I’ve always aimed to take the stress and mystery out of the home buying and selling process. I’ve been trying to help people understand the complexities around residential real estate. It’s not easy. It’s always changing. For example, we are currently in a seller’s market. For buyers, and to some degree for sellers, that means their approaches to buying and selling could probably change to ensure their successes. My website has long been the place where I share what I think is relevant for folks about to enter or currently in the real estate market.
The chat widget is one of the best ideas I’ve had in regard to my website. Unless I’m with clients, I have it turned on between 9am and 9pm everyday. On my site, there is a pop up after 30 or 60 seconds asking the visitor if they have any questions for me. When they engage, the question goes straight to my phone where we begin a chat session. From Buenos Aries to Bowmanville, Brampton to Belle River I’ve had all kinds of conversations about Kitchener Waterloo, buying and selling homes, investing in real estate and more.
It is interruptive, but it’s fun and it actually helps me understand the issues that home buyers and sellers face. It has also lead to business and that is good for business. This blog post is a collection of recent questions about home selling.
How much did my neighbour’s house sell for?
Home seller’s know that real estate is sold through comparative analysis. What has recently sold and for how much is a strong determinate factor to how much their own home is worth. Realtors are still to a large degree the gatekeepers to this information, but we are not the only ones.
Chat Widget: What site would show you how much houses sold in my neighbourhood?
Keith Marshall: Geowarehouse is Ontario’s electronic land registry system. Most Realtors subscribe to it as it not only holds all of the neighbourhood sales information, it also provides demographic information and land surveys and all sorts of other important land information. Ask your local Realtor about home sales in your neighbourhood. Beside the MLS, Geowwarehouse is a great tool for this.
How can I get out of the contract with my Realtor?
There seems to be a lot of conflict between Realtors and their clients. Sometimes the issue seems to be communication. It is impossible to tell from the chat widget if Realtors are not explaining what is happening to their clients properly or if the client is perhaps trying to get out of an agreement he didn’t fully understand when he entered it. We live in a world of conflict and doubt, that’s for sure.
CW: Hi my name is Richard. I’m from New York. I signed a contract with a broker to sell my apartment but she dropped my asking price without consulting me. Furthermore, she hasn’t put my house on the MLS. I want to cancel my contract.
KM. Hi Richard. Real estate rules vary from province to province and state to state, but in Ontario your realtor would have to have you sign an amendment to change your listing price. I’m sorry I don’t know the rules for New York but I would call her broker and the local real estate board and see what you can find out. If you want to cancel your listing agreement (again in Ontario) there is a standard form you can sign. I wrote a blog post about cancelling your agreement. Here is the link. You might find it useful.
CW: She told me that I’m free to work with other agents but she still expects to receive her fee during the contract period.
KM: There is normally a 60-day holdover period at the end of a real estate contract. That means that if anyone that she introduced to the house buys it within 60 days after your agreement ends, she will be entitled to her commission.
How can I get a commission discount?
Commission is the big boogie man, the holiest of holies in residential real estate. Home sellers don’t understand why they must pay 5% of the selling price to a real estate agent, who just puts a sign on the lawn and an ad in the newspaper. Frankly, I don’t either. I’d be much happier doing twice as much business at half the commission rate. I’ve written about commissions a lot. Here is a recent post.
CW: I’m wondering what is the best way to save money on commission?
KM: Negotiate with your Realtor.
CW: What is your rate on selling?
KM: It depends on the client.
CW: Like, if they are buying another house?
KM: Yes. And if they are willing to list at a fair market rate (2-3% above what the comparables say their house will sell for), and if they agree with me about the complete waste of money newspaper and magazine advertising is.
CW: That makes sense. I’d like you to price my home.
KM: OK
CW: Can I get more than one agent to price my house?
KM: Of course. You should really get three quotes. But don’t necessarily take the highest one. Almost 40% of homes listed for sale in KW simply don’t sell. If you really want to sell, base your price on comparable recent sales.
Can I get a commission reduction if my agent “double ends”?
Where the commission goes is misunderstood by many people. It is usually equally split between the listing brokerage and the co-operation brokerage. But what happens if the agent represents the buyers and the sellers?
CW: I’m selling a home. I have a listing agent. A buyer who wants to buy my house does not have an agent. My agent is now helping him. My question is, do I have to pay an additional commission to my agent or can that be negotiated?
KM: If the commission is 5%, your agent will be entitled to both halves. 2.5% for the listing brokerage and 2.5% for the co-operating brokerage, which in this case is the same brokerage. This is a multiple representation situation. He’ll have to explain this to you.
Many agents will offer a discount if they introduce the buyer. The time to negotiate commissions is upfront, when you list. You could try to negotiate with him now but he really should have addressed this eventuality when he was listing your home.
What is wrong with real estate?
Some people just want to rant. That’s OK. I rant all the time too.
KM: Welcome to my website. Do you have any questions?
CW: Too many.
KM: I’m here.
CW: I think mere postings are putting sellers at risk and the governing bodies are not taking this as seriously as they should. Lawyers are cashing in. I think the main word on your blog is “Realtor’s”. So if this continues I think the sellers should pay for their license and all the other good stuff that comes with holding a Realtor’s license.
KM: I agree. So what’s your question?
CW: OK. So what is CREA doing to put Realtors back up front as professionals? We have a local advertising company’s number on listings (mere postings) and we can’t get a hold of the real sellers. The competition bureau has made a great mistake in allowing mere listings without representation.
KM: Thanks for the rant. I agree. Things have to change. The industry is ready for a major disruption.
Who pays the commission in a private sale?
Commission is the main conflict with home sellers and especially private home sellers. I like to argue that the commission is inside the selling price (just like every other consumer product) and if you are selling your home privately, if you are serious about selling your home privately, you should be discounting your listing price by 5%. However private home sellers seem to think they can sell their overpriced old castle to the uneducated peons and then sail off for the new world, worry free and commission free. They can’t.
CW: What liability does a buyer have in a buyer’s representation agreement? Are they able to enter into a private purchase of a home through Comfree without their agent? Will they be liable to pay commission?
KM: Yes. If there is a buyer’s agency agreement in place they will have to pay commission. Having said that, most buyers who have started working with an agent won’t want to deal directly with a private seller. If their agent is any good, they’ve discovered the value of having him around.
