QUESTION: A while ago, you wrote an article outlining the pros and cons of selling a home privately versus using the services of a listing broker.  Can you now outline specific functions and assistance a listing agent would provide me in selling a home beyond assisting in the pricing and marketing of my home?

ANSWER: In preparing this article, I spoke with a few local real estate agents who were more than happy to elaborate on their duties as selling (or listing) agents. I thank them at the outset for their input.

There are many services offered by a listing agent beyond simply listing and attracting would be buyers.  Below is a short list of specific functions or assistance offered by a listing agent:

1) Marketing the Property: Briefly, in order to get the best price for your home, you must expose the property to as many potential buyers as possible.  This is usually the primary reason vendors list a home with a real estate broker, rather than selling it privately.  What this accomplishes is it takes the act of simply selling a home, to actually marketing it.  Through effective marketing of your home, you maximize exposure and hopefully attract the best price for your home.

2) Validating any Offers to Purchase: Your agent will only present  you with those offers and counter-offers that are legal and enforceable.  To begin with, only those offers made in writing and properly executed and dated by the potential purchaser will be presented to you.

Any subsequent counter-offers made by you, or the potential purchaser, will also be verified to ensure they can become legally binding if accepted.  This is to ensure, as best as possible, that once a contract is entered into, there is no chance for the transaction to fail due to a lack of proper contractual formalities being satisfied.

Note, a real estate agent is not in a position to provide a legal opinion or legal advice, and usually, you will be referred to a lawyer if and when the need arises.  However, your real estate agent may be able to provide you with his/her best advice given his/her experience and training.

Much to the credit of today’s licensed real estate agent, I often have agents contact me to review wording on various clauses, provide comments on certain situations, and so on.  Today’s agents strive to look after their clients best interests and if that requires them to sometimes seek assistance, they do not hesitate to do so.

3) Pre-qualification of Purchaser: Prior to, or shortly after your listing agent receives a valid written offer, he/she will determine, amongst other matters, whether the potential purchaser has been pre-qualified for a mortgage.

It is well known that one of the most common reasons real estate transactions fail to close is the inability of the purchaser to acquire financing.  The problem for you, as a vendor, is once the offer is accepted, the home is effectively taken off the market.  Subsequently, if the purchaser fails to acquire financing, you will have lost valuable marketing time.

To avoid such a result, the listing agent will usually attempt to discover as early as possible, details about the potential purchaser’s financial arrangements or ability to finance the transaction.  This does not mean the listing agent can guarantee the potential purchaser will be able to acquire financing — anything can happen.  However, your listing agent’s searches will help to minimize the  odds of the transaction failing due to an inability to acquire financing.

4) Negotiating any Offers to Purchase: The listing agent can also scrutinize any offers and determine if there are any opportunities for negotiating to your benefit.

Generally, the process of negotiating is very quick and usually begins with an initial offer by the purchaser which is then countered by the seller.  This process of making offers and counter-offers can go on and repeat itself many times before a final agreement is reached.

Keep in mind that once a counter offer is made, the last offer that was presented becomes automatically revoked and can no longer be accepted.

Above are only a  few of the benefits associated with retaining the services of a listing agent in selling your home.  There are of course many intangibles such as the security of knowing you have the assistance of a professional who sells many homes through the course of a given year.  Nothing can replace experience.  Best of Luck!

More from Victor Hussein as he talks about:

Title Insurance

Mortgage Renewal

Pricing Your Home Correctly

Fences and Property Lines

Tips and Traps when buying a home

Home Sellers and real estate commissions

The difference between a condo and a co-op

Before buying a condo

Victor Hussein is a Kitchener Waterloo lawyer, specializing in real estate.

Filed under: Interviews, Q&A, Selling Real Estate by Keith Marshall
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QUESTION: We have been looking into purchasing a “co-op condominium” and are wondering if this is the same thing as a “condominium”?  I have been told there is no real difference between the two, is this true?

ANSWER: Co-op Condominium’s, or Co-operative Condominium’s, are different from what are generally known simply as Condominium’s.  There are several differences between these types of housing, however, perhaps the two biggest differences are:

1) Share Ownership: Rather than owning real property, as is the case when purchasing a condominium, in a co-operative condominium (“co-op”) situation, you are actually purchasing shares of the corporation that owns the condominium project.

As a shareholder, and, once you own the required number of shares, you can reside in one of the units of the condominium project.  However, do not mistake that as being your owning that particular unit.  You do not.

As an additional caution, most co-op’s also have an approval process before you can purchase any shares of the corporation.  In this way, the owners of the corporation, and therefore, the residents of the co-op, can control who will be their neighbours.  By having an approval process, co-op’s can control and offer certain lifestyle environments, such as no children, exclusively seniors, or even, singles only.  The latter being more common in the United States.

2) Getting a Mortgage: Getting financing to buy into a co-op is somewhat different than your typical mortgage.  The complication arises from the fact that you will not be owning any real property.  In other words, you will not be able to put your name on title to any particular parcel of real property since none is actually being purchased.  This poses difficulty since your lending institution will not have anywhere to register its “mortgage”.

In a typical home or condominium purchase situation, most lenders, when approving a mortgage, will look at the borrower and the property being purchased.  If: i) the borrower is deemed financially sound; and,

ii) the property being purchased has an appraised value that satisfies the lender that its funds will be secured;

then the loan, or mortgage, is advanced.

However, in the case of  purchasing shares in a co-op, the lender must take a different approach since no actual real property is being purchased to secure the loan.  Therefore, when deciding  to lend money to someone who wishes to buy into a co-op, lenders follow a different approval method and usually also set different criteria for the borrower to meet.

First, the borrower must not only be deemed financially sound, the borrower is also usually expected to invest a much higher down payment than normal.  The down payment can range and can be as high as 60 – 70 percent of the total share purchase price.

Second, the lender will also take a very close look at the corporation into which you wish to buy shares.  This is to ensure, among other matters, the corporation is financially sound, and is managed well.

The lender may also look at other factors, each lender having its own set of guidelines.  Only after these criteria and guidelines are satisfied, will the loan  be approved.

Finally, before buying into a co-op, do your research.  Your research should include such steps as meeting with the other shareholders (or residents) of the corporation — ask them how they enjoy living there, do they find the environment too controlled, and so on; review the rules and regulations, the by-laws, etc. very carefully – you will be governed by them; find out how easy it is to sell your shares and leave the co-op if you so decide.  By doing your research, you can ensure your needs will be met and you will be protected from any unexpected surprises.  Best of Luck!

More from Victor Hussein as he talks about:

Title Insurance

Mortgage Renewal

Pricing Your Home Correctly

Fences and Property Lines

Tips and Traps when buying a home

Home Sellers and real estate commissions

Victor Hussein is a Kitchener Waterloo lawyer, specializing in real estate.

Filed under: Buying Real Estate, condo, general news, Industry, real estate vocabualry, Selling Real Estate by Keith Marshall
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Often when I’m talking with people about real estate (everyone loves talking about real estate) someone will say something like “the housing market is going to crash”.
I always have to disagree. And here’s why.

1) We are the USA. Things crashed there, especially in Florida and parts of Arizona and California. The subprime mortgages offered in the USA was much more aggressive (dodgy) than what our banks and other lenders will offer here. Furthermore, lenders have better recourse to go after people who walk away from their mortgages. We get a lot of news filtering in from the USA. It does not apply to us.

2) Some people argue that when (if) interest rates rise, a lot of people will get caught in a credit crunch and wont be able to afford their mortgages. This will cause sudden and severe downward price pressure on housing prices. Sounds reasonable. There has been a lot of news about Canadians spending beyond our means. But if you’re paying attention, you’ll notice that the Bank of Canada is holding the rate down, allowing it to climb slowly with economic activity, job growth and income levels.
3) In real estate, we like to say the three most important things are location, location and location. In two cities – Toronto and Vancouver there is a bit of a housing bubble taking place (especially in the condo market) and the regulators are trying to let the air out of these markets slowly. But in Waterloo Region we have a very stable market where houses priced right sell within 60 days and multiple offers occur, but not as often as a few years ago.

4) Price-to-rent and price-to-income ratios show over-valuation in the Canadian market, but valuation levels are not usually good indicators of turning points. Over- and under-valuation can persist for years in currency and financial markets. Indeed, the U.S stock market has been over-valued for more than a decade going by several yardsticks—yet it’s still holding up.

5) It’s wishful thinking. Many first time homebuyers would love to see housing prices fall by 30% overnight. Buying a house seems so much more expensive than it was ten years ago – because it is. Since 2000, housing prices nearly doubled but wages remained about the same. Hope is not a plan. House prices will not crash simply because you want them to.
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Filed under: advice, Around Kitchener Waterloo, Buying Real Estate, investing in real estate, mortgage, Selling Real Estate by Keith Marshall
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If you’re looking for a home in Kitchener Waterloo and don’t know where to start, you should start with a lender and a real estate agent.

You know yourself that after you’ve been doing a job for awhile, it becomes easier. The same is true with real estate. Good agents know the answers, the process and where to look, who to ask if we don’t. I always encourage my clients to ask questions, whatever is on their mind. there are no stupid questions. Buying or selling a home is a process of learning so that you can become comfortable in making the big decision.

I encourage questions when visiting homes and through my website and facebook page. Alasdair and I always invite clients into our office to get a better idea of where they are on the learning curve and how we can help. Sometimes we make tea.

From time to time, I post a couple of questions that have come up. Here are two recent questions:

Where to get a mortgage

Q: My husband and I are starting to plan on buying a home in Kitchener Waterloo, but we don’t know where to begin. We aren’t from here. We are just married and have good credit. We are trying to find out who we should contact to arrange a mortgage.

A: You should start at your bank. You can get pre-qualified with a quick trip to your bank. They’ll tell you how much house you can afford. After that, the second step is to find a realtor that will help you identify houses that match your budget, help you understand neighborhoods, development plans, transportation and amenities, schools…

If you don’t have a banker, then start with a realtor. He will introduce you to two or three lenders who will help you understand your financial picture and the current mortgage options.

When to start

Q: We are looking to move into our first home by July. We’ve just started looking. When should we find a realtor?

A: Many people find their realtor as they are looking for their house. They meet them at open houses, or when they call on a listing. They are sometimes introduced through friends and colleagues. It’s important to find a realtor early in the process – you don’t really want to be dealing with the realtor who is selling the place you want to buy. A good realtor will help focus your search and find your next home easily, without having to see everything on the market.

A: Short answer. Next month – March. Depending on how much time and what’s on the market, it can take two months of effort to find the right house. A 60-90 day closing date is common. If you want to move in in July, starting in March will all but guarantee success.

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Filed under: 365 tips for buying or selling a home in KW, advice, Buying Real Estate, mortgage, neighborhood update, Q&A, Selling Real Estate by Keith Marshall
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As both a long time marketer and blogger, one of my favorite daily reads is Seth Godin. He wrote the other day that he was picking out the mat for a framed photo and there were a thousand colors to choose from. The framer uttered the scary invocation, “It’s completely up to you” putting the choice back to him.

That’s a problem.

We live in a very complicated world, full of choice. We are forced to make decisions all the time, everyday. Some are easy (until this week) “large double double”, and some, like picking out a mat for a picture frame or buying or selling a house are more difficult.

Maybe these are more difficult because there is more to lose if you guess wrong and the fact that you don’t make decisions like this everyday, you don’t have the experience and enough information to be comfortable in deciding.

I meet and talk to people every week that look for houses on their own. I think that’s great, we have the tools (like MLS) and the opportunity (like open houses) to educate ourselves about the Kitchener Waterloo real estate market. Although it would be easier to hire an agent right from the start its another of these decisions that are difficult because we make them so rarely.

How do I find an agent?

What do I look for in an agent?

What do agents do that I can’t do for myself?

Anytime we do something we don’t normally do, we’re on a voyage of discovery. We have to move along the the rocky coast of the learning curve, educating ourselves. We have to make little decisions that will help us make the big one.

Seth Godin goes on, “If you think you have no choice but to do what you do now, you’ve already made a serious error.”

Sooner or later, when you buy or sell a home, there is a 90% chance at least one realtor will be involved. If you are comfortable enough to find yourself a trusted advisor early, you can learn what you need to know a lot faster. After all, your decision is completely up to you.

Filed under: About me, advice, Around Kitchener Waterloo, Buying Real Estate, editorial, general news, life of a realtor, real estate, real estate trends, Selling Real Estate by Keith Marshall
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