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

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  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

The Holdover Clause; What Does It Mean For A Private Home Seller?

Is the Holdover Clause a gun to your head?

The nature of our business has us talking to quite a few people that are unhappy with their current situation selling with a real estate agent.  I am sure you have seen the frustrated home seller before; sometime they go through 3 or 4 different real estate signs before they sell.  The most common question we get from people approaching the end of their listing agreement with a real estate agent is "How does the holdover clause work?"  So many people just gloss over their listing contract with their realtor at the time of listing because they just want to get it on the market and "all the contracts are the same."  As they approach the end of their listing contract they start to delve into what they signed and can't believe that not only were they stuck with their agent for 90 days from the start but now they have a 90 day holdover clause where they may have to pay them as well!

I will explain to you in basic English what the holdover clause is and how they work from my personal understanding.  I must first say, I am not a lawyer and this does not represent legal advice. Any questions you may have regarding a legal contract you are best to talk with your lawyer for a clear understanding. If you don't have a lawyer you could always contact one of our legal partners like Teixeira Law in Cambridge.

The typical misunderstanding around the holdover clause is that you cannot sell your home for a specified amount of time without paying the agent commission.  This is not the case. The holdover clause was designed  to protect agents from being cheated out of their (high) commissions.  If you were listed with an agent and someone came in and said "Once your listing is done; sell the house to me and we can split the commissions. Drop the price by half the commission and we both win." The holdover clause keeps this from happening. But if your agent has done very little for you, except maybe tell you to lower your price, the holdover does not restrict you from selling your home without them once the listing is up. It just stops you from selling it to someone that they or another agent "worked hard" at getting into your house without paying them what you had previously agreed to.

So here is a typical holdover clause as laid out in an OREA Listing Agreement:

The Seller further agrees to pay such commission as calculated above if an agreement to purchase is agreed to or accepted by the Seller or anyone on the Seller’s behalf within............................. days after the expiration of the Listing Period (Holdover Period), so long as such agreement is with anyone who was introduced to the Property from any source whatsoever during the Listing Period or shown the Property during the Listing Period.
If, however, the offer for the purchase of the Property is pursuant to a new agreement in writing to pay commission to another registered real estate brokerage, the Seller’s liability for commission shall be reduced by the amount paid by the Seller under the new agreement.
The Seller further agrees to pay such commission as calculated above even if the transaction contemplated by an agreement to purchase agreed to or accepted by the Seller or anyone on the Seller’s behalf is not completed, if such non-completion is owing or attributable to the Seller’s default or neglect, said commission to be payable on the date set for completion of the purchase of the Property.
Any deposit in respect of any agreement where the transaction has been completed shall first be applied to reduce the commission payable. Should such amounts paid to the Listing Brokerage from the deposit or by the Seller’s solicitor not be sufficient, the Seller shall be liable to pay to the Listing Brokerage on demand, any deficiency in commission and taxes owing on such commission.

Let's break it down into chunks to better understand it.

The Holdover Period
The holdover period is the length of time that you are bound by.  This is typically 90 days but I have seen them as little as 30 days and as long as 180 days (6 months).

Who is Covered
This is a critical part.  The holdover clause is only binding on people that were introduced to your property while it was listed with your agent.  The simple way to understand this is if your home was shown to someone while it was listed and you sell it to them during the holdover period you owe commission to your agent.  If you sell it to someone that first saw it while listed on PropertyGuys.com then you do not owe any commissions.  If you want to really cover your butt, contact your lawyer and ask about including an amendment to your agreement to purchase that has the buyer acknowledges that they were not introduced to your home while it was listed by a brokerage nor do you owe any consideration financial or otherwise to a real estate agent or brokerage regarding the purchase. In the event that consideration is due to any party - it is agreed that it becomes the sole responsibility of the buyer.

How Much Commission is Owed
As the seller if you enter into a purchase agreement with someone who had come through while you were listed with the agent you are required to pay the full amount as was agreed to.  The only way that would be reduced would be if you had paid another agent an amount in the transaction. So as an example if you had agreed to 5% in your listing and then when you sold it privately to a buyer with an agent and that agent got 2% you would be required to pay 3% (5% - 2%) to your former listing agent.

The Ugly Part
If you sign an agreement to purchase with a buyer and later find out they were through the house so you cancel the agreement, you could still be required to pay the commission.  I assume this is in place for people that were caught with their hand in the cookie jar.  It does not take into account that if you were not aware that the buyer was previously introduced.  This is another good reason to have the above amendment added to your agreement to purchase.

Monies Held in Trust
This just says any monies held in trust (deposit) shall be used first and then any additional monies owed would need to be paid directly to the brokerage at their request.

Bottom line is the listing agreement is a legal contract.  Any questions you have surrounding the agreement or any clauses within it you should talk to your lawyer, not the other party you are entered into the contract with!

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

How Do You Price A Home For Sale?

Is there an easy way to price your home for sale?

One of the biggest stumbling blocks a home seller can run across is getting the right information to price their home properly for the market. Who do you believe? Are real estate agents the best people for pricing advice? Are you able to make a sound decision when pricing your home, or are you biased?

There are two major things that are going to influence the market value of your home.  What has happened in the market and what is happening in the market.  Sure the fact that you have a nice kitchen and your bathroom is Belgian Taupe will impact the mind of the buyer but it won't majorly impact the value.  It will make it more salable, that is what home staging is all about, but will it make your home worth $20,000-$30,000 more than the same model 3 doors down?

The value of a house is mainly determined by the market.  What houses have sold for and what they are selling for (or not selling for) now.  If you have had 3 homes in your neighbourhood that have sold at a lower than anticipated price, you will have a hard time asking top dollar.  There is reason why neighbours get angry when a couple that splits up lists the house low just to get it sold.

So how do you determine what houses have sold for in your market?  Well you could call a local agent to come in and give you a "free market evaluation" but I don't recommend asking them for their "opinion on value". If you are just calling them for that, with no intention of listing with them, you might as well get the info off your MPAC account and save them an evening away from their family.  PropertyGuys.com suggests using a service like what we are able to offer through our partners. An estimated value report or a full licensed appraisal from a 3rd party service are unbiased and will provide you with the info of what has happened in the market.

Take this info and mix it with watching 5-6 houses within  a kilometer of your house that are within $10,000 of what you feel your home is worth and you will have all the info you need to be successful.  The only thing you will have left to get over is the stubborn, bull headed, house proud owner of your home.

M

Mere Postings for the Private Home Seller

Does adding a mere posting on REALTOR.ca cover your back?

On the 2 year anniversary of the agreement between CREA and the Competition Bureau I wanted to give my thoughts on how adding in a mere posting on REALTOR.ca affects the Private Home Seller.

When you are selling a house it is key that you have all three sides of the Home Selling Trifecta covered. You can add all the exposure you want but if you neglect the other two sides of the triangle you will be deeply disappointed.  Knowing that you can always add exposure as you go, you are best to ensure both your product and your price are right in the beginning.

So 2 years after the ability for private sellers to do a Mere Posting on REALTOR.ca have we seen it as a magic potion to magically sell houses? Not in the least.  It just proves what we have always known here at PropertyGuys.com. Being on the same website as all the agents doesn't sell houses.  If you don't do your homework, if you don't deal with the smell of cat pee, if you over paid for your house 18 months ago, if you don't price your home without emotion and based on factual data, you might as well save your money. You can post your home on PropertyGuys.com, you can add a mere posting or you can use a high fee real estate agent and it won't make a lick of difference if you have not hit all three sides of the trifecta.

What is the Key to Selling a House?

It's not so much a key as it is a shape. A diamond is a home seller's best friend

I have talked about the Home Selling Trifecta in the past. Product, Price, Exposure are key when you are selling your house. The magic happens when you use them correctly.

First let's understand what you have to do in preperation to get your home listed for sale (the top half of the diamond).

• Product - You can use your extensive knowledge borrowed from HGTV about de-cluttering and de-personalizing to get the home ready. Clean it top to bottom and fix anything that you know is broken. If you are not an avid HGTV fan you should get the advice of a professional stager and get things just right.
• Price - Get yourself some comparable sold listings and use them to know what the market has been doing over the last 6 months. You should also look to see what is on the market now in the range you are thinking of listing at and compare how your home stacks up. With PropertyGuys.com the option is also there to bring in a professional appraiser to give you a range in which your home should sell.
• Exposure - Look at your budget, weigh out the options and make sure you have what you need to get your home in front of prospective buyers. A listing with plenty of photos and virtual tours on PropertyGuys.com so buyers know what your home looks like, a nice big round sign for your lawn so the neighbours are all aware, and a listing on Realtor.ca to maximize your online presence. Other things include ads in the local paper, Facebook and Google ads, and open house signs if you are planning on doing any open houses.

Once you are listed you need to work your way in reverse through these steps to evaluate their effectiveness (bottom half of the diamond). Each one feeds into the other working like a funnel bringing you down to the one person who will write the cheque for your house. You must go in this order because if you change your price or tweak your product with limited exposure you will be costing yourself some of your hard earned equity. So how do you evaluate it? Depending on your schedule for selling we usually recommend allowing 4-6 weeks prior to making decisions. Of course if you have a short time frame to sell we do recommend being more aggressive in your evaluation.

• Exposure - Using the PropertyGuys.com visitor report you will see if your exposure is being effective. A single detached home in the Waterloo Wellington area will typically see a spike of around 75-125 viewings per day for the first few days. After that it should settle in to somewhere between 25-45 average viewings per day. If this is the case then you can skip to the next level of the diamond. If you lacking in exposure it means you need to look at putting it in front of more potential buyers. Did you do a mere posting on Realtor.ca? Did you add print ads in the local paper? What about the Facebook and Google ads (this is a fairly new offering so we can always add it in to your existing listing).
• Price - Since we are at the next level we are confident people are viewing the property. The issues is there is no follow through. Your online traffic is NOT turning into foot traffic. When people are looking at your listing and making a conscious decision not to call you, it speaks to one thing. Your price doesn't match your product. Exposure gets the buyers looking, the price gets them in the house! Did you get the appraisal? If so how are you priced in comparison? What are those other properties in your range doing? Have they adjusted their price? You will covert online traffic into foot traffic with more aggressive pricing.
• Product - We have all heard that a house sells it's self. This is true. It also prevents a sale if the house is not ready. The little things add up and tell the potential buyer the story of your home. Once you have the buyer in the home, if you have staged it properly the buyer will be rushing to get the offer in. If you are doing lots of showings and no one is talking about offers or asking when you are looking at for a closing date then your house is not wowing them. Did you paint the baseboards and trim? This always freshens things up. What about a back splash in the kitchen? Easy to do, adds value and fairly low cost. Did you give your home the "white glove test"? It is never too late to have our stager come in and give you the advice needed to push your home over the top!

Diamonds, not just for girls anymore.


M

How clean should your house be when you are selling it?

There is only one way to tell.

For the past 5 years we have been working with an amazing home stager based out of New Dundee. Lynda Schmidt is the real deal when it comes to getting a home ready to sell. One of the keys she always points to is the little details. No matter how ready you think your home is I guarantee you Lynda can put your home over the top with a few hours at your home.

One of the big keys she always points out is "clean, clean, clean". By clean I don't mean give the carpet a once over with the Dirt Devil while the wife is out and tell her how hard you have been working. In order to have buyers falling in love with your home they have to know how much you cared for it while you lived there. If they see dusty base boards, cobwebs in the corners of the vaulted ceilings, or that off colour spot in the "stainless" kitchen sink you may just show them you were more worried about your Dirt Devil than anything else. So you had best get the rubber gloves and the cleaning supplies out.

If you are like me and you would rather do anything than grab the paper towel. If that's the case I suggest hiring a local cleaning company to give it a once over after you have finished up working through Lynda's suggestion list so we can ensure the best possible photos. You want your home to show perfect both online and during your open houses.

Now get going on those baseboards so you can be confident it is ready for buyers.


M

How would a Jedi sell their house in today's real estate market?

Never more wisdom a pie chart has shown.

I would say one of the more common statements we hear in regards to selling a home privately is "it is worth a try". Fortunately we have learned from a reputable source, as so handily laid out in the pie chart above, there is no try. When selling a home, privately or with a real estate agent, the word try should never enter your vocabulary.

When one decides to sell their home there are key areas that need to be addressed in order to "do". If these things are not addressed you can not blame "try" you can only blame "do not".

What are the key areas? Great question! We know that the sale of a home is dependent on product, price and exposure, or the Home Selling Trifecta. Let's quickly look at each of these items as they relate to your home and then with each other.

• Product - This is the home it's self and all aspects of it's physical space including location, style, decorating, layout, quality, condition and over all cleanliness. The things you can't change or alter easily or at all you just have to deal with. Are you located in a busy neighbourhood? Does the flight path of the airport keep you awake? Are you in the neighbourhood that EVERYONE wants to be in? Do you have a 2 story or a bungalow?Areas where you do have control are areas that will impact the emotional buyer like staging the home for sale, having it "white glove clean", free of all defects inside and out (walls, roof, foundation) and ensuring all mechanical items are in good working order.
• Price - This is arguably the most important aspect. This is what will take an internet stalker and turn them into a motivated buyer. People are always lurking on real estate websites looking at this home and that home. Your goal is not to have a million views of your online listing but to have one person motivated to purchase it. Do your homework, find out what homes have sold for in your area. Look and see what your competition will be at the price you are thinking. How does your's stack up? Even if you miss the first 4 week window when properties are getting their first once over by the lurkers, you are still in the game if you are adjusting your price to where the market is moving. What doesn't work? Change your method of marketing and increase your price. If the widget you are selling for $5 isn't selling at Home Depot moving it over to Wal-Mart and charging $7 isn't going to help.
• Exposure - Get your home in front of buyers! Assuming you have priced your product correctly for the market this is the easy part. In today's market, as a private seller, you have more exposure potential than ever. There are plenty of questions someone considering selling their home should be asking. Do you need to be on the MLS? Will placing an ad in the paper help find home buyers? How do we advertise an Open House? Can I advertise my home on Google and Facebook or other social media platforms? What kind of advertising does an agent do for 5%?

The Trifecta works only when all three are working harmoniously together. If one side of the triangle is missing or being neglected you will not fall into "do" category.

Using services like PropertyGuys.com not only presents your home in professional way online but we also ensure you evaluate all areas of finding buyers for your home. We focus our efforts on ensuring all aspects of the home selling trifecta are met. If there is an area that is being neglected it will show up in your numbers. We will work with you throughout the home selling process to determin which part of the trifecta is being neglected so you can "do", because no one likes a "do noter"!



M

We Are More Than Just Guys

As "one of the guys" here at PropertyGuys.com I wanted to take a moment to point out that our local franchise is run in large part by some amazing women. Each and every one of them bring a whole lot of awesome to our company. Dave and I are often looked at as "The Guys" and I take on a pretty public profile for the business. Each of our Private Sale Consultants that are out there spreading the word, helping our clients and changing the way people see the business of real estate are amazing women. Our office is run by a multitasking techno nerd that we honestly could not replace with one simple human.

This doesn't even get into our business coach, fellow franchisees, wives, and mothers that support, guide, and inspire us every day.

On this International Women's Day I salute the women that have shaped me into the man I am today. I am but a product of the greatness that surrounds me.

M