Letting The Cat Out Of The Bag



We know that we have the best kept secret in real estate (maybe even beyond real estate). We are no longer hiding it. We want everyone to know what it is we do. I mean people know our signs, they see us all over but do they truly know what we do?

The most common question we answer on the phone is "So how do you work?". Well now you can find out as easy as watching a video. In under 7 minutes you will know just that, how we work. There is no magic to this thing called real estate, but there are some keys to it working. We have them all covered.

Grab some popcorn (just a small bag) and watch the video. When you are done, send to your friend, wife, father, cousin, whoever you think may be thinking of selling in the next few years. When they do sell remind them you introduced them to the PropertyGuys.com and they owe you dinner. It's the least they could do!!


PropertyGuys.com Best Kept Secret from propertyguys.com on Vimeo.

Get $200 Off When Selling Your Home With PropertyGuys.com

If you list your home in Cambridge, North Dumfires (including Ayr), Guelph or Wellington County (including Fergus, Elora and Rockwood) before Dec 31st, you get $200 off our Real Estate Pro package. So not only do you save thousands on real estate agent commissions, but you get the best in the business even less.

Contact our office 519-208-6204 x204 for Cambridge area or 519-824-7253 for Guelph area. You can always email us as well.

Sell your house. Pay yourself. Even more!

Trust In Your Mortgage Agent


I recently read an article about trust in real estate. There were points in it I agreed with and those that I didn't. I can bring a lot of perspective to this as a Private Sale Professional and as a Mortgage Agent.

I have written many posts about agents and their incentive to work for themselves versus you, the client. To date I haven't delved too far into the mortgage agent relationship. Where I feel the article missus the mark in this relationship is in the regulatory body of the mortgage industry. You see in the real estate transaction, real estate agents are self regulated through CREA. The mortgage industry is regulated by FSCO, a government agency that also regulates more than just the mortgage industry. Here is a snipit from their website:
FSCO's legislative mandate is to provide regulatory services that protect the public interest and enhance public confidence in the sectors it regulates.

FSCO regulates the insurance sector; pension plans; loan and trust companies; credit unions and caisses populaires; the mortgage brokering sector; co-operative corporations in Ontario; and service providers who invoice auto insurers for statutory accident benefits claims. FSCO is accountable to the Minister of Finance.
You see, we in the mortgage brokering business have a higher power to answer to. We don't just get to pick a mortgage to sell you based on what we get paid. We have a dual responsibility to both our clients and the lenders. To the clients we have to prove that what we offered them was in fact, the right product for them. If we have not done our due diligence we can be held accountable for it. We are also responsible to the lender to ensure that the person applying for the mortgage is who they say they are and that the information they provide is accurate. We are the first step in stopping mortgage fraud.

Another area that the author missed the mark is where he said "it wasn't revealed until I signed the mortgage papers" in regards to the brokerage being paid by the lender. We are required to have a consent form signed by the client prior to doing any work for them and it clearly advises that we are paid by the lender. So either the author didn't read what he signed or he was working with someone that wasn't following proper protocol.

So yes at the end of the day the mortgage brokerage gets paid by the lender, but we are working for you, the borrower, to ensure you are treated fairly and to find you the best mortgage for you.

The best advice is to do your home work, interview your mortgage broker/agent, don't just look at rates. 

Mike Shanks, PGPro
PropertyGuys.com
Franchise Operator
Cambridge and Guelph

Mortgage Agent Lic# M14001148
Brokerage # 12466

What Does It Take To Sell A House?


I have been in the real estate game for 7 1/2 years. Which to a veteran real estate agent may seem like nothing. The thing is, we work with hundreds of clients a year instead of 20-30 like the average agent. This means in real estate terms I have 30-40 years of deals under my belt. What I have come to realize is that there is really two different markets of sellers. Similar to the home renovation market there is the Do It Yourself (DIY) market and the Do It For Me (DIFM) market. There are some distinct differences between these two groups which I will break down for you.

DIY Market
The DIY market, often refereed to as the FSBO or For Sale By Owner market is distinct in that sellers tend to feel they have the knowledge they need but do need access to some tools. There are extremes even within this market. The lion's share of this group feel they know their price range, have watched enough HGTV to be comfortable with the staging and just need to reach the buyers. They tend to look for the most inexpensive ways to advertise their home. Kijiji is a staple to this group. It has replaced print ads of days gone by, the classifieds of the 21st century. FSBO signs are common and they sometimes look to private sale marketing companies like PropertyGuys.com to increase their exposure as well as an avenue to get onto Realtor.ca. Typically they do most things on their own with little outside support and occaisionaly we see the true cowboy that has done their own blog dedicated to selling and want NO assistance from anyone, a true DIY person. What is distinct about this group is that they believe the key to selling is finding the right buyer. They feel they have everything they need except a buyer. 

DIFM Market
This market is distinct in the fact that they will pay what it takes for results. That is all they want. They have opinions on what services will provide the result, but if you can provide the result, they are willing to pay for it. The real estate industry have been exploiting this group for decades. They use fear based marketing and take tens of thousands of dollars in the home seller's equity. The industry is run like a cartel and often use the massive amounts of money pulled in to exploit fears in the industry to maintain control over what they deem as "their" market. The seller's big fear is of the unknown. They don't know what they don't know and fear that if they miss something it could be an expensive mistake.

Two Market Solution
So how does one company offer a solution to both of these distinctive markets? It lyes in first recognizing that both markets exist and validating that they are both viable markets. Agents typically scold the DIY seller and tell them they are stupid. The DIY seller tends to scrimp on spending anything and limit their knowledge and exposure. As with anything there are outliers that exist. Some people are true DIY and need very little help, others need someone to do EVERYTHING for them. The majority of people fall somewhere in the middle. The market typically breaks down leaning 10-15% towards DIY and 85-90% towards DIFM market. 

This is where we come in. At PropertyGuys.com in Cambridge we offer the FSBO DIY client what they want. Free exposure (on PropertyGuys.com) and inexpensive tools like open house signs and a listing on Realtor.ca. Everything they would want, from as little as free to as much as $500. The DIFM client is given what they need, results. Results are ONLY delivered when Product, Price and Exposure are in alignment. Our Real Estate Pro package offers all the tools including pricing from a licensed appraiser, exposure on Realtor.ca as well as local print and direct mail, legal advice and offer drafting 7 days a week, a real estate receptionist to answer calls around the clock and book appointments, access to local professionals to answer all their questions, heck even paid ads on places like Kijiji and Facebook! All this is backed up by the best real estate platform in the industry with big, bright photos, walk score mapping, visitor reports, inbox and an online offer maker to work out the deal with your buyers.

At the end of the day, selling without a real estate agent isn't for everyone. But the majority of people, DIY and DIFM, can get what they need from PropertyGuys.com. Set up an appointment to see where you fit. It will be the best 45 minutes you will spend to prepare for selling your home!

M

What A Home Buyer Needs To Know About Using A Real Estate Agent


I have had the two opposite ends of the spectrum come across my desk in the last 10 hours.

Last night while at a St Paddy's Day party I had a great chat with a local Cambridge real estate agent. One that I had yet to really meet, but was bound to eventually as our kids go to the same school. We had a great chat over the food table (where else would I be) about how she approaches sellers and how she coaches her buyers that are looking to purchase a home that is listed with PropertyGuys.com. It was refreshing to hear a proactive approach where she explains to her clients that she is getting paid by them, whether it is included in the asking price or not, and she advises them to pay her directly through the lawyer so they can better negotiate the purchase with the seller.  She doesn't call the seller to ask "Will you compensate me?" She calls and asks if she can show it to her buyers. She brings up commission if and only when they are discussing an offer. Usually she is able to say her buyers are paying the commission so they don't have to worry about negotiating the rate. An agent that is progressive and doesn't hide behind the numbers.

Today I hear from one of the clients I listed last week that were happy to report they had an offer. It turns out in their negotiations with the buyer's agent the agent wanted 3% instead of the traditional 2.5% a buyer's agent typically starts at.  Our sellers were very clear that if the real estate agent wanted 3% that his buyers would have to pay more for the house. The agent proceeded to advise his clients to put in a higher offer to maintain his high commissions. So I ask you this, who's best interest is this agent looking out for? Last time I checked taking money from unsuspecting people was thievery.

IF you are going to use an agent to buy a home I will give you a few suggestions.

  • First, don't sign a Buyer's Representation Agreement unless it is specific to A house and for a short period of time (7 days). 
  • Second, discuss commissions up front with your agent.
    •  How are they getting paid? 
    • Will the agent drop their commission if they can't negotiate a price that is acceptable to buyer and seller? 
    • How much commission are you willing to pay?
    • If you end up buying an agent listed house will they pay you back a portion of the commissions? 
  • Third, know that if you are using an agent to buy a house, it is not free. You are paying more for the house because your agent gets paid through the purchase.
At the end of the day, you the home buyer decide if you want to use an agent. We coach PropertyGuys.com clients on how to interact with your agent and show them that if they maintain their bottom line (or more) and you are satisfied paying more because you brought an extra mouth to feed, why not entertain the offer?

M

List Your Home For Free In Cambridge!

That's right, FREE!

We are offering 20 free SalesPro packages in Cambridge between now and Feb 28th.

This means on top of the $15,000+ in real estate commissions you are going to keep in your pocket, you will also save the listing fee of $899 + HST.

Call the office at 519-208-6204 and enter extension 204 to book your listing appointment before they get scooped by someone else.

Remember though, even if you miss out on the free promo, you will still have those commissions in your pocket!

M

Real Estate Commissions; A Black Hole For Your Money?

Where is your money going when you pay commissions?
It costs A LOT of money to sell your house with a real estate agent. The big question people should be asking is where does it all go. Your local agent is the first to yell I'M NOT TAKING IT ALL, and they are right.

So where does all that money go? First we need to look at what it costs to use an agent.
Selling price of average house: $400,000
Standard 5% commission: $20,000
HST on the commission: $2,600
Total cost to use a real estate agent: $22,600
OK so the obvious first thing is you are paying 13% HST on top of the real estate commissions. That $2,600 right off the top. That alone would cover your costs to sell your home without an agent. So where does the rest of the money go?

The Buyer's Agent

Your agent typically splits the commissions 50/50 with a buyer agent. That means that $10,000 is associated to the buyer's use of an agent and $10,000 is associated with your agent selling your home.

The Broker's Cut

Agents work for brokerages. The broker is actually who your listing is with and they take a cut of the commissions and then leave the agent with their portion. "Agent Splits" as they are referred to in the industry range between 95/5 and 50/50. Let's assume a 70/30 split because you have an experienced agent that has negotiated a better deal with the brokerage.  This means that your agent has to give $3,000 to the brokerage just for the right to do business through them.

This leaves your agent with $7,000 out of the $22,600 it cost you for them to run their business. Let's say a typical agent does 1 transaction a month. That would give them earnings of $84,000 in a year. Now what are their costs to do business?

Desk Fees, Admin Costs, Signage, Advertising, Lexus

These are all the costs that, as a business, the agent needs to pay for. Here is an infographic showing a breakdown a typical real estate agent in the US pays for. It wouldn't be much different for an agent up here. Let's be generous and say it costs $24,000 a year. That leaves your agent with $60,000 for doing one listing a month.

Conclusion

Your home sale results in paying $10,000 in wages, split between two agents; $4,000 to cover their business expenses, including their nice car; paying $6,000 to two different brokerages to manage the agents and have a nice hot air balloon on their building; and $2,600 to the government in taxes to help watch the industry to make sure they are not screwing you over.

How else could you spend that money? 

M

Who Drafts The Offer To Purchase In A Private Home Sale?


When you are selling your home without the services of a traditional real estate agent one of the big looming questions is "Who will write up my offer to purchase?" (also called the purchase and sale agreement)

As a Private Sale Professional, I get asked this question everyday.

The true DIY person will simply Google "Offer to Purchase" and download a form. I am of the belief that most people should not be completing legal contracts for what is typically their largest financial asset. I believe that we sure can negotiate the specifics that will make up that contract, but to enter into it before a lawyer has had a chance to review it is not in either parties best interest!

This is where the PropertyGuys.com Offer Maker and Legal Pro program come into place. Most lawyers are going to charge you upwards of $250 to draft an offer to purchase. Working as either a buyer OR seller with PropertyGuys.com our Legal Pro team will work with you 7 days a week to review any offers, draft your purchase and sale agreement, advise on anything an agent has brought you asking for a signature, or simply answer any questions relating to the legal aspect of buying or selling a home.

You can get a Legal Pro or you can call Saul, your choice.



M

What Do You Get For Your Real Estate Commissions?


Would you spend $6,000 on a plain, old hamburger?

What the traditional real estate agent usually offers a home seller is a standard, plain Jane experience yet they charge you $15,000-$20,000 for it. The industry is trying to shove a value menu burger down your throat and charge you for the Cadillac of burgers.

At PropertyGuys.com, we offer you a nice juicy burger at a fair price, and we biggy size the combo.

It will leave you asking an agent why so much and...



M