Would GARP Ever Work?

Generally Accepted Realtor Principles....hmmmmmm

I recently read a blog post from a realtor in the US. As a CPA (US equivalent to Chartered Accountant) he looks at one of the glaring issues in real estate today. The deficit of rules, guidelines and standardization for realtors to follow.

In accounting there are the Generally Accepted Accounting Principles or GAAP. A standard set of rules and guidelines for everyone to follow. No questions of how a situation is handled. If you are not sure, you go to the GAAP and look it up. A great quote from the post is:

Ask any CPA any question, and their response should be, “Well, according to GAAP, Rule XYZ says that in that situation you must do 123.”

How is this handled in the traditional real estate world? Here is another snipit from the blog post:

let’s assume that you, as a licensed Realtor, receive multiple offers on a particular home you have listed. What do you do? What are your obligations, and to whom? Do you entertain both offers, or only one? Do you tell each agent that there is another offer? What if one of the offers is from an agent from your company? Does that impact your behavior in any way? What if one of the offers is from one of YOUR clients? How does that impact your actions?

Ask 10 agents, and you’ll get 10 different answers, I will surmise.

There are no clear, concise, precise, definitive instructions on this situation.

This lack of "regulation", in my opinion, is what separates real estate agents from what they think they are,highly trusted professionals, to what the public perceives them to be, on par with politicians, and car salespeople. Think Herb Tarlek from WKRP in Cincinnati.

If realtors had a GARP to follow they sure would weed out all the dead wood in the industry and the true professionals would be left standing in place with their head held high.

The other outcome of this would be with less realtors in the game the need for the high commissions would be gone as they would all get their fair share of the pie.

Do I ever think this would happen? When turkey's fly.


M

Antique or Trash?

I guess even ol' Saint Nick needs to be sure!

Just like a home, an antique is only worth what a buyer will pay for it. In my travels I have heard the "oh that's an antique" as I looked at what I thought to be a junky old piece of furniture. The question I have is why are you keeping it? Most times it is a family heirloom of some sort and the guilt of parting with it might just out way the pittance.

Fact is when you are looking at selling your home it pays to ensure your house "matches". If you have an antique mahogany side table, an art deco dresser, an Ikea bed and a chandelier for a light the flow in your room may not work. Buyers will be too distraught over the jumble of styles they won't be able to picture their room. That will cost you money in the end! Don't be afraid to ask for help. A professional stager can effectively allow you to mesh your styles and better your flow, most times using what you already have in the house.

The other issue is just having too much stuff. Often times we take pieces of furniture that were our parents' or grandparents' because we need to hold on to something to remember them. Here is an idea. Make a scrapbook including pictures of the items (both now and from the past in their original settings) to remember them by. This allows us to hold on to the memories but not the items which are just cluttering our already cluttered lives!

Now what to do with the item(s)? I would suggest contacting a local antiques dealer and have them give you an idea of value. At that point they may decide to purchase at a fair price or even allow you to put it up for sale on consignment in their store. Renting a truck and borrowing a friend to lug everything down to the store/market may end up as a huge disappointment as most people don't get the "Antiques Roadshow Surprise" they are hoping for. A couple of ideas. If you have a fairly big "collection" of items most dealers will do a site visit to asses what you have. The other option is using the power of the internet. Green Spot Antiques in Cambridge ON has taken the old world to the 21st century. To quote Vince the owner "like having your own antiques pro at home". You can connect with Vince via Twitter, Facebook and even talk via phone or video with him on skype.

Now about the mahogany table....


M

Can You Learn From the Dragons?

When I saw Kevin O'Leary's tweet about valuations it rang in my ears.

By now I assume everyone has at least heard of the hit CBC show Dragons' Den. Kevin is the "Simon Cowell" of the venture capital world. He is jagged and unrelenting on business owners to show him the money. His words above are the common denominator in deals turned down on the den. Most people go in looking for too much and have too high of a valuation. This is no different then those selling their house.

We recommend all sellers make sure they have the right information when pricing their home. As I have said many times before this is best made available from an independent appraiser. What happens when a home seller takes that advice? As you can expect, if they start with a fair market value appraisal to base their pricing decision on, they get people wanting to make a deal. If they choose to over value their home then buyers are going to say one thing..."I'm Out"

Check out what this Vancouver realtor has to say regarding price...


That's right, he said it. Price is 90% of the selling and marketing is only 10%. So tell me why an appraisal costs $250 and an agent costs $15,000. Seems to me your better investment is the appraiser not the realtor. Seems to me your better to drop your realtor AND your price so you can sell your house!

M

Win Fantabulous Prizes

All you have to do is know the right answer.

When selling your home you need to ask "What is the right question?"

The answer: Knowing the value of your home. Without this info you are guessing and one of 3 things will happen.

1.Price it too low and leave money on the table
2.Price it too high and sit on the market forever
3.Get lucky and price it right and sell your home

The likelihood of #3 goes up dramatically as you start to gather knowledge. First step in the knowledge quest happens by watching the local market and see what other people are listing for. How long are they sitting on the market? How does their home compare to yours? This step should be done 2-3 months before you put your house up ideally. Second step is to see what houses are selling for. This can be done easily enough through the Municipal Property Assessment Corporation website. The third step, and the most crucial, get yourself an appraisal by a licensed appraiser. Not a "CMA" from an agent, the motivation of their pricing can not always be considered in your best interest.
I am including this slide show and want you to look specifically at slide #8

CMA Steps

View more documents from mratcliffe1.

Why is it a Keller Williams agent does not want you to not listen to another agent? Are they not all trained the same? Do they not all look at the same data to come up with your price? Why would there be a difference between agents?

This is why an independent appraisal is so important versus a real estate agent offered CMA.

Hey don't get me wrong, you could always get lucky...


M