Knowing the Rules of the Real estate game:
It still amazes me, that with all the information available on the internet today, buyers and sellers still make mistakes, take advice from the wrong people and are not aware of certain pitfalls to avoid in the game of real estate. It is, after all, a game where sellers try to sell at the highest possible price and buyers aim to strike only when they find a hot deal. In my opinion, most real estate brokers out there are well intentioned professionals attempting to get their clients exactly what they need, either the home sold or a great deal. In doing so, I believe that part of our job is to make the rules very clear so that all parties can come together and successfully accept the price and conditions which meet everyone’s needs. This is what we call a win-win! However, it does not always work out this way and not all transactions are smooth sailing. As a real estate broker I tend to solve problems more than sell homes. To avoid the problems which I see time and time again, I love sharing stories with my clients, in the hopes that they too, avoid the pitfalls. Here are some common pitfalls to avoid for both buyers and sellers:
- CHOOSE YOUR REAL ESTATE BROKER WISELY
Is it a good idea to use your sister or cousin to represent you when purchasing a home? The answer is probably no. Owning a real estate agency, I see many brokers go through situations which are extremely tough both emotionally and financially, one of them being mixing business with family; it should never be done! Should you interview a few brokers before choosing who to sell your home with? Absolutely. You may think going with the person who has all the signs up in the neighbourhood is a great idea, but it is ideal to meet with them first. This will allow you to decide beforehand if there is a connection or if you are simply not comfortable with this person’s character, all very important aspects to consider.
- AVOID DUAL-REPRESENTATION
As a buyer, if you call the listing broker directly in the province of Quebec you are deemed to be an “unrepresented buyer”. The listing broker has a signed mandate to represent the legal interests of the seller and has the ethical responsibility within the profession to provide an honest and diligent service to you as an “unrepresented buyer”. It is all legal. However, would you really want the same person representing your interests and those of the seller at the same time? Some buyers call the listing broker directly, thinking they will negotiate on their own behalf and the listing broker will reduce their total commission, since there isn’t a second broker. The truth is, that this rarely happens and the listing brokers ends up “double-ending” and collect the full commission. So, buyers please get your own broker to represent you!
- HIRING A FRANCHISE BROKER OR AN INDEPENDENT BROKER
Let’s face it, there are over 7000 real estate brokers in Montreal and about 10 000 in the province of Quebec alone. The competition to get your business is fierce! Everyone will have their own opinion on this, based on their personal feelings and experience, and that is fine. Having already been affiliated to the larger well-known real estate agencies and having opened up my own independent real estate firm, I can say that my clientele use my services based on what value I offer and provide. Of course the support of a good agency always helps, but it will definitely not make or break a real estate deal. In any real estate transaction, the most important factor is going to be TRUST. This may sound strange but try to look past the bright colors of our banners and the images you see on social media. Take the time to ask questions and to find out who this realtor really is and what they stand for; how do they work? The real estate broker you work with needs to have the 5 C’s. They need to; have a good character; be able to show caring and consideration; have an excellent connection to your needs and lastly, be able to communicate well with all parties involved.
- AVOID FOR SALE BY OWNER
I love and admire people who choose to put up their own home for sale on the internet. I also understand their main goal, which is to save at least a total of a 3% commission on the price of their home sale. Do you actually make more money when you sell on your own? The statistics from NAR (National Association of Realtors) show that homes actually sell about 20% higher with a realtor. Apart from stats, I can tell you from over 15 years of experience, that I have sold homes after someone has tried on their own, while even being able to sell it for more. If you are really “saving” the commission on the sale of your property, then be aware that the buyers assume this as well, and are looking for that discounted price on your home. The buyers get quite disappointed when the asking price of your home does not seem like a “discount” at all. Qualified serious buyers are working with brokers, who are showing them homes listed on the regular platform. Many will try it for awhile, and when they get tired of all the work entailed, 90% of these for sale by owner properties are sold with the professional services of a broker.
- GETTING STUCK ON COMMISSION RATES
What is more important to you: saving 1% on the commission or making sure you get the best conditions for the sale of your property? Buying and selling a home is an exciting time, but usually entails some sort of financial and emotional stress and decisions sometimes need to be made quickly. Having a trusted professional advisor by your side every step of the way means that this professional needs to be compensated fairly. Commissions and services can all be discussed and flexible. Try not to get stuck on the numbers and look at the big picture. The peace of mind which comes along with having a true professional handle your real estate transaction is worth its’ weight in gold, if only you knew all the things that could go wrong.
Whatever you do, always consult a professional before making any decision to make a move!
Eleni Akrivos is a Chartered real estate broker and President of North East Realties, Real Estate Agency in Montreal. Eleni is a lecturer in the Residential Real Estate Program at College Lasalle and Co-Hosts “The Real Estate Show” on CJADAM800 every Sunday at 1:00pm. To send her questions or comments please write to firstname.lastname@example.org and visit www.northeastrealties.ca for more articles and videos.