RE/MAX Hallmark Blog

My Industry Rant....

It is time we all took a deep breath. It’s time this real estate market of ours took a time out. 

Bully offers, kick backs, lower standards, frustrated buyers, greedy sellers, poor communication all around - mixed together to create a terrible market and industry. Unfortunately the lowest business standards are prevailing amongst us in this industry.

It was bound to happen. There are too many of us fighting over too little business. I am  reminded of hyenas fighting over the carcass of a small animal when I view the day to day happenings of our industry. Match the frenzy with inexperienced, unprepared and desperate realtors, and we are bound to have problems. 

I am not proud to be associated with many of the realtors who call this industry their own. Most view their business as the next two deals rather than the next two hundred. Frankly most won’t be around to experience 200 deals. Many buyers and sellers out there are being represented by realtors who have no clue as to what they are doing. They don’t know how to help their clients - to guide them through the minefield of a real estate transaction. Experienced, business driven and client orientated realtors are getting more and more frustrated and rightfully so.  

So what to do? I really don’t know - none of us have control of the market or our industry. Our board and RECO pay little attention to day to day activities. Many real estate brokerages are at a loss to keep their agents in line - some do. The competition bureau has help create an industry where representation of clients interests are fashioned or based on a price. How much are you charging is driving the market. Certainly price is always an element in the selection of a realtor, but basing a decision solely on price is a mistake not only in real estate but in most if not every other product or service. 

I guess we can ride it out and hope no one gets hurt too much. This market will stop, change will eventually happen and when it does many will be driven out of the industry. We all need to individually do the very best we can at keeping our standards high. 

 

As for me, I just took a deep breath and I feel much better

 

 

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From a buyers point of view

Can you imagine if we all went about our business as realtors without the slightest hint of a client  qualifying process? Suprisingly it may happen more often than you think.

I received an email from a buyer client of one of my realtors the other evening which went into great detail concerning his experience of trying to buy a home in today's market. He explained in two incidences he lost out on multiple offer situations with no regrets concerning the process. But his third experience was one which really set him off - understandably.

I wanted to share his frustration through his words:

"After two unsuccessful attempts of getting a house (first one sold for 101,000 over asking in bidding war of 9 people), and the other (sold for 105,000 over asking with 11 people in bidding war) - we found the 'dream home'.  ugly as sin with lots of reno needed, but steps to a desirable area. 

It was listed in November for 699,000 and sat there for 60 days (over priced).  Apparently they received three offers under asking and turned down all three. 

It was unlisted beginning of February and then put right back on again a few days later and now listed for $599,000.  That's when it got on my radar.

 

After checking it out and walking through it with my husband and 2 contractors we decided to put an offer on it.  Of course like the other properties we bid on, they were holding back offers.  So on Tuesday, we offered 625,000 (26k over new asking price), and there was only one other offer so we felt our chances were good.  The listing agent said the other offer was higher and we had a chance to lift our offer.  So we did.  We jumped it to our maximum budget amount of 650,000. 

Now it should be noted that beautiful houses in that area that are detached (this is semi) with 4 parking spaces (this has zero) and with larger lots have sold for 700k, so this was clearly not at that level at all. 

Instead of countering either of us - they flat out said no to our best offer and the other one.  After sitting on it over night, we contacted family and were able to get a personal loan from them to beef up our price!  

We now offered 680,000 PLUS as before, ZERO conditions AND CLOSING in 2 weeks which is what they wanted!!!!  This was offered to them yesterday and we gave them until 3pm today to decide.

 

The listing agent said there was another 2 offers today (I frankly think she was lying as she CLEARLY wanted more money as she told our agent to ask us to bump it up!  We were completely maxed out so that was not happening).  At 3pm today we had to call them and guess what?????  The daughter (co-signer with dad) said she doesn't want to sell it anymore and wants to keep it!!  We're then told they will go home for a 'pow-wow' and decide what to do. 

As if that's not enough, NOW the news changes.  We find out that they have taken the house OFF the market, and are RE-LISTING it TOMORROW for $704,000!!!!!!!!!!!!

I am so outraged, I can't even believe it.  These people are crazy and in my opinion their listing agent is too for not guiding them better or informing them on what their house is really worth.  How can she let them do this?  It is clearly way over-priced and the owners clearly have no clue what their house is actually worth."

I feel sorry for clients in the marketplace when they are faced with dealing with buyers or sellers who haven't been qualified by their realtors. It is a big waste of time for so many people and as unprofessional as it gets. 

Realtors need to step up their professionalism.

Making a difference

My friend and colleague at RE/MAX Hallmark came to me a couple of weeks ago about a problem which was becoming more and more real for her. Gina Anthanasiou is active in her Greek community, she is involved, intend on making a difference, not just by helping families buy and sell real estate alone, but she is taking a leadership position in making life better for all. Gina and I talked about the current problems the nation of Greece is having econically, and the impact these problems are having on average families. There is little or no work in Greece, and what work there is, there just isn't enough money at the end to get by. Many people worked for the government, and with fiscal cutbacks, it's a mess. We can discuss the reasons for these problems at length, but the impact on families is what matters. Gina tells me many families are now being forced to leave Greece and search for a future in Canada and other countries. They are hard working people now in Canada just trying to make a small difference for themselves and their families. Gina has become aware of many families now in Canada from Greece starting over who need a small helping hand to get a start. They proudly are not looking for our "welfare" but for an opportunity. Gina has spent many hours searching out clean, safe ad inexpensive accommodations. She has also helped by connecting these families to people in our community with job opportunities. What can we do? I think being aware is a good start, there is a human problem evolving for our Greek friends which will only get worse. With Gina's leadership we hope to make a difference. Stay tuned.

$50,000 for Haiti

I have some friends and other people I know who totally avoid reading, or watching any news reports. They go to the extent when driving in their cars and the news comes on, they either switch it off or turn to another station. They rationalize their actions by saying they don't want to be negatively influenced. While I can buy into this philosophy to some extent, I have lately found myself compelled to become engaged and informed about the terrible tragedy which has been visited upon the Island of Haiti.

 When we first heard about the earthquake and the results of the quake, I, like others was stunned by the enormous impact felt on the hard pressed people of Haiti. People in Haiti didn't have a strong foundation in their country before the quake, and now chaos has descended. 

In our company, we knew that our realtors and staff would want to make a difference, would want to do something to help. Everywhere I listened and watched we were told that money was needed NOW. Money was necessary for the relief organization to get in there and deliver, food, water, medical help and shelter. 

Within two or three days of asking, our realtors and staff pledged over $15,000 to be delivered through our company to the Canadian Red Cross. We as a company matched the pledges up to $10,000. The $25,000 collected as of today magically becomes doubled to $50,000 by our Federal Government. So cheque's totally $50,000 will be in the hands of the Canadian Red Cross to help those in need in Haiti. 

We can't drift away from the problems Haiti will be facing. We all have an obligation to help out our fellow man when in need. In the case of news from Haiti, don't switch off the program - stay engaged, make a difference and help. We, as a company intend to help out as needed moving forward.

To donate to our RE/MAX Hallmark Haiti Fund, connect by email to Tania, [email protected]

Bully Offers

The dreaded Bully Offer or as some prefer to call it, The Pre Emptive Offer has resurfaced into parts of our marketplace this summer. Depending how my mood is, I can call the process by either of it's names. Today I will refer to it as the Bully Offer.

This is how the scenario of a Bully Offer plays out. A realtor works with his or her seller.They discuss putting their home on the market and of course price and marketing is gone over. Either the listing realtor suggests a price which is just at market value or below for the home, or the realtor does a poor CMA and misses the mark with the listing price. A date into the future is selected to review offers if any. Life is good, the process of selling the home begins.

A buyer representative happens to come along and show the now new listing to one of his or her purchasers, it's perfect for them but they don't want to wait for the offer date and the frenzy of possible multiple offers. They prepare and register a Bully Offer to be viewed by the seller and their agent immediately, notwithstanding the date selected in the future to review any offers. The Offer prepared is outstanding, well above the list price and very inviting for the seller. It also happens to have a very short irrevocable date for the seller to make up their mind. What would you do if you were the seller or selling realtor?

This is the process a selling realtor must follow if the Bully Offer is actually going to be entertained before the posted offer viewing date. All interested parties must be contacted and told that the posted date for reviewing offers has been changed. In our company that means every inquiry, showing, attempted showing or booked showing has to be told that the offer date has been changed. The listing must be rerun through the MLS with the offer date removed and a reasonable time must now be set to view offers. I have heard of some realtors contacting the inquiries on their listing to tell them the offer viewing date has been taken out and offers are being presented in one hour. That's nuts - I think at least 12 hours notice should be given to prospective purchasers concerning the time change.

If you are a buyer representative, I think the best way to work with listings with future offer dates is to ignore the date as set. Consider the listing as a listing which can be acted upon now and prepare your clients in this manner. Have them go through the process of getting an offer together NOW. If the property is of interest, get things in order, don't wait for the posted offer date. You many or may not want to try a Bully Offer, but you need to be prepared to offer on the property when the opportunity is created.

If you are a listing realtor, and a Bully Offer is registered on your listing, the process of contacting everyone and removing the offer date on the listing must be done, if the offer is to be entertained. In my view, if the listing is strong enough to get a Bully Offer today, other offers will surface on the posted offer date. I don't like entertaining Bully Offers and I don't like underpricing listings simply to create multiple offer situations either. But both situations happen and we must deal with them.

The problem of Bully Offers isn't created by buyer representatives. Listing realtors who act upon Bully Offers with no regard for their peers or the general public are the problem. Always communicate fully.

What I would do...

When I was a very strange young boy of 15, I made the decision to get involved in our real estate industry one way or another. Coming up now to my 30 year anniversary of being a realtor, I have not been disappointed with my dream. It wasn't until I was 28 that I actually became a realtor, having shuffled around for a few years selling various goods and services. I suppose all of that time I was preparing myself for the opportunity, and was ready when it came to me.

It has been hard and rewarding work. Because of real estate, I have met many interesting people, helped many and enjoyed the rewards of my work. For a moment, I wouldn't rewind the tape of my life to do it over again another way. I am looking forward to another 30 years being engaged in our industry - I know it's a stretch - but it's how I feel.

I got to thinking, although I wouldn't change my life experiences, there are things I would absolutely change about our industry and the way we go about our work.

I would change our industry in the following manner:

• I would impose higher minimum standards for realtors - based on education and training. I am not suggesting that I believe we should have more of a "police force" to enforce the works of realtors, but what is needed is higher accountability. We have many rules and bylaws in effect, and for my part - everything is in place to ensure realtors are more accountable, but RECO only does superficial work to enforce foundation concerns. From time to time, realtors are held accountable for their actions, and RECO makes an example of some realtors when they cross the line, but many many realtors get away with terrible work in their dealings with the public and their peers. The whole system is a train wreck.
• To work in our industry, you would have to do it full time. There are a few instances where a part time realtor can be effective, but overall - to be able to serve the needs of the public, when they need it - full time effort must be put into this business. A part time realtor brings the work down of a full time realtor - causing unnecessary delays in procedures. In Manitoba, to be licensed as a realtor, you must work full time. Good idea.
• I would make broker owners and brokerages more accountable for their operations. This part is easy, all RECO has to do is have brokerages on a regular basis, provide them with their trust numbers. Too many realtors have been hurt by terrible and dishonest business operators. Doesn't have to happen. Right now, RECO from time to time audits the books of various companies when they get around to it. There needs to be a system in place where we as broker owners are required to provide our trust records on a monthly basis. This voluntary reconciliation of trust records is now beginning but it is not effective.

Realtors, by their very nature are highly independent people,  much like cat herding  - mostly impossible. We are difficult to control and manage, so for some, having more rules in effect would be hard to swallow. I believe we can honour the interdepence of our industry, while at the same time - improve upon it by tightening up some issues.

Worth Watching

Just finished watching a brilliant news documentary on CNBC titled "House of Cards."  This program was well research and presented.

"House of Cards" told the story of the credit crunch which began in the United States and spread throughout the world. If you have the chance, it shouldn't be missed when rerun.

The documentary starts at the very beginning (in their view) of the crisis. A few days after 9-11, Alan Greenspan does an aerial survey of the ruins of the Twin Towers and makes the decision that the US economy will grind to a halt unless credit is made more available. He and his team set about to encourage credit lending by lowering interest rates. In the short term, his plan seems to work, until the creative people at Wall Street and others set about their work.

Housing was the vehicle used to fuel the spending in the States. Cheap mortgage loans, which were available to anyone with a "stated income"  become the drug to keep the ball rolling. Until at least it all came tumbling down.

What surprised me throughout the entire documentary was that Alan Greenspan at no time acknowledged that he should of done anything different. Greenspan is quick to point out in fact the free market in mortgage lending and securities must continue to function in large part as it did. In other words, no regulation.

Interesting, Canada is the only country in the G7 that didn't have a Bank collapse. Our financial systems are heavily regulated and more secure, and we have Jean Chretien to thank for that.

Just Doing his Job

Today is a big day for many people of the United States and throughout the world. It is Inauguration Day - the day the first person of colour is sworn in as President of the United States. All the fuss is fitting I suppose, but it makes me wonder.

It is a sad commentary on the way we view life and people that this event even matters. Why is it that we even have taken notice that people look different on the surface which makes the choice of them as a leader different? Haven't we for many generations been walking the talk when it comes to discrimination due to religion, gender, disability, colour and choices ? Or have we?

Barack Obama seems to be the real deal as a leader of the United States, and by default of the world. Because of his leadership ability, his vision and his commitment to change people in his country have formed behind his vision. They are eager for something different and his candidacy at this time and moment was right for them. Only time will tell how long their adoration will continue once the hard work settles in. Because he is black makes for good pageantry, theatre and historical significance.

I long for the day when we take no notice of skin colour, religion preference, gender, disability or sexual and lifestyle orientation. What matters and what people should be viewed by are the things they can change, not what they are born as.

So far Barack is saying all the right things. I read today a quote he made about the pilot of the US Airways jetliner that made a landing in the Hudson River. Capt. Sullenberger has been lauded for safely landing the plane in the frigid river after both engines shutdown less than two minutes after takeoff.

President-elect Barack Obama said Monday he had spoken with the California pilot, who told him, “Me and my crew, we were just doing our job.'

“And it made me think, if everybody did their job — whatever that job was — as well as that pilot did his job, we'd be in pretty good shape,” Mr. Obama said.

That I like.

Back in Business of Moving Forward

 

The victory and  election of Barrack Obama as the President - Elect for the United States wasn't just a exercise of American politics for  Americans. In a time when the world is walking with a  heavy load from economic and political issues, last nights election was a loud signal that what was once considered the norm is no longer going to be the way of the future. A new order has emerged which has and will continue to energize Americans and the world with it's confidence.

Obama and now America promises to reach out to the world, to once again become a leader amongst nations not by it's brute strength alone, but by defining itself as a Leader of Nations. In his victory speech last night, Obama spoke to all citizens of the world - he said moving forward there will be a different America, one of hope and future for all.

The confidence in the future for our world, which was so lost in the past months has re-emerged with the election of Obama. There will be a lighter load moving forward. Of course there will be disappointments, and critics will quickly rise to say their piece, but there is now a collective wisdom which says that everything will be OK, there is a future, there is confidence.

We are all back in business of moving forward.

Election Tomorrow

This has been a fairly quiet election on most counts for Canadians. What with the US elections dragging on for what seems years, and then throw in a Global financial crisis, our election seems to be struggling to grab any attention.

I tend to be up with most of the issues of the day, but for the life of me I can't figure out why we are even having an election. By most accounts, we will still have a minority Conservative government come Tuesday night, and I guess that will be considered a failure on every party. A failure since the Conservatives were not able to grab the interest of the electorate to garner a majority, and a failure on the other major parties for not gaining ground on the Conservatives.

There is nothing of substance to anything political right now. Sure we have the Green issue, but focusing on that is difficult based on what it may do for our economy. A couple of elections ago we had the Quebec Independence trigger point, but wiser minds have rinsed that away for the most part. Maybe we need to invent a big problem, or better still - not waste so much time, money and effort on calling an election in the first place.

But I will vote again this time around, because if I don't I will have no right to voice my opinion when it might be needed one day.