My blogs (26 Jun to 20 Aug 2011) have been added here for ease of reference.
Real Estate Customer or Client – Which are You? Posted on August 20, 2011 by Brett Cairns
Real estate agents in British Columbia are licensed to be able to provide real estate services to people in exchange for remuneration.The Real Estate Services Act (Part 1) defines such services as advising on an appropriate price for the real estate, making representations about the real estate, finding the real estate for a party to acquire, finding the party to acquire the real estate, showing the real estate, negotiating the price of the real estate or the terms of the trade in real estate, presenting offers to dispose of or acquire the real estate, and receiving deposit money paid in respect of the real estate. Before providing such services, however, agents are required to disclose a number of things to consumers to include the nature of the relationship that the licensed agent will provide to the consumer. The relationship that is created may be an agency relationship, a limited dual agency relationship, or no agency relationship. The required disclosure must be done at the first reasonable opportunity.
Why is this important? It is important for two main reasons. First, real estate agents, by law, have legal obligations to fulfill before they start providing real estate services to consumers. Second, consumers need to understand that these legal obligations exist, and they need to understand what general and fiduciary duties they are owed, the limitations that may be placed on these duties, and the types of services that they should expect to receive.
Often misunderstood is the notion that real estate agents are merely salespeople. By law, real estate agents are held to a higher professional standard. They are obligated to follow written professional standards while they discharge their duties under the Real Estate Services Act. As well, REALTORS ® who belong to the Canadian Real Estate Association also have obligations that are established in the REALTOR ® Code.
Also often misunderstood is the difference between the consumer as a customer, and the consumer as a client. When you walk into a store or onto a car lot looking to purchase something, you are a customer. The business does not represent you, and they will often try to get you to purchase something on terms and at a price favorable to their business. When you enter into a professional relationship with a doctor, lawyer or real estate agent (unless you have no agency relationship with the real estate agent) you are a client. As a client, your professional has a duty to represent, and to protect your interests as specified by applicable laws and regulations.
In a perfect world, all real estate agents would discharge their duties fully, and to the highest standards possible. However, this is not a perfect world. The character and motivation of the individual real estate agent will often play a role in how fully and well these obligations are discharged. As a real estate client, your real estate agent has general and fiduciary duties to you, and it is important that you understand what they are. In British Columbia, real estate agents have obligations established in the Real Estate Services Act, the Real Estate Council of British Columbia Professional Standards Manual, and the real estate board, such as the Vancouver Island Real Estate Board, to which they belong. Most real estate agents also have obligations established by the REALTOR ® Code of Ethics (either because they are REALTORS ® or because an organization such as their local real estate board has adopted the REALTOR ® Code of Ethics.
What does this mean in practice? Consider the following hypothetical examples: First, a real estate agent is primarily motivated by making money and only provides services required by law. Second, a real estate agent actively seeks listings while ignoring solicitation limitations placed on them by a local real estate board that they consider unenforceable. Third, a real estate agent seeks out and accepts listings even when they know the owner’s asking price is way above market value so that they can get their sign (and name) on a property with the intention of talking the seller down in price after they sign a listing contact. Fourth, a real estate agent tells a buyer or seller what they think they want to hear to make a sale instead of what they need to hear, and in doing so, risk losing a sale. Do you think any of these hypothetical examples are acceptable behavior (legally and/or morally) in the eyes of the organizations that regulate the conduct of real estate agents?
As consumers and clients we all, at some time or another, rely on and depend on a variety of different professionals to provide us needed services. Laws and codes are written to guide, regulate, and enforce the conduct of professionals. We can better protect ourselves as consumers if we get to know what is expected of our professionals. As a real estate professional, I am happy to discuss any or all of these issues with my clients. People who are better informed are generally more comfortable with the decisions that they make in life, and in turn, they will be subject to fewer unwanted surprises. If you are not currently working with a real estate agent and you need information on the Comox Valley Real Estate market please do not hesitate to contact me.
Comox Valley Real Estate – A Time to Buy? Posted on August 14, 2011 by Brett Cairns
This year, an often asked question in the Comox Valley real estate market is “Is this a good time to buy?” Clearly, the answer to this question will vary according to individual circumstances. People who are trying to answer this question may wish to consider some of the following information.
One of the most basic questions is affordability. Some money is generally required as a deposit to make an offer on a home. An additional amount of money as a down payment is required for your mortgage lender to advance you a mortgage on your new home. More money is required to cover the closing costs associated with completing the contract of purchase and sale. Have you analyzed these financial requirements in your particular circumstance? Do you need someone to help you do this? As well, consider that sellers will often ask if a buyer has been pre-qualified for financing (assuming that financing is needed). Are you financially pre-qualified?
Interest rates are often a consideration when people consider borrowing money. The following chart, based on Bank of Canada statistics taken from the Canada Mortgage and Housing Corporation, provides a long-term perspective on current interest rates.
As you can see, current interest rates are as low as they have been in 50 years. While the BC Real Estate Association is forecasting increases to interest rates over the next two years, there has been some recent speculation that we may see interest rate decreases in the very near term. Even if the rates drop in the near term, how long will interest rates remain at or near their 50 year lows before once again increasing? If low interest rates are a deciding factor for you, what do the current rates and the longer-term forecasts tell you?
If you have the money to buy and you agree that current interest rates provide you good value (less money spent on financing leaving more for the purchase), is there a good selection of homes on the market? Take a look at Comox Valley Real Estate Market General Information on my website and you will see that the supply of homes on the market remains fairly high.
Have you created a list of what is important to you in a home? The list may include things such as features, location, and condition. To see if there is a home that will meet your needs perform a basic MLS ® Search of homes to see what is on the market. While an internet search may provide you with some basic information, there is no substitute for first-hand knowledge gained through the viewing of homes when it comes to the location, features and condition of homes.
Buyers often only become buyers after selling. If you need to sell your current home before being able to buy a new one, will current market conditions affect your decision to sell? When trying to answer this question have you considered the selling and buying ends together? For example, if you make less money at one end, you may also spend less at the other. Conversely, if you make more money at one end, you may also have to spend more at the other.
If you have the money and the time, and you have given some thought to what you need in your next home, do you think that now is the time to move forward as a buyer? If you need more information to help you decide, or if you have decided to buy or sell, contact me and I will be please to help you with your real estate needs in the Comox Valley.
Cost – Value – Price: Comox Valley Homes Posted on August 7, 2011 by Brett Cairns
How much is my home worth? This is one of the often most asked questions that I receive as a real estate agent in the Comox Valley. Before discussing this issue, let’s first look at the difference between cost, value, and price.
The cost of a home is what you paid for it. The value of your home at a specific point in time can be described in a number of different ways, and I will discuss several of them in this blog. The price of a home is generally what a seller is asking for the home when they place the home on the market to sell. Let’s briefly discuss the following three types of valuation of a home: appraised value; value to owner; and market value.
Appraisals of homes are often made of homes by certified appraisers for a variety of reasons that include such things as : valuation for tax purposes; valuation for mortgage lending purposes; and valuation for sale upon foreclosure. When valuations are done for tax purposes, the appraiser is guided by provisions in the relevant Acts. When valuations are done for mortgage lending purposes, lending value is generally defined as a long-term conservative estimate of market value. When a valuation is done on a foreclosed property, the appraised value will have been undertaken at a specific point in time. Based on this brief discussion of home appraisals, it is easy to understand why the various types of appraisal mentioned could result in different dollar values estimates pertaining to the same home.
Value to owner is more difficult to quantify because of the many elements that may go into what a specific owner deems valuable in the home. The owner may have paid a certain amount of money to build or buy the home, and subsequently may have invested additional money in the home through various renovations. The owner may have some sentimental or emotional attachment to a feature or features in the home that they believe makes the home more valuable. Each of these factors may have a bearing on what the owner believes is the value of their home.
For the purchase and sale of real estate, only the market value of a home is most relevant. The market value of a home is determined by the market (not by the person doing the market assessment). Market value is based on recent sales prices of similar homes in the same neighborhood. What constitutes recent, similar and same can vary according to the specific location and real estate market within which the home is situated. It is often said that all politics is local. With real estate, market value is often very local.
It is important to realize that just because a home is listed on a specific real estate market by a real estate agent, it does not mean that the home is listed at market value. Sometimes owners will decide to list the home above, at, or even below market value. Why they choose to do this is often as varied a reason as the people are individuals. For example, an investor who is in no hurry to sell a home may choose to “test’ the market and list above the market to see how much they can get for the home. Someone who has to sell in a hurry may list below the market value. Whatever the reason, it is always wise for a buyer to know the market value of a home before they decide to make an offer on a home. Similarly, it is wise for a seller to know the market value of their home before they decide to list their home.
While the determination of market value may seem straight forward, this is not always the case. Ask three real estate agents what the market value of your home is and it is possible that you may get three different figures. Ask your real estate agent to explain in some detail how they came up with the market value. Sellers may wish to ask more than one agent for an assessment of market value and how they determined the market value in order to assess the rigor that the agent applied in the determination. I am more than happy to explain the process that I use. Should you wish to discuss the market value of your home in the Comox Valley with me, please contact me.
Real Estate Realty TV – Real or Not? Posted on July 31, 2011 by Brett Cairns
During the past few years “reality” television shows have appeared in many different forms. Among them are shows that focus on homes and properties. While many of them offer entertainment value; some even offer good tips for homeowners, and buyers and sellers of real estate. However, some also present bad information when it comes to real estate. Competent and well informed licensed real estate professionals can provide you with valuable information in this regard.
For example. some of these shows discuss the purchase price of a home within the context of a budget to renovate the home. Unfortunately, the discussions always focus on financial simplicity and they leave out information that is important to real buyers of homes. A recent episode of a show I watched discussed having a budget of $700,000 to buy and then renovate a home. The purchase price of the home was $620,000. The show presented the renovation budget as merely the difference between the budget and the purchase price.
Not so fast. While this type of representation may be acceptable for television, it is not acceptable for a “real” real estate transaction. Before any prospective buyer starts looking for a new home, they should be familiar with all of the typical costs associated with the purchase of a home. For example, in British Columbia, the property transfer tax levied on the purchase of real estate is significant. Other costs include those associated with legal fees, costs associated with a mortgage, home inspection costs, etc. In total, these costs often represent thousands of dollars. Ask your real estate agent about the types of costs that could be applicable in your specific circumstance.
A second example of false reality in some of these shows concerns the investment and subsequent return on investment of the renovations made to a home. While watching one particular show, the following example was provided. The market value of the home before renovations was $450,000. Renovations that cost a total of $40,000 were made to the home and the home was valued at $520,000 after renovations. This would be very, very, rare in real life. The Appraisal Institute of Canada provides some statistical information that provides a sense of the actual return on investment for specific renovations in a home.
While some types of renovations may realize significant returns on the investment, others do not. In fact, some types of renovations could actually realize a loss according to the statistics gathered and presented by the AIC. Even these statistics, when applied in isolation of other market elements, may be misleading. A competent real estate agent should have all of this information available (or be able to obtain it) for his/her clients. Just because someone spent $40,000 on renovating a home does not mean that the home is worth $40,000 more in a specific market.
These two examples are provided merely to inform of the potential risks that prospective buyers or sellers of real estate could take by drawing any conclusions about real estate, and real estate transactions, from television shows. Consult a competent and well informed real estate agent, and other competent and well informed real estate professionals for advice in their respective areas of expertise. Being better informed is a part of being prepared when it comes to the renovation, purchase, or sale of homes. If you are considering buying or selling real estate in the Comox Valley, and you need real estate advice call or email me to book an appointment with me. I would be pleased to help you with your real estate needs.
Real Estate Agents – A Spectrum of Character, Capability, and Competence Posted on July 22, 2011 by Brett Cairns
For more than 40 years, I have observed that people possess various motivations, and that they also possess a variety of levels of knowledge, practical life experience, and competence in what they do in life. Real Estate Agents are no exception.
Before a real estate agent can apply for a license they must pass a licensing exam. If you are dealing with an agent who is relatively new, would you rather have one who barely achieved a pass on the exam or one who did very well?
In order to maintain their license, a real estate agent must complete a specified number of continuing education courses. Would you rather deal with an agent who attends the minimum number of courses or one who is constantly working at acquiring additional real estate knowledge through a variety of means that include self study?
While practicing, real estate agents are called upon to provide advice on real estate matters. Would you rather deal with one who tells you what they think you want to hear in order to get a listing, or one who truthfully tells you what you need to hear to sell your home?
Real estate agents use a variety of means to market your home. Given the emergence of the internet as an important medium through which buyers first start to look for a home, would your rather deal with an agent who is internet savvy and has a website that ranks high in internet searches or one who does not have a website (or a website that performs poorly in internet searches)?
Many real estate agents have a listing presentation that they present to sellers in order to compete for a listing. Would you rather hear from several agents to see how their approaches compare, or merely select one without having seen first hand how they compare to others?
Technology has become increasingly important in real estate. Would you rather deal with an agent who employs technology appropriately and effectively, or one who is technologically challenged?
Personal and professional networks are important in real estate. Would you rather engage an agent who is connected or one who is not?
Thoroughness and attention to detail are often hallmarks of an effective professional. Would you rather deal with an agent who does only what is required by legislation, or one that goes well beyond what is necessary to provide you with great service?
Knowledge is gained over time through education, training and experience. Would you rather deal with an agent who has limited life experience and life skills, or one who has faced and overcome a wide spectrum of challenges in life, and who has highly developed life skills and an extensive breadth and depth of life experience?
While there are exceptions, many real estate transactions are the result of time and exposure in a given market. Would you rather deal with an agent who ensures that you get personalized attention and regular and timely communication from them, or one who only contacts you when they have something to report or not report at all unless you chase them?
Motivation is a very important aspect of real estate. Real estate agents will ask questions to determine the motivation of buyers and sellers, but who is asking questions to determine what motivates the agent? Would you rather deal with an agent motivated by providing service as a top priority, or one whose prime motivation is making money?
Clearly, these are only a few of the many questions that a person could ask themselves when considering a real estate estate to represent them either as a buyer’s or seller’s agent for the purchase or sale of a home. The time taken to think about what is important to you before embarking on this process may be time well spent. Each of us has different standards and expectations. Do your research, ask questions, and talk to several agents before choosing. When I was a young client I did not do this, and I should have. There are some great agents out there. Some are well known and some are not. By better understanding their motivation, life experience, and approach, you will be better informed so that you can hire the one that is right for you.
How Can I Buy or Sell Real Estate When I am not available? Posted on July 16, 2011 by Brett Cairns
There are situations and circumstances in life that arise from time to time that make the purchase and sale of real estate in the Comox Valley Real Estate market more challenging. Consider how difficult this might be if you were not available, or accessible, for some period of time during which you wanted or needed to proceed with such a transaction.
There are some situations and circumstances that may prompt a buyer or seller of a home or property to consider appointing someone to act on his or her behalf. Here are just a couple of examples. You either want or need to sell your home, but you are scheduled for an upcoming major surgery that will require a fairly significant period of recovery. You either want or need to sell your home, but you will be away on holidays in a remote location (such as the West Coast of Vancouver Island) where you may not have have access to communication utilities such as a phone, cell phone or the internet. What do you do?
One potential option is a Power of Attorney. A Power of Attorney is a written authorization to represent or act on someone’s behalf in business, private affairs, or some other legal matter. For example, a Power of Attorney could be drawn up by a lawyer or notary for a person to sign on behalf of another person for the purchase of a home or property. Your lawyer or notary will be able to explain the benefits and potential disadvantages of signing a legal document such as this.
When it comes to the use of such a document for the purchase or sale of real estate, the Power of Attorney must be in proper form. Seek the advice of a lawyer or notary to ensure that the form of Power of Attorney is valid and acceptable for Land Title purposes.
In addition to the Power of Attorney being valid, and in acceptable form, there is an accepted correct way of signing a real estate document on behalf of another person using a Power of Attorney. The Real Estate Council of British Columbia disseminates information in this regard, and your real estate agent should be able to provide you with it.
While a Power of Attorney may be valid and in proper form for Land Title purposes, this does not necessarily mean that all other organizations that may be involved with elements of the transaction will accept the document. It is always prudent to check with them first before planning to use it for purposes other than Land Title registration. For example, if you plan on signing mortgage documents related to the real estate transaction on behalf of someone else using the Power of Attorney, will the mortgage granting organization accept its use for that purpose?
A Power of Attorney can be used effectively for a real estate transaction when a person’s individual situation or circumstances merit consideration of its use. However, it is important that legal advice be sought by the person contemplating the use of such a legal document. Become fully informed before authorizing someone to act on your behalf for a real estate transaction.
Buying From an Estate Posted on July 10, 2011 by Brett Cairns
Occasionally a property will be listed on the Comox Valley Real Estate market as an estate sale. When buying from an estate, there are a few things that are different with such a sale. Having said this, a competent real estate agent should be familiar with the differences, and should be able to provide you with the advice and help necessary to ensure a smooth transaction. Note, however, that real estate agents do not provide legal advice – seek the advice of a lawyer for legal advice.
In very basic terms, an estate consists of what was owned by the person who died. Property is often part of an estate. An executor is the person named in a will who is responsible to gather up the assets of the estate, pay the debts of the deceased person, and divide the residue (remainder after the debts are paid) of the estate among the beneficiaries. Where no executor is named (and in some other circumstances) the court may appoint an administrator of the estate.
If a deceased person owned land or a home in joint tenancy with another person, the executor will file an application with the land Title Office along with a death certificate to register the land in the name of the surviving joint tenant. However, there are situations and circumstances within which the executor will have to apply for probate in order to deal with certain types of assets in an estate such as property. Probate is the process of obtaining a court ruling that a will is legally valid.
When a property is to be sold by an estate and probate is required, an offer to purchase the property will be subject to the granting of probate by the court. In practice, this means that the completion date established and agreed to in the contract of purchase and sale between the buyer and the executor is dependent on the completion of probate. The key here is for a purchaser to be flexible on completion dates since probate may take longer than the executor anticipates.
It is interesting to note that the British Columbia Wills Variation Act (RSBC 1996 – chapter 490) makes provision for a child or spouse of the deceased to apply to the court to amend or change the terms of the will within six months of the granting of probate. In practice this means that the executor must obtain releases from all people who are entitled to apply under this provision before proceeding with any distribution of the estate within the six month period.
For these two reasons above (the requirement for probate and the provisions of the Wills Variation Act) the subject to clause inserted into a Contact of Purchase and Sale for the benefit of the Seller will: address the requirement for a grant of letters probate (or letters of administration when circumstances necessitate the appointment of an administrator of the estate to perform duties similar to those of an executor) which will allow the property to be sold; and provide assurance that everyone entitled to claim under the Wills Variation Act has waived or released their claims to the property.
This blog only touched on a few of the responsibilities of the executor of an estate involving property. As well, the blog very briefly introduced the requirement for probate for some situations and circumstances involving property within an estate. Clearly, both issues are more involved and they vary according to the individual circumstances of each specific estate. Your lawyer can provide you with much more information on both subjects.
The take-away from this blog should be that purchasers should not shy away from purchasing property from an estate merely because the property is listed as an estate sale. Should you be considering the acquisition of such a property and you require real estate advice and/or assistance contact me to discuss your real estate needs.
My Dream Rural Property in the Comox Valley Posted on July 6, 2011 by Brett Cairns
People who are considering the purchase of a rural property will generally have to consider and investigate more factors than someone whose focus is urban properties. While individual needs will vary based on the real estate requirements of each individual, there are some basic considerations that will generally be applicable to most individuals.
One of the most basic issues concerns the availability of water to service the property. Is there a well on the property? If there is, the well record is a good source of information. Is the well shared or is it privately owned? Was a comprehensive water test completed on the well? When was the last water well inspection report? If there is no well, what will it cost to provide water to the property? To find out one may have to consult a water dowser to find water, a driller to drill, and a well pump installer to install. When water is not provided by a well or municipal/regional source, but it is being provided by surface water such as a lake, is there a water license? A competent real estate professional should know what questions should be asked, and where to find the required information.
Another basic issue concerns the availability of a septic system to service the property (assuming that the property is not serviced by a sewer system). For Vancouver Island, the Sewerage System Regulation is currently monitored by the Vancouver Island Health Authority. Contemporary septic systems can be one of three different types installed by a Registered Onsite Wastewater Practitioner (ROWP). Systems installed before and after May 2005 have different documentation requirements. Knowing what these are is important so that the right questions can be asked about the system that is in place on the property. It is also important to know the costs associated with installing and maintaining a septic system. They will vary according to individual circumstances, but they will include installation costs (applicable if the current system needs to be replaced), inspection costs, cleaning and routine maintenance. A ROWP can be hired to inspect the current system. If a septic system has to be installed or replaced, the cost to do so can be fairly significant.
There are, of course, many other things that may need to be investigated to provide the prospective purchaser with the information that they will need to confidently purchase the property that meets their needs. Failure to fully investigate pertinent details may result in a surprise later by some fact uncovered after the purchase that affects the enjoyment and planned use of the property. Most of us do not like these kinds of surprises so it is better to ask questions before an offer to purchase is made, and especially before it becomes unconditional.
Clearly this short blog cannot address all of the issues that may pertain to rural properties, nor is it my intention to do so in this forum. Competent real estate professionals should be able to help prospective purchasers of rural properties by providing advice on the types of issues that should be investigated, both from the perspective of the purchaser’s real estate needs, and of the property being considered. Don’t be afraid to ask as many questions as are required to uncover pertinent facts so that future surprises can be minimized. It is better to ask a question before a purchase than to say after a purchase “I should have asked that”.
For Sale By Owner, or not? Posted on June 26, 2011 by Brett Cairns
It is relatively easy to imagine reasons why someone would want to sell their home themselves. For example, if a person purchased a home years ago in a different market than that of today and they secured a high ratio mortgage for their home, it is quite conceivable that their home could be worth slightly more (or perhaps less) in today’s market than the value of their mortgage. This situation could certainly prompt a person to think about saving the cost of having a professional sell their home.
There is certainly nothing wrong with someone trying to sell their home themselves but there are a number of key questions they may wish to have considered before attempting to do so. Here are five examples:
Do I have a good appreciation of the various laws in British Columbia that apply, and could apply, to the real estate transaction that I am thinking of undertaking, including those that relate to such things as property disclosure and representation?
Do I know what situations would cause me to seek legal and/or other professional advice during the course of the selling process?
Do I know how to write a legally enforceable contract that will stand up in court if things go wrong?
Do I have access to, and knowledge of, the clauses and conditions that I may need to use to protect me, and my interests, when responding to an offer to purchase my home?
To whom do I turn for advice if I receive an offer with clauses and conditions that I do not understand, especially when the offer may have a limited time specified within which I have to respond?
Every individual circumstance will be different and these five examples are meant to be illustrative of the types of things that a person may wish to consider before embarking on such a challenge. If I were going to consider selling a home myself (and I would not do this because I am a REALTOR ® ) there are at least 10 more key questions that I would ask myself.
I will not mention the 10 other questions here, but I will add that if you need legal advice in any area – consult a lawyer. If you need financial advice – consult a financial professional. There are a number of different types of professionals who become involved in the sale of a home and they are qualified and licensed to assist with different aspects of the sale.
Selling a home is not an easy task, especially if the intended sale is to take place in a buyer’s market. A real estate professional should know what the various challenges will be with such a task. An effective real estate professional should be able to help improve your chances of selling your home in this type of market. If you are considering such an option I would be happy to discuss some of the challenges with you that you could face.
Service – Lowest Cost or Best Value? Posted on June 18, 2011 by Brett Cairns
According to the International Monetary Fund (2010), World Bank (2009) and CIA World Factbook (2010), Canada’s Gross Domestic Product (GDP) is ranked number 14 in the World when based on Purchasing Power Parity calculations.On the 17th of June, the International Monetary Fund adjusted its 2011 GDP expansion forecast for Canada upward slightly to 2.9%. Clearly, Canada’s contribution to the world economy is significant.
Within Canada, according to a 2008 House of Commons Report (Standing Committee on Industry, Science, and Technology dated 17 June 2008), Canada’s services sector accounts for almost 70% of the GDP and employs more than 75% of Canadians. Statistics Canada considers real estate to be a part of the 15 service-producing industries listed in the North American Industry Classification System.
Ben Rabidoux, a college professor and financial advisor based in Canada, provided an excerpt of his forthcoming book The Role of Housing in Boosting GDP, on his blog The Economic Analyst. He provides statistics that show that the construction of residential real estate has accounted for 6.5% to 7% of GDP over the past 5 years. Perhaps more striking are the statistics that show that the contribution of the Financial, Insurance and Real Estate industries has increased from 19% to more than 23% over this same period; striking because of the impact of changes in the housing market on all of these industries.
Based on the above statistics it should be clear that real estate is important to Canada and the health of its economy. For most Canadians, real estate is their most important investment. Why then, do some people take risks with this investment when they decide to sell it?
There are risks to almost everything we do in life, but risks can be addressed and reduced with proper planning, and by hiring the right professionals for the job. Would you try to treat yourself if you were dealing with an important medical issue? Would you try to sell your home yourself if you did not have the requisite education and training, and an up-to-date understanding of the legislation that affects real estate transactions? Real estate agents are licensed professionals who are educated and trained in real estate transactions. While all have to meet a minimum standard to become licensed, there are differences, in terms of the level and types of services, that they provide to clients.
When a person searches for a real estate professional to provide them with the services necessary to sell their home, do they look for someone based on a cost-centred or a value-centred approach? A cost-centred approach focuses on the lowest cost. However, lowest cost does not necessarily mean, and often does not mean, best value, or most effective. For example, if three different real estate agents all charge the same fee, it will be the one who provides the best, and the most effective service who will provide you with the best value.
When different real estate agents provide different types and levels of service for different fees, determination of best value will be more difficult to calculate, and it will often depend on things like the success rate of the person being hired (does the person just look for listings and hope others will find a buyer or does the person focus on selling what they list?), the quality of the services rendered, the person being available when you need them(what hours and days are they prepared to work?), and the attention given to you (do they return calls and emails promptly when they are not with other clients?). Ask questions about exactly what services you will be offered, and read the fine print of the contract before you sign it. If something in it does not make sense, clarify what is meant and why. Perhaps even more important – will they tell you what you need to hear to sell your home, and not just what they think you want to hear for them to get the listing? Will they high ball the price to get the listing, and then work you down on the price because it is priced too high to sell? Being better informed helps be better prepared.
Lowest cost or best value? The choice is yours. Do your homework before selecting a real estate professional. Determine what is important to you. Do you need to sell in a specific amount of time? Think back to previous experiences. How many times in life have you found that you only get what you pay for? What is true in life is also generally true in real estate.
About the Author
Blogs Jun to Aug 2011
My blogs (26 Jun to 20 Aug 2011) have been added here for ease of reference.