Today is Thursday April 7th, 2016. This is the 14th episode of the Marshall Report. Welcome to the podcast.
In this episode:
1. Visiting the Bulk Barn
3. Flying to Montreal
5. Comments and commenters
7. 5 reasons to buy a home near a shopping mall
9. Action through inaction
Let’s get on with the show
I’ve had hundreds of downloads of this podcast already, and dozens of subscribers. It’s growing. Thanks for subscribing everyone. Please go to iTunes and give me a good review.
In other news I was at the Bulk Barn on Wednesday. I’ve got sweet tooth for peanut butter M&Ms, so I bought a pound and found out that Wednesday is senior’s day. Seniors get a 10% discount. I got the discount. I didn’t tell them that I am only 53. There are benefits for having grey hair after all.
Question of the week – real estate commissions
This week’s question comes from Adam in the comment section of a blog post I recently wrote. The post was about how and why to hire me, Keith Marshall as your real estate agent.
The question is a two-parter.
What fee does your brokerage recommend agents charge as the listing agent?
What fee does it recommend offering to buying agents?
Great questions Adam.
We forget as real estate agents that the general public does not know how commissions work. Adam does. There are two parts.
First of all, the buyer does not pay commission. Only the seller does. The home seller pays his listing brokerage a commission and the listing brokerage pays the co-operating brokerage usually near half of that.
Typical commissions in Kitchener Waterloo are 5%, of with, the cooperating brokerage, the one working with the buyer, receiving 2.5%.
At my brokerage, because we don’t waste your money advertising ourselves on buses and benches, in newspapers and magazines, our commission rates are lower than the big box brokerages.
Also because we haven’t got the overhead and franchise fees that big traditional brokerages have our commission rates are lower.
However, we do not sell on price. We are just as good or better than big brokerages, we just charge less because we can and philosophically, we should. We think that commission rates are too high!
We are not a discount brokerage. If you pay peanuts, you get monkeys.
So to answer Adam’s question, my brokerage recommends agents charge 2% as the listing agent and offering 2.25% to the buying agents. We can charge more or less. It is up to the agent after all.
Flying to Montreal
Next month, Nextjet will begin flying out of Region of Waterloo International Airport to Peterborough, Gatineau and Montreal. The trip to Montreal in the nine-seater will take about two and half hours and will cost about $500. Passengers will be allowed 20 pounds of luggage
In Kitchener Waterloo real estate news, after nine long years the Eaton Lofts condo lawsuit was finally settled. The owners of the units did not get the millions that they wanted but they did get a settlement of $850,000 from the defendants including the architect, the City of Kitchener, the ESA, the developer and the original condo board of directors. Nine years ago, construction on the building was suddenly shut down by the City of Kitchener over electrical safety concerns. As this project was a condo conversion and not a new condo, and as such was not covered by the Tarion Warranty. Legal action was the only recourse for the owners.
What’s important here is that the case is finally resolved. The building has been pretty much in limbo for the past nine years as none of the owners could really sell their units. When you buy and sell condominium units in Ontario, realtors always recommend that you request a copy of what is called a ‘status certificate’. It contains all the information about the condo corporation including any lawsuits and of course the financial status of the building. With so many other condo units to choose from in Kitchener Waterloo and with the unknown of when and how the court case would be resolved, very few owners could sell their condo units until now.
Comments and Commenters
A few weeks ago on this podcast I mentioned how much I enjoy reading comments at the bottom of online news stories and other websites. I’m a student of human nature and this sometimes angry, sometimes comical discourse is a fun peek inside the minds of the online readers, pranksters, radicals and a variety of nuts.
It’s all good. On the internet, you can be anyone you want to be.
Well not anymore.
A couple of weeks ago, the CBC banned the use of pseudonyms for its readers commenting on stories on the CBC.ca website. The Toronto Star turned off its comments altogether late last year. In one way, that’s too bad. We’ve all lost access into the mind of our neighbours and friends. But in the case of the CBC, making commenters uses their real names was in response to complaints after an attack that violated guidelines around hate speech.
Who are these online commenters?
According to a recent study out of the University of Texas, the majority of readers neither read nor post comments. Only about 14% of people have left any sort of comments on any news stories ever and most of those posted via social media. According to the study: “Those commenting on the news tend[ed] to be more male, have lower levels of education, and have lower incomes.”
49 Dietz becomes an Airbnb
So I took the little bungalow at 49 Dietz off the market. We didn’t try to sell it very hard. We received a couple of offers in the 60 days or so that it was listed for sale, but in the first case we signed it back pretty much at list price and in the second case we didn’t sign it back at all. (More on that offer below).
I think I listed it $10,000 too high or two months too early, but like I said, I didn’t really try very hard to sell it.
I didn’t take good photos.
I didn’t try to make it prettier than it is.
In the end, or really in the beginning, we decided that it is a good little place to keep for ourselves and our kids. It is in uptown. It is solid as an investment and as a little house. We’ve owned it for ten years and in that time, my mother and father-in-law lived in it for two years, we rented it to a young family for 3 years, then rented to some recent grads for a couple of years. My mother moved in after she sold her house and then my oldest daughter lived there. I put it on airbnb for a short while and that went well. It was actually really fun to be an airbnb host. I met some really interesting people. And I guess that is what we will do again, just to pay the bills.
So with keeping it, the problem is the fixed costs. The only fixed costs are the municipal taxes and the utilities, which are minimum when vacant. Even the water heater is owned, which is a bonus. But I haven’t got the time or energy to be an airbnb host, so I’m going to have another family member run it this time.
About that second offer
We didn’t sign it back partly because the real estate agent working with his buyer included a clause in the Schedule A that I’d never seen before.
It is essentially adding .5% more commission to the agreement increasing his commission from 2% to 2.5%. I think that is a little cheeky. He did not discuss this with me first and in my book, he is putting his own interests ahead of those of his clients.
Five reasons to buy a home near a shopping mall
Large retailers don’t just pop up in the middle of nowhere or in declining neighbourhoods. Companies make careful, and well planned-out decisions in coordination with municipalities and developers. Major retail expansion is good news as an indicator of continuing economic strength. For those looking to buy a home, it’s a sign to look out for new, expanding or improving neighbourhoods and solid buying opportunities. If the malls are doing well, the housing market is doing well too. There are lots of good reasons to buy a home near a shopping mall. Here are five:
1. You will not be in a declining neighbourhood.
2. You will be near public transportation.
4. Entertainment. Malls have movie theatres, ice rinks, museums.
There was a hijacking last week of an Egypt Air flight, by a man claiming to be wearing a suicide vest. He demanded to be taken to Cyprus.
The whole thing ended without bloodshed. The highjacked had some mental issues. So the whole thing turned into a kind of a human interest story. When was the last time there was a hijacking like this? Not since 9/11 for sure. Actually I don’t remember any highjacking in the 90s or 80s but in the 70s there were hundreds.
The US once had more than 130 hijackings in four years. Isn’t that an amazing statistic. Between 1961 and 1972 there were 159 hijackings in American airspace. Back then there was no airport security. Imagine that. Getting on an airplane was pretty much like getting on a city bus. And getting highjacked and taken to Cuba was seen as a bit of a lark and an inconvenience. No one really started taking highjacking seriously until people started getting killed. Airlines were reluctant to screen baggage as they did not want to inconvenience passengers and make them feel like criminals by searching their luggage.
The world has changed.
Call to action
There was a house listed and sold a week or so ago. It had lots of activity and there was a bidding war of multiple offers. Eleven buyers competed to get the house. The house was listed at $395,000 and sold without conditions a few days later at $430,000 —> $35,000 over asking price. It was a good house, but it wasn’t in my and my clients opinion a great house. We did not get involved in the offer process. We instead, watched from the sidelines.
This week’s call to action is really action through inaction. Sometimes it is best to do nothing, and let the others fight it out. My client scooped up a really good house on the weekend, in a snowstorm. It is a better house in our opinion than the one which had 11 buyers competing. Where were they when this one got listed?
This week’s parting thought
The real opportunities are not found in following others, but in finding your own path.