Today is February 18, 2016, This is the seventh episode of the Marshall Report. Welcome to the podcast.
In this episode:
1. Spotify
2. How can you tell if a property is over-priced?
3. Kitchener joining Toronto (by rail).
4. Waterloo Region’s population keeps growing.
5. Wasting money on print advertising.
6. The biggest mistake a homebuyer can make
7. Flippers, Improvers and Key-turners. What kind of investor are you?
8. Good, fast and cheap
9. Staying ahead of the curve
10. Advertising money
Notes
Spotify
I went back to Spotify. I started there and then went over to Apple Music for a few months and it was pretty good. Then I decided that I didn’t want to pay for music streaming, so I went back, way back to Songza. But then they were bought by Google and became Google Play and they introduced advertising, interruptive advertising.
So I went back to Spotify. They were first and first is often best.
With most things, if you have a head start, you can most often stay ahead of the competition.
Not always.
But often.
Question of the week.
How can I tell if a property is over priced?
This question came to me through a new client. He’s a fast learner. He sent me a property with the question if I thought the price was right.
I looked at the listing and then pulled some comparables. One thing about real estate, we have access to lots of information.
It seemed to be way overpriced.
So we went and had a good at it, and it was. It was overpriced.
I like to say that the listing price is irrelevant.
The real price and the market price for a home is based not on the listing price but what is going on in the market. The market price is determined by what else is for sale and by what else has just sold. The list price should be looked at as a guide.
As quick aside, when I’m doing free home evaluations and listing presentations I often find that home sellers want to price their home $10,000 too high. It’s not always $10,000 too high, but it often is.
Back to the problem of listing price.
Some buyers use the list price as an anchor. They say, “I will only offer 95% of listing price” or “I take $20,000 off the list price and offer that”.
That is not the right way to do it. That’s an amateur way.
Remember the list price could be wrong. It could be way too high.
How can you tell if a property is overpriced?
Here are three easy ways for 3 different parties.
By recent sales of comparable properties. (Realtors)
If it hasn’t sold in a reasonable time. (Buyers)
Lots of showings but no offers (Sellers)
Kitchener wants to join Toronto, by rail
More than 60,000 people travel between Toronto and Waterloo Region for work everyday. Most of them use the 401. I used to do that myself, but that was 15 years ago and the traffic was bad enough then. Now? Forget about it. So the mayors of Kitchener and Toronto met last week and talked about transit.
What we are looking for is more efficient and effective transit.
What we need is two-way, all-day transit service between the two cities.
Kitchener Mayor describes the relationship between Toronto and Waterloo Region as similar to the one between San Francisco and Silicon Valley in California.
Here’s a good quote:
“Transit drives innovation, and innovation drives economic growth.”
Waterloo Region’s population grew by about 1% between 2014 and 2015
Nearly 4,000 new residents moved here.
We currently have a population of 511,319.
Growth is good.
Did you know that Waterloo Region is the 10th largest population centre (or CMA) in Canada.
Chronicling my junk mail
I started getting the Waterloo Cronicle delivered into my mailbox again. For the past 16 years, I sometimes get it and often don’t. I will receive it for six months and then not receive it for one a year.
I’d rather not get it. The flyers are 10 times heftier than the newspaper. It actually comes in the front door and most often gets put straight into the recycling box.
So I started to notice all the just mail I get too. Flyers and postcards from realtors and restaurants and health clubs and auto dealerships. I don’t take much more than a casual interest in any of it. Its not like I’m sitting in the kitchen having a cup of coffee thinking “I should buy a new car. Oh here’s a flyer from Ford. I guess I’ll go buy a Ford”.
Have you noticed a theme in this podcast? For someone who used to be in the advertising business, I certainly don’t believe in it much do I?
This one is a bit of a rant
Most sales trainers will tell you that there are no bad clients, only bad sales people. I agree that is true
But its is also true that here is always one exception to prove the rule and this is about that.
The biggest mistake is not learning from your mistake
Everyone make mistakes. It’s part of learning.
Thomas Edison once said, “I have not failed. I have just found 10,000 ways that won’t work”.
With that in mind…
I had a case recently where my client did everything wrong. I hate when this happens. Sometimes I feel like I’m Bill Murray in Groundhog day, watching my clients learn lessons along the learning curve. But I’m OK with that. It is kind of the way the job is.
I really take my time with clients. I try to take the stress and mystery out of the home buying and home selling process. I explain everything and give a lot of anecdotal evidence about how things usually go. We never know exactly how things are going to go, but we try to help our clients make good decisions based on the information we have.
Clients spend a lot of time. My time, the seller’s time, sellers agent’s time and their own time. Learning is never a waste of time so as long as they are learning then they are not wasting time.
But clients who waste time also hurt you in other ways. They hurt your reputation. They create friction with the other agent and with that agents relationship with her clients. But, bad clients can be used like my recent client was. They can be used to generate a competing offer. They can be used to generate urgency.
I think the role of a good realtor is to guide and advise and to teach. But then it is up to the client to take that information and whatever else he can and make wise decisions.
It doesn’t bother me when a client doesn’t follow my advice. It doesn’t bother me when things don’t go my way or our way. It does bother me though when mistakes get made but learning does not get learned.
Its ok if you make a mistake as long as you learn from it
Its ok to ignore good advice as long as you learn by it
Wasting time, wasting other people’s time if you haven’t learned anything from it is a complete waste.
The three kinds of real estate investors
I wrote a blog post yesterday about real estate investors.
There are three kinds of real estate investors
1) Flippers
2) Improvers
3) Key-turners
There certainly are a lot of real-estate investors coming to Waterloo.
What kind are you?
Uber – good, fast and cheap
I want to talk about Uber again. And this is in relation to real estate specifically and the Uber of everything else, generally.
Uber is better, cheaper and faster than taxis. They have unlocked the holy grail of a good product. Normally, if something is better and faster, its not cheaper and if its cheaper and faster, its not better. But Uber has all three.
The way the real estate industry in Canada is structured, it is inefficient and wasteful, (not better), expensive (5% commission to sell a house is high – that’s not cheap) and time consuming (not faster). If you think about the man hours of agent showings, open houses, client viewing, not to mention the sellers having to vacate for the showings…there are lots of wasted hours in selling a house.
So we do need an Uber for real estate but we have to keep in mind that it has to address all three. It has to be good, fast and cheap.
The time is now
This week’s call to action for anyone thinking about buying or selling property this year is start now.
I don’t think a lot of real estate happens between Remembrance Day and Valentines Day, certainly some, but volumes dip for sure. I know I’ve been selling houses and helping people buy houses over the past 12 weeks, however only a few.
Now is when things ramp up. I actually think the best time to list your house for sale is at the end of February. That way you are ahead of the curve and you can also take advantage of the big wave that is coming as the weather warms up.
Final thoughts
Someone famous once said, “Half the money I spend on advertising is completely wasted. The problem is, I don’t know which half”. Personally now that we are in the internet age, the information age, I think its more than half.
