Greg McCarvell

Last week I travelled to British Columbia - I toured through the Okanagan Valley (which includes Kelowna, Vernon and Penticton), Vancouver and Vancouver Island (Victoria, Sidney, Comox Valley etc.). This has to be the most picturesque part of Canada! While there I spent some time experiencing the local real estate markets and learned how important it is to verify the scope of information you base your decisions upon.

Keep in mind this examples presented in this entry are time and date sensitive, I am including specific numbers in order to illustrate the concept.

Comparison of the Markets

The real estate market in B.C. right now appears to be on a downward trend. Based on the British Columbia Real Estate Association’s website the dollar volume for B.C. real estate sales were down by 38% in July 2008 vs. July 2007. Units sold volume was similar with a 37% drop. Interestingly though, the average price only fell by 0.5%. In 2008, with yearly unit sales falling 24% province wide, the average sale price was up compared to 2007 by 8.2%.

These figures indicate to me that the average prices in this market have a strong possibility of trending downwards or at least leveling out. When the demand lessens (number of sales, increased active listings, decreased unit volume) the market tends to shift towards the buyer’s favour. In a buyer’s market there is a more competitive landscape for sellers leading to lower prices.

London in contrast had a strong July, not a record breaking year, but the second best on record. While year to date unit sales are still down 9.1% in comparison to 2007, the market is robust and healthy. Another factor I consider contributing to the strength of London is the affordability. Below is a summary of average home prices in a few different cities across Canada since January 2008:

London & Area: $213,603

Calgary $416,109

Greater Vancouver $615,012

Toronto $ 390,289

Edmonton: $339,147

Hamilton: $285,666

British Columbia has been outpacing other provinces in average sale prices for some time now. This makes me wonder what is driving the prices. I see the draw of the province with it’s beautiful environment, picturesque cities and wide range of world class outdoor activities. Conversely, there are a lot of financial opportunities and population centers in other provinces that should appeal to people’s financial sensibilities.

Affordability

What makes a market affordable? It is largely indicated by the ratio of income to housing prices. According to the Frontier Centre for Public Policy’s Housing Affordability Survey, the following Canadian cities ranked in the most affordable and least affordable cities:

Affordable in Order: Thunderbay, Saguenay, Saint John, St. John’s, Regina, Windsor, Quebec City, Trois-Rivieres, Winnipeg, Sudbury, London, Oshawa, Ottawa.

Least Affordable in Order: Kelowna, Vancouver, Victoria.

The fact that these three B.C. cities are the only ones that rank amongst major US, Australian, UK and Canadian cities shows just how much they have outpaced the other areas of Canada. Knowing all the information in this entry, I will say I would still consider making B.C. a place to live - there really is no other place like it!

You may be reading this entry out of interest - you may be reading it because you are in the market to buy and sell luxury real estate - whatever your case I welcome you! Big goals and dreams are the starting point for success in life! Please read on for an all-round taste of the luxury real estate market as it pertains to London and area.

What is a “Luxury Home”?

I think the answer to this question is largely subjective. It is also a moving target! Generally speaking, the luxury home in the London real estate market today is considered over the $500,000 range. Even more specifically, over $700,000 is where you begin to see very unique, custom built dream homes. How do I know? Well, I asked LOTS of people

Over time I have been developing a niche specialty in luxury homes to compliment the other facets of my business. In the last year I have had the opportunity to represent 7 listings between $550,000 to $1,300,000. One thing is for certain, without experience in this realm it is truly impossible to grasp the true value many of these home owners have invested. You can see examples of these homes throughout the website - all photos are listings I have personally represented at some point. Nice Homes

How is Selling a Luxury Home Different?

Understanding the differences in selling a luxury home is based mainly on understanding the fine home buyer. Put yourself in the seat of a buyer - they have worked hard - quite often for years on end so they could one day enjoy the fruits of their labours. As a buyer this type of person is not likely to settle in many respects. They have definite needs, clearly outlined wants and most importantly a sense that it’s time to fulfill a long planned dream. For some it’s size, others it’s a “kitchen to die for” or like me it’s to find the perfect setting just outside the city. How do you cater to these demanding requirements? With a much more in depth selling approach

Think in terms of magnifying everything in a more typical transaction. More photos, better quality images, a more detailed website, glossy brochures, extensive feature explanations etc. When selling a luxury home, explaining all the information in great depth is key. Similar to this is putting everything in a nice “lifestyle package”

A lifestyle package approach is really about spending the time to profile the target buyer. What would someone buying your home likely be looking for - what type of lifestyle are they probably looking to achieve. Once this is established you need to delivery the message of the features in a step by step build up painting exactly the picture of the lifestyle they desire! Remember, in a typical transaction the mindset is often “this house works great!”... but another will be along in a couple of months that would probably suit us just as well. A luxury buyer quite often has been keeping their eyes out for YEARS!! The message of possible lifestyle needs to be delivered with absolute clarity and followed up with emotional triggers to get a seasoned “house waiter” off the chair into a buying position.

Seller expectations are also important. In most cases the time frames from listing to sale on a luxury home is longer in comparison. This is not a negative thing, simply a reality that needs to be understood. You will be dealing with a more focussed but less plentiful buyer, the first few weeks are key for identifying all the “house waiters” in the wings. It is imperative you have a crisp approach from the first day listed in order to capture this market. After the initial month, you will need to go into a mode of optimistic expectation. Patience is a virtue at this time - think of it as the last chances you have to enjoy your current setting and soak up every minute

Finally, be sure to choose the right person to represent your interests. Having a person without experience can be a major liability. Buyers who can purchase your property tend to have less tolerance for mistakes and misinformation. If you are working with an agent who doesn’t know the depth of knowledge required on the property, potential buyers will become frustrated with what is seen as an uncaring sales person who didn’t have the courtesy to educate themselves on the product they are representing.

Buying a Luxury Home

Purchasing your dream home is an experience like no other! One thing I always encourage my clients to do is keep the process an adventure - think of it as searching for treasure. A home hunt can get the best of you at times, with the proper perspective it can always be exciting and new

You first need to start with the basics - defining the dream! Where will it be (out of the city, in the city), what will it have (a pool, a sauna, a ravine lot), what will the layout include (main floor master bedroom, games room, three car garage, third floor loft), these are all examples of good questions to ask yourself. Spend some time, get it all down on paper. Might I recommend a specially designated coil pad? Keep this pad with you in the car, when you think of something new, add it to the list and rate it accordingly with a “must have”, “would be nice” or “absolutely not”

So now you think you know what you want right? It’s time to view your first set of homes. Take a snapshot of what is available today, be very inclusive in your approach at the beginning. One of the keys to the step previous is experiencing different homes. Chances are you are moving up into a new price range - perhaps there are qualities available in a home that you aren’t accustomed to are even knew existed! Viewing a few listings will probably trigger more ideas

After the initial viewings, if you didn’t find what you are looking for you will need to get into a scanning game plan. Develop a plan with your Realtor on how to communicate new listings - typically email is the best. Be sure this plan is wide range, experience is a key again. The luxury market has a way of working itself in many cases outside of the MLS umbrella. Be sure your agent is in tune with the market and will be privy to pre-listing information from other Realtors in the area.

Be patient. Remember, you are hunting for a treasure! Keep at it and don’t loose sight of the goal!

For additional information on the luxury market see www.londonluxury.ca

In the life of a Realtor, winter is the opportunity to upgrade your skills. This could be technical courses, business system performance tweaking, sales and service training or an great time for a vacation to recharge. It's quite often that people fail to recognize patterns in their life and take advantage of the natural cycles. Below is an outline of the plans I have for this year and why I think it addresses an important part of my business life in general. Perhaps some of these thoughts will be useful to you after translating to your life and your situation.

1) Techincal training: I am currently enrolled in a course studying the details and regulations behind property management. I felt this would be a good foundation course to help investors understand the needs for properties they may purchase and also serve any future investments I may secure myself. To me, technical training is important. I make sure not to go over board - afterall my role is a service role. Service requires action - techincal training is good to support that role, but is never a replacement.

2) Sales and service training: I am scheduled to attend a two day event in Toronto focussed on customer service and client satisfaction. The trainer is Brian Buffini. I found his introductory material interesting because the approach they use stresses improving your service levels to gain more business (through referral) rather than spending time with prospecting activities that do work, but generally annoy people (cold calling, door knocking etc). With a service oriented approach everyone wins, my clients will have the best service possible and I will reach the goal of having a healthy, profitable business that serves it's clients with excellence.

3) Systems overhaul: I've been working heavily on my marketing systems, websites and follow up systems to support a few areas that I feel are not living up to my standards. By the new year I believe I will have the most advanced real estate services on the web and also have a nice backbone of systems to ensure prompt, unprecidented service levels. I'm really looking forward to 2008.

4) Vacation: Montreal is the destination - it will be a great time!

There have been a lot of changes in the real estate market since my previous posts, mainly in the U.S.A. London has been a nice, steady and strong market consistently for the past couple of years (probably even longer). I am just now starting to see evidence of a market shift from an extreme seller's market into a balanced market.

Even this perception is up for debate. Many sources feel London will be strong in the following years because we didn't see the massive upsides that other major centers such as Toronto and Vancouver experienced. Compared to most cities, even ones right in our immediate vicinity, London is quite affordable. This affordability in comparison to similar cities in our region makes it an attractive destination for relocations.

With all of this in mind... if we were to experience a slower market in the near future my advice to a home buyer/seller would be as follows:

Buyers
- Take advantage of some choice. For quite awhile buyers were forced to pounce on the first house they liked or take a very sincere risk of losing it to another buyer. In a slower market, you might just get that chance to "sleep on it". Now take that with some caution. If you've found the place, you've found the place. If you know it's right, go for it - why take a chance!
- Keep a log of homes and take time to really compare. Since you have a selection of homes to ponder you can take time to really compare and think of each house in relation to your life. Generally it's wise to use this as your very first step in the buying process. Arm yourself with a pen and paper and start writing a list of what you want and don't want in a house.
- Negotiate. If your Realtor is timid and you have the ability to find someone new - do it. A lot of agents will have become soft during the seller's market and will find it difficult to grind a little bit for a good deal. Please don't misinterpret a bold person for a rude person. There are ways to ask for significant discounts and be very polite and tactful.

Sellers
- Take a load off and relax. It may take a bit longer than 2 weeks this time! No problem, the goals is still the same - find the right person.
- Realize that you may not sell for over list price. No one can predict exactly what your house is worth or how many buyers are out there looking for a house like yours. It would be wise to price with a little bit of room to discount because in a balanced market, this is normal practise.
- Understand the tradeoffs in price. Unless you are cashing out of real estate entirely, realize that real estate is like a currency. If you're not getting to the price point you might have expected, understand that you will gain that difference on the buyer's side. The basics still hold true - moving to a superior home costs money and downgrading to a less substantial home nets you money.

You will find many different forms of marketing as you interview real estate agents to sell your home. I thought it would be useful to present the bare minimums that you should be offered. The following marketing tactics are the basics, the most common actions.

The "For Sale" Sign
I know it seems obvious. Well, it is your choice if you have a for sale sign on your lawn or not, my recommendation would be to definitely have one. Many sources state that 20% of your potential buyers will be alerted by your sign. Immediate neighbors often know a contact. Many times people who have interest in an area will drive the roads within searching for signs. Make sure you get a commitment from your Agent to inspect the sign on a regular basis and ensure the sign is in proper repair.

Open Houses
An open house is particularly crucial when you first list your home. Let's face it, having people come though your house to inspect the property is not the most convenient thing - what's worse is when they are all spread out evenly for 3 weeks. Have your agent commit to an open house on the first weekend when your listing will appear in the MLS database and ask them to hold off all individual showings until after the initial open house. By promoting this open house, you may be able to avoid some unnecessary disruption in your life and get a volume of showings completed in a short period of time.
Some other quick tips in this area - be sure you agent has the assertiveness to gather names and phone numbers of buyers and follow these leads up. I don't know how many times I have been to an open house and not even been asked for contact information.

Individual Showings
Your agent should be very flexible in the times they offer for showing your home. Arrangements for your availability should be the only limiting factor, an eager Realtor will make themselves available. There are times when a buyer agent will ask that the home owners either stay in the background or not be present. This is normal - if a home owner is not on the premises buyers feel more at ease to discuss things about the home and get the answers they need. Trust your Agent's judgment on this one and be as flexible as you can.

Information Sheets
A complete summary of what your property offers should be prepared prior to listing on the MLS system. Make sure a few copies of this sheet are left with you in case someone asks you for the details of your home. A professional presentation on paper can set a good first impression.

Classified Advertising
A small blurb in the newspaper is a good idea. Some people check these on a regular basis. Probably a more effective place for a classified ad is a specialty paper dedicated to real estate. These are normally free to readers and contain a wealth of listings in one place. People who are truly searching will definitely be reading these publications.

Inclusion on Office Ads
Most Realtors work for an office that does advertising in different areas. Be sure to have your Agent push to have your home included on these ads if at all possible.

Websites
realtor.ca is the largest concern here - be sure to allow multiple photos and even a virtual tour for this site. The amount of visitors is astonishing and the more information you can put in their hands the better. Inclusion on franchise, office and personal websites is also a good idea.

As I mentioned, these are the absolute basics. In later writings I will be exploring some of the more unique ways to market your home.