The Big 0%

Hurry up it is today only!!!

So you listed your home privately. Congratulations, it was probably a big step for you.

If you are like most of the people we see you have not ventured into the arena of Private Sale before. You had looked around the internet, checked out a few different sites, weighed the merits of private vs. MLS, then measured the merits of a few different companies and then finally decided on the one that offered you the biggest bang for your buck. Maybe it was the one with the most experience or the most listings locally. Either way you made your choice based on VALUE.

Your home was then listed on the internet with professional photos, virtual tours, plenty of details. It makes MLS pale in comparison (trust me I've seen some bad photos and virtual tours on MLS).

You are getting some phone calls, doing some showings, hosting some open houses. All things you were expecting to do. But then the craziest call comes in. Some agent calls you and says he wants to list your home for free. Yeah right, free. Anything you had ever heard about agents was all about money, money, money. Why the heck would an agent list your home for free?

If an agent is going to list your home for free there is going to be something in it for him. Here are some of the common situations our clients have run into.

It all comes clear when she states that in order to do this you have to do your new mortgage with them. They are also mortgage brokers. That they are going to get paid from a lender (bank) and that you will only be required to pay the 2.5% commission for the buyer's agent. Hmm, so who exactly is this agent working for?

Another instance we have seen is where an agent comes in and says he will list your home on MLS for a flat fee of $695 (+ or - $100). You can continue to do sell privately. Issue is that the agent's contact info is what goes on MLS so any interested buyers are going to call him, not you. He then shows up with an interested buyer and says he needs 2.5% to facilitate the deal. Hmm, so he gets paid up front and then still collects a commission.

What about this one. "I will list your house on MLS I just want to do Open Houses so I can get some new clients". OK so his whole objective of YOUR open house it not to sell your house but to get some listings that he can get paid on. Seems to me that if an agent is this desperate to get in your door they may not be too good at what they do. There are plenty of successful agents that have built a reputation of service over the years. Do you think they did it by spending every Saturday and Sunday in a non-paying client's home trying to get other people locked into contracts?

Don't be fooled by smoke and mirrors. Best case scenario for you is that you still end up spending 2.5% of your $300,000 house or $7,500 for something you can easily do yourself. I am not saying that you won't have to work a little for your $7,500. We all expect to work for our money, don't we?

Let's figure it out by the hour. At $100 and hour this works out to 75 hours of work. While you are slaving away for the man at your job for just under 2 weeks (hopefully you are making $100 an hour) you could have been selling your home. At a more reasonable $20 an hour you can afford to put 375 hours into the sale of your home. Based on a 40 hour work week that works out to just over 9 full work weeks. Would you expect that an agent is worth $20 an hour (just over $40,000 a year)? Would you think that you will get 9 - 40 hour work weeks for the sale of your home? And that is only if you get one of these "deals". Double it if they are your traditional 5% listings.

Here is a broker in NYC that is looking at a different value model for his agency


M

What is Real Estate?

When some one says to you "I'm in Real Estate" what exactly do they mean?

I own a house. Am I not in Real Estate?

Whether you live in Cambridge, Guelph, Kitchener or Waterloo you are lucky enough to be living in an area that is predicted to to be sitting on top of the worst of this pending storm. So your mutual funds are down 20%, your stocks in the tech and auto sector are not worth too much these days, but that little nest egg you have been slowly building on over the last 10-15-25 years is now prime. The market is at an all time high and you are ready to cash in and downsize. Are you not in Real Estate?

What about you, the guy that owns a few properties around the University. You're in Real Estate, right? I mean you have actually been earning a profit over the years. Sure there has been the odd kegger that got out of hand and some set backs in the "maintenance" of the property but they are all paid off and awaiting liquidation so you can buy that ever so cheap Florida condo on the beach. Sounds like Real Estate to me.

You're a lawyer. You have many clients that have relied upon your expertise in their transaction to ensure everything went just right. Every once in a while it didn't go according to Hoyle, but you got it straightened out, as always. No doubt, that's Real Estate!

I can go on. Stagers, appraisers, home inspectors, movers, duct cleaners, framers, electricians, appliance sales people, real estate agents, furniture sales people and of course Private Sale Professionals. There are many people that rely on Real Estate for something in life. The Real Estate industry is far reaching. Don't think that your decision to move or not move is changing just your life. When you make that decision you set the economic ball rolling. It is your hands that hold the economic house of cards.

We are not in the same boat as our friends to the south, or at least Mr.Harper keeps saying so. Watching a video like this sure makes me think that a slow down in our market here in Guelph or KW or Cambridge seems like small potatoes.

If you are looking at downsizing your home or selling off one of those rental properties, be sharp with your pencil and pay attention to what the market tells you. You don't have to sell, you don't have to give it away, just watch your costs!.

M

Fly in a Think Tank

Like Superman when you wear glasses you are incognito.

As a private home seller I had the luxury to sit in a marketing study this week-end. I sat around a table with other like minded sellers. We were there to look at the new advertising campaigns of the real estate industry and their focus on howrealtorshelp.ca.

We looked at two campaigns and six separate commercials. All were working on using humour and exaggeration to make their point.

The first campaign was entitled "Realtors know what you don't" and focused on 3 situations.

1. A lady is seen thrashing paperwork around her desk. She "comically" picks up a potted tree and whacks papers off her desk. A voice over says "Sandy has just spent the last 5 1/2 hours trying to figure out the the details of the offer. There are many terms that Sandy just doesn't know. Terms like "in propria persona" which means acting on her own behalf. The voice over says "Find out how a Realtor can help you. Visit howrealtorshelp.ca to find out more."


2. A man is seen jumping up and down "comically" on his bed. He is dressed in nothing but Bart Simpson boxer shorts and one sock. He is throwing a temper tantrum. A voice over says "Brad seems a little upset. And he should. When he bought the house he didn't use a Realtor that would have told him the flight to Spain flew 850m over his pillow every 47 minutes". The voice over says "Find out how a Realtor can help you. Visit howrealtorshelp.ca to find out more."


3. A man is seen in his house coat running threw his a garden knocking the tops off the flowers with an inflatable pink guitar. A voice over says "John is a little upset. He didn't realize that for what he just sold his house for he could have bought a Tahitian Mud hut. Neither did his wife, but she does now." The voice over says "Find out how a Realtor can help you. Visit howrealtorshelp.ca to find out more."

The second campaign was geared towards getting bad advice. There were 3 commercials here as well:

1. Outside of "Dunky Do's" donut shop. A voice over says "Do you know what Land Transfer Tax is? Let's ask Angie down at the local donut shop" they cut into a friendly woman that talks like she has know you her whole life "You see Land Transfer Tax is when you have something in your backyard that you want to transfer to your new house. I live in a condo so I don't have to pay for land transfer, I pay condo transfer tax." The voice over says "When you need professional advice look to a professional. Visit howrealtorshelp.ca to find out more."


2. Outside of "Wailing Ed's" Pub. A voice over says "Do you know what closing costs are? Lets ask Brian, local bar man." They cut to a late 30's barman that talks like he has know you his whole life "You see the closing costs are what you owe when you close the door of the house you are leaving and open the door of the one you are moving to. You don't pay until you open the new door. You can avoid them by climbing in the window. That's how you stick it to the man." The voice over says "When you need professional advice look to a professional. Visit howrealtorshelp.ca to find out more."

I really wish I could remember the 3rd one but by this time all I heard was Charlie Brown's teacher. I do remember that it was a hair dresser telling us some overly exaggerated obviously wrong advice. You see the Realtors have been using this same message for a while now. You may recall seeing the commercials with the mother-in-law showing the young couple a home or the one with a young couple coming to the door to see a home and the home owner is waxing his chest.

Here I am sitting at a table with 5 people. Male and female, young and old, single and married. All here for one reason. We all chose to sell properties privately. The lady conducting the event was rather surprised at how much the group didn't like these ads. Hmm let me think about this. Am I going to be drawn to an ad the tells me I'm stupid?

I know my thoughts, but what are yours? Am I missing something? Are these ads hitting the mark? Would you decide to call a Realtor based on these ads? What would it take to call a Realtor?

I look forward to your comments.