In BC the Superintendent of Real Estate, a newly created Government overseer of the industry, has decreed that an agent must not, and indeed cannot, double-end a deal. The ramifications of this amplified rule, (which takes effect on March 15th), 2018, are just now beginning to sink in on licensees in the Province.
While it is true that “Dual Agency” was outlawed many years ago, agents had moved to either, a “Limited Dual Agency” or offering “No Agency” to Buyers who came knocking on the Listing Agent’s door. This was a work around solution to allow licensees to continue to double-end deals. The new increased scrutiny of “implied agency” that the Government regulator is enacting will all but put an end to the notion that calling one side of a double-end a “customer” somehow is in the consumer’s best interest. This will have dramatic impact on the old school listing agents who would make viewing their listing difficult for Buyer Agents. The new regulations in BC will also have a significant impact on larger real estate teams. In fact, the traditional business model of a team, where the leader was the “rain-maker” and the other members acted as Buyer Agents will no longer be possible in this new regime. BC rules require that team members are all included by name on the listing contract and are considered designed agents of the Seller when a team member takes a listing. As a result, a team member working with a buyer will not be able to sell a team listing because that is considered dual agency.
The motivation for making the changes in the regulations in BC is primarily politically driven. The anger of the consumer was a lightening rod for the politicians, who have struggled with identifying the causes and solutions for the affordability crisis that has befallen the Greater Vancouver Region. In an effort to demonstrate that they were acting to address the issues that the heated real estate market had created, the then Liberal government in power stripped the Real Estate industry of self-governance. Additionally, new taxes were introduced to discourage certain groups of buyers from entering the Greater Vancouver Real Estate market.
All of these attempts to create a market fix ignore the core reason that the market has continued to climb out of the reach of the average consumer in BC. The truth is, the Greater Vancouver area has become a highly desirable location to live. When you couple that fact with the scarcity of land between the mountains, the sea, and the agricultural reserve lands, a supply issue is created. What makes matters worse in Vancouver is that many of the older neighbourhoods have been shielded from the demands of densification by local politicians on the municipal level. When there is only one pair of shoes in the shoe store, and there are ten people barefoot outside the store, the price of the shoes will rise. This is the simple fact that Greater Vancouver faces. It is a supply problem, not a REALTOR problem, and certainly not a foreign buyer problem.
The bigger issue of home ownership in a tightening inventory also can be traced to the evolving collective thought and subsequent values in our culture. Our society in North America has been slowly evolving from a religion based mind-set to a humanist mind-set. Humanism has become the prevalent world view, even among those who attend church regularly.
Within the general concepts of humanism there are three branches of thought; Liberal humanism, social humanism, and evolutionary humanism. While the twentieth century will be remembered as the era of failed social humanism, with the fall of communism and a move away from socialistic values, liberal humanism seems to be taking hold ever increasingly in our society. Liberal humanism sees the individual’s feelings, rights, and values as society’s most important watermark. Liberal humanism is best identified with phrases like, “If it feels good do it”, “The customer is always right”, “Think for yourself and you will find the answers within”. With liberal humanism, the social good is a by-product of the individual seeking to better themselves and their own surroundings. Social rules, rights, and order are secondary to the individual.
This emphasis on the individual’s rights and feelings, makes the need for surrendering value, or property for the common good a difficult proposition in municipal politics. When a high-rise building is proposed in an area that abuts single family homes, the cry of the residents who argue that the shade of the building will hurt them, their children, and their quality of life, is considered a greater element than the need to reduce the cost of housing. Where once Religion would dictate that the homeless should be sheltered because God placed that task on society, now the humanist doctrine suggests that we only help the homeless when it makes the individual contributor feel good.
The evolutionary branch of humanism addresses the affordability issue from a Darwinistic point of view. This thinking suggests that it is the survival of the fittest that prevails in society. The more one can build wealth and accumulate property, the better. After all, it was hard work and superior skills that provided for a Vancouver life-style. This mind-set contends that a person should seek to win at all costs because that is the way nature intended it.
It’s unfortunate for those who lament the rising costs of property in Greater Vancouver that the pressures of the capitalist economic system also weight in against slowing down the accelerated growth and demand. When there is no centralized system to limit financial gains in the real estate sector of the economy, of course the owners of the properties will take whatever they can get for their asset. In this age of data processing and open information, consumers can see what their neighbour’s property sold for, and they of course want the same, or more for their property. In a scenario like we find in Vancouver today, with limited supply, property owners can demand, and indeed expect, an ever-increasing sticker price for their homes.
The truth lies in the fact that supply of housing is limited in Greater Vancouver, and given the physical realities, coupled with the political and social mind-sets, there is no quick answer. Placing limits and additional restrictions on REALTORS is like shooting the piano player because you don’t like the tune. The problem of affordability is much more complex and deep than any of us realize. Apart from ways of increasing supply to meet demand, the only quick fix would be a major natural catastrophe, to scare buyers away from Vancouver, or a sudden interest rate jump. Both of those answers would create more problems than they would solve.
- Ari Lahdekorpi
The Chicken or the Egg?
We humans tend to make associations in all things that matter in life. The ability to think ahead and plan for future consequences is one of our key attributes for survival. The linkage between cause and effect is engrained in our logic and thinking. While some would argue a pavlovian response is not unique to humans, what is unique is the further linkage in logical thought that is required to create a cause that provides a desired effect. This understanding of cause and effect is considered one of the traits of human intelligence.
Cause and effect are seen in various forms, sometimes they are embodied in ritual or superstition. Old folklore would offer suggestions on how to ward off evil spirits, or what to do to ensure the gender of an unborn child. Even today we hear of famous athletes having certain rituals or carrying good luck charms in the hope of causing the effect of having a good game. Psychologically, believing in a causal relationship can be positive. Remember the story of the magic slippers that were given to the young ballerina for her nervous first performance…or the lucky sweater for the young hockey player? These were all associations tied together in the hopes of a successful outcome, without any real empirical evidence. Often an implied cause can create the momentum that leads to a positive effect.
In the realm of “sales” we have often heard about the need to ‘make the calls’. The notion is that the number of actual calls you make can be related to your overall success. In Real Estate, as in any interactive business, this is true to a certain extent, however it is important to look at this a little deeper. Relating the cause to the effect is much more than just a simple numbers game. Firstly, as a new agent into the business, or if you are new to a given geographical area, it is clearly important to make good use of your time and get your name out into the marketplace. It is equally important to make valuable interpersonal connections. However, the notion of simply getting on the phone and dialing for dollars from a phone directory or data list has some downside effects to it. You will be faced with a lot of rejection, which can be demoralizing and demotivating. Secondly, if your message is spoken to the wrong audience it’s as good as not having been communicated at all. The negative result of the misplaced communication is that of having wasted your time, which is always translated into money.
Understanding how you benefit from a given action is key to maximizing your time. When you are new to the business this is not a crucial as it is when you are active and are trying to juggle your current workload with prospecting for future business. Too often agents will be successful for a season, forget how they got to their success and subsequently discover a deep valley of no business behind the mountain peak they just experienced. The answer is that you must do the research to figure out what caused the successful effect that you experienced at an earlier time.
So, what is “cause and effect”, or Causality as it is referred to in philosophy?
Causality is defined as: the agency or efficacy that connects one process (the cause) with another process or state (the effect), where the first is understood to be partly responsible for the second, and the second is dependent on the first. Causality is an abstraction that indicates how the world progresses, the concepts date back to the Philosopher, Aristotle.
The ultimate cause and effect dilemma is the question: “what came first, the chicken or the egg?” So, did the number of cold calls you made result in a sale because you made the calls, or was there another element at play in your activity that resulted in the successful result?
Causes can be distinguished into two basic types: necessary and sufficient. However, there is a third type of cause, which requires neither necessity nor sufficiency, but which contributes to the effect. This is called a "contributory cause." An example is calling aluminium wiring a cause for a house burning down. However, it wasn’t just the type of wiring that caused the house to burn down. There were others factors, that in combination, created the result of the burnt-out home. Consider this potential collection of events: the wiring was aluminium, which allowed for poor connectors that caused a short circuit, the walls had a proximity of flammable material, and there was an absence of firefighters or extinguishers. Within this collection, the wiring itself is an insufficient cause related to the ultimate effect.
So, when the number of doors that were knocked on, or the number of flyers dropped, or the number of cold calls made, is considered in creating a desired effect, you can’t stop there. There are many others factors that are contributory causes to a successful activity. For example: in making your calls, how strong is the database you are using? Do you have a good prospecting script for your calls? What time of day are you canvassing? Are you presentable during personal visits? In short, it is important to not simplify a cause and effect relationship. It is never that lucky suit, or the rosary in your pocket that gives long lasting success…it is well placed activity in a well researched environment that is the key to long term, career building success.
A home is the biggest purchase most of us will ever make, so it’s only natural to feel a little intimidated by the negotiation process. This is particularly the case for first-time buyers. Here are some tips to help you approach the negotiation process that will help you minimize stress, stay within your budget and get the best price for your new home.
GET TO KNOW YOUR MARKET
Becoming familiar with the types of properties available in your price range is an important first step. With the help of a real estate professional, you’ll also want to begin exploring neighbourhoods you’re interested in, the types of properties available in those neighbourhoods and their prices. Make note of the difference between listing and sale prices and how factors such as size, location, amenities, proximity to schools, and the age and condition of the home affect price.
Familiarity with the market will help you understand the value of the properties on the market and put you in a stronger negotiating position. While online listings are a good place to start, most buyers should expect to look at 10 to 15 homes in person before they make the decision to put in an offer.
Buying your first—or even second or third—home comes with a lot of excitement and becoming emotionally attached can be easy. When looking at potential options, it often doesn’t take long to start imagining your new life there. However, it’s important that buyers do not act overly enthusiastic, particularly when the seller is home. This can put your REALTOR® at a disadvantage when negotiating for the best price. The best approach is to keep your demeanor neutral, take notes, and keep your thoughts and questions for a private conversation with your real estate agent.
FOCUS ON VALUE
When considering making an offer, many buyers assume that the asking price will be different from the selling price. In certain markets, buyers may expect the property to be listed higher than what it will sell for, while in hot markets, the opposite applies.
Rather than focusing on the listing price, focus on the value of the property. If the property is priced properly, the best strategy is to offer the listing price. If the property is not priced properly, make an offer that reflects the property’s true value. The best way to assess this is by getting to know the market and discussing your options with your REALTOR®.
A common mistake some buyers make is to put in a low offer, just to see if the seller is receptive to it. The result is often that the seller doesn’t take the offer seriously, either coming back with the original listing price or not responding at all.
Remember that just as your REALTOR® is advising you, there is also a real estate professional advising the seller on the home’s value.
THINK BEYOND PRICE
Don’t forget that price is not the only point of negotiation –terms are negotiable too. Everything from the move-in date, to home repairs, to which appliances are included in the sale, is up for negotiation.
STICK TO YOUR BUDGET
Firmly establish a budget and stick to it. In markets where demand is high and inventory low, it can be tempting to increase your budget, especially if you have put in several offers without being successful. However, it’s important to stay within a budget that you will be comfortable with for the next several years. Make your best offer and don’t budge. Home buying can be emotional, but try to keep a cool head by reassuring yourself that there will always be another house out there.
WHAT’S MY BUDGET?
When starting the search for a new home, it is important to establish a budget that you will be comfortable living within for several years. There are several handy tools to help you calculate your housing budget and plan your monthly expenses. Canada Mortgage and Housing Corporation’s Household Budget Calculator allows you to compare your income with your expenses and debt payments and see what kind of mortgage you can comfortably afford, and the RE/MAX Monthly Home Budget Planner helps you gain a better understanding of all the costs associated with home ownership.
No one knows the negotiation process better than a RE/MAX Agent.
To make the house-hunt a little less stressful, consider the following tips:
1. Determine what you want upfront, and stick to that criteria.
What are your non-negotiables? What location do you desire? What educational opportunities are important? What do you want your daily commute to be? And what price are you willing to pay? The first step to avoid house hunting drama is to really sit back and think about what is most important to you. This will narrow down your scope so you are not looking at hundreds of homes, just the ones that fit in your criteria. … Looking in an area that’s not going to provide the home type that you want is going to cause frustration.
2. Get preapproved for a mortgage.
Avoid delays once you do find a home by getting your loan preapproved. If there is any issue, it is identified early on in the process and not the moment that you’re trying to submit a contract on the property. Also, you’ll know your numbers and how much to expect on a monthly payment to make sure you are house-shopping within your price range.
Share with your real estate agent the biggest stressors and fears you have in the home-buying process. The more open the client is with their REALTOR, the less drama is going to present itself in the transaction. You have to trust your agent and relate to them as a confidant, as an ally.
4. Don’t linger too long.
Procrastination causes drama. For home buyers on a deadline, it is recommended to begin four to six months ahead of time to start learning more about the market. Plus, with mortgage rates forecasted to move higher this year, buyers who wait too long may find what they can afford lessen. Have the right expectations, or else you’re setting yourself up for frustration.
A common mistake for those looking to sell their homes in the New Year is to wait until "the market heats up".
There are some good reasons to get ahead of the curve when it comes to listing your home for sale. Despite the tendancity to wait until the Spring market, Consider these reasons to list early in the year...
Firstly, because most people wait until Spring to list their homes, the inventory is lighter during the first few months of the New Year. This means that there is less competition for the properties that are on the market. Less competition means that the Seller has more control over the negotiated price, terms, and conditions. Trends have indicated that prices tend to climb when demand outpaces supply. Being on the supply side as demand grows means that you will have a more favourable result versus a period of time when housing inventory is overstocked, and a buyer has more choice. It is better to be in a position of strength when looking to maximize your Real Estate Investment through a sale.
Secondly, the Buyers that are out looking for a property over the holiday season, or during the winter months are generally serious Buyers, not speculators. These are the Buyers who are ready, willing, and able to buy now. Many of the Buyers during this market period are those that "have-to-buy" as soon as they can. With good financial incentives and low interest rates, the active Buyers in the market presently are primed to negotiate a purchase on the existing inventory.
Thirdly, because most REALTORS do experience lower inventory levels at the start of the year, they have more time to invest in the marketing and servicing of their current listings. This means more attention to your specific needs, and a higher level of concentration on your product. The strength of working with experienced agents in a top Real Estate franchise really shines during those times when the market is not overheated and the agent can maximize on the use of the tools at their disposal. For example, RE/MAX has a wonderful service that provides listings information in the language of the reader's choice via http://global,remax.com. In the "hot market" periods, a tool like this can get lost in the frenzy.
The advice we would give you, is if you are planning on selling this year, don't wait til Spring...it's in your best interest
to list now to maximize on your market position.
Today we used the excuse of the rare sight of snow build up in the Lower Mainland as a time to kick back a bit in the office. We ordered in some pizza for lunch, and then spend the afternoon chatting about politics, philosophy, and the weather. It was a great time to appreciate the warmth of friendship in the office. This caps off a week spent visiting clients to deliver gifts, and being involved in Charity efforts.
There is nothing that gets one into the Holiday spirit better than connecting with those around us in a more relaxed and friendly way. This is truly the social season.
In BC presently REALTORS are getting slammed in the media on a daily basis. While its not unusual to get the bad news bubble stories, recently the pitch of the negative press has increased in its intensity. The government has also jumped on the REALTOR bashing bandwagon…first removing self-regulation from the Industry, then imposing a 15% foreign buyer tax to attempt to cool down the market, and then mandating 28 new policies to tighten up control of Brokerages and their associates.
The Real Estate industry has been the greatest creator of wealth in the Lower Mainland of British Columbia in recent years. In fact, Vancouver was just declared Canada’s first city of millionaires due to the property values that owners of detached homes now enjoy. The BC government has enjoyed a windfall of tax monies from Real Estate transactions…the largest contributor to the government bottom line of any industry. The spin off jobs and industries that rely on the strength of the Real Estate sector are a huge economic driver, so why the REALTOR loathing?
A Real Estate agent and his or her role in the economic engine of our society has the unfortunate position of being greatly misunderstood by the general public. The stereo type of the seller of swamp land in Florida, or of the Brooklyn Bridge remain in the general lexicon of public mythology, much in the same way that the snake oil salesman of lore exists. REALTORS and Lawyers share the unenviable position of finding themselves in the middle ground of negotiation and dispute resolution. This is the place where a successful outcome can find the parties to a transaction often walk away equally unhappy. Many consumers are themselves so internally scripted in a “win-lose” paradigm that one of the REALTORS in a transaction, be it the Sellers agent, or the Buyers agent, will be dealing with an unhappy Client. Adding fuel to this fire is the fact that purchasing or selling a family residence is a highly volatile emotional activity. Agents are viewed with a high level of mistrust due to preconceived notions and general misunderstanding of their role and value to a completed deal.
Much of this perception is due to our industry not being good at managing expectations and demonstrating value. In an effort to secure a listing, agents will fall into the trap of allowing the Client to take the lead on what they expect. The truth is that it is not the agent or the client who determine the duration of time it will take to find the right match for a property, nor is it the agent or the Seller who control what the final price of a successful sale will be. It has been said that the buyer in any marketplace is the one who determines the ultimate value of a property. Agents too often take on the “role” of their clients, rather than keeping to their true role, that of a facilitator to a transaction. The REALTOR is not the buyer or the seller of a property, they are the coach master on the transaction, riding shotgun to ensure that trouble is kept away, and that everyone reaches their destination safely. A Seller can demand whatever listing price they like, but it is the Buyer who will agree with the price, or counter it. The REALTOR is only there to advise, and act according to their Clients lawful direction.
REALTORS have a difficulty in demonstrating their value to the general public. The consumer sees the agent at an open house, or at a contract presentation. Good agents make the process look easy. When the invoice for service arrives, the consumer equates the dollar amount with those two functions and question the value for service. The truth is that much of a REALTORS value is not in the time that was spent glad handing at an open house or at offer presentation, it is in the preparation work before a deal and the follow up after the agreement is signed to ensure all due diligence is completed by the parties to the transaction. Certainly the general public are legally able to sell their property without the aid of an agent, just as most people are able to change the oil in their cars without a service station. However, the REALTOR is there to check over the entire mechanism and ensure that there is no trouble ahead, or at least advise of potential issues and offer solutions. An agent’s role is vital in keeping a real estate agreement on track, meeting all of the required elements needed to realize a successful completion. The fact is that despite the amount of data and support now available via the internet and various services, private residential sales still remain in only the 5 to 10% range of all transactions in the market. More than 90% of registered sales are done with the help and direction of a REALTOR.
Value can be subjective in cases where only a small piece of the picture is seen. A brain surgeon is not paid by the hour, but rather for his knowledge. It’s important for REALTORS not to be blind to the importance of illustrating their service and its value to their clientele. It has been said that in the absence of value, price becomes an issue. Only 10% of consumers look to price, while the remaining 90% feel that value is the primary concern. This is clearly demonstrated within the coffee shop business. Starbucks came in offering the value of an experience. They tripled the cost of a coffee stop, and yet managed to build a very successful franchise. Manage expectations and sell value.
In the present environment, that seems to be hostile to an industry that has given back so much to the economy, it is clear that the public needs to gain a fuller understanding of the role of an agent, and how an agent is critical to the vast majority of successful transactions each day in Canada. While we may wonder why the REALTOR loathing exists, we must also be proactive in helping the public understand our role, its limitations, as well as its value. Money, at it’s root, is an exchange of value. Those who provide the most value will survive, and even thrive, despite all the fear and loathing around them.
There is a lag time in Real Estate marketing. It can be seen as akin to turning on the faucet in an old shower and waiting for the water to heat up. The things we do today won’t necessarily see results until three or more months down the road. Because of this lag time, when a REALTOR gets busy, it is often forgotten why or how that flurry of activity came about. The agent then gets too busy to tend to the process that created the activity. The agent lets go of the tap. For that very reason, it is important to establish steady systems to keep the business at a consistent flow, so that things will continue to run even when it appears that there is no end to the business at hand.
There are some days when the fists are clenched and the teeth are ground. Its those days that the need for perspective is greater than ever. We all find those moments when the universe we inhabit becomes difficult to understand and seems to close in. Everything seems to conspire to work against us. Those days, even the sky refuses to look blue. Time to take a step back from the picture and consider the entire landscape of the artist, and not just the brush strokes.
Most of us have never felt the hunger of more than an afternoons missed meal. Most of us have not had to sleep unsheltered or alone. Living in Canada in our lifetime we have the benefit of a stable economy and political environment. Security is taken for granted, and we have the basics of life handled for us because of our residency in this great country. Even so, it can be difficult to remove one self from the emotional whirlwind that is the Real Estate Industry. Everyday we are dealing with people’s life savings, and the largest asset that they have. When someone acts in a way that is contrary to the best interests of a Client under your charge, it can be frustrating and maddening.
A good rule of thumb is to take that reflective step back and consider the overall objectives and potential outcomes. It can be that the remedy is worse than the infraction. For example, if someone has breached a policy or rule, the cost of enforcement might be greater than the infraction itself. The cost can be measured not only in financial expense, but also in the human cost of stress and being distracted from other more important tasks that may lie waiting. A good night’s sleep can often help to give fresh perspective on an issue. Be careful of the quick “knee-jerk” response or the hasty voice mail or text. Let your responses be thoughtful and measured, regardless of the emotional bruises that may have occurred.
This objective perspective is best developed through the consistent “systems approach” to the business. We are fortunate that the tools of the trade have improved in the Real Estate industry. Systems have moved away from the simplicity of checklists and rolodex cards. There are many apps and software programs available to the modern agent that allow for consistent marketing and servicing of clients.
Most Real Estate boards in Canada have software available that allows for forms to be sent up in templates that can be edited for individual applications. Comparative market analysis is now complete with a multi-page report at the touch of a button. Contact data management software allows for agents to set up tickle files and reminders of important dates and “to-do” lists. Websites can be set up to collect leads and generate prospect follow up automatically. Facebook ads can even be purchased for very refined target marketing to a specific psychographic group.
The key to continued and consistent business remains the realm of the pro-active. It is easier than ever to develop programs and systems. The water in the old shower no longer needs priming for the right temperature…but it still needs the willing hand to start the process and keep it flowing.
It is fascinating to ponder what ownership of property really is. On one side you can see the homeless in any of the major Canadian cities, clutching their cardboard, garbage bags, and shopping carts. Their sense of security and shelter differs greatly from the general population that surrounds them. Looking up from street corners that the homeless occupy one can see the condominiums looking down. These monolithic structures contain layers of strata owners claiming ownership to what is essentially a piece of air. These lofty units usually also carry lofty prices. The structures climb up from a mere footprint on a piece of land. It’s a far cry from what property owners a few generations back would have considered ownership of real property. Seeing this dichotomy raises the question: who has a more defined de facto ownership of property, the street person with their nomadic and unfettered existence on their stake of a piece of public property, or the de jure property owners in the condominium units above?
If the aforementioned strata owners don’t pay their mortgages, they could lose their right of ownership. If any property owner in Canada doesn’t pay their taxes to the crown, or the local governing body, they could lose their rights of ownership as well. The fact that the sovereignty can come and reclaim property ownership due to unpaid taxes is a throwback to the feudal system of ownership. We fool ourselves into thinking that our modern legal systems are more evolved, when in practice they are not.
Despite the words, paper trail, and legal constructs in our present day real estate system, in many respects ownership of land is really just a fabrication of our society. One could argue that regardless of the protection of modern terms and conditions, the average Canadian can only rely on the security of ownership as long as regular dues are paid to the sovereignty. That in addition to the concept of Government appropriation, does lead to the question of what we really purchase when we claim title to real property. If home or property ownership in our Canadian cultural context is nothing more than a legal construct based on medieval foundations, what are the rights that one “buys” when a name is printed onto a deed of land?
The textbooks tell us that ownership in a property can take a number of forms, such as sole ownership, joint ownership, communal property, or leasehold. The differences in the forms of ownership or entitlement to a piece of real estate boils down to what the rights are that are associated with the different options. Essentially, a Canadian buyer does not buy the property, they buy a “bundle of rights” to the property.
In his book, The Common Law, Oliver Wendell Holmes describes property as having two fundamental aspects. The first is possession, or de facto property, and the second is title, or de jure property. In Manitoba, for example, a buyer will first claim possession of a subject property, and then a few weeks later, the title will finally be registered. In BC it is not uncommon to see different dates, usually just a few days apart between possession and completion of the transfer of title. In the interm, the buyer claims ownership under possessory rights, and then that is followed with the legal right. In Ontario, possession is not usually granted until legal rights are extended.
In every culture ownership and possession are built upon custom and regulation, both legal and social. Many tribal cultures balance individual ownership with the laws of the specific collective be it tribal, family, associate, or national. For example the 1839 Cherokee Constitution frames the issue in these terms: “The lands of the Cherokee Nation shall remain common property; but the improvements made thereon… (shall be respected)”.
Different societies have different theories of property for differing types of ownership. It does appear universal that property ownership is not a relationship between people and things, but a relationship between people with regard to things.
Despite the abstract notion of modern ownership, we are driven by a hunger to have real estate that we can call our own. This desire to own real property is not a universal need, as the nomadic tribes in the arctic or the desert demonstrate. However, elements of ownership, such as the need for safety and shelter are primal behavioral motivators.
In his 1943 paper entitled, A Theory of Human Motivation, Abraham Maslow introduced the conceptual model for the importance of certain basic needs that a person is instinctively driven to obtain. In the mid-fifties, he expanded on his theory in his book, Motivation and Personality. Abraham Maslow’s theories focus on describing what the drivers are in our motivation in various stages of our development.
It’s interesting that Maslow studied well adjusted and exemplary people to arrive at his concept of a Hierarchy of Needs, rather than people that were psychologically damaged. In some respects this fact helps to cement the universal nature of the motivational strata that he envisioned.
Maslow’s Hierachy of Needs is usually depicted as a pyramid, with a human’s most basic needs on the bottom platform, and as the pyramid narrows the needs become more esoteric. He placed self realization needs at the top of the pyramid, while physiological needs were foundational. Some have criticized his placing self realization as a “top tier need” as being ethnocentric, or possessing some cultural bias; but no one argues that needs such as food, shelter, and safety are basic motivations in life.
So according to Maslow’s Hierarchy of Needs, the need for shelter is a foundational driver. It is a fundamental motivation in life along with food and safety. These are the ingredients that fuel the hunger for real estate. One could postulate that this primal need accounts for the wars over borders, and the arguments over hedges and fence posts. Countless neighbours have done each other harm over a few inches of lawn, alongside with countries arguing over rocky islands that are inhabited primarily by gulls and clams. History is full of unfortunate battles over real estate. It’s no wonder that dealing with competing offers in a real estate transaction can be so volatile.
The indigenous peoples who had the embarrassment of riches in their unfettered use of large tracts of land seemed to be comfortable with the notion of common property. The nomads and the gypsies also had an abundance mentality that saw the countryside not as a series of parcels of separate ownership rights, but rather as a shared resource. For these social groups the need for safety and shelter did not tie itself to a quantified lot or acreage, but was shared in a larger global sense.
The need for safety and shelter, while it can claim its roots inside the development of the legal constructs of real estate is not the only motivational driver in building a real estate industry. Canadian culture and social convention have added to the primary need for shelter with the notion of self-esteem associated with property ownership. As most Canadians find their primary needs of food, safety and shelter satisfied, they climb Maslow’s Hierarchy of Needs to the upper tier motivational level of self-esteem. As we place our sense of self-worth into the equation, the desire for ownership of property increases. There is no greater flag of conspicuous consumption than the deed to a piece of property in a desirable location.
Considering all of this gives one a new appreciation for the depth of this business of residential real estate. It is a complex industry, built from a primal need to claim a nest, (and then possibly a castle for our self-esteem needs), all for something that can be called “home”. Our cultural and societal motivators drive the real estate machine. This industry will remain strong for years to come because its foundations are built on some primal motivators in the Canadian collective psyche. The REALTOR ® that appreciates and responds to this will always find a livelihood and a satisfaction in knowing that they are fulfilling a deep rooted hunger.
- Ari Lahdekorpi -
The Media in British Columbia have been having a field day with the Real Estate Industry recently. The hot market conditions on the West Coast have been prime for a lot of emotional rhetoric from disappointed Buyers trying to enter the market. Of course the prospect of increasing profits have allowed many Sellers the benefit of capitalizing on the frenzy. For the Real Estate pracitioner it has become a "no win" scenario. On one side, the agent who is representing the Seller is bound by their agency agreement to follow the Seller's lawful direction, including how, when, and why to sell. Frustrated Buyers on the other end of the equation then are focusing their anger and frustration on the Seller's representative, who is obligated to the Seller's best interests above all else.
In response to the highly emotionally charged environment, the BC government has seized the opportunity to create the optics of taking control. Their first action was to close a loophole in contract assignment. The notion of "flipping" a property is not new, nor is contract assignment. The media coined phrase of "shadow flipping" has been a reality in a quickly escalating market for as long as real estate contracts have existed. When the value of a property increases so quickly that the paper it was written becomes a commodity itself, the ability to sell the paper exists. The practice only works in an over-heated market...and only when the signed contract becomes valuable in and of itself. The government's recent change in the law was self-serving in that the only thing it will accomplish is a opportunity for increased property transfer taxes on those who seek to flip properties.
The BC Real Estate Industry will soon have a Government appointed Superintendent. This individual will have the mandate to oversee the operations of the former Real Estate Council. An independent advisory group recently created a document suggesting 28 changes to the way Real Estate functions in BC. The Government has agree to act on all 28 of the recommendations. Several of the changes will have a significant impact on the way business is done. One change that will certainly reverberate throughout the industry is the notion that "double-ending" of contracts will be illegal for licensees.
The law of Agency is an area that is full of grey areas and misunderstanding both within and outside of the Real Estate Industry. The basic concept is that the Agent for a Client must place the interests of the Client ahead of his own, and follow the lawful direction of the Client. Often the consumer mistakenly believes that by dealing with a Listing Agent directly, rather than having their own Agent is an advantage to them. This is an unfortunate misconception. Often a Buyer shares information with a Listing Agent that reveals their bargaining position, or motivation. The Listing Agent is then bound by the laws of agency to share that confidential information with his Client.
In order to help remedy the potential conflict of interest in working with both a Buyer and a Seller, the industry created the concept of "limited" Dual Agency. In this scenario, the Agent pulls back from his responsibility to the Seller and represents both parties in the transaction in a lesser fashion than what the law of Agency requires.
The ideal scenario in a real estate transaction is for each side to have someone on their side. The Buyer's Agent will work with the Buyer to negotiate their best terms, and the Seller's Agent will represent the best interests of the Seller. When there is a willing Buyer and Seller, the process will work smoothly into a mutually acceptable conclusion. The days of a consumer seeking to self-represent themselves in the hope of gaining an advantage in the negotiation process are gone. Agents are in an ever increasing legal position to demonstrate that they placed their Clients interests ahead of their own in all aspects of the complex world of Real Estate.
The question that remains for the consumer to answer is: Who is on your side?
Epigenetics is the study of the material that surrounds and encases our genes. (“Epi” is from the ancient greek word that means, ‘above’ or ‘over’ hence the term epigenetics). In recent years there have been some interesting findings regarding this material. It had been thought by scientists and researchers that our DNA was the sole orchestrator of what we are physically. Well, it turns out that our epigenetic structure has a lot to do with controlling the tendencies within our bodies. These tendencies can have a physical impact over just a generation.
A recent study has demonstrated that a trauma in the life of our grandparents can create a ‘genetic memory’ in our systems that can shorten our life span or create a physical reaction in our bodies given certain environmental conditions. This in turn can affect the DNA as it adjusts to the epigenetic reaction. Researchers postulate that this explains how Giraffes developed long necks in a relatively short evolutionary timeframe. The physical adaptation was due to environmental trauma, and positive physical reinforcement via the genetic memory.
Memory and communication are fascinating subjects to ponder. They are two sides to the same coin in some respects. Communication is our attempt to reach outside of our own reality to impact on the external world. Memory is the reverse, implanting the experience of what exists outside into our internal world. To consider that our physical bodies have a memory that can affect and impact beyond our own lives is truly remarkable. What happens to you will reverberate in your children, and their children regardless of the faded photographs or old stories. Our experiences speak through our DNA long after our tongues are silent.
So what does this have to do with our roles as sales representatives and agents? Consider that the ability to communicate effectively is the hallmark of a truly great agent. The effect of successful communication is the internalization of information into our clients. It becomes a call to action. In fact, we help them satisfy one of their basic needs for survival, protection from the elements.
The search for warmth and shelter is a primal need, one of the base motivations in the hierarchy of needs, as outlined in the research of Abraham Maslow. This basic motivation revolves around a physical requirement for survival. As such, it can be a powerful implanter of genetic memory, either in a positive or negative way. So in a real sense, the function of a real estate agent hits to an epigenetic level via some of our most basic and fundamental needs and motivations.
The notion that our work can have an influence that spans generations should be cause for pause. Not to suggest that anyone in the office has ever taken the importance of our job as REALTORS® lightly, but our duty of care might be more impacting than any of us truly understands or realizes.
One of the great things (among many) about being in the Real Estate Industry is the fact that although we may be in business for ourselves as independent contractors, we are not in business by ourselves. Recently, Laura June and I had the wonderful opportunity to participate in the NEXTGENre conference in Burnaby, BC. I was invited by the organizer, Virginia Munden, to share some thoughts on effective communication in any market. That topic is of course a daunting one given the scope of what technology has done to our communication focus over the last 20 yrs. What can we do in this day and age to rise above the noise of the technology revolution and make ourselves heard...and more importantly, be remembered.
As a child raised in a non-English speaking household by immigrant parents, communication with my peers and cohorts was a true and pressing need. Conversation was at times awkward due to the confusion in my linguistic skills, so I took to drawing. I would create elaborate comic books, illustrating stories of super heroes and villains. This was enough to break the ice with the neighbourhood kids and open the lines of communication. It wasn’t long until I had new friends coming to see me to read my adventure comics. I didn’t know it at the time, but I had created a channel of communication that existed beyond mere conversation. Later my drawings were replaced by other methods of creating communication channels, like music and creative writing.
So, what is the difference between conversation, and communication?
The root of the word conversation is the Latin word, "con". “Con” means “with”. Other words with the same root are content, connect, consider, and even Con man. On the other hand, the Latin root of the word, communication, is “com” which means “together or “in common”. The same root is used in the words commune, communion, compromise, and commit. Communication is deeper than conversation. Communicating is getting inside the mind of the other. It is that almost spiritual connection that one makes with another. In order to communicate, there must be an active internalized participant. Imagine a radio signal…it only fulfills its purpose when a receiver is tuned to the proper frequency. Conversation is not necessary to communicate...but communication is enhanced by engaged conversation. A conversation can occur without the parties actually internalizing the content of the discussion. In fact, two conversations can occur at the same time without either actually communicating.
Communication on a deep level is one of humanity’s most effective tools. Chimpanzees share 99 per cent of our DNA. There is only one per cent that separates them from us, but imagine a stadium filled with chimps. The result would be chaos of the highest order, a significant contrast to the focused community experience that sports fans enjoy when congregating in a stadium. As humans our greatest achievement as a species is the ability to create community. We communicate and internalize our mutual interests in a way that allows us to organize and work for the greater good.
Communication can be both verbal and non-verbal. A full 58% of our communication is via body language, while 38% is via the tone of our voice. Only 7% of communication is the actual word being spoken. Ask anyone who has had a cross cultural romance and they will verify that language only plays a small part in effective communication.
When the destination is effective communication keep in mind that you, as the communicator, must break through many internal walls to connect with the receiver. Not unlike that distant radio signal, the correct frequency must be dialed-in to hear the full signal before communication is achieved. The communicator must make themselves memorable and credible in order for a listener to actually hear what is being communicated.
So, how do we make ourselves memorable?
First, know your desired audience. Understand their response words and their hot button words, in short...speak to them in their language. Keep in mind that different demographic groups and geographic regions use language in different way. Language changes over time. One only needs to read Shakespeare to understand how the English language has evolved...or listen to a twenty-year-old speak to understand that words can change their meaning significantly in just a couple of decades. One example is that it wasn’t so long ago that the word sick was a negative word that meant ill. In todays speak, sick is a positive and affirmative word that would have interchangeable with “groovy” fifty years back.
Techniques like using rhyme, repetition, and unexpected twists of a phrase can also work to draw a recipient into a communication. The lawyer, Johnny Cochrane, was famous for connecting with the jury at the O.J. Simpson trial by repeating the rhyming phrase, "If it doesn't fit, you must acquit". Winston Churchill is remembered for his rallying cry to, "Never, never, give in!" These are great example of "sticky" communication that adheres to our memories through the use of rhyme and repetition. Newspaper headlines often use alliteration, (like “REALTOR Reads Rave Reviews”), to capture attention in the hope of engaging the reader to communicate information.
Tapping into the theatre of the mind is a wonderful way of being memorable and creating a communication flow. This has been used by effective orators and radio ad copyists over the years. By using visual descriptive language and sounds, a mental picture can be created by the listener’s imagination. Friedrich Nietzsche once said, "Those who were seen dancing were thought to be insane by those who didn't hear the music". The mental picture that quote creates makes it both memorable and thought provoking. The image of the dancing figures dancing insanely sticks in the brain.
Finally, to sums things up when it comes to meaningful communication...it is the effort that counts in our attempts to reach into the soul of another. Of course, we don't always have the right words or phrases, or even the correct medium, but the first step is being aware of what communication truly is, who we are attempting to connect with, and then modifying our methods and systems to create that communication that exists beyond words and conversations. As the great Canadian Poet, Leonard Cohen put it, "Forget your perfect offering, there is a crack in everything...and that is how the light gets in."
Remember, the destination is communication not just conversation.
Summer will be here before you know it, and we're definitely glad about that. And now is a great time to get your home in top shape for the months ahead. Whatever your weather, caring for your home now will help to ensure a worry-free, comfortable summer. Follow a few of these tips each week and you'll be done in no time.
- Inspect siding for cracks and make any needed repairs.
- If paint is peeling, cracking, or chipped, repair and repaint now to limit damage to the underlying materials.
- Remove window screens and clean them with a soft brush and soapy water. Rinse well and allow them to dry in the sun. Repair any holes or tears, or replace the screen material before reinstalling. It's a fairly easy DIY job to replace the screening, or you can check to see if your local hardware store offers this service.
- Have your air conditioning unit serviced to ensure good operation. Promote air circulation around the unit by keeping surrounding shrubs and plants trimmed.
- Clear debris from gutters and eaves to allow rainwater to drain properly.
- Seal cracks in the driveway and keep walkways clear of debris and overgrown plants.
- Test irrigation and sprinkler systems and replace any broken sprinkler heads or emitters. Check for proper water coverage and adjust if necessary.
- Power wash decks and patios and seal surfaces as appropriate.
- Vacuum or brush off refrigerator coils to help maintain energy efficiency. Depending on your model, the coils will be located either on the bottom or on the back of the appliance.
- Empty dehumidifier pans and clean hoses according to the manufacturer's instructions.
- If possible, take area rugs outside and hang them over a deck or porch rail to air out.
- Adjust ceiling fans for proper balance and change the rotation to the summer setting. While you're at it, give the unit a good dusting to avoid blowing dust around the room.
- Switch out heavy bedding for lightweight summer fabrics. Have the winter bedding cleaned before storing it away for the season.
- Close the chimney flue to prevent insects from entering and to help keep cool air in during the months ahead.
- Repot houseplants to give their roots a fresh start for the summer.
- Check door and cabinet hinges and lubricate any that stick or squeak.
- Open windows even on cooler days to get fresh air flowing throughout the home.
There is an old saying, “Fake it till you make it” when you encounter a high stress situation or environment where you will be judged on first impressions. The suggestion in the old saying is that you move forward in an encounter, even when you may feel overwhelmed or unsure of yourself. Communication is both verbal and non-verbal in personal encounters. We are all assessed by others within the first few seconds of an encounter. This is particularly true in first time meetings. Our non-verbal communication governs how others feel about us, and then how receptive they are to our verbal messaging. New research seems to confirm that the old adage is actually sound advice.
Our minds and bodies interact and influence each other in both directions. The body creates chemicals both in response to physical positions and movement, as well as receiving cues from the thought and emotional process. The hormones, Testosterone and Cortisol have a lot to do with our sense of confidence or our feelings of stress. Testosterone is released into the body giving more confidence and assertiveness, while Cortisol is the stress reducing hormone that makes us withdraw into a self-preservation mode. These hormones respond to our body language and influence our thinking and emotions.
The body will naturally produce Testosterone when you use what researchers call “power poses”. These are the open stances that you will see Olympic athletes take when they have won a race, or when someone is feeling the most confident during a personal encounter. The amazing thing is that if you assume one of these stances for a period of 2 minutes that is enough time to produce testosterone which in turn gives you naturally induced confidence. On the other hand, if we withdraw into a closed stance or a “submissive pose”, our stress levels are reduced and we signal submission and surrender.
Before you enter a job interview, or a social encounter that requires an air of confidence, remember to take a couple of minutes in private and assume a “power pose” to build your hormone levels, and thus put your non-verbal signals and your thoughts into their peak performance. Despite whatever fears you may be encountering in your mind…they can be dealt with by fooling your brain into a confident frame of mind.
So, according to research into non-verbal communication the new saying should be, “Fake it till you create it” because in truth, that is what happens.
I have long held the opinion that the real estate profession has the power to make anyone comitted to the job a better person. It's almost a necessity actually! It seems that the best REALTORS® are the ones who are able to work through the foibles of personal demotivation, ridicule, stress, and disappointment...and still come out on top!
Because of the fact that real estate is a people business above all else, there is a built in incentive to take the "high road" in the interpersonal minefield we sometimes find ourselves tip toeing through! Afterall, interpersonal relationships and networking are the core of a successful real estate career. The levels of trust and cooperation needed to be a successful extend from the interoffice politics within the brokerage, to the interbrokerage dynamics within a community, and then onto the streets dealing with the general public.
The normal reactions and tendencies that we might have must be kept in check for the betterment of the long term professional life. For example, consider this: Your best friend, or a close relative doesn't inform you of his intention to upgrade his residence. You find out through reading the real estate periodicals. Obviously your first tendency is to be upset and take it as a personal afront. Your options are: 1) Call him up and let him know how you feel, 2) Never speak to him again, or "punish him" in some way, 3) Ignore the situation and carry on.
While your first tendency is to be upset or hurt, if you call them up they will get defensive and of course you will be the one considered at fault. Seeing you as a victim is not an option in their mind because then they must face the possibility that they did you wrong...and no one wants to admit that they have wronged a REALTOR® ...believe me!
If you never speak to them again, you have just written off a lot of potential business...remember that everyone is a potential customer in real estate. That was one of the great truths about real estate that drew me to this sales career over other sales opportunities. The potential in this business is not limited by anything else except your own initiative.
If you ignore the situation and take the high road, you may get the business eventually, maybe even some future referrals, but more importantly you have not sacrificed a human relationship for the love of money. One important rule of thumb is that people should always come before material things...and that includes your next deal! Unfortunately, that ideal has not always been met in the past, as a result, we are facing increased consumer protection statutes.
Our role as REALTORS® is to help put deals together. It is a skill and a special knowledge that is unique in the real estate transaction. Lawyers are involved to help with the clauses, registrations, and projecting how to be protected in a worst case scenerio. Your neighbourhood banker also helps with the dollars and cents issues and protecting the lender's interests...but it is the REALTOR® alone who is there to hold the buyers hand through the emotional roller coaster of the process, and it is the REALTOR® who will be there to comfort the seller when they must say goodbye to there "home" of many years. I am convinced that 80 % of the residential deals out there would not happen without the helping hand of a qualified Real Estate professional!
There is an old saying: " painting a crooked fence doesn't make it straighter". I like that saying because of the truth inherent in it. A REALTOR® may look good and speak elequently, but if he hasn't got the basics of human relationships down, he will not last in this business! It is of primary importance that an agent gets his life in balance if he wants to reach his potential as a long term professional. Consider the burn out rate among Realtors...think of the top producers that seem to be on top of the world for a few years and then quickly fade away. Repeat business is the great equalizer in this trade! Referrals are the life blood...there is no better advertising than a sincere third party endorsment. On the other hand, nothing kills a career quicker than poor reports on an individual REALTOR®. The stereotypical "snake-oil salesman" doesn't exist for long in the real world of real estate!
Real estate as a profession brings out the best in people in other ways as well. Studies have shown that one of the traits of a successful person is the ability to set and work with goals. In this business, if you are not able to set a course for yourself, you will fail...no ifs ands or buts about it! Many agents have learned this the hard way over the years...how do you get yourself going when you are demotivated? It is the strong willed, disciplined person that can overcome the negative impulses and discouragement that real estate sales can bring.
If you have a routine broken into daily, or weekly patterns, you can achieve your financial goals in real estate.That is a fact proven daily in every market in Canada. I am always impressed with how the top producing agents in our office make it look so easy! The simple truth is that if everyone you meet likes you, trusts you, and has a good experience dealing with you, the business will take care of itself as the years roll by!
In my view the most successful Realtors have these traits in common:
They sincerely care about and enjoy the people they deal with.
They are honest to a fault.
They are hard working.
They are disciplined.
They are motivated.
They are passionate about the profession.
They are commited to continually learning.
I believe that it is the job these professionals took as Realtors that helped to mold their characters into being the quality people they have become.
As Jack Nicholson said in the movie "As Good as it Gets", " You make me want to be a better man".
Thank you Real Estate! It's a career like no other...
Here are budget-minded enhancements you can do to make your home stand out.
1. Tidy up kitchen cabinets.
"Potential buyers do open kitchen cabinets and look inside," says Morrissey. "Home owners can add rollout organizing trays so when buyers peek in, they feel like there’s lots of room for their stuff."
2. Add or replace tile.
"By retiling very inexpensively, you make a room look way cleaner that it was," says Javier Zuluaga, owner of Home Repairs and Remodeling LLC in Tempe, Ariz. "Every city has stores that offer $1 to $2 tile, so home owners have to pay only for the low-cost tile and labor to replace a dated backsplash or add a new one. We also use inexpensive tile to upgrade bathrooms."
3. Add a breakfast bar.
When a wall separates a kitchen from a family room, suggest cutting out an opening to create a breakfast bar. "In one home, there was a cutout in the wall between the kitchen and living room," explains Matthew Quinn, a sales associate at Quinn’s Realty & Estate Services in Falls Church, Va., who handles estate and real estate sales for family members whose loved ones have passed away. "We left the structure of the cutout, added an oversized granite breakfast bar, and put chairs in front of it. That cost about $600."
4. Install granite tile instead of a slab.
"Everybody is hot for granite kitchen countertops, but that can be a $5,000 upgrade," says John Wilder, a general contractor and owner of Fence and Deck Doctor in New Castle, Ind. "Instead, home owners can put in 12-inch granite tiles for about $300 in materials and get very high impact for little money."
5. Freshen up a bathroom without retiling.
"With a dated bathroom, I recommend putting in a new medicine cabinet for $100 to $150, light fixtures for about $100, a faucet for $50 to $75, and a vanity for $200 to $300," says Wilder. "And instead of replacing the tile, the existing grout can be lightly scraped and regrouted, which leaves a haze that can be buffed out and will make the tile look brand new. Also install glass shower doors. A French door adds a lot of panache and elegance for $250, and people will notice the door, not the tile. With all that, you’ve done a bathroom remodel for $1,000 to $2,000."
6. Freshen up the basement.
"If home owners have cement block or poured concrete walls in the basement, suggest they have a contractor fill in cracks with hydraulic cement and then paint with waterproofing paint," recommends Wilder. "They can then add a top coat to add color. They can also paint the basement floor with a good floor paint, which spiffs it up. The basement may not be finished, but it’s no longer a damp dungeon."
7. Add a room.
Look for large spaces that can be enclosed to create a new bedroom for just the price of creating a wall. "One time, we closed off a half-wall to an office and added a door to the other side of the room, thus creating another bedroom," says Quinn. "That $400 procedure, which took a contractor one day, netted about $40,000 in the sales price." Zuluaga has also added bedrooms inexpensively. "In a two-bedroom house, there was an archway that led to a third room that was used as a den," he explains. "It had a dry bar where there would have been a closet, so we took out the dry bar and created a closet so the owners had a third bedroom."
8. Spruce up cabinet fronts.
Suggest home owners update tired-looking kitchen cabinets. Reconditioning is the least expensive move for under $1,000. "If the wood is starting to look shabby from use or contaminants in the air, we take out the nicks and scratches, recondition it with oil, and put new hardware on," explains Heidi Morrissey, vice president of marketing and sales at Kitchen Tune-Up in Aberdeen, S.D. For $1,500 to $4,000, owners can replace the cabinet doors and drawer fronts, and for $4,000 to $12,000, they can have all the cabinets refaced. "With refacing, owners can change the color of the cabinets by replacing the door and having a new skin put on the boxes," says Morrissey. "If they have oak cabinets today, they can have cherry the next day."
9. Replace light fixtures.
"In a foyer and in bathrooms and kitchens," says Wilder, "replacing overhead light fixtures provides a lot of pop for a little money." If the kitchen has track lighting, Zuluaga suggests the home owner spend $450 to $600 to have an electrician replace it with recessed canned lights on a dimmer switch to add ambience. For about $700, Zuluaga also suggests installing pendant lights over a kitchen island or peninsula.
10. Tech-up the garage.
"Sometimes we replace the garage door opener with a remote touchpad entry system," says Zuluaga. "That costs about $425 and makes it look like a high-end system."
I recently heard that one of our friends and associate, Janet Rathbun, had distributed a flyer with the caution to beware of the unsolicited door knocker offering to purchase an owner’s home for cash. This caused me to reflect on what is currently happening in the Greater Vancouver market area, and what its causes and repercussions might be.
One of the tried and true methods of building a business is to go to the grass roots and connect directly with consumers. Historically, the door-to-door sales technique has been used by many different types of business. This technique is when a salesperson walks from the door of one house to the door of another trying to sell a product or service to the general public. While the older model of the salesman carrying a bag of goods on his shoulder to sell to the public still survives, this practice has seen a decline in recent years. In the USA, the Green River Ordinance which prohibited door to door solicitation was upheld in 1933.
As of 2008 the business model of many companies that participate in this type of direct marketing has changed with the growth of the Information Age. Products sold door-to-door are now more likely to be more subtle in nature: such as sheets of coupons to events or local businesses, season tickets to local professional sports teams, surveys, or subscriptions to home television and broadband internet services.
The issue that confronts home owners today in the Greater Vancouver market is a new variation on the door to door salesman of the past. Today the knock on the door could be that of a “Buyer” canvassing a neighbourhood offering to purchase homes directly from the owner for “cash”. The issue with this practise is that the door knockers are not revealing that they may be unlicensed wholesale agents for developers or foreign investors, looking to earn income from flipping the purchase contract. As unlicensed wholesalers, these individuals are not bound by the rules and regulations that REALTORS are. The consumer has no inherent protection from these canvassers, and these individuals are not accountable for their statements or actions outside of the costly and time consuming legal process. Unlicensed wholesaling is an illicit and predatory business, and it is quickly growing in the Lower Mainland.
A recent article described a “wholesale agent’s” job. This individual would approach homeowners and make unsolicited offers for private cash deals. She made a 10-per-cent fee on each purchase by immediately assigning the contract to a background investor. Unlicensed wholesaling is completely unregulated. It is estimated that hundreds of wholesalers are scouring Metro Vancouver’s never-hotter speculative market.
Because wholesalers are unlicensed, they have no obligation to identify their background investors or reveal the source of funds to Canadian authorities who fight money laundering. REALTORS on the other hand have a legal obligation to have their Clients complete FINTRAC documentation as well as documents providing full disclosure of agency relationships and remuneration.
The investor behind the unlicensed wholesale agent targets a block, often with older homes, and may even give the wholesaler cash in a legal trust. The wholesaler then begins their door to door canvassing, persuades a homeowner to sell, offering immediate cash, no subjects, no home inspections, and savings on REALTOR fees.
While the wholesaler claims to represent one buyer, or in some cases to be the buyer, often there are three or four contract flippers often already lined up. This shell game of flipping the contract is attractive to any investor looking to launder illegal funds from underworld activities or terrorist related funding.
While it is illegal for wholesalers to privately buy and sell property for investors without a licence, the door to door approach is preying on elderly home owners, or those who are seduced by the lure of a quick cash sale. The underlying problem in all of this is that many home owners could be scammed or pulled into a transaction that may be funding illegal activities. The practice also hurts the Real Estate Market as a whole because it has the potential of inflating the values in certain neighbourhoods artificially, leading to the potential of a severe market correction in the future.
When you get that knock on the door, or find a flyer on your windshield, consider who the canvasser is working for. Is that person looking out for your best interests? Or the interests of a concealed third party. Remember that even a REALTOR working for a Buyer Client is not bound to serving a Seller’s best interests.
The best solution to dealing with this growing trend is to call your favourite REALTOR. Who is the agent that helped you find your home? Do you have someone that you have known and trusted in the past to help you with your Real Estate needs? Keep a stack of their cards on hand, and advise the door knocker to call them as your agent. This way, you will have a buffer against the potential of harm. As licensed professionals, REALTORS have a fiduciary responsibility to represent your best interests, and to ensure that any transaction protects the Clients with full disclosure and legal requirements.
Members of the board Laura June and I belong to, the Fraser Valley Real Estate Board, also abide by the Rules of Cooperation, a common set of rules agreed to by the three real estate Boards operating in the Lower Mainland of BC. These rules are a model of cooperation and ensure consistency of service across our geographic boundaries.
In addition to the commitment to ethics and professionalism, the board members abide by the legal regulations set out by the Province of British Columbia. Any violations to our Code, Standards, Rules, or legislation are brought forward for investigation and disciplinary action at both the Board level and at the provincial level, through the Real Estate Council of BC.
Your best protection from scams and money laundering schemes, is to call Laura or I when you hear that knock on your door. You can also give us a call at any time and we can deliver a supply of business cards for you to hand the door knocker with the advice to call us as your representative.
Lingering animal smells and fur can be a turn-off for would-be buyers. Be sure to remove all signs of your furry friends before showings. Here are some tips.
1. Holey backyard, Batman!
Does your dog bury more bones than they munch on? Start at the perimeter of your yard and circle inward to find your pup’s landscaping efforts and fill them in.
2. Scoop the ####
One misstep can ruin a buyer’s impression of your yard (and possibly home). Make sure your property is clear of any pet-related landmines.
3. Mend fences
Check your fencing, deck and porch for any marks from scratching or chewing. Most can be erased with elbow grease and a bit of sandpaper.
4. Stash the evidence
Collect your pet’s toys, bowls, beds and litter boxes and keep them out of sight. Hide pet photos for now, too.
Have a friend or Realtor come by to sniff out any animal scents you may have become accustomed to. Light candles, open windows or hire a professional carpet cleaning crew to deodorize your home.
6. Need a buffer?
Have claws scratched up your lovely hardwood floors? Ask your Realtor if professional resurfacing might be a good idea.
7. Don’t leave pets home during showings
Not only is there a chance they may bolt through an open door when strangers stroll around, there’s also a liability issue. It may be a good idea to temporarily relocate exotic critters, such as snakes or tarantulas.
**Article courtesy of RE/MAX of Western Canada**
If you’re planning to sell your home, it’s probably crossed your mind to try to sell it yourself and save the
sales commission. But, there are some very good reasons why that would be a mistake.
According to housing industry experts at HomeGain.com and Realtor.org, more homes listed by real
estate agents are sold than homes marketed by owners, and they tend to sell more quickly, with the least number of issues and for more money.
Homes listed by real estate professionals get more exposure and their sellers get more support. Real
estate professionals offer many advantages:
• They’re trained and licensed professionals.
• They have experience in your neighborhood and your market.
• They have oversight from brokers and state licensing officials.
• Their job is to advise you the best way to reach your goals.
• Their continuing education keeps them up-to-date on housing issues.
• They know how to present your home and deal with buyers.
• They know how and where to market properties.
• They know how to overcome typical snags that occur in all real estate transactions and closings.
• They understand state-required disclosures and look out for your best interests.
• They understand personal safety and security for your belongings during showings.
• They know the best resources to make transactions go more smoothly, from bankers to homestagers
• They have the most accurate data sources – the MLS, the only data repository that has the most upto-date
listing and sales information.
• They know how to negotiate.
• Their job is making real estate transactions successful.
When you market your own home, you have to make the time to do all the jobs a real estate professional
would do, and you’ll be competing against other sellers who have real estate professionals by their sides.
If you can’t leave work to show your home, or you feel it requires more knowledge and experience than
you have, you can’t go wrong by hiring a well-respected real estate professional.
Back in the days of the cowboy movies, the story lines would often have the Native scouts look to the ground for tracks, smell the ashes of a campfire or place their ears to the rails to listen for a train.While I don't know about hoof prints, or how to smell a campfire for clues, I do know that a train track is a solid piece of metal sometimes as long as 1000 miles. A train can weigh 2-12 million pounds. this creates a lot of kinetic energy that will be felt many miles in both directions. This kinetic energy can also reveal if a train is coming closer or going away from you. Trains, and mass transit can also signal what is going to happen in the next few years in Surrey Real Estate.
Don Campbell, Senior Analyst with the Real Estate Investment Network (REIN) recently outlined some of his findings to a group of savvy real estate specialists. His prediction is that condos and townhouses with a high walk-score were going to provide investors with the greatest return over the next five to seven years. His reasons take into account the Millennial cohort, which presently is the same size as the Baby Boomer cohort, but will be over taking the Baby Boomers in influence and size in three years.
Millennials have some key traits that are important to consider as they become more of a force in our community. Firstly,they are technologically driven. Nothing appeals to this cohort more than fast Wi-Fi. Next, they are very social and like to collaborate. Millennials also feel that work-life balance and flexibility are very important to their life style choices. They are not interested in owning a car and they are very adventurous. All of these elements add up to an inevitable demand on flexibile housing close to amenities and mass transit. In other words...the next boom generation will be wanting community style housing within walking distance to their social hubs and transportation.
Metro Vancouver's population is projected to grow by one million people over the next three decades. Much of this growth will take place in Surrey and surrounding municipalities. The Surrey Rapid Transit Study identified a shortlist of four rapid transit options, all of which would meet the long-term needs of this growing wave of population.
1. Bus Rapid Transit on Fraser Highway, King George and 104th Ave.
2. Light Rail Transit on Fraser Highway, King George and 104th.
3. Rapid Rail Transit on Fraser Highway, King George and 104th.
The City of Surrey likes the idea of Light Rail Transit and would like to see construction begin in the city centre to Newton along King George with further expansion south in the future.
The time is right for savvy investment buyers to take hold of the opportunity the Millennial cohort will create in Surrey. Already the statistics are showing growth and increasing demand in condos along transit corridors. The data analysis service called Snapstats identified the "Buyer's best bets" as being between 100 - 300K up to 2 bedroom units in East Newton and Whalley. Their 13 month graph also shows that in January prices have jumped, and the trend is continuing in February according to REALTOR reports.
Listen to the sound on the tracks. A train is coming...driven by the Millennials, and that train is Light Rail Transit into community complexes within walking distance of social amenities and shopping. Now is the time for Investment Buyers to act in order to capitalize on the best return on investment opportunity we have seen in condos and townhouses in the Surrey market.