Greg McCarvell on London Ontario Real Estate

A common question is "how much is my property worth?". Understand the answer to this question can vary greatly. Many times you will get a "shoot from the hip" type answer that is simply inaccurate. While an experienced sales person many times can give you a rough estimate based on recent experiences, this advice needs to be qualified if it is supporting a major decision.

The complexity and detail behind formal appraisals will boggle the mind of most. Appraisal professionals have a multitude of methods and mathematics to produce estimates of value from a more scientific perspective. The services of an appraiser are rarely (if ever) free, so a well trained salesperson in this area can prove helpful for many purposes.

Specialty courses are available to diligent salespeople teaching more in depth concepts of appraisal. The current licensing training also includes a good amount of background on the process and cautions practitioners to guard clients against poorly researched value estimates.

The concept of Agency spans far beyond the scope of real estate sales. This area of law is very interesting and detailed in scope. Most people recognize the Agency relationship in a couple of common areas: Listing Agreements and Buyer Agreements. These formalized documents serve a great purpose in establishing a clear, well understood agency relationship.

Two things are interesting about this area. The first thing is the fact that in many ways an agency relationship can be created unexpectedly when involved parties perform certain actions. By acting as if an agency relationship is in place, very often it is in place by the concept of implied agency. In my opinion, you are best to clearly define the relationship than to have it take place by default. Doing so will allow you to be more formally aware of the rights, loyalty and duties that an agent should be providing you.

The second thing that is interesting are the bundle of fudiciary responsibilities that are required as soon as this type of relationship is established. The bottom line is that your real estate salesperson is obligated to look out for your best interests (not their own). If they do bring in a buyer client whom they owe the same loyalty, they are required to inform you of this dual agency situation. Your salesperson should be keeping your best interests at heart, providing competent service and keeping confidential information to themselves.

By the way, don't shy away from a dual agency situation. If this is handled by a professional, many times it can lead to a very positive experience. Today's society favours available facts and easily located information with which to make decisions. A dual agency can put more information on the table and make the process very clear and easy. This is all contingent on the fact that your representative is well versed in professional client relationships.

When you build a new home, you expect things to be perfect right? Com'on now, you know you do! I don't blame you when you see a crack in the drywall or loose tile that you can jump to conclusions about the overall practices used when constructing your home.

The first step is simple, be sure to look at all the information related to warranties, repairs and defects from your builder BEFORE buying. This will put all the worst case scenarios to bed and allow you to peacefully enjoy your new home without being stressed.

If you do experience problems, also understand that certain types of imperfections are normal. Very often a builder will set a 30-90 day check up point where they will go around the house and inspect for any popped nails, cracks in the drywall seams etc.

As your home ages things will change as well. There are certain things with new homes today that there really is no true method of avoiding... read about an explanation of what Truss Uplift is for one example - you will see that the fix is simply planning for eventual movement. (Link on Truss Uplift)

I was reading on the topic of new home development today and was surprised as some of the minimum requirements put forth by the building code in Ontario. Needless to say, if you are talking to a builder and they say "everything meets building code, that means we believe in quality", then keep walking because they are probably not as quality oriented as you would hope.

Here is one specific example from the Canadian Real Estate Encyclopedia:
A typical code allows a floor to deflect 1/360th of it's length under normal live loading, if there is a finished ceiling below.

ie) 2x10" floor joists spaced 16" on a center span of 15 feet. When the room is empty, there should be no perceptible deflection. When the room is occupied with furniture and people, the center part of the floor can be 1/2" lower than the floor edges.

A 1/2" drop in the span of 7.5' is certainly noticeable, not to mention a little tough on brittle floor finishing such as ceramic tile!

Side note: I purchased the domain www.londonhomebuilders.com Friday. I have not decided exactly what I will do with this in the future, but it will certainly have to do with making a quality decision when selecting a home builder. Keep an eye on it - may be 6-10 months out, but I plan on putting a substantial investment into this area of the business.

On the theme of consumer protection, be sure you see the main regulatory body who's mandate is to protect consumers in the real estate industry...

The Real Estate Council of Ontario. (RECO)
http://www.reco.on.ca/

This site will guide you through the code of ethics that 95% of real estate salespeople have guaranteed they will follow. RECO also decides discipline measures and enforces these policies. If you want to know what your salesperson is supposed to be doing, you may find some interesting tidbits on this site.

I often consider one of my greatest strengths the ability to keep composure in a tense situation. I can think of many, many situations where my role as a facilitator - a person in the middle - allowed my clients to realize financial benefit because they kept their emotions in check. Unfortunately, on the other side of the deal was someone who lost because they themselves, or their Realtor went over the top with emotions.

Frequently, I hear myself saying to clients: "This is not a grudge match, it's about finances and lifestyle. You can gain in those areas or you can win this argument - but NOT BOTH". Clients are quickly comforted by the fact that this is likely the last time they will ever interact with the buyer or seller on the other side. When things get tense you can gain ground by giving a little (appearing to lose the fight) and then the situation softens, taking all that loss back and winning in the end. Let me give you a few examples:

 THE PRICE CONFRONTATION

Eventually the focus of any offer turns to price. It's natural! Price is ALWAYS a discussion point. Discussion point - that is the key phrase. Often when the negotiations wind down to the final stages things can get a little tense. My advice to clients is to remember that winning often involves concessions and letting other think they won. For instance, if the negotiation came down to the last $1,000, logically speaking this agreement is already made. No one on this earth can determine the market value of a property within that range. If the other negotiating party is emotionally charged to win, quite often you can spend that last $1,000 in a much more productive way. Give them the last $1,000 and adjust the closing date to save you a couple mortgage payments. Maybe there is more value in some inclusions (appliances etc). An emotional need to win almost always leads to that person overpaying for the item they are attached to (price or otherwise).

THE NEGOTIATION PROCEDURE CONFRONTATION

This one is priceless! Let's face the facts - modern negotiations in North America are fairly tame. I always appreciate working with buyers or sellers from different parts of the world. Very frequently they have very different expectations and tactics when it comes to bartering. It's a mistake to let  yourself get emotionally charged with the sequence of events leading to the agreement. People are different and take different approaches. I've had deals work from $20,000 under list and end up selling quite close to asking price. I've also had deals start at 98% of list and never make it past the first step. Regardless of the fact that they started way too low AND asked for your grandmother's antique wardrobe, getting upset will not help. Take it as a compliment that they are making an offer on your house instead of the others on the market and move forward. 

THE LOWBALL OFFER CONFRONTATION

I'll agree with you that it's annoying. There are buyers in the marketplace who consistently start with obscenely low first offers. As a buyer's agent I advise people it can be counter productive. Still, people are told "if you don't ask, you don't get". Don't lose faith - sometimes a lowball offer can be your greatest tool to leverage into other, more credible offers. When an offer is presented on one of my listings guess what I do first? That's right, I call EVERYONE who looked at the property, everyone who says they are going to look and anyone else I can talk to! It's a funny thing how people are attracted to homes they may lose! Maybe the lowball offer can become acceptable offer, maybe it's just fuel for another... getting out of focus can cost you both of these benefits.

My Clients often have a lot of fun during the negotiation process... that's right - FUN! We talk about the likely outcomes, we know where we want things to go many, many steps beyond the current negotiation position. With this information in place when push comes to shove we never need to make a knee jerk reaction, we just laugh and notice where on the map the other party went.

If you have an experienced negotiator on your side you can take a lot of the negative emotion and unpredictability out of the process. Call me! I would be interested in presenting a more in depth negotiation process to you. It's amazing the amount of information we can discuss in the course of 15 - 20 minutes.

Being a facilitator is a key role your Realtor should be playing. Excelling in the midst of confrontation, negotiation break-downs and high emotions is critical to your success. Be sure you are working with someone who handles pressure well.

Buying a home is a great experience. At least buying a home SHOULD be a great experience. I've encounter a number of clients who came to me wearily wondering if they would ever find their dream home. After interviewing these people, the problem was generally a matter of tactics and organization. When it is a strong sellers market - as it's been in London, Ontario for a few years - the process needs to be approached professionally and with an organized pattern of work.

Let's look at an example of someone who has not yet committed to working with a Realtor. The process usually consists of open houses, calling Realtors direct and setting up appointments and searching www.MLS.ca daily. Sounds reasonable right? I agree, it does sound reasonable... UNTIL you think of the multiple channels of information that comes back!

1. 10,000 Realtors follow up with you, try and work you into a personal client and call you each day with new listings that "might be of interest".

2. The last I checked, www.MLS.ca did not have a great way to keep properties of interest organized. This may change - I hope it does change. But what do you do in the meantime? I have a full time career in real estate and still find it challenging to maintain a system to accurately keep track of listings for clients. Trust me, this may sound small, but get into the search a couple weeks and 10-15 properties and you will understand what I am talking about.

3. Remembering which house had what and where they are. 

There is another way! Buyer's agency is a service provided by most Realtors... Professional Buyer's Agency is less common.

As a professional Buyer's Agent I feel my role is to keep the buyer focussed on what they are most required to do: Determine what they like and don't like about homes. That's it - sounds a little less stressful wouldn't you agree? Beyond taking care of the details above, the other advantages I can offer you as a buyer are the following:

1. Help and assistance clarifying the issues surrounding a particular property. There are certain questions that can very easily clarify if the home is meeting your needs. As a buyer's agent with experience helping literally hundreds of people view real estate I know the questions to ask. It will make the decision clear in your mind and keep the important factors in the spotlight. So many buyers will get distracted by small features and forget the big picture.

2. Quickly summarize comparisons of one property to another. My commitment to this profession has developed in me a great memory for property features. Combine this with detailed notes and I will put a property comparison in front of you on the spot. People shop by comparison. This one or that one, A or B, A&B but definitely not C. As we venture through new houses you will notice I always ask you comparison questions. My goal is to eliminate the non-desirable properties from your mind as we go. I want you to focus on the properties that have possibility instead of get cluttered with homes you would never consider.

3. Logistical convenience. It's fun to look at homes when they are conveniently arranged in order, on the same day in a nice neat path without backtracking. You will never get lost when I'm in the car! I encourage my clients to talk about properties while we drive to the next destination. This is more enjoyable than fighting while reading a map! Let's view 8 houses in a couple of hours instead of getting 8 follow up call and setting 8 individual appointments by calling direct.

4. Area advice and opinions. Many people are interested in knowing the "reputation" of a neighborhood. Everyone has an opinion. I can give you mine, but more importantly, I can summarize the opinion of a lot of people. Most clients are interested in an areas reputation because they are concerned about resale. I think this is important as well. I can give you some good advice in this area.

Beyond convenience features I can provide you a multi-tiered approach to searching. The MLS is not the only source of listings. A good buyer's agent will help you source listings from many places. I would be interested in meeting with you personally to discuss strategies from utilizing 3 major sources of properties.

Keeping tabs on a mortgage "shopping" adventure is like herding cats - difficult at best! Society tells us to be a smart consumer and shop around... good advice. Still, in a situation where the item or service is particularly complicated or specialized, shopping around will not clear up the situation completely.

As a person who has taken formal mortgage financing courses, I would follow the advice below personally. This is not only for the inexperienced, but also for people who are quite familiar with mortgages and the different aspects involved. I prefer to direct clients down a road of practical questioning and evaluate the lender based on answers to these practical questions.

As a Realtor you would think I am pretty up to date on the mortgage market. In comparison to the average consumer, you are probably right. In the same thought, I don't consider myself up to date. The mortgage market has been changing so quickly and introducing new products and services at such a rapid pace that only the best of lenders can effectively keep tabs on it. Below are some key points to sourcing a mortgage. These tactics are somewhat timeless - but very effective. If you have any questions about this information, don't hesitate to contact me directly.

1. Before you do anything - go get a very general book on mortgage financing. Nothing too deep, just something to get you up to speed. The type of book I'm talking about is a 15-20 minute glance through. You will become familiar with some terms, general concepts and key questions to ask.

2. Sourcing the financing. Generally there are two main sources for mortgages - BANKS & MORTGAGE BROKERS. Logic would tell you that a bank would be the most natural place to get a great deal. I thought the same as well, that was until a client of mine went to a bank, got a pre-approval. Not long after they visited a mortgage broker and were quoted a better rate. Big deal right? Well, the quote was with the SAME BANK! A mortgage broker has the power of utilizing many different source of financing. This flexibility is sometimes more important that "eliminating the middle man". My recommendation here is to talk to at least one of each.

3. Get recommendations. Personally, as a Realtor, I don't get involved in financing. All I want to know is what you are aiming for as a price range. Clients prefer to keep their confidential information in a secure place. With this in mind, I do have a few contacts who are mortgage brokers / bankers. These contacts are pre-screened. I am constantly bombarded with requests for referral business, I keep close contact with the best of the best. Now, consider I provide these people with MANY, MANY clients, do you think they would treat my referred clients properly or do you think they would try to pull the wool over their eyes? Get a referral from your Realtor for a mortgage broker and banker. This is my suggestion assuming you did step 1, which is selecting a professional Realtor. If step 1 is still needing to be addressed, call me, I can take care of this for you ;)

4. Ask why. ALERT! ALERT! A GOOD MORTGAGE IS NOT ONLY BASED ON RATE! So many clients shop rate - this is probably because so many  lenders SELL rate. A true professional in the mortgage industry will define the best OVERALL solution for you. Terms, timeframes, methods and more all play a major role in the equation. Finding out if the person you are speaking to is working towards your best solution is easy to find out. Just ask "why do you think this is good for my situation". If they give you answers with your actual situation, that is good. If they didn't ask you specifics of you situation to begin with, that is bad. Some things a good lender would ask a client to craft an ideal solution may include: How long are you planning on staying in the home? Do you have any thoughts of major shifts in your life plans? Do you have a budget in mind?  If you here these types of questions there is a good chance you've found someone looking to provide you the best solution instead of only the lowest rate.

5. Get your papers in order. You are seeking credit. Be prepared with a cleanly put together package containing your major financial credentials. This includes tax slips for at least the previous year, a summary of existing credit and balances, social insurance number and proper identification. I think it would also be wise for you to visit www.equifax.ca and www.transunion.ca. These two sites allow you to request your own credit report without affecting your credit rating in anyway. It's relatively inexpensive and will save you from seeing any unknown issues for the first time in front of a lender. Perhaps you first step in the entire process is to pay off a small creditor you forgot about.

6. Put your trust in the professional. Once you've selected your mortgage provider, put your trust in their advice. Just like a doctor or lawyer, a true professional will have a grasp on all the issues that will protect your best interests. Be diligent and check things out yourself, but don't hesitate to follow a professional's lead once you've done your homework.

So there you go! If you want a referral to a great lender, feel free to call me. You can also reach me through my website: www.homeslondon.com.

One thing you need to understand is that many people love pets. If you have a cute little puppy, a gracious kitty or even a collection of pet insects - other people have the same interests in common. HOWEVER, the majority of buyers will not relate to your particular pet situation.

When you are thinking of pets in relation to your upcoming home sale - think about eliminating or drastically minimizing evidence of your pet during showings. The goal of preparing your home for sale is to make it appealing to the widest variety of people possible. The more people you can put in a positive state of mind about your home, the larger selection you have to find that buyer who will pay everything your home is worth.

Naturally, circumstances happen and it is not always possible to make the needed adjustments. It could be an aging dog who needs special attention or a bird that doesn't tend to fly back to your home if you let it out loose ;). Please understand - my advice here is to do the best you can. Listing and selling your home can be an inconvenience, don't let it rule your life. On that same train of thought, the more appealing you make the home the faster things are likely to happen and the sooner you won't have to deal with the inconvenience.

One thing is for certain, do not allow showings at your home with pets on the loose. With certain pets (cats in particular) you may be able to get away with this depending on the pet's temperament. Don't make it a habit, make it the exception. A dog on the loose is bad news - if you can't have a dog removed or put in a kennel during showings, delay the showing until proper accommodations can be provided to your pet.

If you have any specific questions about the logistics of arranging showings around your pet, please feel free to contact me. A personal call will allow me to tailor my advice to your particular situation.

For quite some time now the most frequent question I have been asked is "is the market slowing down?". The U.S. real estate market has been in favour of buyer's for just over a year and it was likely to catch up to Canada sooner or later. It's common knowledge that Canada will not face the same downturn as the United States because of more conservative lending standards, but economic slow downs will have be a factor.

To me there are good aspects to a balanced market. It's been years since working with a buyer is anything but FRANTIC! It takes it's toll on you when a seller's market demands you be at a new listing the same night it shows up or lose the opportunity. It's only today that I can advise my clients that they can think on a home for more than 10 minutes. Of course, when you find the right home, it's always advisable to make decisions as soon as practical - you never know who else is lurking in the shadows! 

The idea of a balanced market leads to the idea of how to stand out. With listings remaining for sale for longer periods of time, there is a greater likelihood that other quality homes are also available. With higher quality competition you will need to step up to the plate and outperform in a few different areas:

1. Presentation - your home needs to present in a very crisp and professional way. Presentation can be broken down into a few areas such as staging (lighting, arranging and colours), cleanliness, direct marketing materials (lawn sign, feature sheets) and walkthrough strategies. Paying attention to the small details will bring you to the next level and possibly be that one deciding factor.

2. Accommodating Showings - the pace of showings might be more spread out compared to an extreme seller's market. Work with your Realtor and family to make maintaining a clean and presentable home less of a chore. There are very practical things you can do that will save you endless cleaning. With a lower volume and more casual buyer, each showing become much more important. Where it was once important to find the right buyer, you may now find the right buyer can't be replaced quite as quickly. Try to make each showing count... if there is any way to accommodate - DO!

3. Keep Your Listing Lively - Change gets noticed. Keep a regularly rotating marketing system. It's not only price that needs to be evaluated on a regular basis, thing like signs, internet marketing and text descriptions all need to be reworked and tweaked from time to time.

4. Stick to the Basics - while it might be tempting to search for new and innovative ways of getting the home noticed, the more effective approach is to increase the intensity of what already works. In a modern real estate market - the internet constitutes 80% of the marketing focus. Of course, if you really want to get the chicken suit out and walk up and down the nearest busy street with a directional sign, you are certainly welcome to do that as well ;)

I would welcome a personal conversation with you regarding your home. Each home has strong points to emphasize and negative aspects to address. Call me directly to find out what might be the best strategy for your home.