Inspect It Right

Guess who is coming to Waterloo Region and Guelph?

I was reading an article in the Record announcing the launch of Mike Holmes Inspections during his book signing in Waterloo today. I couldn't help myself when I saw a quote like "There also are questions over whether some inspectors are too cosy with real estate agents who don't want an inspection to kill a sale.

Realtor Myth #5 - Agents have a "network of professionals" at their disposal.

How many times have people been referred to a home inspector from an agent? Is there not a conflict of interest there? I have had a very qualified home inspector tell me flat out he does not get referrals from agents because he is overly detailed in his inspections and has caused the odd deal to fall through. As a buyer, that is the guy I want! What about as a seller? Absolutely, for my pre-sale home inspection.

Truth - When a business gets the majority of it's revenue from a single source, that source has the ability to put undue pressure on the business. If an inspector/lawyer/mortgage broker gets 75% of their business from one agent/broker/brokerage there is potential to have things "swept under the rug" to get the deal done. With the way the payment flows to agents, at time of sale, they need deals to close. No close, no pay. No pay, no food. Seems to me that is where the term "hungry for the business" comes from.

How hungry is your agent? Is he Hungry Like The Wolf?


Make sure if you get a referral from someone they do not have any interest in the outcome of the service provided. If they do, look for some objectivity.

M

Don Juan De Real Estate

The Casanova of negotiators.

Realtor Myth #4 - Agents are professional negotiators.

It's as if you were incapacitated by his power. Pen trembling in your hand, afraid to put ink to paper. Was it what he wanted? Would the pen let you down? Under his exacting stare you write down the number that he has wanted the whole time. Defeated you collapse into the rickety chair letting your tired head fall into your trembling hands. At least it was over.

Truth - More and more home sellers are looking to take back the power. To be in control of the process. Why? When a real estate agent is looking at negotiating the sale of a property their goal is to simply come to an agreeable price that will see the transaction come to fruition. Imagine the house was the agent's personal home. Would they hold out to get an extra $10,000? With your sale they are only getting a small portion of that extra $10,000. As Economist Steven Levitt puts it "When she sells her own house, an agent holds out for the best offer; when she sells yours, she pushes you to take the first decent offer that comes along. Like a stockbroker churning commissions, she wants to make deals and make them fast." The goal is not to get you the best price, it is to get your house sold (or bought) at a price that you can live with.

Also it cannot be ignored that if an agent sold your home for $300,000 you would only receive $285,000 (actually less when you add GST on the commissions). That means that you would have had an extra $15,000+ in negotiating room to get the property sold FASTER.

For those younger readers that would prefer to hear Levitt's theory in rap, here you go...


M

Culling The Herd III

Who will be the last cow standing?

Not only are the local agents in peril of market shrinkage even the brokerages and brands are in jeopardy from market changes and corrections.

As more and more agents leave the business there are less and less desk fees being paid to the brokerages. As brokerages struggle to pay their bills so will big names that we all know. I suspect that we will see more agents get away from the big names on the signs and the independents start to take off as just another way to lower their costs.

Cost cutting has started on the backs of the local print media. How do I know? This recent article in the Record is not solely related to business advertising. The week-end home papers are half of what they were last year.

Maybe they can go out on a limb and try something different, like Microsoft.


M

Serious, I'm Not Playing Around

This is no TV playhouse, this is Real Estate!

Realtor Myth #3 - 90% of Private Sellers end up listing with agents when they get serious.

When your doorbell rings do you shudder at the thought of another real estate agent going door to door to "help out" people selling their house? Do you really need anymore phone calls or letters telling you how agents justify taking your money? Worst of all they use stats from when you were watching Saturday morning cartoons.

Truth - More and more people are selling privately. How do I know? I talk to home sellers every day. When I look at how many listings PropertyGuys.com has versus previous years, it cannot be denied.

In the last 3 months (Nov - Jan) here in Waterloo Wellington, stats show that PropertyGuys.com boasts a 53.98% list to sell ratio, meaning more than half the number of clients listed for sale have sold. Realtors for the same time period......39.39%. Even more impressive when you look at how things have flip flopped from the same time last year (47.3% for PropertyGuys.com and 64.17% for the Realtors)!

PropertyGuys.com phones are ringing off the hook with expired MLS clients. People are realizing that in light of the drop in market price that they need to reduce their costs. With real estate commissions being the largest piece of those costs, Private Sale makes more sense than ever before.

Next time your doorbell rings I hope it's not a SALESMAN!



M

Real Estate #'s Buried In Snow?

I can understand why the president of the Real Estate Board of Cambridge would want to try and paint a pretty picture but let's call a spade a spade. Lipstick on a pig only gets the farmer in trouble.

In the Cambridge Homes insert on Friday February 20th there was a "report" by C Warrington, Twire. In this "report" Mike Toffner, President of the Real Estate Board of Cambridge, stated that January house sales were up 14% over December. It is true that January house sales were up over December. The stats that I find released from the board show December had 95 houses sold and January had 109. Here is the issue with this glamorized statistic. Traditionally January increases over December, that is the norm! Poking around I found stats that show last year it went from 124 to 177 and the year before from 151 to 196. Telling us that January house sales are up over December is like saying the we had more snow in January than July. If they told us that there was 35% less snow this year than last year and snowfall has dropped by more 50% in the last 2 years it might mean something.

Now snow fall has not changed like that for us here in Cambridge but the housing market has. So far since October when the economic crisis became a part of our everyday lives we have seen continual 30%+ drops in housing sales versus last year. In January that was also coupled with a 4.9% average price decrease over last January.



Things may not be pretty but let's not stick our heads in the snow, or worse, shovel it on our neighbour's head. Maybe the Real Estate Board of Cambridge needs a Shovel Cam!

M

The Buyer Garden

What are you growing in your back garden?

Realtor Myth #2 - Real estate agents have all the buyers.

I hear this all the time. I always picture a a garden in behind the local real estate brokerage with new buyers poking out of the soil like pansies in the early spring. An agent standing there tossing a steaming load of sheep manure on them to ensure they are full of "nutrients". When the time comes they go back and pick a bunch of their favorites. Next, a drive around with their load of buyers delivering them to all the home sellers for a hefty price tag. Can you see it?



Truth - According to the Canadian Real Estate Association (CREA) 90% of home buyers are using the web to search for homes. The internet has changed the way business is done, just ask a travel agent. Buyers are more savvy, better informed and often know more about properties than agents because they have been looking and focusing on the few that they are interested in. Sure some buyers are looking in the paper and some are driving around in neighbourhoods but one thing most buyers have in common is the internet. Where this deep rooted misunderstanding comes from is when agents have homes listed they get calls from buyers. If the home seller's phone number or email address was on the website listing, who do you think the buyer would contact?

When that agent is standing at your door telling you about all the buyers he has, check to see if he has any manure under his nails.

M

Put Bullets In Your Private Sale Arsenol

I was recently asked by a client to provide some ammunition.

Like many private sellers he is being contacted by more real estate agents than he cares to talk to. Every real estate agent seems to have their own angle or propaganda they are pushing. After a while it just gets tired and boring and you just want to tell them all to go away. I was asked to post some ammunition to assist a private home seller in combating this propaganda with valid arguments. So today I will post the first of many bullets to put in your gun.

Realtor Myth #1 Real estate agents can sell your home for more money.

Truth - First let's discuss the basics. If an house sells for $300,000 the home seller only get $285,000 (based on 5% commission) if done the "traditional" way with a real estate agent. Agents would have you believe that without their involvement the home seller could not sell the same home for the same money. That a buyer will pay more money for a home simply because of the square sign on their lawn. Real estate agents will add value to the transaction simply by being involved. A recent study from the National Association of Realtors in the US shows that private sellers get closer to their asking price and sell sooner. Hmmmm.

Let's look closer to home to see how this relates to you and I. A property in Guelph was listed on PropertyGuys.com at a price that was higher than what the market wanted to pay - after several weeks the owner was solicited by an agent who is knocking on the door of all of our clients. He came with a promise to put the price UP $10,000 and sell no problem. Our client bit the hook and listed it for $340,000. After 90 days with the agent she was down to $319,900. It did not sell because the market was not attracted to the property at that price point - so she re-listed with PropertyGuys.com at $309,900. It ended selling for just under $300,000 after 5 weeks.

We see this time and time again. Real estate agents do not add value. They provide a service, an expensive one at that. If an agent comes knocking at your door tell them if they can sell your house for more money, go ahead. Your accepting offers. If they can get more than your asking tell them they can keep the difference. Tell them to head back to the office and in to the "buyer vault" and bring one over, heck bring two and start a bidding war.


Real estate agents claim all sorts of things. They claim that they can sell your home for more and then the next breath they say that you need to use them to buy because they will make sure you don't pay to much. Which is it? Do they make them more expensive or less money?

If there was any weight to this claim agents with buyers would only be shopping on sites like PropertyGuys.com because houses would be cheaper than ones listed with agents.

The Latest, Greatest, Wonder Tonic To Sell Your House

That's right boys and girls, gentlemen and ladies. This wonder tonic will calm your worries, ease your troubles and make you sleep like babies.

I am not talking about a scheme or a plot just come and see it, I promise you'll want what I got.

Your house has sat through a few of the seasons. Over and over you have thought but it is obvious to me the reasons.

Now you must ask "How much for your tonic?" Well that all depends on just how much you want it.

This magical solution is amazing and bold. You will exclaim "It was that easy to have it marked SOLD!"

I will now reveal the most amazing and intoxicating nectar. One that will change FOR SALE to SOLD before you can say "bring on the home inspector."




No really!! As you drive around town watch for the signs. The ones with the tonic can no longer hide. Soon they will be marked SOLD and you will be jealous because you didn't believe and thought I was overzealous.




Now if you decide that I am truthful about my wonder drug. I am the man you should come to.(shameless plug)

Don't go shopping around town to compare. The price of this sign from others is not fare.

They will cost you so much of your hard earned dough. You will want to stay far away from those ordinary Joe Schmoes.

Legal Pitfalls?

I'll bet you thought it.

Maybe you've just felt that knot in your stomach.

Here you are thinking of selling your house and wondering how will you get through the process without an agent. They are commonly heard spouting how they protect you from "legal pitfalls".

Last I checked a licensed agent was just that. They have not been to law school. Neither have you. Your lawyer has.

In any real estate transaction your lawyer is there to work on your behalf. They are the ones there to question the contract and ensure that your rights are covered. With that said when you are negotiating the sale you should never sign a contract with a buyer (or seller if you are buying) without first having it reviewed by your lawyer.

Negotiate, YES. Agree on price, conditions, inclusions and closings dates, YES. Write it all down on your Offer Maker, YES. Sign an Offer to Purchase, NOT UNTIL YOU ASK YOUR LAWYER!

Even the agent in this cheesy video thinks it's best!!!



M

January Monthly Real Estate Stats

It seems everyone has the same question.

Where is this market going?

Waterloo Region MLS stats are out for January 2009. The market is adjusting, make no mistake. Another month of sales decreases for the agents. Nearly 1/3 less homes SOLD means money is not flowing into the brokerages. Expect to see less agents in 2009.

Average prices are starting to drop, as we have been expecting, with a 5% drop versus January of last year. Expect this to continue.

If you are currently selling your home, note that prices are dropping. If you are thinking of selling, find an appraiser that uses a forecasting tool and not just past history. When the appraiser tells you that your house is worth less than you might have anticipated, don't be surprised.

If your home was worth $300,000 last year, today it is only worth $285,000. Interestingly if you SOLD last January with an agent at $300,000 you would have ended up with today's lower value ($300,000- 5% commission = $285,000). Today if you SOLD that same house with an agent you would end up with $270,750 ($285,000 - 5% commission). So now the market has taken away 5% and the agent has taken away 5% and you are left with a $30,000 hole in your pocket.

Don't worry though. According to this video, in Ontario we have an increase in affordability. That should help!


Is it all doom and gloom? I couldn't do that to you. 1st quarter 2009 PropertyGuys.com Waterloo Wellington is up 11% for SOLDS year over year.

And The Revvy Goes To....

It is with great honour that I announce that our own Sue Machado has been awarded Associate of the Year for the PropertyGuys.com system.

You may remember Sue for the love she has for her job.

Sue has garnered many great testimonials as have all of our Private Sale Consultants here in the Waterloo Wellington area. I am taking a few moments to thank our PSC's for the hard work they put in day in and day out.

Here are some words from PropertyGuys.com clients.

Where do I start when I'm gushing with nothing but praise for PropertyGuys.com!!!! Christine Menard's support and guidance from beginning to end was above and beyond! I was hounded and harassed by a number of unethical and pompous Real Estate Agents that said I wouldn't sell my house without an agent, that only they had the know how and experience to sell my house. They also said I was overpriced, but guess what, I received exactly what I was asking for without paying them a dime. Well, I'm living proof that you can sell your house privately and save so much in commissions, thanks to PROPERTYGUYS.COM!!!!! In this day in age, you don't need a real estate agent, all you need is a real estate lawyer and PropertyGuys.com.
Cathy Sobczak Cambridge ON

I'm so happy that I contacted Property Guys to sell my house. Tonya, my Sale Consultant, did an excellent job at preparing me for the process of selling on my own. The pictures she took of my home and gardens were beautiful. The first family who contacted me made an offer on their first visit. The offer was finalized within a week for just over my asking price!
Kari Lowry Guelph ON

If you are in the need of some advice feel free to contact any of our associates. They would be happy to buy you a coffee and answer all your questions.

Guelph 519-824-7253
Tonya Brubacher x207
Martha Neath x203

Kitchener Waterloo 519-208-6204
Sue Machado x201
Chelsey Collins x202

Cambridge 519-208-6204
Christine Menard x205

Where Do Buyers Find Homes?

It would seem they are looking everywhere.

We often get asked to advertise our clients in the paper. That the paper is where they NEED to be. We find many of our clients from ads they have placed in the paper after putting that FSBO.

Truth is people are searching on websites not in their local paper. Paper is still an additional form of advertising that we recommend, but if you are not on the internet then more people will miss your home than see it. Heck even agents say that people are searching EVERY website not just the agent sites.

I love the part at the end when she talks about how happy her clients are.

Just imagine how happy you would be paying yourself that $15,000 in commissions.

M