Costs Of Doing Business

It's only money.


Let's look at the value of a home. Their are many things that go into the makeup of a value. The area that you live, square footage, storeys, flooring, numbers of bedrooms, bathrooms and "living spaces", lot size, exterior add-ons, finished basements, types of door handles, colour of the appliances, etc, etc, etc.


When an appraiser comes in to look at your home and decides on a value they look at all of these things as a whole. They compare it to other like properties that have sold recently and also "forecast" based upon current and expected market conditions. This is why you get a range in value from one appraiser to the next that can differ by as much as 5%. The key thing we need to understand is that an appraiser gives us a "market value". This is what the home should sell for on the "open market".


There are costs for you to sell your home on the "open market". Costs are dependent on a a few things. There is a decision to make as to what service you want to pay for and what value you associate with that service. The service of an agent does not add value to a home. So when you are looking at selling your home, evaluate the value proposition that you are offered from an agent.



I didn't find "Hire an agent" on this list. If you still want to use one, by all means sign their contract. It's only money.


M

Culling The Herd

They say that every farmer knows the importance of getting rid of the sick and the old.

There is some talk going around in the real estate world that the changes in the Canadian market will result in less agents in 2009. According to CREA there are 97,000 agents in Canada. Although it is hard to find a number it is estimated that we have over 1,300 real estate agents here in the Waterloo Wellington area. Those 1,300 agents were responsible for 11,426 SOLD properties in 2008. That works out to just under 9 deals per agent or less than 1 deal a month.

Here is where the numbers get interesting. Those estimated 1,300 agents were responsible for just over $3 Billion dollars in real estate SOLD. That works out to $150 Million in commissions paid or $115,000 per agent for the year. Not to shabby for less than 1 deal per month.

So what happens when we start to see the decreases in SOLDS like we have for the last 3 months? Well the way the traditional real estate works, less SOLDS means less money for the agents. My experience with agents is that taking anything less will not happen. So the natural selection process will take over and ensure that the weak and feeble will not survive.

Why do they feel the need to band together? What is the mentality to this herd? Here is an interesting perspective.






In listening to the "psychology" of the herd it seems only natural that Private Sale is growing at the rate it is. Don't look now but you may have a star on your belly.

Welcome to the Private Sale Revolution.

M

December Real Estate Stats And The 2009 Market

Well the news is out. It confirms what we all new.


This linked Record article shows the stats for Waterloo Region for December (and 2008 as a total) had dramatic decreases from last year with MLS SOLD properties

The good news is the sky is not falling.

First we must remember that 2007 was a phenomenal year. Second is MLS is losing ground to competition. The stats for PropertyGuys.com here in Waterloo Wellington show a different story than what the "traditional" real estate model shows. Year over year for December SOLD properties increased by 46.1% and when you look at the entire year of 2008 vs 2007 the increase was 32%.

1/3 more people paid themselves in Kitchener, Waterloo, Cambridge and Guelph in 2008.

People are choosing a cost effective alternative to listing their home with real estate agents. When you sell your home you need some level of comfort. For most a sign on the lawn and an ad in the paper falls short. Some just prefer the all encompassing feeling that an agent can bring, no matter the cost.

I had lunch with an agent today. His opinion of the market for 2009 was pretty bleak. He is going to ensure his clients are focusing on pricing their home not only on past market trends but also on future market trends. This means that with an expected decrease of 5% in the market he will be adjusting his clients accordingly in their expectations.

If you are looking at listing your home and have not purchased one yet you are sitting in the driver's seat. In a market like ours, having an offer not conditional on sale is the ultimate tool for negotiations.



Give yourself a strong start in 2009. Be a CHAMPION!!!

M