During 2009, ongoing news reports regularly appeared regarding the Competition Bureau's allegations that Canada's Multiple Listing Service (MLS®) was anti-competitive. The MLS® system which as you will note is a registered trademark, is owned and operated by the Canadian Real Estate Association (CREA).
After months of legal wrangling which cost CREA and essentially those of us in real estate over three quarters of a million dollars in legal fees in addition to the cost born by Canadian taxpayers, a settlement was reached which saw modest changes adopted to the way in which property listings can be placed on the MLS®.
Contrary to public belief, the change does not allow consumers to list their homes or other property(s) on the MLS® by themselves. The MLS® still remains a REALTOR® to REALTOR® service. What the new rules do allow is listings to be simply posted onto the MLS® by a REALTOR®, allowing the home owner to handle as much or as little of the selling process on their own as they wish. If a home owner elects to recruit a REALTOR® that will simply use his ability as a licensed real estate practitioner to "post" the listing on MLS®, the seller can then put up their own sign, conduct their own open houses and handle all the negotiations and paperwork should a potential buyer happen along.
REALTORS® are still required to handle the posting of a property on MLS® in order to ensure the accuracy and integrity of the listing information ie: are the room sizes, taxes and other information about the property correct?
I know of at least one area property the owners are trying to sell on their own which has been posted onto the MLS®. The REALTOR® that posted the listing to the MLS® on the seller's behalf is located 6 to 7 hours from Collingwood. Has he seen the property, measured the rooms, calculated the total square footage and verified other pertinent listing information? Not likely. This was one of the primary concerns that CREA had in adopting this change and rightly so. Canada's MLS® is the envy of many other countries including the U.S. We are one of a few countries that has a nationwide MLS® thus allowing consumers to search for properties online anywhere in the country regardless of where they happen to live. Further REALTORS® are legally held to a high standard via Provincial law and are required to carry errors and omissions insurance in the event we make a mistake. As such, consumers have a much better chance of receiving accurate information and fair treatment with respect to their real estate buyer and seller needs versus dealing with a private individual.
Thus far, we have seen little change in the marketplace as the result of the regulatory changes that took place with respect to the MLS® rules in 2009. The listing and sale of real property continues much the same as it has for years with the majority of properties on the MLS® listed by full service REALTORS® that work with seller clients from start to finish. Other options for consumers now exist and there's nothing wrong with that. For those sellers wishing only to have their property "posted" on the MLS® and are willing to promote and market their property on their own and subsequently handle the negotiations and paperwork associated with the sale process they are free to do do. Buyers dealing with sellers wherein their listing has been merely posted to the MLS® should exercise some caution with respect to the information provided. For sure, a home inspection should be done and further, buyers of these properties would be wise to verifiy first hand tax, zoning and other information relative to the property in question. In this area we also have other regulatory bodies to deal with in certain circumstances such as the Niagara Escarpment Commission, the Nottawasaga Valley and Grey Sauble Conservation Authorities etc. A REALTOR® that is located outside the area may not be familiar with properties that fall within the confines of these governing bodies and the chance of a mis-step is then that much greater. As with any purchase the term caveat emptor applies and even more so when dealing with the unknown.
I want to hear from you. Please leave a comment or take my current online poll regarding this matter, I look forward to hearing from you.
The Emotional Sea of Real Estate Part 2
In my last post I touched on the emotional aspect of being involved in a real estate transaction and that neither seller(s), buyer(s) or REALTOR(S)® are immune to the flood of emotion that often takes hold of those involved in the purchase of real estate.
Without a doubt the most significant things affecting the emotions of the majority of sellers is the price. While some will confess they have no idea what their property is worth and are thus relying on their REALTOR® to establish that for them, most will harbour somewhere deep down inside a number and usually it's a higher dollar amount than the current market value. A seller's price may be based on what they need to get out of a property to help finance their next purchase or to pay off their mortgage or other debts. Their price may and often is based on what they feel it would cost to replace the home, cottage or whatever. Unfortunately none of these factors affect market price so right off the bat, the seller's emotional tension is starting to build fueled by disappointment once they learn their listing price is not a realistic one. Already on edge with a lower than anticipated list price, the seller's emotions then really erupt when an offer is received that is10% or more below the asking price. If the asking price is realistic, I always recommend a starting point somewhere between 90% to 95% of the asking price. Anything less may result in not getting a sign-back and worse, it creates a very emotionally charged almost antagonistic atmosphere for future negotiations.
Buyer's on the other hand are faced with the emotional element of "fear." Fear of making the wrong choice of area, fear of buying a home with problems, a leaky basement, mould, are the well and septic okay or the most prevalent on today's top 10 list of buyer(s) fears, are we paying too much!
When a buyer and seller are negotiating an Agreement of Purchase and Sale numerous conditions and clauses are always prevalent and while some of these ie: the closing date, accepting an offer conditional on the sale of the buyer's current home are all emotional triggers, none are as flammable as the aspect of price. The seller wants to maximize their price, they are mentally calculating the real estate commission they are going to pay versus the perceived value they are getting from their REALTOR® and lastly, they fear the buyer is just trying to unjustifiably beat them down on price. Some terms in an Agreement of Purchase and Sale are equally as important as the price because in one way or another they too have a financial cost or benefit to the seller, buyer or both These are often overlooked however and it's the responsibility of the REALTORS® involved to point that out.
So what emotions do REALTORS® have. Well, as I stated in my last post, every day we wake up unemployed. That's emotional and you really need to learn to control that or you'd never get out of bed in the morning. Every time we list a seller's property, despite our best efforts, the attractiveness of the property and or its price, there is no guarantee that the property will sell and we will get paid for our efforts. After months of working on a listing, having it not sell and worse losing the listing to another REALTOR® that can be a major let down creating a whole sea of emotional thoughts. The same applies when working with buyers. We load them in the car, spend time driving them around burning up both time and fuel with again, no guarantee of them buying anything thus generating a pay cheque. Obviously these scenarios can lead to frustration, resentment towards the clients and a host of other feelings which all fall into the emotional category.
Perhaps the worst case scenario in a real estate transaction is when the emotions of the REALTOR® or REALTORS® kick in preventing the deal from getting done. Our job is to shrink or preferably remove the emotions of the buyers and sellers however sometimes they are only amplified by the REALTOR'S own thoughts and emotions. REALTOR® egos can sometimes pose a real problem when a listing agent who believes they are 100% right in the price is bound and determined to show up one of their counterparts who may be representing a buyer in the negotiation process and vice versa. Typically there are no winners in this scenario as the deal often reaches a stalemate and is aborted. It's not that the seller and buyer do not want to move on a point, it's the stubbornness of the REALTORS® that is preventing the deal from getting done. Cooler heads needs to prevail and the only way to do this is to remove the emotional elements that are preventing things from moving forward.
Removing or mitigating the emotional feelings with a seller(s), buyer(s) starts with the process of discovery. As REALTOR(S)® we need to determine what the real objection is in order to diffuse the emotional feelings attached to it. The process of dealing with the emotions of seller(s) and buyer(s) can't be addressed when REALTOR(S)® have their own agendas which more often than not are emotionally driven. Our Code of Ethics stipulates that we have to follow the instructions of our clients. That is not to say that we shouldn't step in and bring our knowledges, skills and unbiased opinions into the equation to solve a problem. After all, it is a business transaction and most successful businesses run far more successfully by making fact based decsions versus emotional ones.
Without a doubt the most significant things affecting the emotions of the majority of sellers is the price. While some will confess they have no idea what their property is worth and are thus relying on their REALTOR® to establish that for them, most will harbour somewhere deep down inside a number and usually it's a higher dollar amount than the current market value. A seller's price may be based on what they need to get out of a property to help finance their next purchase or to pay off their mortgage or other debts. Their price may and often is based on what they feel it would cost to replace the home, cottage or whatever. Unfortunately none of these factors affect market price so right off the bat, the seller's emotional tension is starting to build fueled by disappointment once they learn their listing price is not a realistic one. Already on edge with a lower than anticipated list price, the seller's emotions then really erupt when an offer is received that is10% or more below the asking price. If the asking price is realistic, I always recommend a starting point somewhere between 90% to 95% of the asking price. Anything less may result in not getting a sign-back and worse, it creates a very emotionally charged almost antagonistic atmosphere for future negotiations.
Buyer's on the other hand are faced with the emotional element of "fear." Fear of making the wrong choice of area, fear of buying a home with problems, a leaky basement, mould, are the well and septic okay or the most prevalent on today's top 10 list of buyer(s) fears, are we paying too much!
When a buyer and seller are negotiating an Agreement of Purchase and Sale numerous conditions and clauses are always prevalent and while some of these ie: the closing date, accepting an offer conditional on the sale of the buyer's current home are all emotional triggers, none are as flammable as the aspect of price. The seller wants to maximize their price, they are mentally calculating the real estate commission they are going to pay versus the perceived value they are getting from their REALTOR® and lastly, they fear the buyer is just trying to unjustifiably beat them down on price. Some terms in an Agreement of Purchase and Sale are equally as important as the price because in one way or another they too have a financial cost or benefit to the seller, buyer or both These are often overlooked however and it's the responsibility of the REALTORS® involved to point that out.
So what emotions do REALTORS® have. Well, as I stated in my last post, every day we wake up unemployed. That's emotional and you really need to learn to control that or you'd never get out of bed in the morning. Every time we list a seller's property, despite our best efforts, the attractiveness of the property and or its price, there is no guarantee that the property will sell and we will get paid for our efforts. After months of working on a listing, having it not sell and worse losing the listing to another REALTOR® that can be a major let down creating a whole sea of emotional thoughts. The same applies when working with buyers. We load them in the car, spend time driving them around burning up both time and fuel with again, no guarantee of them buying anything thus generating a pay cheque. Obviously these scenarios can lead to frustration, resentment towards the clients and a host of other feelings which all fall into the emotional category.
Perhaps the worst case scenario in a real estate transaction is when the emotions of the REALTOR® or REALTORS® kick in preventing the deal from getting done. Our job is to shrink or preferably remove the emotions of the buyers and sellers however sometimes they are only amplified by the REALTOR'S own thoughts and emotions. REALTOR® egos can sometimes pose a real problem when a listing agent who believes they are 100% right in the price is bound and determined to show up one of their counterparts who may be representing a buyer in the negotiation process and vice versa. Typically there are no winners in this scenario as the deal often reaches a stalemate and is aborted. It's not that the seller and buyer do not want to move on a point, it's the stubbornness of the REALTORS® that is preventing the deal from getting done. Cooler heads needs to prevail and the only way to do this is to remove the emotional elements that are preventing things from moving forward.
Removing or mitigating the emotional feelings with a seller(s), buyer(s) starts with the process of discovery. As REALTOR(S)® we need to determine what the real objection is in order to diffuse the emotional feelings attached to it. The process of dealing with the emotions of seller(s) and buyer(s) can't be addressed when REALTOR(S)® have their own agendas which more often than not are emotionally driven. Our Code of Ethics stipulates that we have to follow the instructions of our clients. That is not to say that we shouldn't step in and bring our knowledges, skills and unbiased opinions into the equation to solve a problem. After all, it is a business transaction and most successful businesses run far more successfully by making fact based decsions versus emotional ones.
The Emotional Sea of Real Estate - Part 1
One of the seldom acknowledged and or appreciated aspects of real estate is the human emotion that typically plays a significant role in the buying and selling process. As real estate practitioners, one of our fundamental roles and perhaps the most important one, is to remove or at the very least minimize, the amount of emotion associated with the real estate buying and selling process and to treat it emotionally unbiased for what it is, a business transaction. Emotion involves and affects every person that is party to a real estate transaction. Sellers are often reticent about leaving their home. It is a place where memories have been made. It represents a significant portion of most people's net worth and often includes large amounts of sweat equity for the work they have put into their garden, the basement and or other improvements they completed on their own and so forth.
Buyers on the other hand are filled with trepidation as well. Is this the right home/neighbourhood for us? Is there something wrong with the place? Can we afford it? Are we paying to much? All these questions and more create a flood of emotion with buyers especially when it comes to actually signing an offer to purchase.
REALTORS® are not immune to the emotional aspect of real estate either. One of the issues we face is the realization that every day we wake up unemployed. We have no idea when and or where the next pay cheque may be coming from but that is all part of being self-employed in a commission only based profession. You either accept it and control the emotional uncertainty of being a REALTOR® or get a none to five salaried job.
Area Condo Sales Increase Show Modest Increase in 2010
Condominiums have and continue to be a significant segment in the local real estate market and 2010 was no exception. Many first-time recreational buyers in the area start with a modest 2 or 3 bedroom condo purchase then subsequently move up to a second property either in the form of a larger more upscale condominium or to a single family home/chalet. Case in point. In 2004 I sold a 3 bedroom 1,500+ square foot waterfront condo to a couple from Toronto. Four years later they traded up to a 3,800+ square foot home I procured for them that sold for over $1 million. While the monetary magnitude of their second purchase was higher than usual the pattern is not. Condo buyers often find they use their property much more than anticipated and quickly find they need something larger. Further, with an aging demographic many of whom are approaching retirement, the move from a modest condo to something larger for full-time retirement residency is a natural progression.
A total of 331 condo sales were reported through the MLS®system of the Georgian Triangle Real Estate Board in 2010, 6 sales more than in 2009. Condo sales in Collingwood actually dipped slightly from 202 in 2009 to 198 last year. Conversely, condo sales in the Blue Mountains increased from 103 sold in 2009 to 109 in 2010. MLS®condominium sales revenue totaled $75.8 million in 2010 up from $70.6 million in condo sales the prior year. None of the aforementioned statistics include the sale of new condominium units in developments such as The Shipyards and others. When the sales of new units are are added in, the Collingwood and area condo market can only be seen as being vibrant, offering those that prefer the maintenance-free lifestyle of condo living either as a full or part-time residence, plenty to choose from. For a complete re-cap of the condo market comparing 2009 and 2010 please see the winter 2011 of my Condo Communique´newsletter or Contact me for further information regarding specific developments.
How Were Sales in Your Area Last Year?
Real estate sales activity throughout the various municipalities that make up the market area of the Georgian Triangle Real Estate Board offered up a mixed bag of results for 2010 with many showing continued improvement in sales following the downturn in activity we experienced in late 2008 early 2009. The Blue Mountains, Wasaga Beach however both posted a decrease in the number of residential properties sold during the year as compared to 2009. Unit sales in the Blue Mountains decreased the most, down 8.5% from the prior year with 151 sales as compared to 165 in 2009. Wasaga Beach had 357 sales a decline of 3.3%.
Residential sales in Tiny and Clearview Townships were essentially unchanged in 2010 whereas the municipalities of Collingwood (up 6.9%), Grey Highlands (up 38.0%), Meaford (up5.4%) all showed increased sales activity.
Some significant shifts took place with respect to average pricing in these areas but this should not be construed as being an appreciation in property values. As mentioned in my prior posting, sales activity at the upper end of our market last year grew significantly with sales between $500,000 and $800,000 up 40.0%, sales between $800,000 and $1 million increased 33.3% and lastly sales above the $1 million threshold increased a whopping 86.7% with a total of 28 sales posted through the MLS® system of the Georgian Triangle Real Estate Board. The two areas reflecting the highest average residential prices were Mulmur Township with an average price of $543,140 while The Blue Mountains followed closely with an average residential price of $510,427. Residential sales in Mulmur Township are traditionally made up of acreage or estate type properties while The Blue Mountains is home to many of the area’s higher priced homes close to area ski and golf clubs.
The increased activity we experienced last year with upper-end “luxury” home sales helped to drive the average residential price for our market overall at the end of December to $314,937 from $286,378 one year earlier, an increase of 10.0%. The lowest average price for residential housing can be found in the Municipality of Meaford - $264,954, Wasaga Beach - $267,477 and in Collingwood - $275,895. Moving forward we will undoubtedly see continued growth in the sales of higher priced homes, driven by the influx of buyers from the GTA purchasing these properties for recreational and or retirement use. These higher end sales impact disproportionately both the overall sales revenue and the average residential pricing for our area leading one to believe that overly positive conditions exist when they in fact do not. Whether you are buying or selling, every property transaction deserves a detailed comparable analysis to ensure that the appropriate pricing is applied. For further information with respect to your real estate decision(s) please feel free to Contact me. For a complete summary of area real estate activity 2009 versus 2010, see the latest issue of my Georgian Triangle Real Estate News.
Residential sales in Tiny and Clearview Townships were essentially unchanged in 2010 whereas the municipalities of Collingwood (up 6.9%), Grey Highlands (up 38.0%), Meaford (up5.4%) all showed increased sales activity.
Some significant shifts took place with respect to average pricing in these areas but this should not be construed as being an appreciation in property values. As mentioned in my prior posting, sales activity at the upper end of our market last year grew significantly with sales between $500,000 and $800,000 up 40.0%, sales between $800,000 and $1 million increased 33.3% and lastly sales above the $1 million threshold increased a whopping 86.7% with a total of 28 sales posted through the MLS® system of the Georgian Triangle Real Estate Board. The two areas reflecting the highest average residential prices were Mulmur Township with an average price of $543,140 while The Blue Mountains followed closely with an average residential price of $510,427. Residential sales in Mulmur Township are traditionally made up of acreage or estate type properties while The Blue Mountains is home to many of the area’s higher priced homes close to area ski and golf clubs.
The increased activity we experienced last year with upper-end “luxury” home sales helped to drive the average residential price for our market overall at the end of December to $314,937 from $286,378 one year earlier, an increase of 10.0%. The lowest average price for residential housing can be found in the Municipality of Meaford - $264,954, Wasaga Beach - $267,477 and in Collingwood - $275,895. Moving forward we will undoubtedly see continued growth in the sales of higher priced homes, driven by the influx of buyers from the GTA purchasing these properties for recreational and or retirement use. These higher end sales impact disproportionately both the overall sales revenue and the average residential pricing for our area leading one to believe that overly positive conditions exist when they in fact do not. Whether you are buying or selling, every property transaction deserves a detailed comparable analysis to ensure that the appropriate pricing is applied. For further information with respect to your real estate decision(s) please feel free to Contact me. For a complete summary of area real estate activity 2009 versus 2010, see the latest issue of my Georgian Triangle Real Estate News.
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