The Holdover Clause; Does It Matter To The Buyer?

There was a recent CBC news story about a gentlemen who bought a house and was sued by his former agent for commissions "owed". The challenge here is that when you are selling your home a hold over clause usually negates when you sign a new listing agreement with an agent. When purchasing and signing a Buyers Representation Agreement (BRA) the holdover clause is not replaced with a new contract.

The concern here shouldn't be the holdover clause, it should be the BRA in the first place. Why should an agent get the exclusivity to my purchasing if they are not doing their job. In most cases, like the one in the CBC story, if the agent is enforcing a BRA holdover, it's likely they were not living up to the expectations of the client. Simply put, they didn't do the job they were contracted to do. I would think that, as a professional, I should work at earning my clients trust and respect to keep them loyal to me, not be a smooth talking salesman and sign them to a contract locking them up for upwards of 6 months.

The worst part of this story, IMHO, is that the governing body (RECO) says the buyer is at fault. This is what happens when you have self policed industries working under what could be considered a monopoly.

What are your thoughts? How would you feel if someone didn't do their job and you got told you had to pay $12,800 to them because they made you sign a bunch of papers as a "trusted professional"?


M

Letting The Cat Out Of The Bag

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

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

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


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

Trust In Your Mortgage Agent

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

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

FSCO's legislative mandate is to provide regulatory services that protect the public interest and enhance public confidence in the sectors it regulates.

FSCO regulates the insurance sector; pension plans; loan and trust companies; credit unions and caisses populaires; the mortgage brokering sector; co-operative corporations in Ontario; and service providers who invoice auto insurers for statutory accident benefits claims. FSCO is accountable to the Minister of Finance.

You see, we in the mortgage brokering business have a higher power to answer to. We don't just get to pick a mortgage to sell you based on what we get paid. We have a dual responsibility to both our clients and the lenders. To the clients we have to prove that what we offered them was in fact, the right product for them. If we have not done our due diligence we can be held accountable for it. We are also responsible to the lender to ensure that the person applying for the mortgage is who they say they are and that the information they provide is accurate. We are the first step in stopping mortgage fraud.

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

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

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

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

Mortgage Agent Lic# M14001148

PropertyGuys.com Mortgage

Brokerage # 12466

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What Does It Take To Sell A House?

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

DIY Market

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

DIFM Market

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

Two Market Solution

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

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

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

M

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

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

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

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

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

• First, don't sign a Buyer's Representation Agreement unless it is specific to A house and for a short period of time (7 days). 
• Second, discuss commissions up front with your agent.
•  How are they getting paid? 
• Will the agent drop their commission if they can't negotiate a price that is acceptable to buyer and seller? 
• How much commission are you willing to pay?
• If you end up buying an agent listed house will they pay you back a portion of the commissions? 
• Third, know that if you are using an agent to buy a house, it is not free. You are paying more for the house because your agent gets paid through the purchase.

At the end of the day, you the home buyer decide if you want to use an agent. We coach PropertyGuys.com clients on how to interact with your agent and show them that if they maintain their bottom line (or more) and you are satisfied paying more because you brought an extra mouth to feed, why not entertain the offer?

M

Real Estate Commissions; A Black Hole For Your Money?

Where is your money going when you pay commissions?

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

So where does all that money go? First we need to look at what it costs to use an agent.

Selling price of average house: $400,000
Standard 5% commission: $20,000
HST on the commission: $2,600
Total cost to use a real estate agent: $22,600

OK so the obvious first thing is you are paying 13% HST on top of the real estate commissions. That $2,600 right off the top. That alone would cover your costs to sell your home without an agent. So where does the rest of the money go?

The Buyer's Agent

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

The Broker's Cut

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

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

Desk Fees, Admin Costs, Signage, Advertising, Lexus

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

Conclusion

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

How else could you spend that money? 

M

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

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

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

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

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

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



M

What Do You Get For Your Real Estate Commissions?

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

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

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

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



M

Why A Home Doesn't Sell

The reason a house won't sell is broken down into 3 keys, Product, Price and Exposure.

There is no doubt that the three keys to selling a home are Product, Price and Exposure. If any of these three are missing you will run into problems. At PropertyGuys.com we focus our efforts on these keys in order to deliver what our clients are really buying from us, a SOLD Sign. The one that always rear's it's ugly head as we get going is price.

In a blog I read recently, the author points to the reasons houses don't sell are based on pricing it wrong from the start and not having enough exposure. He points out that in many cases where real estate agents are involved in the pricing that the cause is either inexperience or something called "Buying A Listing". This over pricing a home in order to get a listing is, in my opinion, a fraudulent act yet they are never really held accountable.

When a private seller overprices a home it is usually ego and bravado or sometimes just straight finances that causes over pricing the home. Who doesn't think their house is nicer then their neighbours? No amount of exposure will compensate for grossly overpricing a home. This is why it is so important to have an independent, third party give you pricing advice for your home. The PropertyGuys.com Price Pro is a summary from a local professional appraiser.

In the end it is always the home owner's decision as to what to price it. If in 6 weeks you are not getting the traffic you want through the house you can usually point to Price because with PropertyGuys.com we will have already addressed Product and Exposure.

PropertyGuys.com - More Than Just a Website

Some website just don't translate into real life.

At PropertyGuys.com, we know that selling your home is not something that should be taken lightly and just left to some online platform or website. Over the last 15 years we have worked with tens of thousands of home sellers. Experience like that has helped us figure a thing or two out. We know people want more than a website to sell their house, why else would they consider spending $20,000+ to sell a cookie cutter home?

Being locally owned and operated, having the business owner sitting at your kitchen table to walk you through the entire process is one of our market advantages. We also rely on industry professionals like local appraisers as well as lawyers to offer you what you need when you need it. In addition we have a call answer service that books appointments for you allowing you to never miss a buyer.

When it comes to marketing we look at traditional options like the local newspaper and Just Listed postcards mailed out in your neighbourhood as well as some non traditional marketing like sponsored Facebook posts targeting buyers in your wanted demographic. For those that want to reach the MLS audience we even have real estate brokers that will get you on Realtor.ca for some added exposure.

We are more than just PropertyGuys.com. We are more than a website. We are part of your community, living and working along with you, effecting our local economy by keeping your money in your pocket, where it belongs.

M

The Real Estate Sign - Lore, Myth, and Legend

Does a for sale sign on your lawn help you sell your house? Of course it does!

The for sale sign is responsible for a few things in the process. Let's first look at what it's use was in the past. In the dark ages (pre-internet) if you wanted to sell your house, the for sale sign was very important. It was one of the only ways to advertise your intention to sell your house. The only other ways were classified ads, bulletin boards, and the well connected real estate agent.

In today's age of the information super highway (do we still use that term?) your online listing is your for sale sign screaming to people zipping by at the speed of a Facebook news feed. But does the old school for sale sign, the one in real life, on your lawn, still offer you value?

To answer that question you have to go around the complete circle. What is the purpose of the sign and what information does it provide to it's intended audience? The main purpose of the sign has not changed. It is to tell people your house is for sale and how to get more info. An agent`s sign usually provides their phone number because they want the buyer. Maybe for your house or for another if your's isn't exactly what they are looking for.

On the PropertyGuys.com sign we have our ContactPro phone number so questions can get answered and appointments can be booked. We also have your Sign ID# to direct people to your online listing. This is where the virtual viewing of your home happens. It all starts with the buyer falling in love with your home and this can all start with an innocent drive through your neighbourhood and seeing that 5 foot tall lollipop sign on your lawn.

Don't underestimate your sign, it says you are selling and should connect people with your house, not someone looking to sell any house!

M

How Do You Minimize Economic Impact When Selling Your House

I assume we have all heard the news from Blackberry by now. More job cuts, pending sale to a private equity firm, another failed software launch. Man that was a week!

I am sure there are plenty of people wondering what will happen, how will this impact the local economy, the local housing market. If even 1/2 of the job losses are here in Waterloo Region it will have to effect things, right?

It is no secret that I am not a fan of the traditional real estate agent model. Taking 5% of someone's equity for the work that needs to be done is darn near criminal in my opinion. It is sometimes justified by "market increases" and excuses like "well you are still ahead by $20,000". What happens when you loose your job, or worse yet you AND your spouse loose your jobs? That $15,000-$20,000 in real estate commissions could be the difference between pulling through and bankruptcy.

Selling the PropertyGuys.com way allows you options, at a time when you may not have too many. You have the option of selling at market value and pocketing the commission for yourself. The other option is if you are in a pinch and need to change things fast you have the ability to lower your price by that commission amount and have a competitive advantage over your agent selling neighbours. Most of our sellers land somewhere in the middle between these two options, with a win for both buyer and seller.

It would be a shame to see any negative impact from Blackberry bolster an already over inflated industry.  Look around at all the square signs in your community and know that $20,000 is more than just hot air, but then again, those balloons don't stay afloat by themselves.

The Biggest Issue Selling Your Home Without a Listing Agent

Have a look in the mirror!

I see people get frustrated when selling their home privately. They blame anything and everything but themselves. They think it's that they are not listed with an agent, that agents are not showing their home because they didn't list with an agent or that they are lacking exposure (even if they are on Realtor.ca) or some other imaginary problem they have dreamed up in their mind.

With PropertyGuys.com they have access to all the information they need. They see how much traffic they are getting on their listing through their listing analytics. A standard conversation with this type of seller goes something like this:

Seller "I think I need to list with an agent."

Me "Well looking at your listing you have had 1,027 people look at your listing. How many showings have you done?"

Seller "That's the thing, no one is calling. *insert concern like agents not showing it here*."

Me "Our experience tells us that if people are choosing not to call you it is usually related to pricing." 

Seller "No we know we are priced right."

Then 3 weeks later they list with an agent and lower their price by $25,000.

This is why our new Pro Approach is designed to bring in the professionals needed to get your home sold from the beginning. From Pricing to Legal to SOLD!

M

Does Your House For Sale Stand Out?

I had a client ask me today if they were better off to use an interior photo as their lead photo so they stand out from the crowd.

You can look at it 2 ways:

1 - You standout and are different than how everyone else looks

2 - You standout and are different than how everyone else looks

Depending on your stance those are 2 very different statements. 

Yes it's important for your house to standout from the other houses for sale. You need to be better than your competition. The trick is to know that this is not done by different or cute "marketing tricks".  This is done by bringing in a stager and making your home the best it can be, pricing it where the market says it should be; then taking AMAZING pictures and getting them on to a platform where buyers are searching.

Let the purple cow be the quality, not some gimmick.

Can I List My House On The MLS?

First let's be clear; the MLS, or Multiple Listing Service, is not open.  It is wholly owned and operated by the Canadian Real Estate Association in Canada.  The changes to allow Private Sellers "access" to MLS was not what most people think it was.  Yes you can do what is called a "Mere Posting", but it needs to be done by a licensed Realtor, as they are the only ones who can post houses for sale on the MLS.

Where most people are confused is that it is not the MLS they are looking to have their house appear on, it is Realtor.ca, the public facing site where the Multiple Listing Service properties are showcased for you to search.  Go ahead, go to your internet browser and go to MLS.ca and look what happens.  There is no MLS.ca, it ports you over to Realtor.ca.

Each local board has their own listing service and they, inturn, upload those listings onto Realtor.ca.  You will note that if you go onto any of the local Realtor association websites ( KW, Guelph, Cambridge) you can't just look at their listings.  Any searches of listings they point you to Realtor.ca

If a realtor comes a knocking on your door, or calls you on the phone, to tell you you have to be on the local board, tell them to take a hike.  I am sure they will say something like "If you are not on the local board then local agents won't find you."  To which I would respond "Are you a local agent?"

Tied Selling in Real Estate

• 

  Are your hands being tied as a house buyer?

  
  

  So you think you have found the perfect house. From what you have seen online it is the "forever house" the two of you have always talked about.  After contacting the real estate agent that has it listed and going to see it you know it's right.  You sit down to crunch some serious numbers. It will be tight over the next few years but doable.  After running all the numbers and budgeting your costs to sell, including $1,500 for your PropertyGuys.com listing you decide that you will make the leap.  
  
  You contact the agent to tell them your intentions to put in an offer conditional upon sale of your home.  This is when the house of cards comes tumbling down.  You are told that not only do you have to list the home with an agent but that it also has to be within this agent`s office.

  
  

  As you go through a range of emotions from anger to panic to fear you wonder is this even legal?
  Here is what the Competition Act has to say about Tied Selling:

  “tied selling” means(a) any practice whereby a supplier of a product, as a condition of supplying the product (the "tying" product) to a customer, requires that customer to(i) acquire any other product from the supplier or the supplier’s nominee...

   Why would the competition act be the place where this is addressed? Great question!  You see when someone ties you to a specific product what they are in turn doing is limiting your options in the market and forcing you to pay their price.  This snuffs out the opportunity for another company to offer you a newer or cheaper or more efficient or ground breaking product or service.  The act of tied selling costs you, the buyer.
  
  If you come across this situation as you are searching for houses in the market make sure that the real estate agent you are dealing with knows that they cannot force this type of condition on you and that you would be interested in knowing why this type of Tied Selling is even in the agreement.  No doubt you will hear some mumbo jumbo about how they need to know you are serious about selling your home and that you have to do everything in your power to sell it blah blah blah.
  
  The quick and easy response to this is to plainly say that by adding $15,000 to your selling price works against not only his client's best interest but also the laws of economics.
  
  Have a story where you were pushed into this type of situation?  Please, share some details with us.
  
  M

Real Estate and the Death of Agency

Reading Seth Godin's blog entitled Industrialism and the Death of Agency today I could not help but replace the word "Industrial" with "Real Estate".

Go ahead try it.

M

How Buyers Search for Houses Online

How are buyers finding homes on the internet?

The results of studies vary, but most conclude it is 85%-90% of home buyers search online for their next house.  In today's internet hungry, immediate gratification society this is really no surprise. I mean if you are reading this blog it's because you use the web for information, so where else would you search for a home than the comfort of your home, in your jammie pants, with a glass of shiraz.

That is not what I wanted to write about.  This information is like the 1 in front of an algebraic x, it is understood (shout out to Dr Pamboukian my high school math teacher). What I am more interested in explaining is what they do when they get to the site.

The main sources of online inventory have search tools.  Sites like PropertyGuys.com and Realtor.ca both offer the ability to narrow your search.  Typically you will type in the city you are looking for and more than likely narrow that down by price range.  No doubt we all want to see the mansions and multi-million dollar properties but the goal when you are serious is to narrow the search and find homes you can afford.

For the home seller this is important.  This is something you need to pay attention to because if a buyer is limiting their search you need to make sure you are maximizing your ability to be found.

Our society seems fascinated with the "900" factor.  You know, "Why list your home for $300,000 when you can list it for $299,900?"  Do you think today's buyer really sees that $100 difference as a savings on a $300,000 purchase?  It equates to 1/3 of a tenth of a percent.  I am going to show you how that $100 will work FOR you.

You will notice on search pages that the areas in which you set your high and low price criteria are drop down menus.  They usually are $25K increments to $400,000 and then they go in $50K increments from there.  So if someone is looking for a house between $275,000 and $300,000 your $299,900 shows up, great! Now let's say the next buyer is looking between $300,000 and $325,000.  Do you think this would be someone that should see your home?  What about if you priced your home at $302,000 hoping to settle for just under $300,000 once negotiations finished.  The person searching $275,000 to $300,000 doesn't find you, and they probably should!

My point is that if you look at the buyer search tools you are better situated to have your house found.  If you are within a few thousand of one of the search criteria you are best to round to the number so you can straddle both sides of the search bracket.  $300,000 will get you way more traffic on your listing than either $299,900 or $302,000.

What other things do you think will get more traffic to your listing?

M

What Does It Mean For a Home Seller If House Prices Fall?

How do you handle a drop in the market as a seller?

If we know anything about the stock market it is there is one key fundamental and two key ways to achieve it.

Fundamental - Buy low. Sell high. 

Achievement method one - Look for quick short term gains.  Under valued stock and/or companies that are on the verge of something new, big or wonderful. (Usually individual stocks) 

Achievement method two - Buy something stable and dependable now and put it away and know that in 25 years it will be worth more than it is today. (Usually mutual funds or bonds)

The housing market really isn't that different.  If you buy in a hot market you are poised to get quick returns. For the most part the big gain in housing happens over time.  If you purchased just before the market crashed in the early 90's and tried to sell after the crash, you would have lost thousands. That same house would show a total value increase today worth much more than any loss you would have felt.  Long term smooths out the ups and downs of the market with a general overall increase.

With fear starting to penetrate into the media about the "cooling of the market" people are starting to wonder what will happen. How will people deal with the news that their house they just purchased 2 years ago is worth 10 or 15 percent less then what they bought it for?  Is that even going to happen?

The good news for us here in the Kitchener, Waterloo, Cambridge and Guelph is that predictions for 2013 are to be steady through the year.  The bad news is if there is a correction in the major markets it could send a spiral through the media that will affect the market here.

As someone looking to sell a home in a market that is flat at best with potential for decline the most important factor in selling is price.  Anyone looking to buy will also be aware of the market conditions and they will be looking for homes that are more aggressively priced.  If you purchased a few years ago for $300,000 and your home has only seen a moderate increase and market value is $310,000 a $15,000+ real estate commission puts you at a loss. A $1,500 marketing package puts you at a gain plus gives you the advantage of being better priced then your competition using a real estate agent because in order to break even they end up over pricing at $320,000.

Typically in a volatile market it is best to hold on for the long term increase, specially with the low interest rates.  If you have to sell though, you really need to look at the dollars and sense (yes I meant sense and not cents).

M

Should I Sell My House Before The Holidays?

Do you want to list your house for sale when this is happening?

So many people think they are best to wait until the new year to list their home for sale, that during the month of December people don't buy houses.  Quite the opposite is true.  Houses sell all year long, regardless of what is going on with the social calendar.

With so many people thinking about waiting until the new year to list their home for sale you can get a jump on the competition by listing now.  All the people that are either seriously or casually looking for houses now will be looking at your house.  If you have it priced right they may make the decision to jump on it before someone else does.  Just think how good the holidays would be with all that commission money tucked safely in your pocket away from the grinchesque agents.

No one can guarantee when your house will sell. The one thing I can guarantee you is if you don't let buyers know your house is for sale you won't find any buyers, regardless of the time of year.

M