleakest time since the Great Depression" when an opportunity arises and you find yourself putting your home on the market. Spend smart, Spend cautious.

M

Betting the Farm on the Trifecta

Product, Price, Exposure.

This is the "Home Selling Trifecta".

Trifecta is "a type of bet, esp. on horse races, in which the bettor must select the first three finishers in exact order" as found on dictionary.com.

When you are listing your home for sale you are doing just that, betting. In order to sell your home successfully you need to have Product, Price and Exposure finish in that order to win the bet. Why that order?

Product is the one you really have the least control over. It has "bones" and outside of a massive training regime it is what it is. You can wash and groom (stage) it so it looks great on the track. You can ensure the jockey has a good saddle and the right equipment (features like fire places and flooring) but all in all the horse is what it is. It needs to be the first thing you look at before anything else.

Price is KEY in selling your home. If you list a 3 bedroom semi in Eastbridge for $1.4 Million, I wish you luck. I am sure we will see you on the front page of the paper as the "Crazy Couple from Eastbridge". Your Product/Price ratio NEEDS to be in alignment. Keep an eye on the market in your neighbourhood, use the Property Tax Assessment information available to you and, if you are really unsure, enlist the services of a professional appraiser. We have seen strange things happen with clients that have left PropertyGuys.com to go to MLS. They lowered their price, some dramatically, in order to sell. On top of a commission that needs to be paid. When making decisions like this you need to consider what you are going to get out of it. Does a drop of $10,000-$15,000 plus the $15,000 in commissions really makes sense? You can reduce it by a portion of that amount and be priced properly for your market.

Exposure is only important once the first two have crossed the finish line. There is little to no point in going through the expense of saddling up ol' Exposure if Product and Price have no chance of finishing the race. Your bet is reliant on all 3 coming across in that order. So if Exposure pulls out in front of Price then guess what, kiss your sale good-bye. Ensure that Product and Price are in top form and then giddy up. Exposure can come in many forms. The key to Exposure is getting your property in front of buyers, like I had to tell you that. Having internet exposure is paramount these days. Hard to argue, you are using it now to get information aren't you? Just being on the web is not the only issue. You need to get buyers visiting the site. Is this not what agents have been talking about all these years? Their access to buyers? The internet has changed this. They do not "have" the buyers, the "elusive" buyer is out there looking at many websites, driving around neighbourhoods and looking in their local paper to find their house.

Get to the track early and have a look around at the horses. Fill out your slip for the Trifecta in order of Product, Price, and Exposure. Step up to the wicket and place your bet.

M

Drop in MLS solds across Waterloo Region

Year to date the Waterloo Region seems to be faltering when you look at the MLS solds year over year. An article in the Record last month had some horrific numbers for solds. The article for this month tries to paint a rosier picture by slipping in the YTD stats at the bottom. It seems that the editorial staff the Record are not overly strong in their math skills. They made the error of dividing the difference by this year's total and not last year's giving us the wrong percentage decreases. I have adjusted them below for an accurate assessment.


KW MLS Solds
YTD 08 = 5175
YTD 07 = 5481
Difference = -5.58%


Cambridge MLS Solds
YTD 08 = 2142
YTD 07 = 2437
Difference = -12.1%

When you start adding in the impact of Private Sale into the mix it adjusts slightly. When you add in all the properties sold on PropertyGuys.com (Unfortunately I do not have access to other information) and look at the comparison year over year, it does paint a better picture.

Adjusted KW Solds
YTD 08 = 5336
YTD 07 = 5596
Adjusted Difference = -4.64%


Adjusted Cambridge Solds
YTD 08 = 2199
YTD 07 = 2492
Adjusted Difference = -11.75%

In both markets PropertyGuys.com has seen an increase in sold properties year over year when MLS has seen dramatic drops. In KW the increase was 40% over the same period last year. These increases are all part of a change starting in real estate, a revolution if you will. People are realizing that with the increases we have seen in house prices mixed with no adjustment to the commission based system they need to find an alternative. With the all the talk of economic hard ship and Scotiabank even using the "R" word in today's report people are looking to save where they can, a nickle hear and a dime there. In real estate we are talking about more than a few nickles.

M

MPAC Assessments

It appears that the new MPAC assessments have caught some people off guard. Seems strange that people would be so surprised that MPAC assessments that have lagged behind for years finally caught up and now those that got hit are screaming bloody murder.

My assessment went up a total of $58,000 since last assessed, but then it was under assessed last time. It just so happens to be right where I would (and did) peg my value My Listing on PropertyGuys.com.

There was an article recently written in The Guelph Mercury that spoke about it that may be of interest. What I found most interesting with the MPAC assessments was that you can log onto MPAC and view the detail about how the assessment was calculated as well as compare it to other properties in the neighbourhood. This sure takes the sizzle out of the real estate agents using a "free market evaluation" as a selling tool.

I see this as just another hole in the boat that is taking on water.

M