Sandra Dimock

CHOOSING A REAL ESTATE AGENT:
A DIFFERENT APPROACH
by Sandra Dimock

I've been there. When I was a homeowner in Toronto and looking to sell, I didn't know how to choose. The agent who had helped me buy my house many years before-well, I hardly remembered him except for the calendars he mailed to me every Christmas, which I promptly threw into the recycling bin, especially because his face was at the top of every month. There were limits to my love and memory of him.

My friends had no clear recommendation either. They told me to look through the real estate news and look for the agents with the biggest ads. The idea was, I guess, the bigger the ad, the better the agent. Flipping through those colourful pages, all that registered clearly to me was a bevy of very similar smiles and stares: some to the point of mania. The bigger ads caught more attention, but I wasn't sure that was the kind of agent I was looking for even then and now that I've been a real estate agent for a while, I am sure that that particular premise is not always true. At least not for me.

I'm sure you've heard the argument: look for the agent who has the most listings. More listings means success, people think. Higher salaries suggest expertise. Yes, obviously, it is true on one level, but if I were suddenly transported back in time and not a salesperson any more I would look for someone who doesn't have many listings. A lot of these 'big-ticket' broker types work in teams, hiring people or working with other agents of various types. If I were interviewing someone to represent me in my house sale, I would ask if they would be conducting open houses personally (this is just one indicator, by the way, I will get to others later) or getting others to do it.

Open houses are actually a contentious issue. Many brokers who have been in the business a long time will tell you that open houses are not a good idea. They will say open houses can actually be a venue for potential thieves to scope out a burglary. The veterans will say that most people who go through open houses are far from the point of buying and few sales actually happen during open houses so they are effectively a waste of effort. Still, some sales do happen on the spot or because of open houses and if I were a homeowner, yes, I would want open houses. The more exposure the better.

The listing agent cannot always be available on a given day, but as a homeowner I would want to be assured that the listing agent would be doing open houses personally a lot of the time. This is especially true for the agents' open house which to me, is very important. The agent open house often occurs during the first week or two of listing and it is the listing agent's opportunity to persuade other agents that your house meets the needs of their clients. You want the person who is making the commission on your house sale to be making the best pitch possible to other realtors.

You've probably heard stories of a realtor coming to a person's home, making a razzle-dazzle marketing pitch, the client signs on the dotted line and presto, the salesperson disappears. Here's a strategy to avoid this.

When realtors present you with their written marketing strategy (and he or she should have one), ask if they are prepared to cancel the agreement with certain notice if they don't fulfill their promises. If they are fully prepared to live up to what they say, this idea should not be a problem. If they start to look edgy or nervous at this idea, well, that would make me wonder. References are one thing but a satisfaction guarantee says much more. Personally, I would not want to force an unsatisfied client to keep listing with me if I felt they were dissatisfied with my services. I wouldn't feel happy about all the time and money I'd spent already, mind you, but it would strike me as the right thing to do-as long, of course, as the seller is acting out of good faith and not trying to scam.

Likewise you've probably heard the argument: look for the realtor with the most years of experience. Again the premise is more years equals better performance. This is sometimes true, sometimes not. The comparison might be between newer teachers and experienced teachers (you can guess my former occupation). Some teachers keep up with the times and new curriculum and are as vital a ever. Others may vary well be teaching the same subjects in the same way they did twenty years ago. Similarly, if salespeople come to your house for a property assessment and their market research basically comes out of the top of their head and they haven't even bothered to print out any comparable listings in your neighbourhood to show you, well, you shouldn't be impressed. Instead ask them about their marketing strategies. Will they have a virtual tour or at least a slide show of your house to present? What methods do they plan to use to market your property? You want to make sure that your representative will put in the required effort and advertising dollars to market your property in the best way possible with optimum exposure, especially in this internet-centred day and age.

Finally, make sure you like the salesperson. Some of the public has a strange attitude toward real estate agents: they are virtually invisible until it comes time to purchase or sell a property, then they suddenly come into focus. Don't underestimate the importance of needing to trust and like the salesperson. Market times vary according to region, but you may very well have ongoing interaction with that person, sometimes for months. Recognize that many sales people use 'sales scripts'. Take the time to see through the sales approach and try to get a feeling for the genuine person underneath.

Sandra Dimock

www.sandradimock.ca

Buying Homes in KW in 2008 and 2009: There still is hope!

I have been hearing it all over Kitchener Waterloo: "Should I buy a home right now or should I wait?". I've heard this from people who currently own a home and are toying with the idea of selling as well as from people who have never bought a home before and are thinking of dipping their toes into the biggest financial investment of their lives. Nervousness and apprehension saturate the air. A recent article in the Record claimed that sales were down in October of 2008 by 21.5% because buyers were generally reluctant to put in offers. This has translated in a longer average time for houses to stay on the market, although in KW so far, this time difference hasn't added up to much. In September, for example, detached houses in KW were only on the market a few days more on a average than the previous year (45 to 49), and while this average period may be expected to increase, I do not believe that the KW housing market will slow to the same degree that Toronto has and will certainly not suffer in the same way as so many regions in the U.S.

Where does this floating nervousness come from? Some of it connects to recent global market downturns and some of it to the particularly wounded economy of our giant neighbour to the south. What happens to the States will inevitably filter up to us-that is the common assumption. However, Canadians differ from Americans in fundamental way. For once our widespread parsimony is rising up to save us. To put it simply, we haven't taken the risks that many American businesses have. We haven't been giving mortgages to anyone who asks for one (mainly) so we are not faced with a nationally overwhelming subprime crisis. And culturally-yes I do believe Canadians have a specific culture with common norms-we Canadians have a horror about maxing out our credit cards or engendering bankruptcy so we are not facing the back-breaking, economy-crunching debt load of the US. In short, we are in much better economic shape.

Are we in for a bit of an economic downturn here? I wish I could say no. In fact, like you, I wish I could say: if you bought a house right now and sold it in a year, you'd make substantial profit. It seems likely to me that our housing prices will stop increasing so precipitously, may even dip slightly, but I don't believe that we are in for the same kind of real estate shakedown that Toronto has recently experienced. As a former Toronto home owner, I have experienced the Toronto real estate boom firsthand. In twelve years, the value of my property more than doubled. However, it did seem like the Toronto market had a ‘crazy' period not so long ago; housing prices became grossly inflated; so a re-adjustment in value seems natural, even inevitable. In fact a recent Globe and Mail article stated that, in a year, the average house price in Toronto has dropped from $434,022 to $376,896 and overall sales are down 38 per cent. In KW, although we once had a very strong ‘sellers' market", our prices did not rocket up as explosively as in Toronto, so the readjustment may not be nearly as dramatic.

While house-flipping might be a riskier investment choice in than in the recent past, I'd wager that if you bought a property right now (assuming that it is a viable choice in the first place) and held onto to it for five or more years, you'd get your money back and more. Economic cycles are part of life, but I believe that our economic leaders have learned enough to forestall a grand depression in the near future. Am I being optimistic? Yes, but even the experts admit that economic forecasts have an element of faith in them; no one really knows all the economic variables that will pan out in the end or how creative we can turn out to be.

KW's economy is especially strong and still growing. Our universities and hospital are expanding; our downtown and shopping centres are being revitalized. New schools are being built and have just been built, including the School of Pharmacy in downtown Kitchener. Real estate investors have been flocking to put the big bucks in. As Dr. Sherry Cooper, Chief Economist of BMO Capital Markets stated in a report earlier this year: "Once the current weakness passes, we expect growth in Waterloo-Guelph to exceed both the Ontario and Canadian rates over the 2009-12 period" (www.bmocm.com/economics). So why are we afraid? A crash in housing prices seems highly unlikely.

First time buyers can continue paying rent until they decide to take the plunge; in the mean time, they may very well miss out on that elusive ‘perfect' house out there. Likewise, sellers can continue holding onto their property till brighter economic days, but when that will happen, remains to be seen. If sellers plan to buy another property in this current ‘buyers' market', they may lose a little in the selling, but gain a little in the buying. It all evens out.

So our local economy is still growing. The housing market is actually pretty stable; it is only our perceptions of it that have gone a little wonky. As Michael Pritchard said "Fear is that little darkroom where negatives are developed". So I say-take a chance, believe in us. KW is a wonderful place to live!