Today is February the 11th, 2016. This is the sixth episode of the Marshall Report.
Welcome to the podcast.
In this episode:
1. An award and a partnership
2. A question about buying from a builder
3. Hang on, it’s the Ion
4. January real estate is up, up, down, up
5. Newspapers again in the newspapers
6. Mortgages are like dogs and cheese
7. How to deal with multiple offers
8. How the real estate market will preform in the year of the Monkey.
9. Podcast format questions
10. The opposite side also has an opposite side
Other Links
Show Notes
1
I got an award. I’m not bragging. I love what I do. I was a “premier performer top ten” at my brokerage last year. Yeah me. Go dog go.
Also I want to mention that I have partnered with a colleague who specializes in real estate investment. Together we are giving investors better information tailored to their specific needs. The stream has become a river with mostly Toronto area investors coming to KW so we had to up our game.
I got another post card.
This one says ‘Your home sold in 29 days or you don’t pay’
There is a little*
And then on the other side in small print – ‘special conditions apply’. Those special conditions, I’ve written in my blog before are very restrictive and unfavourable for the home seller
Another offer of a ‘free home evaluation’. This is the foot in the door technique.
Another promise that your home will be advertised 24 hours a day until sold.
This one says that your home will be advertised in print ads every week until it is sold. I guess that means those glossy magazines you can flip through when you are waiting for your pizza or in other places waiting for food, and researching real estate. I thought it was only me who liked to look at real estate advertising all the time.
And you can get a team of specialists for the price of one agent. It takes a village to sell a house. It is so complicated.
2
Question of the week.
This is my favourite part of the podcast.
This week I have an email from Simon. He writes and I quote:
Hi Keith, i’ve been reading your blogs and have been learning a lot from you. Me and my girlfriend are currently looking to purchase a home from East Forest Homes in the south Doon area. I read your blog about why you should have a realtor when buying a new construction. Could you just further explain some the key points you mentioned? So, for example, will a realtor sit at the table with me and negotiate the lot premium charges, to eliminate them? How will they get the salespeople to budge? And these realtors won’t get paid on my behalf, so why are they doing this for me?
I currently have no representation, and tomorrow i am going to sign a conditional offer. Should i bring a realtor to the table? or do i bring one at the time of the firm offer?
Cheers,
Simon
Great. So lets unpack that one like I like to do.
1. Hi Keith, i’ve been reading your blogs and have been learning a lot from you.
My motto, my byline is “I take the stress and mystery out of the home buying and selling process.” At least I try. So I’m happy that you think you are learning.
2. Me and my girlfriend are currently looking to purchase a home from East Forest Homes in the south Doon area.
Doon is nice. Sounds like a young guy. I’m going to guess a first time home buyer. First time home buyer make up about 40% of the market so that is a pretty safe bet, knowing what I know.
3. I read your blog about why you should have a realtor when buying a new construction.
There is a link in the introduction
4. Could you just further explain some the key points you mentioned? So, for example, will a realtor sit at the table with me and negotiate the lot premium charges, to eliminate them? How will they get the salespeople to budge?
Point number 12 in that blog post I railed on about the, well I used the word ‘scam’ of lot premiums.
Some lots do have more value, if they are backing onto green space or can support a walk out basement.
But I think the dollar value is arbitrary, set by the builder and you won’t get the whole thing back when you eventually sell.
But Simon is asking about Money here, his money and early in the post I talk about negotiating.
You don’t know until you try and currently usually you can’t negotiate anything money related, so you can only negotiate upgrades and get free stuff.
For example, I was working with someone that had a $3000 condo storage locker thrown in.
I know, I know, they should be included, but thats the way the builders are currently. When trying to negotiate price, I’ve had builders say directly to me, “if your client doesn’t buy it, we’ll sell it to someone else. That’s the way the market is.
But back to money, if a home builder is at the end of the build and wants to move on, then he’ll sell off what ever inventory he has left and move on. That’s about the only time you can talk money with builders currently.
5. And these realtors won’t get paid on my behalf, so why are they doing this for me?
I currently have no representation, and tomorrow i am going to sign a conditional offer. Should i bring a realtor to the table? or do i bring one at the time of the firm offer?
Realtors do get paid by almost all of the builders. We know which ones pay and which ones don’t. East Forest Homes pays realtors. Whether you use a realtor or not, that is up to you. But if you don’t, I’ve written before that you can try to negotiate the 2% commission the builder is saving but you won’t get it.
Its always about money with homebuyers and its their money so I get it, but because of inexperience they don’t know what they don’t know and that is when having a realtor on your side could be beneficial.
I could list a bunch of reasons for having a realtor
When I’m working with new Canadians, they need a realtor.
First time home buyers, they need a realtor.
There is value here, if you need it, and don’t have it, it is like insurance but you might not need it.
It doesn’t cost them anything
Working with a realtor is free, you should take it.
3
The Ion. Disrupting traffic and hurting businesses since 2014 has now closed Uptown Waterloo for 9 or 10 months.
King street in Uptown Waterloo is closed now. I’ve come to the realization that I’m living through another mass rapid transit disruption. I was in Taipei in the early 90’s when they put in their MRT. Six lines at once. We are only putting in one line but since I live in uptown and because I drive all over Kitchener Waterloo on a daily basis…
It’s going to be another year like last year.
I’m feeling sorry for myself. But I really feel sorry for the businesses along the line. They know if they can just hang on through the construction then their future will be secure. But can they hang on?
I know we say, I’m not going there, there is too much construction. I’m no different. But we should do this for our favourite restaurants and retailers.
4
Homes sales in Kitchener-Waterloo in January were up almost 30% compared to January of last year.
A total of 309 residential properties were sold compared to 238 the same time last year in Kitchener-Waterloo and area.
Single detached homes sold for an average price of $409,101 an increase of 10.5% compared to last year.
The average sale price of all residential sales is up by 8.2% to $353,514 compared to January 2015.
The average sale price for a condominium was $214,464 (down 7.6%). What is going on with condominiums?
Townhouses sold for an average of $311,509 (up 12.4%)
Semi detached $283,966 (up 10.0%)
5
Last week on this podcast, I said that newspapers are becoming like taxi drivers protesting Uber and making a nuisance of themselves. With the closure of the Guelph Mercury, a local columnist said that newspapers are public institutions. They aren’t. They are businesses, like watch makers, cd manufacturers and travel agents. Newspapers are more like the yellow pages than Centre in the Square.
This week, our local teachers are boycotting the newspaper. What is the world coming to? They don’t like the columnist, the same one who thinks newspapers are institutions. They don’t like her anti-teacher rhetoric.
It is kind of ironic when you think about it. The week after she pontificates and pleads us to subscribe (use it or lose it she said), her writings lead to a mass drop of subscriptions.
6
Mortgages to me are like American politics
With american politics, I know all the names but don’t know anything else. Except Donald Trump of course. I know he’s a dangerous nut.
With mortgages I know like with breeds of dogs or kinds of cheeses there are lots to choose from. After that, its too complicated for me to give advice. That why I don’t.
I ask my clients if they’ve been pre qualified or pre approved (which are different – i know that) and if they have questions I refer them to their lender or a mortgage broker I know.
Trust the experts
7
How to deal with multiple offers.
Its terrible. It happens all the time. Changes the dynamic. Changes the balance of power. From buyer to seller. In KW we handle it differently than Toronto.
You have one chance.
The offers are presented at the same time.
All offers are now registered.
In the first round, the seller decides to accept or “work with” one of the offers.
The other offers are rarely sent back to be improved.
Essentially, you have one chance and only one chance. You have to offer what you are willing to pay for the house. Full Stop.
A Toronto real estate blogger I really like has recently written about this. If you are interested you should go read it. There is a link at the bottom of the post.
8
Chinese New Year
Year of the monkey. Intelligent, witty, curious and playful.
A year of promise and positive change.
The monkey is a problem solver and a risk taker
I went looking around the internet for how the monkey year will affect real estate. This is the best I could find.
If you are buying or selling property, don’t hesitate to negotiate the price. Monkeys applaud and encourage the haggler in us.
9
Remember earlier when I mentioned that “Question of the week” was the favourite part of my podcast.
This week’s call to action is what’s yours? Things like blogs and podcast take shape overtime. Sometimes you find the path and sometimes the path finds you. So please let me know what you like and don’t like. And “I like it all” is not an answer, to that I say.
What do you most like.
This podcast is only six episodes old. I don’t know how it is going to develop
Of course, if you don’t like it, then —> why are you still here?
10
The Japanese have an expression, ‘the opposite side also has an opposite side’. I’ve been trying to find a good way to explain this. We think if I say this, they’ll say that. If I do this, they do that. I’ll wait until this happens and then I will do that. Man makes plans and God laughs.
So here is how that Japanese thing works out.
Black. White.
White. Black.
Blue. Green.
Green. Blue
Green. Red
Red. Yellow.
Blue. Happy.
Happy. Sad.
Right
Left
Right
Wrong
I only bring this up now because when we are negotiating for a house we always think. If I do this, they’ll do that, If I offer this, they will counter offer that, but things rarely work out exactly as we predict.
