Andrew Plank

Welcome to December. My children have already made their Christmas wish lists; Pokémon seems to be the theme this year. It’s now December and officially NOT too early to get out holiday decorations and put up lights. Yes, ok, my wife calls me a “humbug”. She will be pulling out the tinsel and garland soon, and within the next week we will select and set up our tree. I may take a bit longer to get into the spirit than some, but, really, I do enjoy this time of year a lot. I just don’t get all festive quite yet. Bah! Call me Scrooge if you must, but until I’m visited by the spirits of Christmas past, present, and future, I’ll just have to go along with it. Should be any day now.

As the days get shorter and the nights get darker, there is something very comforting in having the vibrancy of the lights and sounds of the approaching holidays, the visits and gatherings with friends and family to warm us in the midst of winter. How dull and dreary could winter nights become without this excitement and festivity!

December is typically a very slow month for real estate, everyone has OTHER plans, so although sales have risen in the past two months, December will likely reverse the trend. If you look at November’s statistics, you’ll also find graphs with yearly sales trends and you’ll see this in past years as well. Mortgage rates are quite low again, and as I perceive many buyers sitting on the fence, I think we’ll begin next year’s cycle early, likely next February, as they tire of waiting, or the fence breaks under the strain. I still expect spring to be mixed and unexceptional overall. Sales will be soft relative to past years, but not outside the historical norm. We’ll definitely see more activity than the past fall; prices will likely remain near to where they currently sit.

I like being a Realtor. It's not so bad once you get used to the odd hours, its inconsistent and unpredictable nature, the ongoing expenses... I've worked hard to organize and systemize my business to ensure my client's get the very best, while allowing me more consistency and balance in my personal and business life. The thing is, I like to work, especially when I have clear goals and direction. Marketing and prospecting for business, while essential to my trade, are not my preferred way to spend time. I’m most engaged and excited when I work with clients with clear needs and a definite timeline. It’s the thrill of the hunt and the strategy of the sale which really make this business fun for me. Ok, so I’m doing my best to stay in touch and put myself “out there” as a market expert with blogs, twitter, advertising, and… newsletters. But I need your help to turn this work into the work I value. It's also the work that I believe makes me most valuable to YOU. In the last year, over half of my business came as a result of referrals by past clients and friends. Keep it up! I really appreciate your support, and want you to know that I rely on you to contact me when you or your friends have real estate needs and questions. You can rely on me to do my very best for them.

Because December is typically slow, and this year slower than past years, I also have more time for visits, catch-ups, and coffees. If we haven’t connected for a while, send me a note and I’ll buy the coffee. All the best, see you in 2011 if not before!

Hi everyone,

It's that time of year when we begin shifting gears preparing for the coming winter. I find the time change is when I really notice it. We keep the woodstove going, and try to keep warm and cozy at home in the evenings.

Dare I say...Christmas is coming around the corner! I'm not going to sweat it this year, but perhaps I shouldn't leave all preparation for the last minute yet again. It's nice to have a time in the mid-winter dedicated to warmth, connection, and sharing, and I ‘m feeling grateful.

Market Update:

I'm personally finding myself busier and busier as the fall progresses. In Victoria, we still have a large number of listings on market however, and buyers are cautious. I encourage buyers to still buy, but buy wisely, as there are many positive factors including low interest rates, negotiable sellers, and large selection.

Although Victoria stats are showing AVERAGE prices rising, I believe this is not sustainable, and furthermore, although MEDIAN prices rose only slightly for single family homes, condos and townhouses both lowered in terms of MEDIAN price.

http://realestate.about.com/od/mo/g/defmedian.htm
Definition: Median is a mathematical result that indicates that one half of the group is higher and one half lower. Median price of 101 sold homes would be that price which is lower than 50 of the prices and also higher than 50 of them.
Do not confuse this term with the average. They can be quite different for the same sample group. For instance, if you are doing a sold properties report and the homes are very evenly distributed, the median and average might be very similar. However, if the homes sold were weighted more to one end or the other of the price spectrum, then the median and average could be quite different.

Expect to see sales drop off substantially in December as everyone get's distracted by inclement weather and holiday preparations.

I think we may have an early market in the New Year, and encourage anyone thinking of selling to beat the spring rush and separate themselves from the crowd by listing in January or February. We can't know for certain what will happen this spring, but my feeling is that things will stabilize pricewise, while days on market will increase, especially as more and more people list properties in spring.

If you're considering a move within the next year, it would be a good idea for us to sit down and discuss strategy and timing.

Recent news:

New MLS Rules? Not really. It's been a matter of negotiation in Victoria for years. The changes are primarily back east where listing rules were tighter. I'll be blogging soon about the Real Value of having Professional representation. What the cost should be, I don't know, but if you understand the value, you'll understand there are benefits far beyond MLS access. It's really not about MLS access or MLS broadcast. MLS is a powerful tool, but it's not what ultimately creates success in buying or selling. Ok, enough of this or I'll have nothing to write about on my blog. Have you read my blog? Check it out at www.rooftopsmarketing.com

Major updates coming soon to my website, www.andrewplank.com

Thetis Heights Review, my Langford neighbourhood newsletter, is going online. Currently under construction, I'd appreciate any suggestions or feedback for content. www.thetisheights.com. It's created in Wordpress, a blog format, and I'm still working it out.

Have you heard of Uther Interiors? I'm considering using their services for 3D virtual tours on appropriate properties. Thoughts? http://www.utherinteriors.com/

Two big runs coming up for me, the Bear Mountain 10km, and the Gunner Shaw 10km trail run. Apparently Bear Mountain 10km is Canada's hardest 10km run. I remember when 1 km was hard for me. A major shift in the way I view my life and my work is learning we tend to overestimate what's possible in the short term and underestimate what's possible in the long term. Baby steps really do work when combined with a goal to keep you going along the path in the right direction!

If you're on Facebook, please check out my real estate page and be sure to "Like" it!

Recent Stats from the Victoria Real Estate Board:

http://www.vreb.org/pdf/vrebgap.pdf

http://www.vreb.org/pdf/vrebgal.pdf

http://www.vreb.org/mls_statistics/current_statistics.html

And I'm not just saying that because my boss wrote the article, it's actually very good advice!

Please click below for the article as published in this month's "What's Up" magazine.

"The Value of Real Estate", by Richard and Mike Holmes.

Key Points -

• Victoria, due to geography and other elements, has limited space for expanded growth outwards, which helps to keep values stable. Climate and social elements also keep Victoria in demand.
• Utilizing leverage in real estate can result in high rates of return, even when values increase only modestly.

Now, because I can't help myself, my 2 cents (Which, if leveraged properly, could result in at least a dimes profit!).

I'd like to talk about timing the market.

Ok, sometimes you don't have a choice of when to buy or sell. Life brings circumstances which are sometimes out of our control. But many first-time buyers sit on the fence, when they COULD buy, because they don't know if it's the right time. They are concerned they may be paying too much.

I'm value conscious (Cheap!), and I don't like to pay too much myself. But I also look at value relative to the market. It's really difficult to negotiate on a property based on where we "think" prices will be in 6 months. A good deal is always relative to the market we're in.

So, first rule of timing the market, is be willing to work WITHIN the market as it exists, or WAIT (on the fence) until the market clearly shifts (which it may or may not do). Key, be clear in what you're doing.

The second rule is, if you ARE waiting for the market to shift, if you are using the media as the indicator, you are too late. In other words, the media won't be reporting that prices have "hit bottom" until some time AFTER they've begun to rise. Savvy investors (not just in real estate), don't try to buy at the bottom, but NEAR the bottom, nor do they try to sell at the top, but "near" the top. Real estate has yearly cycles which you can benefit from, as well as longer term cycles. Ask me about this.

The third rule is, price isn't everything. If you can afford to buy now, you may not be able to afford to buy later. Interest rates change, lending rules shift, credit ratings alter, etc. Getting your foot in the door, for a first time buyer, is one of the most difficult things to do. My advice is, if you can afford to buy, buy. Get your foot in the door and then go along for the ride. Short term may be difficult, but long term benefits are amazing. Also related to this... When there is uncertainty in the market, it is SO much easier to negotiate favourable terms on a property, and there is SO much more selection and SO much less pressure. Ultimately, if it's a home, you have to live there, so be sure to buy not only based on value.

In the 1970s and early 80s you could buy a home for $100,000. Do you think the person who paid a bit too much, say 10% over market at the time, regrets their decision to buy? How are they feeling about their investment today?

What's your strategy for buying property?

I find most people end up using a "Buyer's Agent" to assist them but I do get calls on my listings from people who believe they will get a better deal working with the agent listing the home. It happens all the time.

The reasons I've been given is they think they'll have access to insider information and the agent, who stands to make significantly more money by assisting both parties, will be willing to flex with commission. They also think the listing agent may be more motivated to persuade the seller of the attraction of their offer.

Sure. These seem valid arguments from one viewpoint, and may in SOME cases save them money.

I don't believe it really works as a long term strategy though.

Here's why.

As a listing agent, my duties are to my seller. I protect their confidences and their financial interests. I disclose all known facts that could affect their decision. There is no leaking of "insider" info to a buyer. While it's nice to make extra $$ for representing both sides in a transaction, I won't compromise my ethics or morals, not to mention my legal obligations. I'm not motivated by the money; I'm motivated by doing a good job. So this strategy, while it MAY work with some agents, won't work with me (and I'd like to think, won't work with most agents).

I think people make the best decisions they can based on the information they have. Unfortunately, if they don't have a Buyer's Agent helping them, they don't have the best information. A Buyer's agent can provide real time listing information, compare property values, and negotiate in most cases free of conflict of interest concerns. They are often aware of properties before they are listed, and, having formed a relationship with their clients, know and recognize how to best serve their interests.

So, those who choose door number 2 are calling on stale listings, negotiating without representation, and expecting to save money. They may. But they likely won't be finding the best property for their needs, and may not save as much as they could by having their own representative.

I'd love to hear other opinions, and stories where either strategy has worked or not worked.

Thank you to Jo-ann Roberts and CBC for their coverage yesterday of the agreement between the Canadian Real Estate Association and the Federal Competition Bureau. Thank you as well for reading my response on the air today.

There is currently a lot of coverage of this agreement, and I'd like to say, a lot of confusion.

Most people don't realize that even before this agreement the public could list properties on MLS for whatever fee their Realtor is prepared to charge. And real estate companies are free to set whichever policy they wish for providing service and fee.

I've seen listings in the past years offering buyer agents a few hundred dollars for bringing buyers to the listing, and have heard of listings offering only $1. I haven't been privy to what they charged to actually list, but usually its $200-$500. Obviously, this isn't enough to maintain an industry. Regardless of what fees actually "should" be, a Realtor, through experience, education, and the authority given by their clients to represent their interests can provide value far beyond the financial. While change is in the air, it is incumbent upon those who seek service to understand the pros and cons of the various service models they are considering. At Pemberton Holmes, my brokerage, the policy is that, while I can charge whatever fee I wish, I cannot offer anything less than full service and representation. Other brokerages are free, as they always have been, to create their own unique model.

Below is a link to CBC's Podcast, the story is about halfway through. http://podcast.cbc.ca/mp3/bcallpointswest_20101026_40199.mp3

My response as read today on the air.

"As a working Realtor, I welcome changes which bring clarity and flexibility to my business. I'd like to note that Realtor fees do not reflect simply putting a property on MLS as was suggested on today's program. Realtors take on a very high standard of care and fiduciary duty, and often are expected to market and promote a property at their own cost and risk for months at a time and for thousands of dollars, regardless of whether the property sells. While "out of the box" solutions may work for some people, most "for sale by owner" properties eventually end up listing with a Realtor. Although MLS access is a reason for doing so, it is not the sole reason; there are many benefits to professional 3rd party representation. Before a seller chooses any one option, I recommend they do their research and weigh all the pros and cons. By the way, I don't believe we will see the dramatic changes to the industry as being forecast. Realtors in Victoria, even before this agreement, could choose to place properties on MLS with limited services and charge what they wish. It is the market which has always dictated the model and fee structures. Andrew Plank, Pemberton Holmes"