Buying Real Estate a Bad Idea?

You don’t always make money when you buy your home. The costs associated with owning real estate can quickly add up.  There are transfer taxes, closing costs for a lawyer/notary, property taxes, city utility fees, replacement insurance, mortgage insurance, mortgage interest fees and finally real estate agent fees. Picking the right house can be crucial to better your financial position when owning real estate and picking an agent can help you pick the right home.

Typically Buyers don’t pick buyer agents.   The majority of the time the Buyer agent tries to “pick” a client and this happens either through an online inquiry, phone inquiry or open house. Occasionally a Buyer will be referred to an agent and a few times a buyer goes actively looking for a buyer agent themselves.  When you go looking for an agent you quickly realize that there are 100’s of agents and we all say the same thing.   Background information on agents are usually missing or minimal so it is normal for buyers to wind up working with an agent they did not choose.

The value the buyer agent brings to a Buyer, generally speaking, is as follows:

  • Buyer agents make it easy for Buyers to look at multiple homes and keep their identity private rather than having to contact multiple sellers or seller agents. This means the agent needs to be available even on short notice.
  • The Buyer agent makes it easy to write an offer on a property.  Generally a custom legally binding contract can be created within an hour of looking at a property, any day of the week.
  • They give advice and have a fiduciary duty regarding contractual subjects and conditions on any one particular property.  In this respect Buyer agents give Buyers assurance backed up with actual liability insurance usually up to $3 million dollars.
  • The buyer agent can connect the Buyer with reputable sub contractors, mortgage specialists, and home inspectors to help ensure that the home buying process goes as smoothly as possible with minimal stress.
  • They give advice about general market conditions as well as specific advice down to a single segment and single property, ideally speaking, helping the buyer ultimately find the right property for them so that the buyer can have the best chance of building wealth.

The first two points are probably the most important practical values a buyer agent can bring to the table and these two points also require the least amount of knowledge/experience.  Just by doing these two points, a lot of Buyers appreciate the services of their agent and just these two points can mean the difference between securing a great property or getting ‘stuck’ with a not so great property or renting. These are the passive things an agent can help a Buyer with.

The last three points generally require more knowledge and experience to do well.  The agent becomes more of an advisor than a passive participant.  These points require more of an active approach where the agent tries to actively ask questions that can help them better understand the needs of a particular Buyer. Outside of being available, typically the biggest difference between one agent and another one has to do with these last three points.

Picking the right agent can save you a lot of time and be the difference  between finding a property you want to hold on to and build wealth or buying a property that could literally lead to financial trouble. The difference can be based on who you decided to use as your buyer agent.

Are you looking to buy a property in and around Kamloops?  If you would like some help feel free to contact me when you are ready.

Andrew Thompson

andrew.thompson@century21.ca

Call or text: 250-320-0154

Office: 250-377-3030

It Sucks to Sell Your Home!

You have put down roots, made great memories, have friends close by, but now you have to sell. The costs associated with selling are not small by any measure – moving costs, lawyer or notary fees, transfer taxes (on your new purchase), and real estate agent fees quickly add up.

Real estate agent fees are one of the greatest costs, but despite this, not a lot of people (less than 5%) try to sell their property themselves. Most people decide to use a real estate agent to sell their home for the same reasons they use a mechanic to fix their automobile or a lawyer to deal with a legal matter. It is possible to sell your property yourself,  but what you save in commission you could lose in sale price and there’s a chance you can expose yourself to legal issues.

As you know, real estate agents provide the following services:

  • answer questions;
  • prepare listing documents;
  • Sell your property
  • keep you at arms length from potential buyers so that you can maintain your privacy and not get emotionally involved with a potential buyer;
  • offer insight on current market conditions and provide real estate advice when needed;
  • help your property standout;
  • limit your liability;
  • Give advice on how to negotiate a good price for your property;

Based on my experience, generally speaking, this is the order of importances most people have when deciding who to use as a real estate agent or brokerage and why most people just rely on a referral from a friend or number of listings agent has to sell their property.

The real estate industry is big business. For example, in Kamloops with a population of about 95,000 on average there is about $75 million of transactions per month in our real estate market. Collectively, real estate agents are trying to make that number as big as possible. Real estate agents are like the managers of the real estate industry and for their services they charge Sellers a commission usually of no more than 4%.  In return, Sellers hopefully get a good management team that consistently makes their wealth improve by more than 5% to offset this cost. I say management team because when you hire one agent you are indirectly hiring all agents. In theory, your listing agent is trying to help you achieve the highest sale price while a buyer agent is trying to help buyers achieve a lower sale price.

What Should you look for in a good Agent?
Every consumer is different but in my experience, marketing and real estate advice are typically not a top concern for most consumers when it comes to picking an agent. Typically, Sellers rely on referrals or superficial metrics like how many listings an agent has when determining which real estate agent/brokerage to hire.

When choosing a real estate agent, Sellers should look for good management skills and an entrepreneurial spirit. Good managers not only have good people skills, work hard, and are honest, but they also look for ways to make things more informative and transparent. Good entrepreneurs always have the energy to try to become more efficient and effective. When you are seeking a real estate agent keep these managerial skills in mind because they should be at the heart of any good real estate agent’s business. One way to show entrepreneurial spirit is to be proactive in marketing a home with high quality pictures, and even videos that give your property a story so that there is a great first impression of the property.

Obviously selling your home doesn’t suck.  But chances are you would not have read this article if I called it, “Sell your property with me for top dollar quickly!”.

 

Andrew Thompson,REALTOR(R)

andrew.thompson@century21.ca

Call or txt: 250-320-0154

Office: 250-377-3030