The way to being a lazy, lousy, Realtor is the short way.
A lousy Realtor is going to try to sell their buyers on the first house they tour because touring more than that is just a pain in the azz.
A lousy Realtor is not going to point out things that are wrong with the house, or verbalize reasons why the buyer should NOT buy that particular house because it could require seeing even more houses.
A lousy Realtor is not going to make the extra effort to determine if that asking price is in keeping with the other comparable sales in the area.
A lousy Realtor is not going to bother being aware of future local developments such as the express toll highway being planned to pretty much butt up against the buyer's desired house and advise them of that so that they can make a truly informed decision. (and also better understand why others are selling!)
A lousy Realtor will not look into the history of the buyer's preferred house(s) to see if the house was previously sold as a former-grow-op, or a "stigma property" (where there was a murder/death/suicide etc.)
A lousy Realtor will not look into the sales history of those same preferred properties to try to analyze whether the house is currently being sold as a "flip" or whether the "listed" sellers are the ones truly on title.
Yep, a lazy, lousy Realtor can have it pretty easy.
Fortunately, I prefer the extra work involved and going the extra mile to make sure that my clients are making decisions that are purely in *their* best interests!
Friday, 5 August 2011
Tuesday, 28 June 2011
Time is of the essence - in almost all aspects of our lives
While reviewing a offer to purchase, the "time is of the essence" clause struck me for some reason and how almost everything these days seems to be that way.
Everyone is always rushing everywhere. People are in too much of a hurry to even hold doors open for one another anymore. I even see the odd nutbar driving a few yards further up the highway's shoulder just to get a few car-lengths further, sooner in his quest to get the cottage quickly. Are you kidding me?
But in some regards, I have to say that my time is more valuable (to me) than certain savings.
When I was a kid, Mom and Dad lived in a different kind of world, with different values. Time was what they had in spades. Dad was a Chartered Accountant and he knew how to manage their money very, very well and when he passed away, Mom was financially taken care of.
I vividly recall their regular Thursday night grocery shopping run which started after dinner and usually brought them back home after 9pm, when most grocery stores closed. And they had a car-load of groceries!
In their world, (when $5 would buy a half tank of gas *and* get you change back!), they thought nothing of driving to Loblaws to get a certain selection off their list, then go to Miracle Food Mart because their meat selection was better, then to a Knob Hill Farms because grapes and eggs were on special and then to......
Now really, how much cheaper could grapes possibly be in this day, in order to make me drive to a different grocery store *and* line up to check out again just to buy cheaper grapes (and eggs).
I mean, if grapes were 15 cents/lb cheaper, am I rushing to another store just to save 30 cents (assuming I splurged on TWO pounds!)? Even if eggs were also reduced by 15 cents/dozen, come on - how many dozen eggs could I buy to justify this trip?
I'd have to buy a HELLUVA lot of grapes and eggs to justify that trip - I'm talking about skid-loads!
Needless to say, I'm unable to consume enough grapes and eggs to make that trip cost-effective.
With today's cost of gas, and higher traffic, I'm burning up the savings just idling in traffic in the round trip!
And that doesn't even factor in what MY time is worth.
There are lots of theories and methods on determining what your time is worth on an hourly basis.
For the sake of this historical example, I'll go cheap and say Dad's time was worth $10/hour.
So if it takes him an hour and a half to make that round trip shopping for grapes and eggs, his time-cost alone is $15!
I was speaking to Mom yesterday (she's 85 now) and she had been browsing the flyers and was urging me to get to Sobey's for a smoked ham and then to Freshco for potatoes, watermelon, bacon and mayo...
because they were a "good deal".
So are cheaper grapes or eggs (or ham) alone going to make me choose a particular grocery store over another in today's world?
If someone said to me - "would you travel to this grocery store over this other one, just to save a dollar in combined savings, at the expense of your time - and hassle of a another parking lot, checkout etc and an added 45 minutes? Would I do it?
Nope.
Time is of the essence.
Everyone is always rushing everywhere. People are in too much of a hurry to even hold doors open for one another anymore. I even see the odd nutbar driving a few yards further up the highway's shoulder just to get a few car-lengths further, sooner in his quest to get the cottage quickly. Are you kidding me?
But in some regards, I have to say that my time is more valuable (to me) than certain savings.
When I was a kid, Mom and Dad lived in a different kind of world, with different values. Time was what they had in spades. Dad was a Chartered Accountant and he knew how to manage their money very, very well and when he passed away, Mom was financially taken care of.
I vividly recall their regular Thursday night grocery shopping run which started after dinner and usually brought them back home after 9pm, when most grocery stores closed. And they had a car-load of groceries!
In their world, (when $5 would buy a half tank of gas *and* get you change back!), they thought nothing of driving to Loblaws to get a certain selection off their list, then go to Miracle Food Mart because their meat selection was better, then to a Knob Hill Farms because grapes and eggs were on special and then to......
Now really, how much cheaper could grapes possibly be in this day, in order to make me drive to a different grocery store *and* line up to check out again just to buy cheaper grapes (and eggs).
I mean, if grapes were 15 cents/lb cheaper, am I rushing to another store just to save 30 cents (assuming I splurged on TWO pounds!)? Even if eggs were also reduced by 15 cents/dozen, come on - how many dozen eggs could I buy to justify this trip?
I'd have to buy a HELLUVA lot of grapes and eggs to justify that trip - I'm talking about skid-loads!
Needless to say, I'm unable to consume enough grapes and eggs to make that trip cost-effective.
With today's cost of gas, and higher traffic, I'm burning up the savings just idling in traffic in the round trip!
And that doesn't even factor in what MY time is worth.
There are lots of theories and methods on determining what your time is worth on an hourly basis.
For the sake of this historical example, I'll go cheap and say Dad's time was worth $10/hour.
So if it takes him an hour and a half to make that round trip shopping for grapes and eggs, his time-cost alone is $15!
I was speaking to Mom yesterday (she's 85 now) and she had been browsing the flyers and was urging me to get to Sobey's for a smoked ham and then to Freshco for potatoes, watermelon, bacon and mayo...
because they were a "good deal".
So are cheaper grapes or eggs (or ham) alone going to make me choose a particular grocery store over another in today's world?
If someone said to me - "would you travel to this grocery store over this other one, just to save a dollar in combined savings, at the expense of your time - and hassle of a another parking lot, checkout etc and an added 45 minutes? Would I do it?
Nope.
Time is of the essence.
Thursday, 9 June 2011
A house for $1? Don't bet on it.
There are even a couple of houses on the market listed for $1 (one dollar!) with a clear intent of creating a bidding war. It’s not a new tactic. Some feel that by removing a particular list price, that you’re telling the market they’re free to set their own price for the house.
Nice in theory.
But Realtors have access to the selling prices of homes on that street and are going to know what’s fair value and what’s not going to fly. And they’ll advise their clients accordingly.
(NOTE: A “client” is one who signed a Buyer Representation Agreement with the agent. That agreement requires the agent to work in the *buyer’s* best interests and provide them with sound advice and historical sales etc. If you don’t sign a Buyer’s Rep agreement, the agent is not obligated to provide that info on your behalf!)
The Sellers and their agent are going to find themselves sifting through a lot of offers that aren’t even in the ballpark for what they’re prepared to sell it for.
So why bother with all of that “noise”?
Are they looking to find that one person willing to hugely over pay? They could have achieved the same thing by listing it for $100,000 less than expected and then eliminate the myriad of lowball offers at the same time. All that this $1 list price is going to achieve is kill a lot of trees through wasted paperwork by a lot of agents with buyers believing they’re going to score some ridiculously sweet deal.
www.Alexa.com reports that www.Realtor.ca is the 49th most visited site in Canada. By comparison, the Star's website is #50.
Lots and lots of people are going to notice that house at that price.
And since the sellers are not obligated to accept just *any* price for the house, they're likely going to get market rate for the place or even slightly above.
But if I'm selling your house, that $1 listing tactic is not something I would do.
Why would you and I want to sift through dozens of ridiculous offers just to weed through them to find the few that are even in the ballpark?
That said, it might be something to consider if the property was a really unique, one-of-a-kind property and difficult to find comparisons with it. But for the average property in the GTA, nope.
To some it may seem "crafty". But they just haven't really thought it through.
Thursday, 26 May 2011
Winning in multiple offers - more than just the money
I won a bidding war on behalf of my buyers last fall for a condominium in downtown Toronto not because of price. We were neck and neck with another offer but the listing Realtor and the sellers ultimately decided to select mine and work with me simply because I *was there* and they could wrap it up on the spot! I presented in person. The other offer was faxed in. Do you think the other bidding Realtor was going to tell his buyers that they lost out on their preferred condo simply because s/he faxed in their offer?
I won another bidding war on behalf of my clients, again, not on dollar value alone, but because we had also more flexibility with the closing date - and I had made it a point to emphasize that in my offer presentation.
And there was another one I won again, more because of my offer presentation than purely the dollar amount. The sellers still had an emotional attachment to the house. And part of my offer presentation included an explanation of who my buyers were and what they loved about the house (Note: I can't divulge all of my specifics because I consider them a competitive advantage - and one that's clearly been working for me in these situations.) It made a connection with the sellers and we won.
And the odd time, even my best efforts or dollar amount don't work. Several years ago, my buyers and I were involved in a 7-group multiple-offer situation. Offer presentation started at 7pm and by 10:30pm, I finally found out that we won. I went back inside the house to finalize the papers only to have the seller-wife break down in tears about not wanting to sell and pleading with her husband to stay a little longer. He agreed and because they hadn't signed the agreement yet, they pulled out. Needless to say, the selling Realtors (it was a team of two) were as dumbfounded as I was. And one of them had to go outside to vent. I simply thanked everyone for their time, wished them the best and walked out to my car to break the news to my buyers:
We won, yet we lost.
I'll share this tidbit though, obvious as it may seem - manners matter.
I've encountered some huge egos in real estate, some who *try* to bully and some just simply bombastic types. But when you're dealing with a number of people and with an emotional issue like real estate and often dealing with large amounts of money, manners matter. One can negotiate hard and creatively while still being polite and respectful of everyone at the table. It's really an additional negotiating tool.
What's that old saying? "You catch more bees with honey than with vinegar"
Sunday, 22 May 2011
Condo fees - too high or too low?
Condo fees are like the weather. Almost everybody likes to complain about them.
Most of the time, condo owners are likely to complain about the seemingly excessively high fees - and sometimes they're right. I myself have had the next to impossible task of trying to sell a condo that had comparatively high maintenance fees.
But what about when condo maintenance fees are impossibly low?
There was an article in today's Globe & Mail that talked about the perils of low maintenance fees.
Low maintenance fees can be attractive to buyers because it lowers their overall monthly carrying costs. However, if you expect to sell your property for good, competitive value down the road, you can't live in a house or condo without having to invest in its upkeep on a regular basis. In a house, there are some big-ticket items that you have to maintain - I.e. roof, driveway, windows. That's no different in a condo. There's a very large roof, a very large parking area and often hundreds of windows that at some point, all need replacing.
Where does that money come from?
A portion of condo maintenance fees is supposed to go towards everyday type maintenance.
Another portion is supposed to go into the reserve fund, to take care of those costs that only come up every 20 years or so. Everyone is supposed to share in the cost of that repair, not just those who happened to live there at the time.
But what happens when something wears out unexpectedly fast?
What if the parking garage has bad leaks that caused the the structure to crumble beyond expectation?
And what if the maintenance fees were too low to create a sufficient reserve fund to pay for those repairs?
Where does that extra money come from?
It comes from the unit owners.
If the condo board needs to raise money for an unexpected repair, they can levy a "special assessment" which is distributed proportionally to the unit owners based on square footage (just like maintenance fees).
And those fees can't be dodged. They go with the unit.
So if the seller tries to dodge these fees by selling their unit, the buyer should be aware of them.
Standard practice when buying a condo is to have a condition in the purchase agreement that enables the buyer and/or their lawyer to review the status certificate - a document about the condo corporation's current "state of fiscal health" as well as any specific special charges that have been levied against that unit.
So a condo buyer would see that the seller is trying to dodge the special assessment and then the buyer has the option of negotiating that "discount" into the purchase price or walk away from transaction.
This is not an unusual tactic by the seller.
But the problem intensifies when more than a few unit owners try to sell for the same reason. All of a sudden you have a large number of units for sale on the market and that means they're competing against themselves for the few buyers. So they try to get around that by lowering their prices and find themselves in a spiral of falling property prices .
When you have a condo that's well run, it has a healthy reserve fund and a management board that is prudent in spending money to maintain the value of every unit-holder's investments, then everyone wins.
You get a well maintained building.
You get a building that's desirable to buyers.
You get a building where owners don't want to leave.
And the units are likely going up in value because of it.
So if you're thinking of buying a condominium, don't just look at the dollar amount of the maintenance fees. Have a close look at where they spend this money.
Are they spending enough? Too much?
How well is the reserve fund is managed?
What kinds of people are actually on the board making these decisions?
Remember, the board is just made up of other condo unit holders like yourself - ones who wanted to get involved. That doesn't necessarily mean that they have financial property management experience.
With condo ownership, it truly pays to get involved in the management of the corporation to help ensure that you protect your own investment in the property.
Most of the time, condo owners are likely to complain about the seemingly excessively high fees - and sometimes they're right. I myself have had the next to impossible task of trying to sell a condo that had comparatively high maintenance fees.
But what about when condo maintenance fees are impossibly low?
There was an article in today's Globe & Mail that talked about the perils of low maintenance fees.
Low maintenance fees can be attractive to buyers because it lowers their overall monthly carrying costs. However, if you expect to sell your property for good, competitive value down the road, you can't live in a house or condo without having to invest in its upkeep on a regular basis. In a house, there are some big-ticket items that you have to maintain - I.e. roof, driveway, windows. That's no different in a condo. There's a very large roof, a very large parking area and often hundreds of windows that at some point, all need replacing.
Where does that money come from?
A portion of condo maintenance fees is supposed to go towards everyday type maintenance.
Another portion is supposed to go into the reserve fund, to take care of those costs that only come up every 20 years or so. Everyone is supposed to share in the cost of that repair, not just those who happened to live there at the time.
But what happens when something wears out unexpectedly fast?
What if the parking garage has bad leaks that caused the the structure to crumble beyond expectation?
And what if the maintenance fees were too low to create a sufficient reserve fund to pay for those repairs?
Where does that extra money come from?
It comes from the unit owners.
If the condo board needs to raise money for an unexpected repair, they can levy a "special assessment" which is distributed proportionally to the unit owners based on square footage (just like maintenance fees).
And those fees can't be dodged. They go with the unit.
So if the seller tries to dodge these fees by selling their unit, the buyer should be aware of them.
Standard practice when buying a condo is to have a condition in the purchase agreement that enables the buyer and/or their lawyer to review the status certificate - a document about the condo corporation's current "state of fiscal health" as well as any specific special charges that have been levied against that unit.
So a condo buyer would see that the seller is trying to dodge the special assessment and then the buyer has the option of negotiating that "discount" into the purchase price or walk away from transaction.
This is not an unusual tactic by the seller.
But the problem intensifies when more than a few unit owners try to sell for the same reason. All of a sudden you have a large number of units for sale on the market and that means they're competing against themselves for the few buyers. So they try to get around that by lowering their prices and find themselves in a spiral of falling property prices .
When you have a condo that's well run, it has a healthy reserve fund and a management board that is prudent in spending money to maintain the value of every unit-holder's investments, then everyone wins.
You get a well maintained building.
You get a building that's desirable to buyers.
You get a building where owners don't want to leave.
And the units are likely going up in value because of it.
So if you're thinking of buying a condominium, don't just look at the dollar amount of the maintenance fees. Have a close look at where they spend this money.
Are they spending enough? Too much?
How well is the reserve fund is managed?
What kinds of people are actually on the board making these decisions?
Remember, the board is just made up of other condo unit holders like yourself - ones who wanted to get involved. That doesn't necessarily mean that they have financial property management experience.
With condo ownership, it truly pays to get involved in the management of the corporation to help ensure that you protect your own investment in the property.
Tuesday, 12 April 2011
"Fine print"? I beg to differ
There was an article recently in The Star, that talked about a couple who were looking to buy a cottage in the Muskoka area and signed a Buyer Representation agreement with an agent in order to see some properties.
(This is pretty much normal paperwork in the process of buying a property in Ontario.)
However, the buyers go on about how they feel shafted by the terms of the agreement.
How is "I didn't know what I was signing" a reasonable explanation?
Maybe for a 5-year-old, or an 85-year-old.
So I have several thoughts about this.
Background - among other things, the Buyer Representation agreement creates a confidentiality between the agent and the buyer. Without this agreement, the default situation is that all Realtors are working for the Seller. It also states that the Buyers are not currently working with another Realtor. Poaching clients is unacceptable. It also helps to ensure that the buyer-agent gets paid for their efforts in finding and showing properties to that buyer. Nothing wrong with wanting to be paid for your efforts, right?
Additionally, if they're already working with a agent, why would I want to get involved when I'm not going to get paid? (I've actually had buyers contact me to see a house and when I ask them if they're working with an agent, they said "yes, but he said he's busy so we'd like you to show it". Too busy for your own clients?)
But I digress.
I don't agree with some of the Realtor's methods. Since they just met, I disagree with signing the buyers up to a Muskoka-wide geography and for that long duration of time. Neither of those are fair or realistic terms given that the parties just met each.
When I just met a possible buyer and they would like to see a property, I'm going to ask them to sign a Buyer Representation agreement with me but
a) just for that specific property address and
b) for a period of only 2 weeks
And if they decline, I'll first try to determine the concerns and address them. And if they still decline, I'll suggest that they contact another Realtor. (And if they're already working with another Realtor, then *I'll* decline!)
I think it's fair that if you decide to buy that house in that time, that my time and efforts be compensated.
And if you don't like working with me - well, our obligation begins and ends at that specific house and for just two weeks, at that. The agreement does not bind us together beyond that specific house for that 2 weeks.
No tricks.
If you wanted to see the house right next door, you're not obligated to use me.
A short duration in the agreement gives the buyer a chance to become familiar with me and my work style, real estate knowledge and professional ethics and we can mutually decide if we want to work together going forward and sign a longer one. But if instead, you want to see another house with another Realtor, go ahead.
What kind of Realtor gets their own clients to sign legal papers without explaining what they're for and why they should sign them? If you have a Realtor that works that way, maybe you should re-think who you're working with.
If you don't trust your Realtor when signing a simple agreement to work together, how could you ever trust them when they advise you to buy or not buy a property?
Not all Realtors are the same.
You need to find a Realtor that you can trust.
I disagree with the article referring to the geography and duration as being "fine print".
Wow, it's front and centre in the middle of page 1 of the agreement!
It's right in the fill-in-the-blank portion.
It's not buried at the bottom of the page or on the third page of legalese!
How obvious can it get?
The buyers claimed they didn't know what they were signing.
So then why would they sign it?
If they buy a house, are they going to try making the same claim to get out of that? After all, both agreements are written in the same font. No different than a credit card transaction.
"What? A million dollars? No one told us!" Come on.
Right above their signatures it says "This agreement has been read and fully understood by me". If you're signing something, don't you want to know if you're joining a swinger's club or AOL or Publisher's Clearing House or KKK or cheese-of-the-month club?
I think the Realtor could have handled things differently/better but that's just my opinion.
When you sign an agreement to work with me, it's because *YOU* want to, and *I* want to do so.
The last thing I'm looking for is to bind someone who doesn't want to work with me, or someone I don't want to work with, into an agreement to work together. There's no point. And it's no way to build a lasting reputation or a business.
Sometimes personalities don't mix and it doesn't work out. I accept and understand that. I have let buyers out of agreements in the past when hasn't been working out.
At some point in all of our lives, usually when we become "adults", we're supposed to become accountable for our actions....and especially our signatures.
If someone asks you to sign something - ask yourself WHY??
Read.
Ask questions.
Know what you're signing.
Otherwise, DON'T SIGN A THING!
I'm here to help.
(This is pretty much normal paperwork in the process of buying a property in Ontario.)
However, the buyers go on about how they feel shafted by the terms of the agreement.
How is "I didn't know what I was signing" a reasonable explanation?
Maybe for a 5-year-old, or an 85-year-old.
So I have several thoughts about this.
Background - among other things, the Buyer Representation agreement creates a confidentiality between the agent and the buyer. Without this agreement, the default situation is that all Realtors are working for the Seller. It also states that the Buyers are not currently working with another Realtor. Poaching clients is unacceptable. It also helps to ensure that the buyer-agent gets paid for their efforts in finding and showing properties to that buyer. Nothing wrong with wanting to be paid for your efforts, right?
Additionally, if they're already working with a agent, why would I want to get involved when I'm not going to get paid? (I've actually had buyers contact me to see a house and when I ask them if they're working with an agent, they said "yes, but he said he's busy so we'd like you to show it". Too busy for your own clients?)
But I digress.
I don't agree with some of the Realtor's methods. Since they just met, I disagree with signing the buyers up to a Muskoka-wide geography and for that long duration of time. Neither of those are fair or realistic terms given that the parties just met each.
When I just met a possible buyer and they would like to see a property, I'm going to ask them to sign a Buyer Representation agreement with me but
a) just for that specific property address and
b) for a period of only 2 weeks
And if they decline, I'll first try to determine the concerns and address them. And if they still decline, I'll suggest that they contact another Realtor. (And if they're already working with another Realtor, then *I'll* decline!)
I think it's fair that if you decide to buy that house in that time, that my time and efforts be compensated.
And if you don't like working with me - well, our obligation begins and ends at that specific house and for just two weeks, at that. The agreement does not bind us together beyond that specific house for that 2 weeks.
No tricks.
If you wanted to see the house right next door, you're not obligated to use me.
A short duration in the agreement gives the buyer a chance to become familiar with me and my work style, real estate knowledge and professional ethics and we can mutually decide if we want to work together going forward and sign a longer one. But if instead, you want to see another house with another Realtor, go ahead.
What kind of Realtor gets their own clients to sign legal papers without explaining what they're for and why they should sign them? If you have a Realtor that works that way, maybe you should re-think who you're working with.
If you don't trust your Realtor when signing a simple agreement to work together, how could you ever trust them when they advise you to buy or not buy a property?
Not all Realtors are the same.
You need to find a Realtor that you can trust.
I disagree with the article referring to the geography and duration as being "fine print".
Wow, it's front and centre in the middle of page 1 of the agreement!
It's right in the fill-in-the-blank portion.
It's not buried at the bottom of the page or on the third page of legalese!
How obvious can it get?
The buyers claimed they didn't know what they were signing.
So then why would they sign it?
Why would anyone sign *any* agreement without knowing what they're signing?
If they buy a house, are they going to try making the same claim to get out of that? After all, both agreements are written in the same font. No different than a credit card transaction.
"What? A million dollars? No one told us!" Come on.
Right above their signatures it says "This agreement has been read and fully understood by me". If you're signing something, don't you want to know if you're joining a swinger's club or AOL or Publisher's Clearing House or KKK or cheese-of-the-month club?
I think the Realtor could have handled things differently/better but that's just my opinion.
When you sign an agreement to work with me, it's because *YOU* want to, and *I* want to do so.
The last thing I'm looking for is to bind someone who doesn't want to work with me, or someone I don't want to work with, into an agreement to work together. There's no point. And it's no way to build a lasting reputation or a business.
Sometimes personalities don't mix and it doesn't work out. I accept and understand that. I have let buyers out of agreements in the past when hasn't been working out.
At some point in all of our lives, usually when we become "adults", we're supposed to become accountable for our actions....and especially our signatures.
If someone asks you to sign something - ask yourself WHY??
Read.
Ask questions.
Know what you're signing.
Otherwise, DON'T SIGN A THING!
I'm here to help.
Tuesday, 22 March 2011
Real Estate articles in the news
Click on the links below for recent real estate articles in the media.
Selling your home - 10 tips
GTA Condo Market - Has it peaked?
Spring Housing Market - Is this the last big one?
Duct cleaning - Is it worth it?
TREB reports resale homes holding their own
10 ways to avoid buying the wrong house
Selling your home - 10 tips
GTA Condo Market - Has it peaked?
Spring Housing Market - Is this the last big one?
Duct cleaning - Is it worth it?
TREB reports resale homes holding their own
10 ways to avoid buying the wrong house
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