Real Estate in Waterloo Region and Wellington County

Helping Out At Christmas

2011-12-12T12:32:00.008-05:00

What are you doing to help out in your community this holiday season?

James Howe wrote a great post today about Jodi Sonoda and some of the things she is doing this year. You can read it here.

My family has a yearly tradition of helping out the local foodbank packaging up toys for kids that won't see presents under the tree without their assistance. It is always humbling and helps us put things into perspective, specially with our own kids.

I know from talking to them the nights are almost full (which is a great problem to have). If you want to get involved and have some time give them a call.
Cambridge Self Help Food Bank
Family & Friends Night - Calvary Pentecostal Church, Hespeler Road
Monsday December 12, 2011 6:00 to 7:00 or 7:00 to 8:00 pm
Wednesday December 14, 2011 6:00 to 7:00 or 7:00 to 8:00 pm
This is our second year for our Family & Friends night, so come on out and bring your family and/or friends to help pack toys for kids. Refreshments will be served, Christmas music, and gain an understanding of the work we do for families at Christmas time.
Open to all ages but children must be supervised at all times by parent.
Please call to reserve a spot for your group as times are saved for those only that have registered. Call Alie at 519-622-6550 ext. 203 or email: projects@cambridgefoodbank.on.ca to reserve a time for you.

So Where Does All Your Money Go?

2011-11-21T14:29:00.003-05:00

It seems more important today than ever!

A recent blog post on buzzbuzzhome.com has us look at the transaction of a home purchase from an economic standpoint. How does your home sale/purchase impact our economy?

It would seem that the national average "service and taxes" fee of $22,775 sits well with the traditional high fee real estate agents.

Imagine another reality...the $10.2 Billion spent on these services was reduced to a fraction and the average home owner had more equity, more accessible cash and less debt. What would our economy look like then?

M

How Does Your BRA Fit?

2011-11-14T17:15:00.003-05:00

They are not one size fits all, or so my wife tells me!

Garth Turner had a great post on his Greater Fool blog exposing the Buyer Representation Agreement and the dangers of signing one.

There were a lot of really good points brought up in this blog. The one area that he didn't get into is that not all agreements are equal. A BRA is as varied as a seller's agreement and depending on the local real estate board or even individual realtors, they can differ.

For the first time I am going to ask for homework. Think about what you would look for in your BRA. If you could write a BRA that would fit you like a...well bra, what would it look like?

M

What does "Discount Realtor" really mean?

2011-11-09T09:00:00.003-05:00

Just who is getting the service?

Let's first understand what the traditional "high fee agent" (5%) break down looks like. Typically a 5% commission is split 50/50. Meaning 2.5% goes to the buyer's brokerage and 2.5% goes to the listing brokerage. This means in a $300,000 home there is $15,000 in commissions paid. Man, that's a lot of skin!

In a typical discount brokerage 3% Program the listing brokerage typically discounts their fees down to 0.5% and offer 2.5% to the buyer's brokerage or on occaision they do 1% and offer 2% to the buyer's brokerage. In one way the listing agents are not getting "their share" and may skimp on the service. The other, buyer's agents will prefer to show other listings where they get 2.5%. Same house as above and your still spending $9,000. Still more then a skinned knee!

A typical 1% Program the agent is not offering any commissions to buyer's brokerages and are expecting to work on behalf of both buyers and sellers. The real danger is that for buyer's to get the info they have to call your agent. Your agent now has a buyer looking to buy a home. Your home pays them 1%. Every other home listed with agents (High Fee or Discounts presented above) get your agent more money. Why would they push your home when they can sell the one up the street and make more money! It may only be $3,000 if it sells but unfortunately for you they sold one of the two above and made $7,500 so you sit with their boring old square sign on your lawn selling other peoples' houses!

Ever think someone was telling you one thing and then doing another?

M

Exclusivity...at it's finest!!

2011-09-23T10:43:00.006-04:00

Who are you being exclusive to?

The term "Exclusive Listing" is one that had gone by the way side it would have seemed. More and more I am finding people with that sticker on their sign though. I ran by one this morning and it got me thinking. What is that agent offering as an "Exclusivity"?

Traditionally the reason a home seller would choose to go the route of an exclusive listing would be to save on commissions. The listing agent has said that in order to save on the buyer's agent commissions "we won't put the listing on the MLS and I will market it locally on my website, in the paper and through my network of buyers". This really is not that far off selling it privately, except your agent is going to charge you 2-2.5% if a buyer ends up bringing an offer.

I mean the whole term "exclusive" comes from "excluding" things, right? Why when you are selling your home would you want to exclude putting your home in front of buyers? Pick an agent in your town, any agent. Go to their website and browse through it. Was that a good experience? Heck most of them when searching for homes just point you back to Realtor.ca anyway!

If you are looking to save money when selling your house going to someone who drives an $80,000 car and talks about all the houses they sell is probably not going to do it, exclusive or not. Going to the agent around the corner, or the one who's son plays with yours at school and lists 3-4 houses a year probably isn't going to help you much either. The biggest bang for your buck is to ensure your listing looks professional for the online shoppers, has plenty of eye catching signs for the drive buy people and is in front of as many people as you can afford to get it in front off. Traditional real estate agents will charge you 5-7% ($15,000 - $21,000) for the average home sale ($300,000 house in the Waterloo Wellington area). Discount agents will charge you 3-4.5% ($9,000 - $13,500). Exclusive listings usually run 2-2.5% ($6,000 - $7,500) but REALLY limit your exposure.

Selling privately with PropertyGuys.com gets you all the same exposure to buyers, including a listing on Realtor.ca, for under $2,000 for the average home seller. Could be less depending on what options you want, not the value of your house!

So if you are ready to jump in, say it "I'm ready and you're the one I want!"

M

Are You Being Exposed?

2011-02-11T15:14:00.004-05:00

Not by this publication!

So you have to ask yourself "How will buyers see my property?" Exposure is one of the keys to selling so where will your home be marketed?

Mid-way through last year the Realtors of the Guelph and District Real Estate Board decided it was in their clients best interest to no longer focus on advertising their clients in the Guelph Mercury. They felt that instead of having their clients' listings sent right to the door of many Guelph homes that they would "Go Green" and cut distribution by 3/4 and that home buyers would search out their paper around Guelph in their Green Boxes. Given that it has been a week since the plows have been out plowing snow it appears that not to many buyers are using these green boxes.

Our clients still have the option of local print advertising with any listing done. Whether it is in Guelph with the Mercury, KW with the Record, Cambridge with the Times or Wellington County with the Advertiser. Mind you our clients also have access, through a partnership, to list their properties on Canada's busiest real estate website along with listing on PropertyGuys.com.

It leaves me asking what do Realtors offer for all that money that you can't get yourself with a little guidance?

M

Using an Agent is FREE for Buyers....

2011-01-31T09:00:00.001-05:00

Not a chance!

I hear this regularly. In my opinion, this is one of the biggest fallacies in real estate today!

Just because you don't stroke a cheque to your realtor doesn't mean you are not paying for it. Think about it. If you are selling your house and using a real estate agent your first thought is generally "I need to get $X for my house". Then you figure what the agent is going to cost and tack it on top. Looking at it from that point of view....the buyer ends up paying the ENTIRE realtor commission as the seller has passed it on to you.

I prefer to look at it this way. The cost of selling the home is on the seller and the cost of buying is on the buyer (what can I say...I am a no nonsense kinda guy). In a standard 5% realtor assisted transaction the 5% is split 50/50 between the buyers agent and the sellers agent, 2.5% each.

In a Private Sale transaction the seller pays to market the home with services like PropertyGuys.com and the buyer is responsible to pay for any representation he chooses to use (buyer's agent). Now this can be negotiated into the purchase price, meaning the buyer pays more for the house than without the agent, or the buyer can pay for the agent themselves. We have seen this happen but it is for sure the minority. Our experiences tell us that less than 15% of private sale transactions have a buyer's agent involved and that the BUYER is the one paying for them, even if they are paid through the transaction!

Now what exactly is a "Buyer's Service Agreement"? Below an agent describes what "Buyer's Representation" is. Pay attention to the comment about paying the agent whether they are the ones who find you the house or not. This would mean once you sign the agreement you are on the hook even if they do NO WORK!

M

Golf For Men's Health

2010-11-22T11:45:00.005-05:00

OK so we are going to do something a little different....I mean it's my blog right? I can do that if I want!

You may have seen a few men in your community with a lip sweater housed just below their nose. The "mo" (Australian slang for mustache) is a sign of a gentleman. It is also how many men are raising funds in Movember for Men's health, specifically prostate cancer. Both Dave and I (PGWW Partners) are supporting this worthy cause with our lip caterpillars. To date as part of Team Waterloo we have raised over $7,000 locally and over $12,000,000. Now we have pledged that for each listing in Movember we are going to donate $5 to our fundraising campaign, but I think we can do more. This is where the golf comes in.

I am auctioning off a foursome of golf, including carts at Savannah Golf Links in Cambridge AND limo service to and from the course from Brentwood Livery. To bid on this AMAZING item you can comment on the blog, send me a note on twitter or Facebook (where you can also see the progression of my Mo). The final draw will be held at the Waterloo Region Movember wrap up held at Chicopee on Movember 28th.

If you don't get the golf package, or you just don't golf, you can always donate directly to my Mo here.

M :{

It's All In The Details

2010-10-27T09:00:00.001-04:00

Can you see it?

People are becoming more specific when searching on the internet. Search engine text strings are getting longer. People have a better understanding of what they want.

When people are searching for a house they generally want to weed out the houses that won't fit their requirements. The internet always listens. One of the complaints I often hear about searching for a home with an agent is even after telling them your needs or specifically your dislikes you end up in homes that are not what you are looking for.

As a seller you need to be sure that you put all the info available into your listing. I suggest this not only on your PropertyGuys.com listing but also on your MLS listing form available through our Ontario Flat Fee partner Harvey Real Estate. This way if people are searching on PropertyGuys.com or Realtor.ca they will get what they are looking for.

Handling things on your own makes sure you can do this without having to rely on someone else to check the box. Just like Ian points out!!

M

The Power of the Vote

2010-10-25T09:00:00.002-04:00

As we head into municipal elections across the province an important vote, one that will impact how people buy and sell homes, took place yesterday in St John's NL.

Nearly 100 of the real estate boards from across Canada voted to ratify the agreement between CREA and the Competition Bureau. Now as many have pointed out this vote hasn't really changed anything as far as rules go. What it has done is given plain language to the boards on what they can and cannot do in regards to "mere listings". Here is a quote from the media release:

The Commissioner and CREA have agreed that its rules as well as those of its members should not deny or discriminate against REALTORS® wishing to offer mere posting services. CREA does not believe that such rules exist today, but if they do, they must be repealed or Boards will lose their license to operate under the MLS® trademarks.

Now just to clarify this does not mean that John Q. Public can just upload their home for sale on www.realtor.ca. The system is still a closed, member to member system, as it should be. What it opens up is the ability for brokers to offer flat fee listings to people that just want to post a home for sale. This maintains that someone be held responsible for the information being entered into their system.

You may be asking yourself "If the realtors are going to make less money on listing homes for sale and private sellers won't offer the "standard" 2.5% commission how will the realtors pay for their Cadillacs?"

"we have ways of going around that" these guys are too much. Their sense of entitlement for your money is overwhelming. "Buyer Beware" takes on a whole new meaning.

M

It's simple...it's all there in Black & White

2010-10-08T15:20:00.003-04:00

Sometimes seeing things in black & white can change your perspective.

I have said it many times before. Your price (as it relates to your product) will be your biggest stumbling block in selling your house. So many people are lost in their home and don't realize that they are taking THAT with them. You are not selling your home. You are selling a house!!!

I have often joked the the difference between a house and a home is about $15,000. If you have even the slightest idea that you are house proud (do you think yours is worth more than your neighbours?) than I suggest you invest in some professional advice and get an appraiser in to give you the information you need to price your house correctly!

The last thing you want is the big $ sign and the little house...

He Was That Close

2010-09-02T09:00:00.005-04:00

I recently saw a video posted on my Facebook feed where a VP from Keller Williams (and best selling author) talks about why houses don't sell. Why some homes sit and others move. He explains a very basic principle, one that I have talked about many times here.

If you are priced too high for your market you won't sell.

He goes on to explain that if you are getting no showings it tells you you are OUT of the market. If you are getting showings AND offers than you are IN the market. If you are getting showings but no offers than you are in "No Man's Land". What he failed to mention is that the cost of your trusty Realtor is what has you stuck in "No Man's Land".

Drop your Realtor and join the IN crowd!

Here's the video (don't judge him for his lack of white board skills.

M

Survivor's Newest Song?

2010-03-18T10:00:00.000-04:00

OK so I talk quite regularly about selling. A recent comment asked about sharing some knowledge for buyers.

The comment specifically was:

I know property guys have been really going well with sell your self but what about buying. Using an agent seems to be the only option and then that becomes a problem since they won't show private sales.

Let's first focus on the misconception that using an agent is your only option when buying. Stats show that 90% of people start their home search online, not with an agent. We find that buyers are more concerned with the homes than the sign on the lawn. They care which website it is on because they want to be able to get as much info as possible while doing their search. As pointed out by Levitt & Dubner in Freakonomics the hording on information on the public facing portal of the MLS (www.realtor.ca) forces you, the buyer, to have to call them. Information hording throws the balance of the power on their side. Sites like PropertyGuys.com work the opposite way. As a home seller you want to talk to qualified buyers, buyers that want to buy your home. To do this you have to give them all the information you can. Quality photos, virtual tours, Google maps (including street view), and all the information you can cram into a web page.

As for agents not bringing buyers to private sale homes, this is another misconception. I would estimate that 5 to 10% of the PropertyGuys.com homes sold here in the Waterloo Wellington area are sold to a buyer with an agent. We make sure to coach our clients on just how to deal with an agent assisted purchase. It is simply about knowing your bottom line and knowing your "agent" bottom line (bottom line divided by .975). This will allow you to account for the agent's 2.5% commission they "expect" for working with a buyer. When worked this way the seller is not paying for the agent they are simply allowing the buyer to pay for the agent as part of their purchase. Want to see how it works?

Private Home Seller Asking Price - $300,000
Private Home Seller Bottom Line - $290,000
Private Home Seller "Agent Bottom Line - $297,435.90

If a buyer comes in "sans agent" they have $10,000 in negotiating room. Buyers that choose to use an agent now have less negotiating room on the house,$2,564.10 to be exact. This means they are paying for their agent without having to cut a separate cheque. As a buyer are you keeping your eye on the dollars you are spending?

I pity the fool that pays commissions!

M

But They Are Doing Me A Favour!

2010-02-19T10:00:00.001-05:00

Are they?

I have been knocking on a lot of doors lately. Last week I had the pleasure of talking to a gentleman about his listing with a C21 agent. As he answered the door and saw my PropertyGuys.com Beetle over my shoulder he was quick to blurt out "I already have an estate agent." He continued on in his proper British accent about how the agent was giving him a deal by lowering the price on the house he was purchasing because he had listed with her.

So in this case the house was listed for $459,900. That means that the commission the home seller was expecting to pay was $24,097.50 including GST. What I am trying to figure out is how is this agent going to reduce the purchase price of the house they are buying by nearly $25,000. Generally if an agent does both sides of a deal (working on behalf of both buyer and seller) they reduce their commission from 5% to 4%. Let's say this agent was feeling awfully generous this day or even more likely, motivated to move the property and adjusted her commissions to 2.5%. For her to reduce the price by $25,000 it would mean this couple was buying at least a $1,000,000 home. Seems like a bit of a stretch for an upgrade, but possible.

If you are shopping to buy a house and the one you want is listed with an agent keep in mind that if they offer to work both sides of the deal to reduce the price of your purchase, under the condition that you list with them, they are not doing you any favours.

If they want to do the world a favour, they would let you sell privately and then you could pass on some of your savings to people that could REALLY use it...

Get involved with Kiva and make a difference in the world.

M

Can I Check Your Oil?

2010-02-17T10:00:00.001-05:00

Have you noticed that "Full Service" gas stations just aren't "Full Service" anymore?

In the days of the "Service Station" things were different. You went down and visited Joe for everything from lead gasoline, getting your points done or a tweak of your carburetor. This started to change as the technology changed. Carburetors were replaced by fuel pumps, points were replaced by distributor caps, and unleaded gas became the norm. The service station was replaced by the gas station but it was still full service. The attendant washed every customer's window, he asked to check everyone's oil, he topped up all fluids. Technology continued to change. The need of full service was replaced by "pay at the pump" and no one looks under the hood anymore....not even car owners! Sure they still have "full service" pumps at some stations...but you are paying 2-5 cents per liter more so you don't have to get out of the car and pump your gas...not really full service is it?

It would seem there are some parallels to the real estate industry here...

M

Looking Out For Your Financial Freedom?

2010-02-10T10:00:00.000-05:00

How soon do you plan on retiring?

I don't care if you have your investments with a bank, an insurance company or an independent financial planner. Fact is, if your financial adviser is not discussing your choices of how to sell your home they are not working in your best interest.

Think about it. If you were to live in 4 houses in your life how much money could you waste on a real estate agent. Let's do the math, shall we.

Year 1 (Age 30) First Home - Modest townhouse selling for $225,000
Agent Commission 5% - $11,250
GST on Commission - $562.50
Total amount not invested - $11,812.50

Year 5 (Age 35) Second Home - Single detached selling for $300,000
Agent Commission 5% - $15,000
HST on Commission - $1,950
Total amount not invested - $16,950

Year 20 (Age 50) Third Home - Large family home selling for $450,000
Agent Commission 5% - $22,500
HST on Commission - $2,925
Total amount not invested - $25,425

Year 30 (Age 60) Fourth Home - Bungalow selling for $300,000
Agent Commission 5% - $15,000
HST on Commission - $1,950
Total amount not invested - $16,950

At 60 I hope that we are all ready to retire (if not before). All ready to buy a cottage on a lake in Northern Ontario and a condo in Palm Springs. So let's look at our investment profile....or more importantly what didn't end up in it. The total amount of commissions (including taxes) paid to real estate agents through your life was $71,137.50. That sure is a big number! But let's add in the aspect of lost interest into that figure over the 30 years and see what it is.

Using the Bank of Canada investment calculator over the 30 years at 6% interest the $11,812.50 from our townhouse would have been $67,844.99. The $16,950 from our second home would be $72,747.21 over 25 years. The $25,425 from our 3rd home would be $45,532.30 over the 10 years. Of course our $16,950 doesn't get invested because we just sold that place. So the total money not in our financial portfolio due to needlessly spending it on real estate agents is $203,074.50.

You always have other options...

M

Best of the Best!

2010-02-08T10:00:00.000-05:00

Well the votes were tabulated and the winners were honoured.

Jan 27th 2010 the PropertyGuys.com annual Revvy Awards were held in fabulous Las Vegas NV. As you can see from the picture above the awards had a groovy theme based on the swinging sixties with a little Austin Powers mojo.

Franchisees and associates from across the country gathered together to honour the best of the best. Here are the winners for 2010...

- Cathy Young Perseverance Award: Leanne Carter, Grey Bruce, ON
- Associate of the Year: Tonya Brubacher, Waterloo Wellington, ON
- Model Office Award: Rick Davies, Belleville-Quinte, ON
- Most Listings Award: Donny and Tiffany Legere, Moncton, NB
- Homey Marketing Award: Daina Hernden, Truro, NS
- Private Sale Professional (PSP) Award: Linda Bernier, Timmins, ON
- Rookie of the Year: Katherine Benoit, Norfolk- Haldimand and Niagra, ON
- Top Performer (West): Simon A. Jones, Kootenays, BC
- Top Performer (Central): Dave Waters and Mike Shanks, Waterloo Wellington, ON
- Top Performer (East): Donny and Tiffany Legere, Moncton, NB
- Franchisee of the Year: Donny and Tiffany Legere, Moncton, NB

Congratulations to all winners! I would like to give a few "shout outs" though. Fist to Leanne Carter of Grey Bruce. Leanne and her husband Perry were clients of mine in Cambridge a few years back. When I was in and sat down with them in their kitchen I couldn't help but notice over Leanne's right shoulder she had some "start your own business" books. I made mention that there were franchises available with PropertyGuys.com and to look into it. Well within days not only was their house sold but they were looking into purchasing the Grey Bruce franchise. Always great to see hard work honoured but it means more when you saw the spark that started the fire!

Last year our own Sue Machado was honoured with Associate of the Year award. 2010 has brought the return of the Associate of the Year award to Waterloo Wellington but this year Tonya Brubacher was honoured. If you have ever met Tonya you know her love for her clients is almost always shared with a hug. Here are a few testimonials from her clients:

"Absolutely a delight to deal with Tonya Brubacher. Professional, courteous , enthusiastic and knowledgeable. We would not hesitate to use PropertyGuys.com again as it was not stressful but loads of fun and we saved a bunch of money in not having to pay commissions."
Peter and Heather Ternoway
Elora, Ontario
"Sold in about 2 weeks. PropertyGuys.com provided a friendly professional service, and saved us thousands. No wonder every other PropertyGuys sign has a SOLD sticker on. Thank you Tonya, professionals like you make the difference."
Greg Boyajian
Guelph, Ontario
"The PG team have perfected what it takes to get you all the way through to 'SOLD.' Their professional acumen, knowledge, personal touch, and genuine interest in your success is unparalleled. Lifelong friends have been made in the PG process."
Donna Maidmen
Guelph, Ontario

Nothing more needs to be said...so shhh....

M

Cart Before The Horse?

2010-01-20T10:00:00.000-05:00

Are you doing things backwards?

It would seem that the common conception is that when we want to sell our house we plan on what we need or want for our house and then set our asking price accordingly.

Are we not putting the cart before the horse here?

So lets say you own a horse. Not just any horse. A big old handsome horse. A horse that the Budweiser Horses would be jealous of. The kinda horse that the lady horses would want to date. Here is the problem. You need to sell it. It would seem that your brother has a love of football and gambling and has racked up some bills. You got a call and if you don't raise $10,000 "Vinnie" is going to take your horse to the glue factory (if only it was that no good brother). In order to avoid the sticky situation looming you have decided it might be wise to sell your horse, parlaying it into enough cash to cover your delinquent brother's debt. So you put up the ad for your horse at $10,000 on Horsetopia.com and hope for the best.

Problem is that the only other "Budweiser" horse you can find is going for much less ($2,500). Now given this horse is a gelding and nowhere near the horse that yours is, a difference is expected but the $7,500 price gap is not working in your favour. Had you done your homework you would have found out that your horse's market value is only $5,000.

It would seem this situation is common place in the real estate market. How are you going to price your home? Let's hope you price it right...before your horse runs off to the circus...

M

Why Would You Buy A Home?

2010-01-08T10:00:00.002-05:00

The question comes up often. Most people fall into the purchase column because that is what we do, right. We go to school, get a job, rent an apartment, save up some money, buy a house, buy another one, maybe one or four more, then we rent again, move into a "home", then we die. Life in Canada.

So does it make sense to buy a home? Their are plenty of people on either side of this argument. On the purchase side their are countless realtors, mortgage brokers, bankers, etc. Against the home purchase plenty of economists and investment people. The loudest voice against purchase seems to be Garth Turner. He is far from shy about exposing people "talking out their ass" about purchasing.

Let's look at the basic math as it sits today to see if Garth is right.
Here is a rental townhouse in the north end of Cambridge that is available for $1,350 per month. Cost to rent this home for the year would be $16,200. Lets look at this over the 25 years it would take to purchase a home because we know that you pay more interest at the front and less at the end. Assuming that rent will not go up (err on the side of caution) the cost of renting this home for 25 years would be $405,000. WOW. What would it cost you to purchase?

We recently had a comparable home in the same area sell. It sold for $240,000. Again erring on the side of caution let's assume your mortgage was at 6% over the 25 years (although it is 3.79% today I would think it will go up over the next 25 years). So calculating this with 5% down ($12,000) your mortgage would be $228,000. With monthly payments of $1,458.76 your annual costs are $17,505.12 (a little more than renting) and the total paid over the 25 years is $437,627.41. $32,627.41 more than rent, right? Wrong. You still have the equity in the home. When you take away the $240,000 in equity (again not looking at inflation) total cost of the home was $197,627.41.

The only other thing to consider is the $12,000 you put out as a deposit and the $100 or so a month you saved in the rent situation. Let's assume that money was invested to see if it evens out. Investing the $12,000 deposit plus $100 a month at 6% (equal to the mortgage amount to be fair) works out to $123,225.53. Subtract that from the cost of rent and your cost to rent was $281,774.47, or $84,147.06 more than buying a home over 25 years.

So I will leave it to you whether you will buy or rent. Whatever you do don't get pushed into anything you are not ready for. Specially if it seems like Dr. Suess is the one doing the pushing...

M

New Year, Old Problems?

2010-01-06T11:00:00.001-05:00

How do we figure out the last piece of the puzzle?

Last year turned out to be a fairly strong year for real estate (even after the doom and gloom of the "Next Great Depression"). With any good year there are still problems that exist. When we are sitting on a strong real estate market what inevitably happens is people get caught up in the dollars and feel their home is worth way more than what the market is willing to pay.

The stats for 2009 show KW had their second best year in home sales. But what do the rest of the numbers tell us? Let's have a look.

For the Waterloo Wellington area MLS sales in 2007 were 13,093 based on 19,573 listings. These means that 66.89% of the homes listed sold. 2/3 of all homes listed sold, a very strong year and a seller's market for sure. This means that as a seller you were in a stronger position than a buyer as decidedly more people were selling than not selling.

2008 showed a reverse of this seller's market. MLS sales for 2008 were 11,573 based on 20,292 listings. Less solds and more listings, not looking good. The List to Sell Ratio dropped to 57.03%. Still not a bad ratio but an adjustment of 10% year over year effects the market. This is a common occurrence after a strong market as more and more people jump in to "ride the wave" and get their piece. People see what their neighbour got and then proceed to ask more for their house (and this continues to perpetuate). As the market price pushes up buyers either become more cautious or they just can't afford the costs of ownership.

Which way did 2009 go? I still don't have the Dec numbers in but Jan-Nov show 11,325 MLS sales (sure to be above 2008) based on 18,811 listings (expected to be under 2008). So as it sits the List to Sell Ratio has increased vs. 2008 but is still well under 2007 at 60.20% (Jan - Nov).

So where does this leave us in 2010? What is the piece of the puzzle to keep a strong housing market? I believe that the increase in 2009 is directly related to the lowered mortgage rates we saw. If these rates continue through 2010 then we will see a slight increase over 2009 as the first few months of last year we were still getting our feet under us. If the rates move up with any swiftness we will see a quick spike as those approved under the lower rates will make rash buying decisions and then a stall in the market slowing sales.

All in all our 2010 looks like it should be OK. Could be worse, we could live in the US...

M

Would GARP Ever Work?

2009-12-30T10:00:00.001-05:00

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?

2009-12-21T10:00:00.002-05:00

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?

2009-12-18T10:00:00.000-05:00

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

2009-12-14T10:18:00.001-05:00

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

Keep Your Eye On Your Money

2009-11-27T09:00:00.000-05:00

What is your cost to get your house noticed, per eyeball?

The interent has changed the way people buy and sell homes. Gone are the days of flipping through the big green MLS book at your local real estate office. Gone are the long Saturday drives in the back seat of your realtor's lincoln looking at 30 houses to see what you like within your price range. Gone is the lack of information for the consumer.

People are searching for homes while in their underwear. Come on you've done it. Just as your getting ready for bed your partner calls you "Honey come and see this one!" You rush over to the computer with your best pair of Calvin Kliens on. You catch a glimpse in the mirror and think "this is not the way my parents hunted for their first home".

The internet is a great tool allowing people to make a short list based upon what they see in the listings posted to their favorite sites. But as a home seller how do you choose where to list your home? Is there a way to measure the value of those eyeballs looking at each and every site? Let's boil it down with simple math. Depending on who you talk to Private Sale is garnering somewhere between 10 and 25% of the market. So as a conservative figure I am going to work with 15% for the purposes of this calculation. We are going to forget that people are looking at multiple websites and assume that 15% is decidedly Private Sale and the remainder are only looking on the MLS.

The cost of an average detached home in KW is just over $300,000. Based upon the industry average of 5% it would cost you $15,750 incl. GST to sell or $185.29 per set of eyeballs out of 100 home buyers. Looking at the same home being sold with PropertyGuys.com shows us a much better scenario. To ensure you are getting all the same coverage including paper advertising, virtual tours, and even an appraisal done by a 3rd party licensed appraiser lets look at the $1,500 package. With tax you would pay $1,575 or $105.00 per set of eyeballs a savings of nearly 44% per set of eyeballs. Remember that is the most expensive package. If you went with the $350 package it would cost you $23.33 or about 1-8th of the cost of the realtor.

I know what you are thinking. They get more eyeballs and that means more chance of selling, right? Wrong! The stats from November 2008 to October 2009 show that for every 100 listings that were listed by an agent in the Waterloo Wellington area 58 of them sold. Same time frame, same area for PropertyGuys.com and the numbers show 60 out of 100. The list to sell ratio (how many homes were listed vs sold in a given time period) for PropertyGuys.com in October was 81.67%, MLS was only 68.08%. I guess taking the commission off the table and making your pricing more attractive is what buyers are looking for.

Give your buyers a reason to have their eyes pop out when they see your home...

M

Honesty Works

2009-11-25T09:00:00.003-05:00

Ever been sold something that didn't live up to the claims?

Real Estate is the same way. You have to be honest about what you have. You cannot lie in your advertising.

If you own a two bedroom, story and a half, century home with stone foundation and a dirt floor in the basement, say that.

Imagine you saw what you thought was a great home online. Took the time to make sure the neighbourhood was what you needed (schools, shopping and amenities), booked an appointment even though your spouse thought it was too good to be true, packed up the family to drive over (maybe 15 min maybe 2 hours) only to find the truth was stretched online.

Your home is what it is, nothing more, nothing less. Price it accordingly and be truthful. Like the way this guy advertises his mobile homes...

It worked for me.

M

HST....Not If Your Realtor Has A Say

2009-11-23T12:00:00.000-05:00

There was an article printed in this week-end's real estate papers in KW and Cambridge. The one that appeared in the Cambridge Times was entitled "HST threatens home buying dream". It was written from the board and quoted Mike Toffner, president, "No matter how you sell it, the HST is a big tax increase for local home buyers, sellers and owners." The article goes on to claim with the average home price being $302,354 (Ontario) that the cost to home sellers would go up an estimated $1,449.

Realtors are very much opposed to the HST, and I suspect it is for a reason different than they claim. The following chart was included with the article to show you how much you would be effected.
Not pointed out is that of the $1,449 in additional tax, 83.5% of it is a direct result of their fees. If they are so concerned with home buyers being able to live out their dream of home ownership lets not worry about $1,449 in potential taxes when they are charging 10 times that amount for a simple process.

If a home seller decides to pay themselves commission, which the government can't tax, then they end up not only saving HST on the commission but also the $15,117.70 in commissions. What would the chart look like if it considered the cost of a an average Private Sale marketing package?

Realtors appearing so adamant on reducing costs for the home seller by going after a proposed tax that equals a small fraction of what they charge seems a little misguided. They claim that HST will add an additional $262-million to residential resale real estate transactions. That means that they are expecting to charge $3.275-BILLION to you the home sellers. Put your equity in your pocket where it belongs. Pay for all your marketing with less than the taxes you would have paid for using a Realtor.

Here is their "official" stance:

M

Am I Priced To High?

2009-11-04T09:00:00.004-05:00

You don't need Bob Barker to answer your question!!!

When you are considering selling your home the big question is "How much is my house worth?" It's a great question. It's the most important question you should be asking.

So how do you go about finding the answer? Well the best way is to hire a third party appraiser. This unbiased professional opinion is your best bet. The investment of $250 is a good one in the sale of your home. Knowing that you are priced right can save you time and money! Heck you can even make this report available to prospective buyers!

If you are more inclined to figure things out on your own there are a few things you need to do. Watching the market is a great way to understand what is going on but you have to know what you are looking at. People can list there home for as much or as little as they want. You can learn from this if you are paying attention. Specifically it is good to watch comparable homes in your neighbourhood. Are they sitting for a long time? Did one just list and sell right away? Are their reduced price stickers on the signs? These nuggets of knowledge are all telling you something. The one thing you should always keep in mind is if a home is priced correctly it will sell (so long as you get the needed exposure).

If you are looking for better information, than the key number you want is their SOLD price. A home is only worth what someone will pay for it, no matter what they were listed for. So how do you get this info without calling a home appraiser or real estate agent? One way is to use the public info available to everyone through MPAC. As you can see on this sample report you can chose comparable properties within your community and it will show you the last sale date (if within the last 5 years) and the price it sold for. When I SOLD my house last winter I printed this report with 4 comparable properties and handed them out with my feature sheets to prospective buyers.

Giving prospective buyers information on how you priced your home is a great way to avoid situations like this...

M

Inspecting For Who?

2009-11-02T09:00:00.001-05:00

Have you ever wondered just who the home inspector was working for?

The key to avoiding this is to hire your own. By all means get some references but you should have final say on who the inspector is. Hire based upon ability, skills and value, not on referrals from a party gaining from the transaction. Even worse if the real estate agent is offering to pay for it this should raise all kinds of red flags!! (Author’s note) Make sure you ask the agent if they are willing to pay for any inspector or just one in particular. If they will pay for any inspector than it is simply your commission dollars paying for it. Where the flags should be raised is if they will only pay for one inspector in particular. I was unable to get any details of the program offered by the agent in the link as it was not spelled out on his website. I have emailed him for details on just how his program works. I have asked him to post the details as a comment on this post. Added 11/5/09.) I have met a few inspectors in my travels that said they lost referrals from local real estate agents because their thoroughness had caused deals to fall apart, losing the agent's precious commission.

I did a post on this back in July when Mike Holmes announced his new inspection business. I really respect Mike for his ability to stand up for what is not right. Take this quote about the inspection business as an example:

"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."

Let's hope that Mike can do for the inspection business what he did for the renovation business!!

He is putting his money where his mouth is too. Have you been stung from a bad inspection in the past....Mike wants to make it right....

M

What To Do With All This BS?

2009-10-28T12:00:00.002-04:00

Author’s Note: Due to a complaint about the legitimacy of information in this post I have double checked my sources and found the data to be accurate and made some notes below. I have also made some edits to help protect the home buyers/sellers involved as well some of the language has been edited due to individual interpretation of the specific words used.

I think I need a skid of these to deal with it all!

I hear all sorts of stories in this business. I recognize that they all start with a kernel of truth and through the art of story telling they get altered slightly. We all remember playing broken telephone as children, right?

I was out putting up the first of two sold signs in Cambridge last Friday when I came across a flyer blowing aimlessly on our client's door step. I am sure it fell out of the door jam or mailbox but there it was carefully avoiding my feet as it tried to get my attention.

I picked it up to see the same drab excuse of a flyer we expect from a (replaced Joe Schmoe with) ordinary agent. What popped for me was the PropertyGuys.com sign in the photo. (Using other people's trade marks in your advertising is not allowed and was a big motivator to this post. I have scanned and presented the flyer as it was found and included another company logo only to show the flyer in it's entirety.) When I read it in detail I knew it was a stretch of the truth at best. It is the exact opposite of everything we see in the market...so I did some digging.

Nothing is the truth except the truth, and here it is.

Address deleted
Listed with PropertyGuys.com on July 14 2008 at $267,900
Cancellation date deleted
Listed with Robert Wollziefer on Sept 30 2008 at $269,900 MLS® #0894383
Relisted with Robert Wollziefer on Dec 1st 2008 at $259,900 MLS® #0895294
Sold Date Jan 29 2009 for $255,000 (There was some question to privacy laws in publicizing the sold value of the property. This is already public information available through the Municipal Property Assessment Corporation aka MPAC)
Total days on MLS 121
Estimated commission paid at 3.5% $8,925 plus $446.25 in GST
Net amount client sold for deleted

Here are some points that Robert fails to point out in his marketing piece:
Details of the price drop of $8,000 in listing price and $12,900 to the actual SOLD price
(Deleted a comment regarding bottom line price client received after commissions payed).
Property was relisted after 60 days on the market

Here is (in my opinion) the absolute (replaced false with) misleading statement made:
"One day they received 3 offers and can now move forward"

As you can see from the truth above, they were listed for a total of 121 days with Robert (deleted “and not the 1 day he states”. It was brought to my attention that the client did in fact receive 3 offers in one day, the ad fails to mention that it took 120 days prior to that happening). The truth is they were listed twice as long with Robert than with PropertyGuys.com and needed to drop their price because it was price that was the issue not their choice of marketing. (Deleted language specific to the client and replaced with) One of the true benefits of selling privately is the fact that you are able to lower the cost of the transaction. Those costs can either be kept by the seller or used as a tool to lower their price, making them more attractive in the market place and sell faster.

Way to help them "Move Forward" Mr. Wollziefer, (grammatical error replaced your) you’re a gem!

Do you have a similar story? Leave a comment! Your story may help someone else avoid the "Rubber Lips"...

M

She Needs Your HELP!

2009-10-27T00:17:00.004-04:00

Do you remember the Ypreneur Gene contest I blogged about earlier this month?

Things are starting to heat up with over 25 contestants vying for top spot and a $100,000 franchise package from CYBF and PropertyGuys.com.

We have seen our first entry from the Waterloo Wellington area entered by our very own associate Martha Neath. Martha joined our team in September of 2008 and quickly became a valued member. Her belief in Private Sale spread like an infection. She was passing it on to everyone she knew. But then she realized it was more than just that.

When she found out about the contest that could put her at the helm of her own Private Sale ship she came to the conclusion her infection spread so fast because she had the Ypreneur Gene.

Now it's time for you to help make her dream a reality. The first round of the Ypreneur Gene contest is a down and dirty popularity contest. She needs your votes by 11:59pm Oct 31st. So HELP MARTHA OUT!

Here is her video submission for your viewing pleasure...

Have You Seen This Dinosaur?

2009-10-26T08:00:00.000-04:00

Now why do you think he ended up here?

There are many theories as to why the dinosaurs disappeared. Many creatures have gone the way of the Dodo Bird and more often than not it was because of their inability to react and adapt to changes in their environment.

When the travel industry was faced with the internet changing their business many were doomed for the tar pits. The ones that remained did so either through specialization or over the top customer service. The everyday ordinary transaction has gone online. The majority of people are now booking basic travel needs either direct with airlines like WestJet or using services like Hot Wire and Expedia.

Why has the real estate world taken longer to adapt than the travel industry? In travel it was a company dealing with a consumer. One large company can make decisions quickly and change an industry. In real estate it is a consumer to consumer transaction. Instead of one or two CEO's changing the course of an industry it is millions and millions of home owners each making the decision one at a time, as the situation arises. This no doubt has lead to the extended yet agonizing march into the pit for those not ready to adapt to a changing market place. As is with any tipping point, the closer you get to it the quicker it picks up speed. Have you noticed a change happening? Has it been picking up speed?

One can only hope that if extinction is in their future they won't feel the pain...

Do You "Get It"?

2009-10-21T20:00:00.002-04:00

Some people "get it" from the start, others, not so much...

I saw this quote on Facebook from the PropertyGuys.com Edmonton franchise.

"Just had a client who was listed on MLS for 2 weeks and was already getting the "Drop your price, drop your price, drop your price". The Realtor of course was going to get them "Top dollar" when she set the price two weeks prior. ...... So they dropped her and went with us. Listed Friday and already had 8 families through by Sunday. Somebody gets it, they really get it!!! Product......Price....Exposure."

More and more people are getting it.

Here in the Waterloo Wellington area we have been helping people pay themselves the commission for about 3 and a half years. Things are starting to come full circle in the local real estate market. Those leading private home sellers will be second time clients in the near future (we are already starting to see them).

As the Private Sale Circle grows so does the empowerment of you the home seller. The three card monte game of pricing your home with a realtor will end. No longer will you be lead astray in order to sign a contract. Pricing your home should not be a contingency on your listing. There is a better way. A licensed appraiser has to be objective. Here is a quote from their code of ethics

"public interest will be served by members acting responsibly, impartially, objectively, and with independent judgment."

Pricing shouldn't be tricky!

M

Getting A-Head

2009-10-14T16:00:00.003-04:00

Can you judge a Realtor by their head shot?

I was having breakfast with some friends on the weekend and we were thumbing through one of the local real estate rags. It was everything to keep eggs from coming out of our noses looking at some of the head shots that local real estate agents use. I found an interesting blog post showing some of the "worst Realtor head shots" so I thought I would showcase some local talent and things some of the "traditional" and not so traditional poses.

Here are a few of my favorites (along with the one above) from the aforementioned blog:
Not your parent's real estate agent.
Spray Tan, check. Teeth whitener, check.

OK so here are some pics of locals that seem to speak to the stereotypical agent head shot:

"The Tilt"

Almost like stop motion falling. I dare you to not tilt your head when you look at them.
My favorite example of the "The Tilt"...Hold on to that contract!!

"The Lean"

Probably the most versatile of poses. Often imitated and always duplicated. Here are a few styles to choose from.
The Single The Double

The Classic The Pairs.

The Prop

Nothing says "I can sell your house" like a sunburst yellow Hummer!

"High School Confidential"

Kinda speak for themselves.

"She's a Brick....House"

There are right and wrong ways to use back drops.
Right Wrong

"SMILE"

How much teeth should one show?
Too much? Not enough?

"Location, Location, Location"

Let's take a stab where in the world they might be.
The outback? Down on the farm?
The Sun? ACC?
This guy is in Florida for sure!

"The Honour Role"

My mother-in-law cuts off the entire head!

I wonder if they are talking to each other?

Platinum Blonde called....um....they want to talk to you.

Is Facebook really the place to get your head shot?

Super Ben!

I guess at the end of the day, they're only pictures and it doesn't really matter...

Buzz

2009-10-05T08:00:00.000-04:00

Can you hear private sale buzz getting louder? We sure can!

I had the pleasure of spending some time at the KW Fall Home & Leisure Show. You almost couldn't think the buzz was so loud.

Bzz Bzz Bzz

"Hey I just wanted to say hi. Tonya helped us with the sale of our home in Conestogo last month!"

Bzz Bzz Bzz

"That sign sure looks better with the SOLD on it. We just SOLD in 2 weeks in Paris with William!"

Bzz Bzz Bzz

"Our neighbour just SOLD with you guys. I can't believe how quick it was!"

Bzz Bzz Bzz

"Can we book an appointment to list our home today?"

Real estate agents, brokers, realtors all want you to think that private sale is going no where. They could not be further from the truth. The buzz on the street is growing. Our clients are selling their houses and telling everyone how easy it is. Word is spreading. Fast.

How fast does word of mouth spread? Have a peek at this video...

M

You SOLD Privately.....Now What?

2009-10-02T08:00:00.000-04:00

Well if you are between 18-34 you can make a living at it....for FREE!

PropertyGuys.com has teamed up with the Canadian Youth Business Foundation to offer an unprecedented contest. You can win a franchise package worth $100,000. How is this "unprecedented"? Well by simply uploading a video on the website describing how the "Ypreneur Gene" effects you and the "symptoms" that you have you can be part of the narrowed field that gets to pitch to the stars of CBC's hit series Dragons' Den.

Feeling a little shy? Worried that someone might point and laugh? Carry on, we don't want you. Our winner will have the last laugh when they are looking at the business plan of their new business, an award winning franchise systems that has been featured on the cover of many Canadian business magazines! Shy need not apply.

Don't feel your worthy of such a prize? Than you probably aren't. We are not talking to you. Go punch your time card. You do not have the Ypreneur Gene.

Think you could hang out with Dr. Emmett Y. Browne....step right up and smile for the camera!

M

How Many O/H Signs Does It Take?

2009-09-25T06:00:00.000-04:00

Is more better?

There seems to be some misinformation in the FSBO world. If people are having problems selling their home privately it would seem they blame it on lack of Open House signs. I come to this conclusion because when people have been on the market for 6-8 weeks they seem to add more signs.

On a positive note they are trying to increase a third of the HOME SELLING TRIFECTA. Problem is they are not hitting the right one.

Do you know how many eyeballs are seeing your home? This information is imperative to selling. You see if you are judging your sale proceedings simply on the traffic in your door you are making an oversight that could cost you precious time and money.

If you have had no phone calls and no showings in the first 4 weeks of marketing your home you need to make a decision. You need to change something in your HOME SELLING TRIFECTA. But what? It would seem people automatically place blame on Exposure. If people are seeing your listing online and choosing not to call you, Exposure is not your problem? Let me give you a scenario that may show why other areas need to be considered.

You are the PROUD owner of a 1992 Chevrolet Corsica. A fine piece of North American engineering. Since you bought it off the showroom floor you have babied it. Oil changes every 5,000km, brakes at the slightest hint of a pedal pulsation, new spark plugs each and every spring, fuel injector cleaner in every 4th tank of premium fuel. Nothing is too good for your baby. This time of year most people are leaning towards snow tires for their car, you wouldn't think of it because your sweet ride hibernates through the winter. Alas it is time to move on. A new minivan is calling. The twins changed everything. The scoundrel at the dealership told you your baby is worth $500 for trade, you almost puked. The Voltage Blue Metallic Clearcoat still glistens in the heat of a midday sun and highlights the FOR SALE sign posted in the window. To make it easy for people you even put the price right there on the sign. After weeks no one has called. You place signs at every corner within a 2km drive of your house announcing the availability of this classic road machine, nothing. Time to up the ante and place an ad in the paper.

1992 Chevy Corsica
Like new, under 100,000km
of summer driving. Call
Today to get this car
$22,500

I am sure you could always look at washing away your blues with some lemonade...

M

How Is Your House Branded?

2009-09-16T08:00:00.001-04:00

Tell me, what's in the bag?

When we make our buying decisions we look to the familiarity of brands. We look to something that is tried, tested and true. Products and services become popularized only after a Maven has proven their worth. What is a Maven? Wikipedia tells us Malcolm Gladwell used the term in his book The Tipping Point (Little Brown, 2000) to describe those who are intense gatherers of information and impressions, and so are often the first to pick up on new or nascent trends.

We brought PropertyGuys.com here to the Waterloo Wellington area over 3 years ago. The Mavens have come and have been telling all their Connectors about us. Word has spread. People are talking about PropertyGuys.com.

How do buyers look at your home? Do they see a bloated balloon? Maybe they see indecision in that faded orange and black sign?

Branding your house, good or bad, could be the difference between selling and sitting. Katie Johnson knows:

[I'm] very impressed with PropertyGuys.com. They have a great brand and have firmly founded themselves outside of the expensive MLS world.

Katie Johnson
Kitchener ON
Sold Aug 2009

What are you doing to brand your home. Are you branding it properly? Are you passing on confidence of a brand to prospective buyers? One that speaks to them?

We are not just creating our brand through Connectors and Mavens. We are also getting word on to lips of others...

M

Give Us A Hug

2009-09-14T06:00:00.001-04:00

Nothing says "I appreciate you" like a hug.

Standing on the porch is always exciting. Waiting there with a bottle of champagne in my hand. Trying to hide it behind me to help with the surprise. The SOLD sign has already been installed and the door bell has been rung. CLOMP CLOMP CLOMP The foot steps are making their way down the front hall. I can barely contain my smile. The door opens almost as wide as the arms...

Human kind shows their appreciation in all sorts of ways. A smile, a wink, pat on the back. I think the ultimate is a good old fashioned hug.

When I was first given the designation of PSP (Private Sale Professional) I never knew just how rewarding it would be. I knew that I would be helping people, but I never understood the unfathomed joy people would get from selling their own home.

Real estate agents talk about the joy they get from helping a client sell their home. If only they could imagine it with out the dollar signs.

Here is a little video of someone who understands the power of hugs.

M

Hey Mister...

2009-09-11T06:00:00.000-04:00

If you have ever been to the Caribbean you know the beach peddler.

They claim to be the guy that has everything you need. Solve all your problems. Get you what you need. Sound familiar? I've had 5 clients say to me this week how surprised they were to learn how easy the process of selling their home was.

Imagine a trip to the beach and the peddler comes up and offers you sand. You are surrounded by it, you can feel it between your toes. All you need to do is lie down, yet the offer is there. "Hey mon, I get you some sand. Don't worry I'll only charge you $15,000 for da sand." Seem a little crazy?

I mean a trip to the beach could be worse...

M

Are Realtors Actually Zombies?

2009-08-31T06:00:00.001-04:00

I hear they actually eat your brains!!

I mean it makes sense. Why else would people spend half of their annual salary to advertise their home on the internet and toss an ad in the paper?

Who among us hasn't thought "Maybe I will be better off..."? It boils down to the fact that for you to be better off you would have to put a value on the service provided. 5% of the value of your home, or 20% of your equity, is tough to justify.

It is amazing how deep this penetration of their fear mongering goes. They have spent thousands of your commission dollars to help scare the bejezus out of you and your neighbours.

This video should help you get through it...
Leave your brains to be eaten by more important people. What else will the politicians be sustained on?

M

Qualifications...

2009-08-28T06:00:00.001-04:00

I know which one I would pick!

I love looking through the paper to see the different ads and ideas people have when placing a classified ad for their house. I came across one this week that included the street name and the phone number but not the house number. As I drive to the area I find the deep caverns of water main repair. Dare I cross? I am glad to report I survived the treacherous trip across the chasm.

When I talked to the gentleman at the property I suggested he may want to ad the house number to his ad. His response surprised me a bit. "That was done with purpose. If people are interested they are forced to either call us or drive by if they so choose."

In today's world of information overload people not only want, but expect information at their fingertips on their schedule, not yours. As a buyer I would not want to jump through hoops when I have plenty of options available to me. I can search through hundreds of homes on the internet, including photos and virtual tours. Why am I going to play your game to call you to get your address? NEXT!

In this instance it seems very much a control issue. The home seller wants to control each and every buyer and when and what information they get. A strategy that could work but is very labour intensive. This takes away a key benefit of selling privately. The ability to talk to qualified buyers and work within your schedule. You actually spend your time qualifying them instead of letting them qualify themselves!

Qualified buyers are something real estate agents claim as their own. They proclaim to spend hours with all the perspective buyers getting to know their wants, likes, desires. Maybe so, but it is on your time schedule. In speaking to many people frustrated with the traditional system one complaint often heard is that agents will bring just about anybody through a home. They use the homes as part of the process of narrowing down what a client might like, meanwhile forcing you to leave while they show an uninterested, unqualified, tire kicker through your home.

Having the control of the sale by selling privately allows this to stop. You show the home when it is convenient for you. When they have made the decision to pick up the phone and book an appointment, they have already looked online and ogled your photos. They know that your basement is not finished. They know that you have a large backyard and a new deck. It's what they are looking for, they have self qualified.

Your duty as the home seller is to verify two things on initial phone calls. Have they viewed your property on PropertyGuys.com and are they pre-qualified for a mortgage in the amount of your home. When they pass this test they are invited across the bridge.

M

The Market

2009-08-24T06:00:00.000-04:00

Farmers are smart people.

My grandfather was a farmer. He raised cattle and grew grapes in the lushness that we know as the "banana belt" sandwiched between Grimsby and St Catharines. It's not easy being a farmer. Early chores 7 days a week, sick animals, too hot and no crop, too wet and no crop yet they always seem to be one step ahead. Next time you see that your local Farmer's Market is open, pop in and have a walk around. You will see plenty of beans and tomatoes and lettuce and potatoes. There will be plenty of smiles and earthy hand shakes. The term "salt of the earth" must have been coined about a farmer.

While you are there at the market you will notice something peculiar. People all around you are buying fresh vegetables, meats and cheeses, preserves and honey, fresh cut flowers and hummus. Maybe even a fresh baked pie (apple with some old cheddar is my favorite). Know what you won't find? Check out counters, pharmacy sections, a pop & chip aisle. Look long and hard but these are not grocery stores, just simple little markets with people selling their goods to people that want to buy them.

I know exactly what you are thinking. How is this possible? I mean these are farmers. How do they know how much to sell their beans for? They never went to some fancy university like Queens to get their MBA. My lord how do they know the value of that cucumber???

You see the farmers have a little secret. I was blessed in my travels to have a few local farmers bestow their secret on me. I am going to share it with you under the expectation that you TELL NO ONE! I will deny it was me. Do you think I want to be black-balled by the farmers?

OK, here it is. It has a few basic steps but the concept is sound (It has been handed down for generations). Are you ready?

The market will dictate your pricing

Here is how they do it.

See what other people are selling similar products for.
ie. green beans and yellow beans could probably sell for the same price but watermelons and strawberries not so much.
Price yours in a similar fashion and display them where buyers might find them.
ie a farmer's market
If the farmer at the next table is selling beans like they are going out of style while yours sit and wilt in the heat of the sun, check to see how he is priced.
ie. his are $2.00 a basket and yours are $5.00
Adjust accordingly.
ie. lower your price or get a bigger basket

Well there you have it, the secret of the farmer's market. Man I hope no one tells the farmer's I told you about it, they may make me dance....

Maybe my next post I will get back to talking about something that a home seller could use to help them. Something about the economy, because we all know you can't sell a house in an economy. Right?

M

Culling The Herd IV

2009-08-14T06:00:00.000-04:00

With this heat even the cows are melting!

News out of Saint John NB is that the 4th largest brokerage in town closed it's doors this week. 50 agents left to scramble and find themselves a place to hang their Porsche keys.

Interesting comment from a researcher at UNB.

"The traditional real estate business model is under pressure," said Dan Doiron, whose research interests at the University of New Brunswick include industry-wide innovation patterns.

Doiron said the Internet is creating avenues for a person to advertise and sell their home cheaper online, forcing real estate agents to add value any way they can.

"A friend of mine just sold his house over Twitter," he said.

More and more people are realizing that giving away $15,000, when they could simply pay themselves, just doesn't make sense.

If you are a realtor and wondering how you can avoid the cull, maybe this cow abduction video can assist you.

M

Bad Cover Songs?

2009-08-12T06:00:00.002-04:00

Imitation is the most sincere form of flattery.

The cover song has long been an individual interpretation of what the covering artist thought the song meant to them. Sometimes adding in parts, taking parts out, or rearranging the song front to back.

We often see real estate covers. Problem is they are taking a bad song and trying to do it the exact same. Heck open up a paper in any city across the country and you are going to see the same thing. You've seen them.

"Your house sold in 90 days, guaranteed."
"We'll sell your house or we'll buy it."
"The best team in the industry."
"Get sold with the top agent in the region." (amazing how many their are per region)

Hearing the same ol' song and dance day after day get's you longing for something new, something completely different

Sure does beat hearing something that just should never have happened!!!

To help cleanse your pallet...

M

Knowledge IS Power

2009-08-05T06:00:00.000-04:00

The question now is "Where to get the knowledge?"

As a Private Sale Professional I meet many people with the desire to do things their way. Peopl that are not interested in paying the high cost of commission to some real estate agent and looking for the best way to avoid it. This is generally why they get in touch with PropertyGuys.com.

They are in search of knowledge and expertise to help guide them through a process. Not a difficult process, just one that is some what foreign to them. It is not everyday one sells a house so why would you know the process in which you go about the deed?

I had a couple that called me a few years back in a bit of a panic. They had gone down to Canadian Tire and purchased a black and orange "For Sale By Owner" sign, stuck it to a 2" x 2" stake and hammered it in the lawn. They went in side, sat down with the pride of accomplishment. Before long the hearts started pounding. They looked at each other and said "Now what?". That's when they called me.

With a little guidance and the transfer of knowledge they were prepared for what came next. They learned the proper way to show their home, what it takes to ensure they have the home staged properly, how to compliment your home with photography, how to deal with buyers, how to deal with buyers that have signed a buyers agency with an agent, how the offer process works, what it means to "close", what a suitable deposit amount is, when to do an open house, how to price your home effectively, how to judge the market based on your traffic, when to involve a lawyer, how the different conditions work, what to expect in the negotiation process, and on and on.

The point here is anyone can sell their own property. All you need is the knowledge of the process. It's not rocket science!

So what is "rocket science"? I'll let her explain....

M

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Sink or Swim

2009-07-29T06:00:00.001-04:00

Have you ever wondered what became of the baby?

I recently took up swimming as training for Triathlons. I was always a "nervous" individual in the water. The fear of sinking is always top of mind. I think this is because I know the difference between sinking and swimming having choked on my share of water. A baby thrown in the water knows no difference. There is no fear there, as is evident in the face on the ground breaking, grunge plunge album "Nevermind".

Selling a home is a leap in the lake we don't often take. A first time home seller is a babe in the water unaware of the ominous financial dangers waiting after plunging into the deep blue unknown. After splashing around and taking in a lung full commissions we become painfully aware of the dangers of sink versus swim in the housing market.

Today people are deciding to take a swimming lesson from a Private Sale Professional. They have swallowed some commission and are now doing lengths in the pool with the aid of swimming knowledge and a trusty instructor to assist them should their nerves get the best of them.

Are you going to jump in the lake and keep thrashing around hoping to swim, or are you looking to get some lessons?

One of my favorite Nirvana songs reminds me of another post I wrote....

What is the story with the baby anyway?

M

The Waiting Game - FAIL

2009-07-27T06:00:00.001-04:00

It's hard to beat the system
When we're standing at a distance
So we keep waiting
Waiting on the world to change
@johncmayer

Many people put there house up for sale and wait. Waiting is a mistake. Buyers don't wait so why would you?

How do people wait? What are the mistakes they make?

1. Relying on classifieds. Put an ad on Kijiji and wait for a call. As a free classified site the local real estate agents seem to think it is a great way to put out their listings. Guess the MLS system isn't all they claim it to be. Problem for you, the private seller, is there are hundreds of them posting daily on sites like Kijiji and your ad gets relegated to the back pages quickly.

2. Sitting on their price. It is not about reducing the price every 3 days until you find a buyer. It is about making sure your price is right for the market. So many people sit on their price for months. If in the first 4 weeks you have not received any direct calls or emails to set up appointments your product/price ratio is out of alignment.

3. Waiting for the "interested couple" to call back. I hear this while talking to people regularly. Heck I am guilty of it myself. Fact is if they are interested they probably would have called already. If you are that sure they want it, call them. You did get their number, right?

4. Waiting on the fix. Similar to the price, as it relates to your product/price ratio, sitting and waiting on feed back to fix a deficiency is another mistake. If the house needs a new furnace or an electrical update, do it. That or get a quote(s) and reduce the price accordingly. People generally do not want to move in and do major work, unless your house is a fixer upper.

5. Waiting to step up the ads. People sometimes feel it is best to wade into the cold water of real estate marketing inch by inch. The first 4 weeks are the most critical in the sales process. Get it all ready and then do a cannonball into the deep end. Trust me your splash will get noticed long before the cries and whimpers of the waders!

If we are all waiting on the world to change won't it just stay the same.

"A Definition of Insanity:
Doing the same thing the same way over and over expecting a different outcome"

All Hail The Internet?

2009-07-15T06:00:00.000-04:00

Is there a place for analog in the digital world?

Recently I read a blog post by Mark Evans (@markevans) talking about "digital" and "analog" business models. It peeked my interest being a franchisee of a dot com company.

There is no question that the internet has changed many business models. We often point to the travel industry as an example. People utilize the internet to book hotels, airfare, car rentals even entire vacation packages on one stop shopping websites like Expedia, Sell Of Vacations and even with airlines directly like Westjet.

In his blog Mark points to the growth of online movie rentals as an example. Movies have been around for over 100 years. The VCR has been in our homes since the 70's and the DVD player has made home entertainment a thing of normalcy since the mid 90's. The trip to the video store is one of familiarity to all, as are the wallet pangs of late returns.

With comfort and familiarity come evolution and efficiency.

The home selling process is not a weekly occurrence like Saturday night movies. It is transaction most are a stranger to, or at least not comfortable with. To jump on to a website and offer a home for sale is just one step of the process and people can feel overwhelmed after doing so.
Some are studious in their research but others would be much happier to have someone hold their hand through the process. The thought of Private Sale being one of solitude and despair is one sold by the high priced world of traditional real estate. A quote from Steven Dubner's Freakonomics Blog talks to this generality:

Controlling for differences in house and seller characteristics we find that listing on the MLS does not yield a price premium relative to listing on FSBOMadison.com. This is not to say that using a Realtor is not worth the commission. Realtors can save sellers time and generally help through a stressful and maybe difficult period.

Analog takes the pressures off the digital fears. Can you get this pressure release while still selling your home privately?

Online classified sites like Kijiji and Craig's List don't offer comfort. They are online classified, nothing more. FSBO services like By The Owner get a little closer but still miss the mark. What is needed is a Private Sale Professional in your corner all the way through the process, someone that has been in your home, sat at your kitchen table and knows your situation. A Professional that has the experience of guiding hundreds of people through the process and knows exactly what you are going through. This adds comfort to the process. This relationship with people is something we all crave. The internet is a great tool when used in conjunction with human interaction.

This is the marriage between analog and digital.

The meeting of evolution and efficiency.

M

Asbestos In The Home

2009-07-10T06:00:00.000-04:00

When embarking on the path to purchasing a home, there are many things to consider. Living in the 21st century, there is an importance being placed on green, sustainable methods of building, which promote better energy efficiency, cleaner air and stronger homes.

Many homes built prior to 1980 may still contain asbestos and other obsolete building materials. Having the assistance from a reliable Home Inspector can make the home buying process simple and stress free.

While many homeowners may think that building green can take a toll on the wallet, the benefits outweigh any initial monetary losses. Building or remodeling your homes with eco-friendly materials can lower utility and water bills, achieve federal tax credits, higher real estate value, purer air quality, reduced waste sent to landfills and conservation of natural resources.

Asbestos Tips

Asbestos is a fibrous mineral that was used in construction applications for the greater part of the 20th century. Often appearing as insulation, piping, roofing and flooring, homes and buildings could still contain asbestos materials if they were built prior to 1980.

If you locate any suspected asbestos in the home, most experts suggest leaving it un-disturbed until a home inspector can examine your property, take evaluations and determine the safest course of action. Sometimes the best action is no action at all. Disturbing asbestos in good condition may cause its fibers to be released into the air.

Long term exposure to damaged airborne asbestos fibers can lead to the development of a severe lung ailment known as malignant mesothelioma. Due to latency periods that can last 20 to 50 years, mesothelioma diagnosis is truly a difficult task for physicians.

The Health Canada Organization offers assistance and information in the prevention, disposal and removal of asbestos. They are federally responsible for helping citizens maintain and improve health at home and the work place. The inspection and removal of toxic substances must be performed by licensed abatement contractors who are trained in handling dangerous materials. They work under state and federal regulations to ensure no health concerns arise from improper removal.

GO GREEN

A catalyst for homes, industries, schools, universities and business, the incredible diversity of enterprises is driven by a common bound to move to a green lifestyle. Green alternatives to asbestos include the use of cotton fiber, lcynene foam and cellulose. Cotton fiber is quickly becoming a favorite for home builders and renovators.

Made from recycled batted material, it is also treated to be fireproof. Research has demonstrated that the use of eco-friendly insulation alternatives can reduce annual energy costs by 25 percent. Rather than expensive and mal-treated wood, interior walls can be made from steel and concrete, avoiding many of the problems associated with asbestos and other insulation methods.

Living in a world where environmental sustainability is a vital concern to the future of mankind, it is important to take note of the consequences of improper building materials and environmental degradation. As citizens of Earth, we are obligated to nurture and sustain this planet. Many locations throughout Canada are swiftly changing their construction practices to suit the environment and the health of human beings.

Take A Realtor's Advice

2009-07-08T06:00:00.003-04:00

I recently read a tweet from @JulietJohnson about a blog post from a Realtor giving the 3 basic tips to get your house sold.

The tips are good and straight to the point. Given they are written by an agent they need a bit of an editorial comment.

Tip #1 - GET LOST

"The buyers want to make fun of your house. They want to look in your closets. They want to discuss the home's potential while they are there. This is not bad. It means he has an opinion, and might be trying to make a case for his offer".

How the heck are you going to do this if you are selling privately? Easy to do with a little coaching. First you only need one person there. Kids and spouse can go to the mall (I also like what the agent says about grandparents). You need to stay in the Kitchen or Den or out on the deck if the weather co-operates. Let them wander through with out hanging over their shoulder, you would want the same if you were looking through their house, right?

Tip #2 - You have too much stuff and half of it is crap

This one is pretty self explanatory, and accurate. I have always talked about the importance of staging you home. Whether you do it yourself or have a professional do it, get rid of the crap!

Tip #3 - If you are not getting offers and and there does not appear to be a good reason it is because you are in denial. THERE IS A GOOD REASON.

Nope, not the economy. We've always had an economy of some sort. There is only one reason that a reasonably well-marketed home does not sell. Note that I said "reasonably well-marketed". Your Realtor does not have to take out a prime-time television ad, a page in the NY Times, hire a celebrity spokesperson and drop leaflets from a crop duster. The Internet (Lots), some print, calling in market area, open houses, word-of-mouth and some mailings will do nicely if you are PRICED correctly.

Everything on that list is available with a Propertyguys.com listing. Everything except the price tag! Just make sure you price it correctly.

Here is some more advice you could use prior to a showing if you have a leaky faucet...

M

Can You Spot The Fraud?

2009-07-06T06:00:00.001-04:00

Con Artists come in all sorts of different packages.

A recent article in the Waterloo Region Record talked about a real estate scam on the internet. Without a doubt it is important to do some due diligence when making any purchases online. To just send money to a classified ad on a Kijiji or Craig's List seems a little preposterous.

Internet classifieds are no different than that of the traditional print media. People place ads with little or no scrutinizing. It is generally up to the people responding to the ad to verify the merit of the ad and the person placing it. With the advent of free online classifieds people are now able to place ads from anywhere in the world for free with no one policing them at the outset. Set up an email address, place an alluring ad from Nigeria, wait for your fish to swim into the net.

Given the value of the purchase, when you are shopping for a house it seems a little odd to do the entire transaction online without ever seeing the property or meeting the seller. House selling was not really intended to be done this way.

The internet is a powerful and essential tool. One thing it doesn't do is take away the human interaction needed in the real estate transaction. When you buy a car you want to take it for a test drive. When you buy a loaf of bread you squeeze it for freshness. When you buy a water melon you tap it for firmness. Why wouldn't you walk through a $250,000 house before sending money?

Remember that if you have limited information on the seller, like just an email address, it should send up a red flag. Name, address, phone number are essential (hard to buy a house without an address, right?). Visit the home, walk through it, talk to the neighbours. Of course it is always recommended to have things looked over by your lawyer and any money in the transaction should be handled in-trust through your lawyer to ensure you have some protection.

Don't be to sure about anything. It appears even MLS listings have fallen prey to this type of scam...

Hopefully you are reading this post before you send a $5,000 wire transfer to houseseller54@aol.com so you can have a chance to see their amazing house before they put it on the market for $80,000 more.

M

Everyone Into The Pool?

2009-07-03T06:00:00.000-04:00

I don't care how hot it gets....NOT GOING TO HAPPEN!

Summer time memories are often intermingled with frolicking in the water on a hot day. Kids running through the sprinkler, playing in the pool, or baking at the beach are emblazoned thoughts in the psyche of many Canadians.

It seems that the pool as it sits is a choice for some. An investment in their property that allows them the daily trip to an oasis avoiding the traffic that sloths it's way to the cottage or the beach. It comes at a price. Consider a second mortgage or a line of credit because the pool of your dreams could cost you anywhere between $30,000 to $100,000 depending on how extravagant you want to go.

That investment in a property is not usually realized at time to sell. The backyard cottage will add value to a property but it also limits your pool of buyers. Many people looking for homes just are not interested in the pool owner's life. One of maintenance and upkeep. One caution and worry for a parent of young children. One of neighbourhood parties and summer kids hang outs.

They payoff really comes when you find that buyer. The one that always had a pool as a kid. One that couldn't afford the install or couldn't fit the dream into their postage stamp yard. The one shopping and their main requirement for the house is YOUR pool.

If you are like me, and not a pool guy, the other option is to head to a local municipal pool...

M

Who Pays Commission?

2009-06-29T06:00:00.001-04:00

You can be sure it is not a PropertyGuys.com client!

This question gets debated all the time. It is often thought that the home seller is the one paying commissions because of the way the transaction plays out. In a traditional agent fabricated deal the commission bundle is directed by the listing contract between the seller and the listing agent. They set the amount to be paid to both agents involved in the transaction.

The buyer's role is to simply look at houses with their "buyer's agent" and decide on one that fits their needs and price range and have their agent draw up an offer. They have little, if any, idea as to the commission amounts involved. Why would they even care, their agent did a great job and negotiated $10,000 off the asking price!

In a previous lifetime I was a purchasing agent. I purchased mass amounts of auto parts for the repair industry from all over the world. An important factor needed in my cost calculations was the expense of procuring the item. If there was shipping costs on a product than the expense needed to be included in the net cost of the items. Take a disc brake rotor for your car. These are commonly bought in China. If the rotor was worth $5 but cost $2 to ship to Canada then the "landed cost" was $7. Let's say the rotor sells for $14 with a standard mark up of 100%. If they find an alternate source to purchase the product for $6 locally with no shipping costs than that same part would sell for $12 saving you money.

Think of home buying like this. The price that home seller receives after commissions are paid is the "landed cost". If the seller can adjust his cost by not having to pay the high costs of "shipping" (read "commissions") than the savings can be passed on to you the buyer. The costs of "shipping" (again read "commissions") are actually paid by the buyer because the seller is passing it through.

Now imagine the house having changed hands 5 times. How much cheaper could you have bought it if agents had not been in the equation?

Here is an agent with a "sideways" look at who pays the commission...

M

Freindly (and Functional) Real Estate

2009-06-26T06:00:00.001-04:00

It is hard to be friendly when you have to go through a 3rd party.

Christine Durocher of Guelph recently sold her house. She had been trying for some time. She listed her house in time for the big "SPRING MARKET". She had called upon an agent she knew quite well to list it and it hit the MLS on Mar 26 2009 at $264,000.

After being on the market for a few months and not getting the results she needed (a SOLD sign on her front lawn) she called Tonya Brubacher in our office. Because Christine didn't have to pay the $13,860 (including GST) in commissions she was able to better price her home. She listed on June 4th for $258,000 with PropertyGuys.com and was able to sell her house within 2 weeks for 97.7% of the asking price. This decision allowed Christine to pay herself $13,230 (including GST) in commissions.

Here are Christine's comments on the the sale of her home.

"PropertyGuys.com is definitely the way to go. We are very pleased with the outcome and it didn't take very long to sell our home. Thank you to Tonya and PropertyGuys.com"

I guess the only thing worse than having someone stuck in the middle would be to have THIS guy stuck in the middle...

M

Cudos Mr. Turner

2009-06-24T06:00:00.000-04:00

Garth Turner has had a tumultuous run to say the least.

He has worn many hats in his days. From author to lecturer to syndicated newspaper columnist to TV personality to entrepreneur to 2 time MP. He may just be best known in Canada for standing up to Stephen Harper and getting the boot from the conservative caucus.

In his book "Greater Fool" he looks at where we are heading in the world of real estate. He does not see a rosy future.

Garth continues his thoughts from his book on his blog by the same name. A recent post includes a letter from a local RIM employee that recently sold his home privately in Waterloo.

"Mr. RIM" has $95,000 in equity saved up in his $244,900 house. The one thing that Garth does not expand on is the fact that had this RIM employee used a Realtor they would have used up 13.53% of their equity.

$244,900 x 5% = $12,245
$12,245 + 5% GST = $12,857.25
$12,857.25 / $95,000 = 13.53%

When we are considering whether to use an agent we make choices on a cost of 5% of our home. Unfortunately most of us don't own our home, the banks do. In the case above "Mr. RIM" only owned 38.79% of his home yet he is expected to pay the entire selling fee charged.

When you are looking at the future of your financial life you should look at the big picture not simply what is in front of you. Watch for what lies beneath the water, not just the majesty of what protrudes above the surface. That is a mistake made by so many in the past. Are we not supposed to learn from their mistakes?

M

Strength In Your Sale

2009-06-19T06:00:00.001-04:00

Don't let a skunk eat your lunch!

It would seem that every agent wants you to believe that they have the secret that will sell your house. I am sure you have seen all the marketing ploys. The most popular one these days seems to be "Your home sold in 90 days....GUARANTEED"

Something smell off?

They always list "some conditions apply". I did some digging and this was the most detailed explination I could find.

"We'll give you a guaranteed written offer on your home within 24 hours of your listing.
This written guarantee will give you the assurance that if your home doesn't sell within 90 days, we will buy it for your upfront guaranteed amount."

If you want more details you have to call them. So what's the catch? The "guaranteed" amount will allow them to purchase your house for under market value. Not such a bad deal....for them!

Programs like these emphasize that price is what sells your home. So what can you do to strengthen your position to sell?

"We tried selling our house using an agent, but after a number of issues, we let the listing expire, as we just didn't see the value we were getting. We decided to try PropertyGuys.com, and we had immediate interest. In 3 weeks we accepted an offer!"

Joe & Heidi Devitt, Ayr ON - Listing 162639 - June 2009

Sometimes You Just Know...

2009-06-17T06:00:00.001-04:00

Is there a higher power involved in your decision?

Have you ever walked in the door of a home and just knew? What was it that did it? Floors, colours, windows, backyard or maybe the master bedroom.

Have you considered this as a seller?

Have you focused on the key features of your home?

When a buyer pulls up out front what do they see? Not just at your house but in your neighborhood. Are the lawns kept? Is there always cars parked on the road? Can you see the park from your driveway?

They come up the walkway. Knock, knock, knock. You open your door and what do they see? Is there a predominant smell?

What makes your house stand out? Will it help you sell?

This guy knows how to sell it. I mean seriously this is the best 8:04 house tour EVER!

M

May Monthly Real Estate Statistics

2009-06-15T06:00:00.001-04:00

It seems these days we are always waiting. Not sure it is because things take longer or because we expect things to happen that much quicker.

Guelph stats for real estate are a little slow to be posted this month. I found an alternate source that says sales are down a little over 16%. Stats for KW and Cambridge are looking a little more promising. With increases of 9.9% and 7.7% respectively it shows the first year over year increase for Waterloo Region since September 2008. This helps the YTD numbers slightly but in total MLS stats show a decrease of almost 15%.

All things have been pointing to the stop to the free fall. Low interest rates and the home buyers' plan and home renovation tax credits. Low interest rates have started to move back up. Does this put an end to people looking to buy, a halt on the pick up of the market? Anyone that was pre-approved has some time to make a purchase but anyone that does not already have the locked in rates may think twice. I would watch for a stall in the July-August time frame if nothing else changes or if the rates continue to raise.

Not to sound bleak. Just looking at what I see. It could always sound worse...

M

Do You Have IRD?

2009-06-10T06:00:00.001-04:00

Have you checked your financial wellness yet?

Do you know whether the sale of your home will leave you in the financial infirmary? The costs of selling your home are well documented. The one that seems the most elusive though is the mortgage penalty.

It seems with the lowering of interest rates people are finding that breaking a mortgage is more than what they bargained for. Most mortgages are subject to either a 3 month payment penalty or Interest Rate Differential (IRD), depending on which is higher. With the drop in interest rates IRD is usually the prognosis.

So what is IRD? Here is a basic understanding for you. You bought your home 3 years ago. Your mortgage rate at the time was 5.99% on a 5 year fixed term. The balance left on your mortgage is $200,000. The rate your lender is charging today is 3.99%. You will take the value you have left, multiply it by the months remaining and the difference between the interest rates to get your penalty. In this instance you are looking at about an $8,000 penalty. Now this is a guideline as each lender calculates this amount in their own special way. I found a great "rough idea" calculator online for you to estimate your costs.

As with any contract, when signing your mortgage you need to read the fine print. If you are working directly with a lender (ie The Bank) make sure you ask exactly how their penalty works should you choose to break the mortgage. If you are working with a mortgage broker have them explain the different penalties on the different mortgage options you are looking at.

It is not uncommon with the rate declines we have seen over the last 6 months to see $10,000-$25,000 in mortgage penalty. I would suggest before you decide to sell your house that you find out what your IRD is so you don't find yourself looking for a miracle cure. Here is a discussion on a blog between a lender(PC Financial) and a home seller that clearly shows the lenders do not feel bad about sticking to their contracts and getting what they can. If you have made it through a bought of IRD feel free to leave a comment and advise others of the lender that infected you with this money draining condition. You may be responsible for saving someones financial life.

So what do you do if you have been diagnosed with a high cost IRD? If you are dead set on selling make sure you minimize your other costs to help maintain your financial health and then contact a mortgage professional to ensure you are protected the next time. Based on this TV ad, I am not sure this "doctor" would be my first choice to help.

M

Who's Playing Monopoly?

2009-06-08T06:00:00.001-04:00

What is your barrier to entry?

Truth of the matter is real estate agents have, for all intensive purposes, a monopoly on the real estate game. In a recent article in the National Post, Garry Marr wrote about the dominance of MLS over the market since it started some 50 years ago.

In it he focuses on two different MLS systems. One for the consumers and one for the agents. The agent's version is much more robust and complete where as the consumer facing one is a knock down version. With today's privacy laws it will not be changing anytime soon, nor should it.

The real story here was that $131.9 Billion in real estate transacted through the MLS last year. That constitutes an estimated $6.595 Billion in commission pulled from the pockets of hard working Canadians. Was this necessary? This is a societal loss of billions of dollars done $15,000 at a time. Are you next?

I feel a need to answer a question that some may ask. Is a monopoly bad? Let's call on expert Phil Holden, an economics professor in Greece, to answer the question in this video from Youtube (unfortunately he has disabled embedding).

Is it coincidence that all the downsides experienced in a monopolistic situation Phil speaks about are alive and well in today's real estate industry?

To lighten the mood slightly here is Ernest's view...

Remember that no matter how bad it gets it can always get worse.

Communist Monopoly anyone?

M

Red Tape Wrapping

2009-06-03T06:00:00.001-04:00

Who likes birthdays?

June marks the 20th anniversary of REM (Real Estate Magazine), a news magazine dedicated to the traditional real estate profession. Their news blog did a retrospective piece looking at what has changed in real estate over the last 20 years. It did not surprise me that the first quote was on the internet.

“If you look at the last 20 years, the biggest change has been the Internet. Fundamentally it has changed how we are perceived, how we do business, and how people can access information, which is the key,” says John Powers of Claussen Walters & Associates in Lunenburg, N.S. (25 years in real estate)

I agree the key is "how people can access information". Some stats say as high as 90% of people start their house search online. When this information was made available to the general public it changed the way the business was handled. No longer are people dependent on a realtor for their housing information, it as all online. Dwindling are the days of spending your Saturday and Sunday in the back seat of a real estate agent's Cadillac looking at house after house. You spend more time on a computer short listing properties that match your requirements.

Opinions didn't end their. Technology is not the only thing to have changed.

“What’s changed is the amount of bureaucracy and the amount of forms. (In the 1980s) the listing form and the purchase sale agreement were one page. Now they are each 10 to 15 pages. The amount of paperwork, the entanglement with federal regulations for the Privacy Act, terrorism, money laundering, the collection of HST – all that stuff has impacted our business. We’ve become a bureaucratic machine, much different and much more regulated and litigious,” says Powers.

Bureaucracy costs money, and plenty of it. Just ask your local politician or health care professional.

I use the health care profession because realtors often compare themselves to surgeons. Have you seen the ads in the paper likening selling your house to an appendectomy? I even got an email recently from a realtor with Prudential Grand Valley Realty where he said "Real estate costs are very high and the client pays for a vast network. Our commission rates are justified because of all of that.... Are you going to tell people also that they should operate on themselves and that a surgeon's fees are too high?"

Extra steps and procedures that need to be done all have to be done by someone. As the agent above states you pay for this bureaucracy? When you choose to cut the red tape of bureaucracy you get to put the savings to work for you, drop your price by the cost of their commission.

Think of it this way, two identical properties located right next to each other should take the same amount of time to sell. As one of the home sellers you have a way to reduce your price by the high cost of commissions ($10,000-$20,000 in most cases) with out effecting your bottom line. Viola, competitive advantage!

M

The Art Of Home

2009-05-29T06:00:00.001-04:00

Staging and decorating is more than just painting.

A good stager will be able to walk into your home and present a guided tour for a prospective buyer. Anyone can tell you an orange living room with purple shag carpet is not an asset or that taupes and neutrals work best while using accessories for colour enhancement.

Warm inviting colours along with textures and materials like wood and suede will envelope you into the comfort of a room. As a juxtaposition steel and sharp angles are cold and modern and can work as a contrast.

I have been chatting with a client that is a few weeks away from listing a house they are flipping. They were not sure if they should furnish the home when they were ready. To me it was an obvious answer. Walking into an empty house is stark and takes thousands of your price, I've seen it first hand.

The home needs to tell a story. Who are you planning on selling to? What is their story? Paint their picture with the brush of luxury. Stainless steel appliances, wood floors, micro suede all speak to a higher level of living.

If you are not sure on what to do or you think that red walls and green carpet is sweet, call a professional stager.

M

Angry?

2009-05-27T06:00:00.001-04:00

Your eyes begin to pulse as you read further into the statement. Like a scimitar, words cut through your heart as if paper. With unabashed anger you stand up and throw the paper on the floor and begin to stomp on it. It is not enough, you need more. Grabbing the plant seems insane but you can't help yourself. Still your anger is unabated. The chandelier?

Sound familiar? Have you seen the commercials?

You want to buy a house and you still have one to sell. Most people would put in a conditional offer. This condition would state that your offer is under the condition of selling your home with in a time frame (30-60 days) and should include a bump clause that states that if any other offers come in during this time frame you would have the right to either firm up or walk away from the deal (usually allowing 48 hours to make your decision). Seems pretty straight forward, right?

As a home buyer you want nothing more than to breeze through a purchase (including the sale of your home as part of your conditional offer). It would seem local realtors don't want you to do that. They are angry. They feel deserving of your hard earned money. They are even willing to use coercion to get it.

Think coercion is to strong a word? Here is the definition from Dictionary.com:

Main Entry: co·er·cion
Pronunciation: kO-'&r-zh&n, -sh&n
Function: noun
: the use of express or implied threats of violence or reprisal (as discharge from employment) or other intimidating behavior that puts a person in immediate fear of the consequences in order to compel that person to act against his or her will; also : the defense that one acted under coercion —see also DEFENSE, DURESS —compare UNDUE INFLUENCE.

As I wrote about in a previous post, local agents are using intimidation in the offer process. For you to get that house they are forcing you to have to list with an agent. Imagine the feeling of violation when you find out in order to buy your dream home you will be forced to spend thousands of dollars wastefully on a service you don't want or need.

I found another one of those helpful realtor commercials I have posted about.

M

THE Moving Day Decision

2009-05-25T06:00:00.003-04:00

This time we got smart. This time we used a mover.

How many times in your life can you go to the well? How many times can you buy beer and pizza and expect your friends to brake their backs AND your dishes?

When Yvette and I decided on moving one of the "have to" items in the budget was a mover. Not only were we not interested in carrying everything we owned but we were also not interested in being indebted to our friends to help them when their turn comes up.

We opted to use AMJ Campbell. When I first met the guys from AMJ Campbell I heard the sales pitch. It was one that made sense to me. Their movers were not just guys picked up at the temp place in the morning. They were all employees and worked at moving people full time. They were experienced and professional.

Move day came and I was ready to see if these guys met up to the high standards I expected. They were a few minutes late, not that I minded. The 4 guys jumped out of the rig and each introduced themselves to me with a hand shake. First came the runners to protect the floors. Next was the walk through to get the "lay of the land". On our way up from the basement they did not want to waste a trip so they each lugged a box with them, not bad.

They went through the home quickly loading my life into the truck by just after noon. The one thing that stuck out from the morning was when my in-laws showed up. As my father-in-law says his customary "how ya doin" to the guys the response was always followed by a "sir". These guys were hardworking and polite in every instance.

All in all it was about 10 hours and ran us $1,900 for the move. Cheap if you ask me. I guess I could have hired guys like these to do it for less.

M

The Future On Video

2009-05-15T06:00:00.000-04:00

A few weeks back I wrote about a blog post with a futuristic look at the real estate market.

When I saw this video on Youtube I could not help but be reminded.

It got me thinking. Today is yesterday's future. What shaped our today?

Where as once we relied on newspapers, letter writing, radio and television for our link to the world. Today our views come from Google, email, Twitter, Facebook and Youtube.

What will Real Estate look like 10 years down the road? Do you think anyone saw this coming in 1995?

M

Buyer's Are Asking

2009-05-11T06:00:00.002-04:00

The most important question in real estate is how much?

Pricing your home correctly up front will save you more time, hassle and MONEY than you care to know about. I am going to enlighten you anyway.

When a house on your street hits the market what is the first thing you do? Hit the computer and get nosy, right? Do you judge it? Rooms, decorating, layout, PRICE? Imagine all the people that jump on to the website where you are listed and judge your home. Once they have looked and judged will they ever be back?

So how the hell will you get the right price, specifically in this market?

Using "old" data is a starting point. If we don't learn from our history than we are doomed to repeat. Looking at trends and future market is what will propel you to the front of the pack.

The most important thing that Stacy points out is right at the end. Did you catch it? "Price your house below others in the market and get it SOLD!"

M

Potecting Your Rights

2009-05-08T06:00:00.001-04:00

How many annoying calls are you getting?

Our clients are telling us that real estate agents have stepped up the calling. It seems some of them are subscribing to a service that accumulates information from private sale websites and newspaper ads so they don't have to "hunt" for their "leads".

How do you, a Canadian citizen, stop these annoying calls from happening? Well to start, get yourself signed up on the National Do Not Call List (DNCL). Your number appears on the list within 24 hours but realtors do have 31 days to "update their list". If you get a call from any agents (or other unwanted solicitors) in the first 31 days simply tell them you are registered on the do not call list and that if they call again you will file a complaint.

Make sure you write down their name, number, brokerage and time they called. If they call back the next step would be to file a complaint with their brokerage and the local real estate board (as well as the DNCL)regarding their lack of compliance with the the program.

Here is an example of the realtor mentality and getting your listing.

The one thing Steve said that makes sense is making sure you ask anyone that comes into your house if they are pre-approved for a mortgage. If their not, tell them to sign up for PropertyGuys.com Winners Circle and get Canada's best mortgage rate. Today the rate for a 5 year fixed mortgage is at 3.45%!

M

April Monthly Stats

2009-05-06T11:44:00.000-04:00

The new growth of spring.

Numbers are in for both Kitchener Waterloo and Cambridge for April real estate sales. Congrats to the home sellers of Cambridge as the leak in the dam seems to have been plugged by the tulips of spring. Cambridge has shown 20-40% decreases over the last 6 months so to only be down by 1.8% over last year is quite an accomplishment. This is still a drop of nearly 20% over the 2007 numbers of 307 homes sold in Cambridge.

KW is improving as the gap between this year and last year is shrinking. This month a 14.9% gap from last year is an improvement over the preceding months.

Guelph on the other hand does not seem to be holding it's ground. Early numbers show a 26% decrease over last year and that was down nearly 6% from 2007.

Let's hope that the consumer confidence is back and can repair the levee damage so the spring/summer homes sales don't get washed away in the tidal wave of unsurity.

M

Hello There!

2009-05-04T06:00:00.001-04:00

Does he come with the house?

A key point of an internet listing is to show your home at it's best all the time. Knowing that you may not keep it pristine 24/7 you can still have it shown 100% of the time in the best shape. Before you plan to have your photos taken make sure that your house is ready. Here are a few hints you will want to ensure you pay attention to for your photos:

Demagnetize - Although the kids art work is dear to you a buyer wants to see the fridge! Take all magnets and associated artwork, pizza coupons, to-do lists, and extended family photos off the fridge and into a drawer.
Zamboni the Counters - You are selling space, especially in the kitchen. Feel free to leave one, maybe two small appliances if you have more than three counter spaces (U shaped kitchen or L shaped with an island). Photos have a tendancy to make things look restricted. Clearing off the counter tops will assist in opening up the kitchen and giving the perception of having a larger kitchen. This goes for bathrooms as well.
Reflect When Selling - As in the photo above you need to be very cautious of where mirrors are in relation to the camera. Sometimes it is darn near impossible to avoid having the camera in the shot, but that's why they have tripods and self timers on cameras. Don't get caught in the mirror!
Tall and Skinny - No not a Starbucks order. Landscape (wide) versus portrait (tall) should be the standard shot. The only exceptions that I would use would be in a small powder room or the front shot of a townhouse where you pick up 3 units when trying it landscape.
Sleeping In - Make sure you have made the bed! Don't laugh I've seen it more than you would think. The bedroom is a personal space but not so much when you are loading it onto the internet. Underwear, bras and "personal items" should be taken into consideration before the thought of a camera as well.
Pee Wee's Playhouse - Toys everywhere worked for Pee Wee but not for selling your home. Even in the kids to room hide most of the toys in closets or out of the room to take the picture. Even the neatest, most organized room with 300 toys looks cluttered.
The Dungeon - Call it a man cave or parlor or games room any way you slice it you need to appeal to both sides of the relationship. Not sure too many people will want to walk into the "Private Club of the Satan's Helpers!"

Now you have been hipped to that dude!

M

How Fast Is Fast Enough?

2009-04-29T14:00:00.005-04:00

9.69 Seconds is as fast as anyone has gone to date.

How fast will your house sell?

Home selling is a balance of the Home Selling Trifecta. More commonly know as Product, Price, Exposure. If one of these three essential elements is off, you will have issues in selling your home.

The knock most people have with Private Sale is the perception that they are limiting their exposure and extending the time they need to sell their house. Back pre-internet I would tend to agree. Today's private sale marketing companies get you the exposure that you need in order to get in front of buyers. Where this perception comes from is not from the exposure angle of the Trifecta but the other two components.

Product and Price are key in order to sell your home. They HAVE to be in alignment. If you are sitting with a $200,000 house and asking $230,000 people hit the next button on the computer screen. The decision is made without you even knowing.

As Private Sale Professionals we encounter more real estate transactions than that of the average home seller. We see people make good and bad decisions every day. To watch someone give up on private sale and reduce their price when they list with an agent does not comprehend. Let me give you some examples.

140 Peeblecreek Dr in Kitchener had listed with PropertyGuys.com in April 2008 for $384,900. In July they opted for the Realtor route. We last saw them on the MLS system on Feb 26 2009 after it had been listed for 224 days with an agent and had dropped the price to $349,988. A difference of $34,912 not including the estimated $17,000+ in commission. All that and they still had to wait 2/3 of a year!

17 Harrow Ct in Guelph listed at $460,000 with PropertyGuys.com in January 2008. After being listed a mere 66 days and dropping their price to $419,500 they opted to leave for the "greener pastures" of the MLS. Pastures grew, dried up, got covered in snow and were finally thinking of sprouting again this March when things finally showed promise and they sold. A harrowing 344 days with an agent and their last listing price on MLS was $369,000. A difference of $50,500 from their last price on PropertyGuys.com not including an estimated $18,000+ in commission.

61 Clive Ave in Guelph originally listed with PropertyGuys.com in June of 2008 for $349,000. After a few months on the market and price drops to $329,900 with no takers they opted to change their marketing strategy. Agents had been relentlessly telling them that they can get more money for their house, all they had to do was list and get the exposure that comes with from the wonderful world of the MLS. They listed with an agent in August at $340,000. After months of going nowhere except down in price ($319,900 is where they ended up) they opted to come back to PropertyGuys.com in early December. Doing the math they realized that even if they could have sold with an agent at $319,900 they would have ended up with $303,905 after commissions were paid. Knowing they needed to be more flexible they adjusted their price to $309,900. This seemed to put their Product/Price ratio into alignment because just after the Christmas holidays they had a sold sign on their lawn and a little over 95% of their new asking price.

Any athlete knows your performance does not happen out on the track. It all happens in the training. You must prepare yourself for the meet with countless hours of workouts to ensure when the pistol goes off you are ready to run down that track to victory.

Don't tense up and let the lactic acid build up and kill your finish, as Darrin says, "keep flexible"!

M

Pricing Is The New Black

2009-04-27T06:00:00.001-04:00

It doesn't get anymore basic.

I have had some discussions with local agents over the last few weeks. It is no surprise they all feel the key to selling a house quickly is pricing it accurately from the get go.

As a home seller it is imperative that you price accurately in order to be succesfull in selling your home. Local PropertyGuys.com clients have boasted getting offers within hours of getting listed on the website, even before a sign on the lawn. This would not happen if they were $10,000 over priced.

One of the benefits of selling privately is the ability to be more flexible in your pricing. Cutting out the most expensive portion of the selling process allows you the ability to negotiate, even better you can be more aggressive up front while your listing is still fresh.

How do you know if you are priced right? First and foremost did you get QUALITY information in the beginning? You can easily watch the market to see where people are listing their homes for sale. Problem is to get a true idea of where the market is you need to know what they sold for. That information is pretty hard to come by unless you have access as an agent or appraiser.

You can have any agent come in and give you an opinion on value. Problem is that their opinion can be enticed by the large payday looming. Third party appraisers are an irreplaceable resource. They give you a value on your home, no strings attached.

If you are already on the market look around and see how you compare to the homes in your neighbourhood. If you are near the top of the list you may need to rethink your strategy. You don't want to be the one wearing the purple dress do you?

M

A Little Q & A

2009-04-24T16:00:00.000-04:00

You ask and I answer!

My last post seemed to drum up some discussion and it got me thinking. What others topics are out there that people might want some answers to? If you have something that is a burning issue or that you can't get a straight answer to, drop me a line. This blog thing might as well be interactive, right?

Here is a question and answer dialogue that might have taken place on a typical website:

Q. We recently attempted to put an offer on a house with the condition that ours sells. The agent that has the house listed has informed us that we NEED to first list our own home with an agent before our offer could be considered – is this true?

A. This is definitely not true. Private sale has grown both in comfort level and popularity as the internet has gained momentum - and is now considered a mainstream alternative to traditional agents. It’s estimated that 25% of sellers are now choosing private sale and if 1 in 4 are trying it and experiencing the same success rates as those with agents then it cannot be denied as a credible strategy for selling. In fact, in many circumstances private sale has proven to be more effective than traditional because the seller’s asking price has not been inflated to pay commission. This allows the seller to price closer to what people are willing to pay, and therefore increases the likely hood of selling. The best defense against this type of scenario would be for you to go knock on the front door, and make the offer in person. The home seller can then decide if they want to consider the offer or not.

This is a pretty straight forward answer to the question. I try to lay things out with as much clarity as possible. In my opinion this type of action is morally and ethically wrong. As a Canadian citizen you have the right to sell your home how you please and you should not have anyone putting undue pressure on you in order to line their pockets. Your offer as a private seller is as good as that from an agent. In fact it has potential to be better! Without the high cost of commissions you can be more aggressive with your price which attracts more buyers. If this circumstance were to happen to you I would suggest that you advise the agent that the offer is conditional and they will have every right to continue to offer the home for sale. Any better offers will end up bumping yours in most cases so what's to loose?

We have seen many instances of this locally. If you or anyone you know has fallen victim to this type of deception by an agent let me know. Collectively your voice is louder and we will help you stop this from happening to someone else.

Here is a guy that should have used his phone a friend to call a Private Sale Professional.

M

Feeling Violated?

2009-04-22T06:00:00.009-04:00

Are you outraged about your equity being ravished?

Last Friday a gentleman by the name of Mark Fox wrote a provocative blog post entitled Death Of The Realtor. Mark is a very interesting person. Now a corporate trainer and author he has an impressive resume including rocket scientist. A person not to be misdirected by fluff.

I first learned about the post when I saw it on twitter. What makes it so provocative? Mark likens paying 6% commission in a real estate transaction to rape; loss of control specifically. The use of this feeling of violation is an interesting one. It stirs up an emotion, one that could conjure up guilt in the most ethical of real estate agents. The ones that are lacking scruples won't even bat an eye. Let me give you an example.

I met with a friend of mine this week to discuss the listing of his house. He and his wife got a call from a local agent that wanted to show them a great little fixer-upper. They fell in love with the potential of this house and decided to put in an offer. Knowing the agent they felt comfortable having him work both sides of the deal. They put in a strong offer conditional on the sale of their property. This friend of mine is no rookie in the housing market. Having sold his two previous homes privately he was excited to get it on the market once the offer was accepted.

Knowing the way some real estate agents manipulate clients with trust I gave him a warning. Although some agents have strong ethics and want the best for their clients we have experienced many local agents that thought more of their own pocket books then the financial concerns of the client. Sure enough the offer that was presented was not just conditional on the sale of their property. It was dependent on them listing their property on MLS. That's when it was explained to the agent that they were going to sell privately. The real estate agent said he would take this "new offer" back to the seller to see what they thought. Here is where the real depredation of trust happens. Why would the seller care how the buyer chose to sell their house? Price it properly and get it on the market!

When the agent came back with the news the seller would not accept the offer unless they listed on MLS it became obvious that this agent was not out for the best interest of his clients but only for his own personal financial gain. If he was looking after the clients' best interest why would he force the buyer to have to add an additional $8,000 to the selling price of their house? How is this in the best interest of either buyer OR seller?

Realtors might argue that the agent is working in best interest of the seller because for a home to sell it needs to be listed on the MLS. I beg to differ. Stats for the last 6 months in Waterloo Wellington show that only 43% of homes sold with the high profile marketing of realtors and the MLS while the clients of PropertyGuys.com bettered the agents by selling 46% of homes in the same time period.

Why is that? Why would homes listed privately have a better chance of selling over those listed on MLS?

Private home sellers are in control. No one ravishes their pocket book. They are able to flaunt their lower price out to the market without fear of someone pillaging what is rightfully theirs.

M

On The Upswing?

2009-04-20T06:00:00.002-04:00

Life at the park.

In my monthly stats post for February I predicted March MLS solds based upon their slumping sales to date. The good news is the market out performed my prediction, which means things are improving.

Cambridge ended March with 209 solds (I predicted 175), Guelph came up with 241 (I predicted 210) and KW had 497 (I predicted 470). All in all the Waterloo Wellington MLS market was down by over 17% versus last year and nearly 24% from the record 2007 numbers.

How is this an upswing if we are on a downward trend? I would liken it more to a pilot pulling up on the stick as they plummet in a stall hoping to level off before the unfortunate ordeal of an unplanned landing.

M

She's So Funky Ya

2009-04-17T06:00:00.002-04:00

Kate Bush is not that "funky", no matter how hard she tries.

When I was growing up so many people thought the song Games Without Frontiers by Peter Gabriel had the repetitive line of "She's so funky ya". Do you remember it? Everyone singing it at the tops of their lungs "SHE'S SO FUNKY YA". In actuality it was simply the title in french "Jeux Sans Frontières" as sung by Kate Bush.

We often think we know something when truth be known we have no clue. If you are missing information (like knowledge of french) it makes it difficult to even know that you are wrong. We see this in the housing market. A sign goes up, hangs around for a while, comes down. A new sign goes up and miraculously a sold sticker. Must have been that new sign, right? Not so much.

When one lists their house for sale they usually do so with the best of intentions. In turn they are also trying to get the most out of their investment. Problem is so many people price their home from what they want or need to get from it not taking into consideration market price. This usually leads to the home being overpriced and on the market for an extended amount of time. The home seller eventually places blame on the person they listed with and looks for another alternative (a different sign).

This new sign comes in with a solid case for adjusting the price. Rightfully so, if your house has been on the market for 2-3 months you are more than likely priced too high. Once the new sign (along with the new price) get onto the market SHAZAM a sold sticker. Was it the sign or simply the adjustment of price?

A home priced right for the market will sell. If your home is listed now and things are not going the way you had hoped, you may need to adjust your price. If you are looking at the bottom line after paying an agent 5% of the value of your home and saying there is no room to adjust your price, it may be time to switch from the square sign on your lawn to a round one.

M

Why Waste Your Time?

2009-04-15T11:00:00.000-04:00

"I have to pay how much in commission?"

Seriously, when you look at "The Scream" by Edvard Munch what thoughts does it conjure up? When you see the colours and the details how does it make you feel? Did you ever notice that there are actually 3 people in the painting? What about the ships on the water in the background?

Have you put as much effort into your photos as you have your description? Chances are the photos will say more than you could ever write. The old saying of "A picture is worth a 1000 words" can work for you or against you. If you have not paid enough attention to your photos it speaks volumes to your prospective buyers. Everything from the quality of the photo to the cleanliness of the room screams from the photos.

A not-so-recent article in the Globe & Mail points out the importance of good real estate photography. You have to pay attention to the entire frame as well as ensure you are seeing the entire room. You are not selling your couch or dining room set so why would that be the focus of your photo? If you do not have a wide angle lens I would suggest you allow someone else to take the photos. If the person coming to take photos of your home does not tell you to take the magnets off the fridge or that it would be best to tidy up the kids toys, why are they there? It is more than just taking a few snaps and loading them on a website.

It does not stop with just the photos either. Your virtual tours need to be top rate as well. Not like this "Real Estate Professional"...

M

Dirty Deeds...

2009-04-13T06:00:00.002-04:00

Do you think any of them will help you in the garden?

Can you feel it? That dull ache in your lower back. The one caused by countless hours of shoveling, raking, digging and planting?

Spring is upon us and that means it is time to get out and spruce up the yard. The first impression your home gives is an important one. Keeping the lawn in good shape, the garden beds weeded and the bushes pruned ads to the value of your home, not to mention curb appeal. Having a prospective buyer pull up and say "I think this is the place" before they even step foot on the property is the aim of every home seller (or it should be).

What is the first step? Call the garden center and get some dirt delivered? Problem is one of two things will happen. You will end up with a big messy pile of dirt on your driveway or a large unsightly yellow bag where your car should be. There has to be a better solution.

There is...

For those of you that expected an AC/DC video, here is a rare Live Bon Scott one

M

Are You Eating Ham or Turkey?

2009-04-10T14:49:00.004-04:00

I know what his vote is.

Easter is upon us. Family, food, chocolate and hopefully the end of winter like weather.

Like so many people this holiday we have family visiting us. If you are thinking of selling your home in the next little while take full advantage of these extra eyes (and backs). When a visitor arrives at your door, sweet potato pie in hand, ask them to imagine they were looking at buying your house. Don't let them in until they agree. They need to be judgmental and harsh. This usually is no problem for most relatives.

Have each and every person give you their 3 favorite and 3 least favorite aspects of your home. Having these additional eyes and opinions will prepare you for the buyer onslaught. Since they were nice enough to tell you they didn't like the layout of your living room, put them to work to move furniture. Maybe even send them home with an end table that you just don't need.

Give in the spirit of Easter!

To get you ready for your furniture moving here is a little something to get your blood flowing.

M

Kitchener Waterloo Monthly Stats

2009-04-08T08:00:00.000-04:00

The horse is dead, stop beating it.

I commend Karen Shartun (KW Real Estate Board President) for trying to put a positive spin on the economy. The traditional media has put enough negative spin on this whole thing we could use some good news. Problem is we need information that is not misleading us.

In another article in the KW Record Ms. Shartun says "the positive momentum suggests the market has turned the corner". Truth is this is nothing special. The "momentum" of the spring market is all part of our normal cyclical nature. More houses sell in the spring and summer then in the fall and winter, FACT.

A better perspective to look at this would have been "Sales for January in KW were down 36% year over year and 28% for February. In March we are seeing that number shrink as MLS sales are only down 18% vs a year ago. Not only are we seeing the seasonal increases that we do every year but the gap to last year is closing as the economy settles down."

On another positive note PropertyGuys.com numbers for KW in March show that client sales were even with last year. If we look at the entire Waterloo Wellington area PropertyGuys.com clients sold 26% more homes this March than last March.

You would think that by know their arm would be getting sore.

M

So How Did This All Happen?

2009-04-06T06:00:00.006-04:00

More importantly where did it all go?

We have all read the stories in the newspapers. We have all seen the reports on TV. Does anyone really understand what happened to the US economy? Is it as simple as banks lending money to people who could not afford to pay it back? If it were stock markets would not have crashed the way they did.

Here is a video that takes you through sub-prime mortgages, Wall Street vs. Main Street, and credit default swaps. Visualization is much easier to comprehend then the Wall Street Journal.

My favorite part is the depiction of the "less responsible"!

So what is next for those of us on Main Street? Hunker down, pay off your debt and get back on the right side of the balance sheet. With interest rates so low you can pay off your debts (mortgage, credit card, line of credit) quicker and easier. Extra payments on your mortgage or increasing your monthly payments are applied directly to the principle.

M

Nothing Like A Good Chicken Leg!

2009-04-03T06:00:00.005-04:00

Now all you need is a BBQ to cook them on...

Do you remember my post about the client that was sick of annoying agents calling and knocking on his door? He had asked for some ammunition to help fend these pests off.

Glad to announce in under 3 months Peter and Nancy were able to sell their house and pay themselves the commission. They sold for 98.5% of their asking price and saved $17,325 including GST. They spent some money to market their home, in total $1,028.70, giving them a net total of $16,296.30 more than if they had of used an agent. I am not sure what they will use their extra cash for but I know one thing, they won't be wasting it on something they can do themselves!

Today I am going to share with you a few of the many things you can spend your money on instead of some Joe Schmoe agent.

Put it towards your mortgage - This is by far the best use of these funds (IMHO). Putting this money down on a $200,000 mortgage (based on a 25 year amortization and 4% interest rate) would save you an additional $9,418.52. That means you would end up saving over $25,000 by selling privately!
Pay for upgrades in a "new home" - If you are buying a new home you know that it never comes "fully equipped". Did you want hardwood floors? What about upgraded cabinets or a finished basement?
Make some changes in the home "new to you" - When you buy a resale home it is generally not perfect. Maybe you need a new water softener ($1,000 and up), high efficiency furnace ($3,500-$6,000), new A/C ($2,000 - $3,000), new roof ($2.50-$8.00/sq.ft.). Here is a great list of expected costs.
You sold the your place with appliances and now need to replace - Fridge ($2,500), Stove ($1,800), Washer & Dryer ($1,850)
Upgrade the backyard - New deck, Landscaping, Gas Grill for the chicken legs!
Your new place has a space for a kick butt man cave - TV ($3,000), Surround Sound ($3,500)
You decide that you want a spa in your basement - Hot tub ($4,700), Sauna ($3,400), Massage table ($500)
Send your child to University (1st year tuition and books)- Optometry ($16,100), Computer Science ($12,000), Architecture ($10,900)
Deposit on a new convertable or a new Harley Davidson.

I could go on and on. The point here is that you have the ability to make a choice how you want to spend your money. Whatever floats your boat. Don't let anyone tell you how you should spend it. If you want to use it for a real estate agent, by all means, it's your money.

One year ago today Joe Lima used some of his new found money to give back to his community. That's always a good idea.

M

Home Show Bullies

2009-04-01T06:00:00.001-04:00

Sometimes you have to fight no matter the odds.

Did you hear about Remax suing a small South Carolina real estate agency over their logo? They claim that it was a trade mark infringement yet the logo didn't even resemble Remax's. Seriously, you be the judge...

They eventually dropped the suit, due in large part to the negative backlash by the press and in social media outlets. It seems that Remax has a reputation of trying to be the bully against small and medium sized businesses. You hear rumours and stories about it but until it becomes a a part of your reality you never imagine the power of big money.

This past week-end was the annual spring home show at the Aud in Kitchener. For the third consecutive year we were very excited as it hastily approached. 2008 proved to be a success and we committed to the same booth space for 2009 well in advance (last summer). We borrowed our main concept this year from an idea another franchisee had and made arrangements to have a Harley Davidson Super Glide in our booth. We noticed in the pre-show material that Remax had not only came in as the major sponsor for the show but was also located right across the aisle from our booth (B127). With a very attractive value proposition we were thrilled about the opportunity to take on this giant face to face.

With out getting into the finest of details after the first day we were relocated out of the main show area and into the hallway between the two arenas (LL02/LL03). Not the most professional place by any means. We were given a partial refund and the impression that we would not be welcome back next year. This is not the first time a PropertyGuys.com franchise has seen this happen. PropertyGuys.com St. John's NFLD ran into it when Remax came in and sponsored the local home show. They went from being voted "Best Marketing of New Homes" in the single booth category in the 2006 show to "not allowed to participate" in 2007. This is their way to control the market. Large companies like Remax come in, throw money at the organizer, flex their muscle and try to suffocate smaller more attractive options.

Last time I checked Canada was a place where we are all entitled to compete in a free and open market. In Canada we have a government agency "overseeing" this type of thing. The Competition Bureau has a mandate to help small companies in this situation. Here is a quote from their Website:

"ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy"

When you look through the exhibitor list from the home show you will see many competing businesses throughout the list. I did a quick summary and came up with a list of some of the categories:

Landscaping x 13 Companies
Heating and Cooling x 10 Companies
Windows and Doors x 9 Companies
Roofing x 8 Companies
Financial Services x 8 Companies
Painters x 6 Companies
Flooring x 5 Companies
Fences and Decks x 4 Companies
Water Services x 4 Companies

If there was only one company from each of these services allowed in the show would they even have a show? How can one company dictate if their competitors are allowed to attend when clearly the event is based upon allowing fair and open competition giving greater choice to the consumer creating the draw? We had a videographer at the show to interview other attendees and I thought we would have a walk through to give you our prospective of the move.

The choice of which service you should choose should not be decided by the company with the biggest bank account but by you the consumer, after all it is the Canadian way. If you want to lodge a complaint against Remax to help preserve your rights as a consumer you can do so here. I would also welcome your comments here on the blog.

Hope to see you next year @ the Aud!

M

GST Has Risen Again

2009-03-30T06:00:00.006-04:00

This trooper has a new name...Harmonized Sales Tax.

The Ontario Budget released last week announced the plan for a harmonized sales tax like our friends in Atlantic Canada. For those of you buying homes after June 1st 2010 this new tax will not be charged on resale homes. There are some increases on tax charged on new homes, dependent on the value.

Where this tax increase will hit the everyday consumers is when purchasing a service related items. Service oriented businesses like lawyers, hair dressers, car repairs, accountants, real estate agents. That's right real estate commissions are subject to GST today and as of June 2010 taxes will increase to 13% on all commissions charged by a real estate agent.

Here is how deep this will effect you, the home seller.

Today: $300,000 x 5% commission = $15,000 + 5% GST = $15,750

June 2010: $300,000 x 5% commission = $15,000 + 13% HST = $16,950

Of course there is a way to avoid this HUGE increase of $1,200 in costs to you. As a matter of fact you can REDUCE it by thousands. Sell your home privately and you only have to pay HST on the fee of your marketing. Let's look at the same example, but as a private sale.

Today: $300,000 x 0% commission = $0 + $1,500* + 5% GST = $1,575 ($14,175 Savings)

June 2010: $300,000 x 0% commission = $0 + $1,500* + 13% HST = $1,695 ($15,255 Savings)
*PropertyGuys.com Elite Package

So as it turns out this new HST thing gives you even MORE savings selling privately. What a Trooper.

M

5 Equals 20 or "Real Estate Math"

2009-03-27T06:00:00.004-04:00

Sounds complicated but it's not.

Your family is growing and it is time to move out of your starter home and into something with room to breath. What is the first thing you do? Call your parents of course. Always a great place to start.

After the obligatory apologies for not calling more and assurances that you are eating enough vegetables you get on to the business at hand. This is your first house, you have never sold one before and you are looking for some advice. Your parents are from the old school and say that they will call Joe the realtor because he has sold 3 houses for them. Joe is such a good guy he will only charge you 5%.

Wrong, he is going to charge 5% of the transaction but he is charging YOU 20% of your equity!

Here is the breakdown.

You paid $190,000 for your townhouse 3 years ago and put down the minimum deposit of 5% leaving you a mortgage of $180,500 (not including any CMHC fees). Based on an interest rate of 5% (you didn't have the advantage of today's low rates) you would have $168,672.50 left on that mortgage. For ease of calculation we will call it $168,000.

Your house has increased in value since you purchased it and is now worth approximately $225,000, congratulations. If you were to sell this home with Joe he would charge you 5% or $11,250 (I won't even get into the fact that you would have to pay GST on this).

$225,000 (Value) - $168,000 (Mortgage) = $57,000 (Equity)

The bank owns such a large piece of your home (75%) you really only have $57,000 in equity built up between your appreciation and the amount of principle you paid off on the loan. If you take the $11,250 as a percentage of what you actually own of the house, Joe is taking a total of 19.7% of your equity. Everything that you have worked for over the last 3 years and he is coming in and taking 1/5th, that's fair, right?

$11,250 (5% Commission) / $57,000 (Equity) = 19.7%

For those that need a refresher on how to calculate using "New Math"...

M

Seeing The Future of Joe Schmo

2009-03-25T06:00:00.005-04:00

He is reading the mind of the North American culture.

He being Seth Godin, author of best sellers like Purple Cow, Permission Marketing and most recently Tribes.

I recently read a tweet (post on Twitter) from @ebloch about one of Seth's blog posts talking about the decline of agents in today's world. Travel agents, insurance agents, real estate agents. Anyone that is a middleman in a transaction is in danger of being replaced by a cheaper, faster, more efficient way. He goes as far as to say that it may even be a consumer with a computer.

This is nothing new to me, I see it every day.

I am going to draw your attention to a quote from the blog.

"Think about how anonymous the typical real estate broker is. He will sell almost any house or represent almost any buyer. When selling a house, he has a fiduciary responsibility to represent that house to the best of his ability. Just like every other broker. The great real estate brokers do far more than this."

This quote describes perfectly the term "Joe Schmo Agent" from PropertyGuys.com radio commercials and marketing materials. Does an ordinary agent deserve the extraordinary fee charged in the transaction? What have they done in order to justify their fee?

It seems everywhere we go these days we run into an agent. I'll bet at least one person you know from High School is an agent today. Why do we have so many Joe Schmo agents out there? I'll let Seth explain it...

With nothing stopping people from becoming agents in the Tiger Woods Market, with no "Dip", we have become overrun by the unexceptional.

M

The Tiger Woods Years

2009-03-23T06:00:00.001-04:00

I swear I didn't write that on the photo.

Last week a "Real Estate Investment Specialist" by the name of Don Campbell was on The Hour (click to watch). Strombo's laid back interview style allowed for a light easy going interview that talked about all sorts of things.

Here are some of the snipits that I took from the interview.

The market is adjusting and people that are expecting the same outcome as the last few years are nuts. If you were a player over the last 3 years you did well, anyone could have done it. It was the "Tiger Woods Years". There was no failing. Things are down now and people are still expecting the high return. There is a home in Cambridge that I was watching. The owners bought a little over a year ago and now have it on the market for almost $100,000 more than they paid for it. They are now on their 2nd agent (over 3 months listed) and still way over priced for today's market.
Now is a good time to buy especially in an area that is growing. We are lucky enough to be one of the areas that he keyed in on along with Barrie/Orillia, Hamilton, Edmonton and Calgary. As an aside if you are a first time home buyer it makes even more sense with programs available for you.
If you are looking at investing in property you don't have to buy where you live. Look at the hot spots, where your investment will grow the most and focus there. He really thought Hamilton was an area poised for growth, looking at access to commuter transit and it's proximity to GTA and KWC.
If you want to live in Toronto because you like the "city life" look at renting. You will not be "house poor" and still be able to save up for a deposit when/if you are looking at investing in a property down the road.

What does this mean for us here in Waterloo Wellington? Well if you are looking at selling a home you can expect to be at an advantage over any of your friends in the GTA. Sure their house may be worth more than yours but you won't lose as much as they will. If you are looking at buying for a principle residence or an investment property, go for it. You will be fine as long as you are thinking 5-7 years down the road.

You may not pull off a shot like this but he is the best...

M

Your Dream Vacation Is One Move Away

2009-03-20T06:59:00.003-04:00

At least you won't get burnt.

How much will a real estate agent give back to earn your business? Well that depends on how much they stand to pry out of your wallet.

Aeroplan has a program entitled "Aeromove" that earns you points when selling or buying a home with an agent enrolled in their program. They recently announced a promotion that could get you to Hawaii when you buy and sell a home with one of their "referred agents". I found a flight to Hawaii departing on April 5th and returning April 12th on Air Canada. It worked out to be $1,457.28 per person from Pearson to Maui. Sure is nice of the agent to send you on vacation for using their service.

Based on a 5% commission let's see just how they can afford to send you away to Hawaii.

Selling your house ($300,000).
Commission paid by you $15,000
Less paid to buyer's agent $7,500 (based on 50-50 split)
Less paid to broker $3,000 (based on a 60-40 split)
Less advertising $1,000 (estimated @ $100 per week)
Net Commission $3,500

Buying your house ($300,000). (Don't ask why you would buy a house of the same value, it is the example Aeroplan uses)
Commission paid by seller $15,000
Paid to your buyer's agent $7,500 (based on 50-50 split)
Less paid to broker $3,000 (based on a 60-40 split)
Net Commission $4,500

Total Net Commissions $8,000

Less the $1,500 for your one return flight it leaves a mere $6,500 for your agent to cover off any other sundry costs they may have like assistants, desk fees or office space.

Poor buggers, not sure how they survive.

Now let's look at the same scenario for you selling privately.

Selling your own home ($300,000)
Commission not paid to an agent $15,000
Marketing costs $1,500 (Elite package with PropertyGuys.com)

Net Commission paid to you $13,500

Flight, Hotel, Rental Car and $200 per day for a week in Hawaii (Family of 4) $11,340

That still leaves you $2,160 to spend on upgrading the lights (or bathroom fixtures or a new washer and dryer) in your new house.

The best part is if the house you bought was listed privately, you can go on vacation with the new friends you made because they saved the same amount of money.

If Hawaii doesn't float your boat...

M

Pigs Get Fat, Hogs Get Slaughtered

2009-03-16T10:00:00.000-04:00

An old saying that talks to the greed of the world.

Clay Rideout is a new PropertyGuys.com franchisee in Saint John NB. Like any "newbie" he was nervous yet excited about his upcoming home show.

As a new business he didn't have the money nor the justification to spend thousands of dollars on a trade show booth. What he did have was a compelling story and an idea to help people understand the message with clarity.

Here is a picture of Clay at the Atlantic National Home Show in Saint John NB.

"(I was) at the home show this weekend. Lots of interest in the bike, even more when they found out what it represented. Here was my schpeel: Traditional Real Estate commissions are something in the range of 5-6% of the price of the home. And when the deal finally closes, we are so happy to have a successful sale, that we are usually unaware of what 10 or 12 thousand dollars actually looks like. We just sign off those funds at the lawyer's office. Piece of paper, stroke of the pen. But this represents that commission. This motorcycle represents the (conservative) 5% commission on a $199000 home. Does that make sense?"

This hits home here in Waterloo Wellington more than you know. I had a good friend that had sold his home just prior to me getting into PropertyGuys.com. He was newly married and was selling the old bachelor pad and getting a new (much bigger) place with his new bride. He used the same real estate agent that he had purchased his "man cave" with years before. He ended up selling for around the $250,000 range and purchased in the $400,000 range. Now his realtor was such a nice guy he gave him a break on the commissions of the sale because he was also buying. After the move my friend was out front of his new place doing some yard work when a guy on a brand new bike rolled into the driveway. The helmet came off to reveal the face of a smiling real estate agent. "Just thought I would pop by and congratulate you on the new home". It was not lost on my friend that this new bike was paid for solely from his move.

There goes your equity down the road. Too bad you were not the one driving...

M

Don't Feel Like An Ass

2009-03-13T21:57:00.008-04:00

It's a valid question.

Before I give you an answer you need to answer a question for me. Are you buying for the first time or are you moving on up?

For our primordial buyers
(I just couldn't resist the star burst. Who doesn't love a good star burst?)

I am hearing time and time again that first time home buyers (FTHB) are going to be what kick starts the stall in the housing market. It's kinda like the food chain. FTHB buy the starter home which allows the young family to move up to the single family home which allows the growing family to move up to a bigger home that gives them room to breath and allows the empty nesters to move down into a condo.

So is it a good time for the FTHB to buy? Given that mortgage rates are at their lowest point in years, government programs are increasing, house prices are dropping it makes more sense now than ever before.

You're an old pro
Are you ready for an upgrade? Can you afford to if your house value has dropped? Not only can you afford it but you can profit off of it!

You must remember that you are buying and selling in the same market and that it all fluctuates together. The time you would loose is when you are either down grading to a smaller home or if you are not repurchasing at all.

Take advantage of this buyers market because any equity you have sure as heck can't buy you love.

M

So How Far To The Airport?

2009-03-10T20:00:00.000-04:00

I just love seeing all the losers that live by the airport when I land in a plane. Do you think any of them used a real estate agent?

If you remember my Fly In A Think Tank post from last year you will recall the new realtor ads that were being proposed.

They have now started to air on TVs across Canada telling us all just how useless we are without real estate agents. So far I have only seen the one with the guy that bought the house in the flight path of the airport. Last time I checked airports were pretty hard to hide. I mean look at any map, you will easily see your proximity to an airport....or a school or a park or a 400 series highway. Heck take a drive around the neighbourhood with your eyes open and I am sure you will see these things.

I think I know where the they got there idea from...

I like to think this is a realtor in some foreign land helping his client avoid making the decision he could not have made on his own. Thank goodness he was there to point out the airport is "hidden" behind those bushes!!

Their new website lists all the wonderful things real estate agents can help you with. They do it with a virtual board game asking you questions along the way. Concept is neat but to have multiple choices like "A: $322,000 should ensure a quick sale.", "B: $503,000 means a hefty profit." or "C: Ask a realtor." insults your intelligence. Only a realtor would know that the difference of $181,000 is ridiculous?

On the question about marketing your home if you actually choose "Ask a realtor" you get great advice like "there is a list of 25 things a realtor will do to market your home. Things like virtual tours, other media sources and of course top of the list putting it on the MLS". Last time I checked on PropertyGuys.com there were virtual tours, various print media options and national exposure with thousands of properties listed from St John's NFLD to Vancouver Island BC not to mention hundreds right here in Waterloo Region and Wellington County.

Getting great advice when looking to buy or sell is a great idea. Just make sure you ask someone that doesn't think you are stupid.

M

Holy Crap I Think We Just Bought A House

2009-03-09T23:58:00.005-04:00

Straight jacket seems fitting, no?

Like molten lava engulfs the country side we are swept under the warmth of the sun. With aimless abandon we drive through the streets just enjoying the happy brightness. The darkness of winter oozes from our souls and our skin is once again kissed by the glory that is the sun.

We Canadians appreciate our summers more than most. The contrast allows for it. It also makes us do weird things. Crazy things like buy houses. That Sunday drive so epically described above was mine some 9 years ago. The good weather had taken us, to of all places, a sales office for a builder. As young renters we had no immediate plans for a house. "Can't hurt to look and see what's out there"

When we signed the papers we were expecting full well to be denied from the bank so no big deal. Two young newlyweds with not much in the way of savings, what were the chances. "We were approved???"

Stats show that as we work our way from winter through spring and into the summer more people buy homes. It is a cyclical sales pattern that can not be denied and is less to do with the market and more to do with the psyche of the Canadian home buyer. Knowing what the property looks like when you are spending time outdoors helps but so does the fact that it is no longer dark when you leave for work and when you get home!

It does not take a pitch from a pushy agent to buy a house, just a buyer out for a Sunday drive with not much more than a dream.

The point is if you are looking at selling your home and wait until May you are missing out on the people that are out and about at the first eruption of sunlight. We have already seen it starting. The warm spell in February that saw temps in the high teens had door bells ringing and emails chiming. People were out.

Knowing someone is at home riffling through their files for their tax assessment so they can buy your house is a neat feeling. Almost as neat as rifling through your files for your tax assessment so you can buy THAT house.

M

February Real Estate Statistics

2009-03-07T13:23:00.004-05:00

Still not pretty.

Well according to the numbers in KW, Cambridge and Guelph things are continuing as expected. Sales are down almost 30% and average house prices are still below last year, albeit not by a lot.

Real estate boards are sticking to this ridiculous notion that increasing sales versus December and January is something to boast about. Here is the quote from the KWREB president.

Last month's sales represented a healthy gain over the activity in December and January, the boards said.

"It's a small victory," Karen Shartun, president of the Kitchener-Waterloo board, said in a news release. "But after a steady diet of bad news concerning our economy that we've had in the past couple of months, we'll take it."

At least this time they only claimed it as a "small victory".

Now I know you are wondering if all this lipstick is doing any good? Is the pig looking any better? Is it actually kissable? Someone seems to think so...

I expect the spring market to pick up, as is the cyclical nature of our market. Based upon what we have seen over the last 4-5 months I would expect about a 25% drop in solds over last year. So for March that would put KW at about 470 solds, Guelph at about 210 and Cambridge at about 175. Let's see how close my predictions are.

M

SNAP II

2009-03-05T06:00:00.000-05:00

Pretty snazzy camera. And they thought Justin brought sexy back.

Nothing like a fancy camera with rhinestones to impress the clients! Heck it must be better than using the Blackberry!

We often get into a debate at PropertyGuys.com about using the right tools for the job, specifically for photography. What is the best camera, DSLR or point and shoot? This debate has raged long and hard for one reason. Everyone has a DSLR except me. I would stop arguing because the DSLR photos our Private Sale Consultants take are amazing, but I have a secret weapon. A point and shoot with a wide angle lens.

That's the biggest issue with most interior shots of a home. Lack of W I D E angle lenses. There is no substitute for this. After that things like white balance, lighting and sharpness of the photos are needed to properly show your home. It's what you would want to see in a home you are looking to buy, why should you provide anything less?

I was sent this video from my colleague Dave. He is a bit of a camera junky and thought he would pass this on.

The video helps point out the importance of a good quality photo. It also points out why so many BAD photos are on agent sites. I was not exaggerating about the Blackberry photos. I have seen it. The agent standing across the street from the home with RIM's darling in their hand. Ensure you have high quality, wide angle shots taken of your home. If you are spending $15,000 to sell your home the least they could do is use it to buy a proper camera like we do.

M