# How To deal with a realestate



## Bobcajun (May 15, 2018)

Hello,
kind of an odd question. But, I noticed that Just A Guy has often said on here that he deals closely with real estate agents who pass onto him immediatly good possibilities that have just come on the market.

I am wondering what you would say to a real estate agent? Give me only the best deals you have?, for instance. I don't think so. 

I am thinking of buying a second house, possibly for the summer, in an area which doesn't see much move in prices (Cape Breton Island) and I would like to find something that I wouldn't get stuck with, if I had to sell. I am not expecting a great profit, because I don't think there are great profits to be had in this market. But, I would like at least to get back what I paid, if I sell. or, at least have a good chance of doing so. Seems it might be a good idea to work with a real estate agent that could signal me when such deals arrive. Although, you see houses for sale there where the real esate agent publishes that it won't last long it is such a good deal, and it is there for years.

It is a very difficult are to have com-parables, as everything is different.
thanks for any ideas bob


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## nobleea (Oct 11, 2013)

If a realtor starts to recognize that you're the real deal, that has money, and closes often, then you're going to get the notices first. They spend so much money trying to get a new client, so an existing one that is no nonsense and all about numbers, they're going to work hard to satisfy them. Especially when there's no hand holding during the process.


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## sags (May 15, 2010)

If real estate agents are low balling market values for their clients, with the intent of buying it cheap themselves or with a partner and then flipping it..........they are committing fraud.


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## AltaRed (Jun 8, 2009)

Only if they are the listing agent.


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## Just a Guy (Mar 27, 2012)

Basically, getting a realtor when you buy is a no-brainer. Their fee is built into the selling price and will almost always get paid out to someone (commissions are paid out first). Any realtor can set up a “search criteria” on mls which matches your request. I’d suggest a broader search that what you actually want, for example I’d look away an entire city including the bad areas for one bedrooms under say 75k when I really don’t want to pay more tha 65k in a good area) and see what comes up. If you see something interesting, you may just want to watch what happens, my whine probably has 20 places on my watch list (probably too expensive for me or just watching as a comparable). 

After a while, you develop a sense of what things should go for. If you find something of interest, have the realtor pull up the sales history and some comparable s in the area. See what you think. 

Notice, I haven’t said go look at it until this point. As soon as you show interest to go look at it, the game changes. Your realtor gets paid to sell you the house, not to get you the best deal. As soon as you start looking, they will start putting on the pressure to buy in most cases. This is easier if you like the house. Try to keep the emotions out of it. Don’t be afraid to walk away, if you are you’ll probably pay too much.


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## OptsyEagle (Nov 29, 2009)

The search idea JAG suggest is probably the best. Most will offer that service and if the property goes on MLS you will see it right away.

I would not trust that a real estate agent is going to find and then show you a property that is drastically undervalued. Depending on its undervaluation, they will either have many other clients, doing what you are doing, that they will want to offer that to first, or they would simply buy it for themselves, if the deal is super good.

If you want to find a gem do not higher others to go looking for them and expect them to hand them over to you for a paltry fee.. Too easy to pocket the gem and say, sorry, none found. That is just common sense from understanding human behavior. The search criteria with instant emails to you, as the properties come on the market is probably your best way to get involved yourself.

I will add, that some properties that the selling agent has identified as sweeeeet, will probably never make it to MLS. They will sell it within their own office and pocket both seller and buyer commissions. Again, common sense. People are predictable.


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## Just a Guy (Mar 27, 2012)

I should have also said start with the realtor putting all the currently listed properties. There may be some old listings that have been forgotten about. 

As for most realtors grabbing all the gems, it doesn’t happen as often as you think. Realtors have too much tunnel vision, what they think are killer deals have often come back to kill them. I know many realtors who’ve tried it and last their shirts. Being a real estate investor is different from a real estate salesman, something many beginners learn the hard way. It’s not that realtors can’t be successful investors, many are, but many fail at both. I pick up deals all the time that even my real estate lawyers can believe and certainly don’t see as often from anyone else. Realtors, if they were buying all the cream, would have snatched them up months before. I also negotiate harder than most people. My newer realtors often don’t want to write up the offers because they don’t think it would work. I tend to prove them wrong a lot.


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## kcowan (Jul 1, 2010)

A friend of ours went to The Gaspe in the summer, fell in love and bought a waterfront property for $90k. She moved out of her apartment in Victoria but only lasted one winter. She never sold the place again. It was listed for 3 years and then she just gave up.


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## sags (May 15, 2010)

The latest study showed that home prices across Canada are excessively priced when compared to average incomes.

To be in line with average incomes for each city, home prices would have to drop by 50% or wages would have to rise by 50%. (Vancouver and Toronto are worse)

In our city, the local Reddit page has some comments about buying a home here. People are saying they are still unable to buy a home at the MLS listed price.

Where are all these homes that can be purchased for below market value ? If there is a home listed below market value there would likely be multiple bids from the clients of various realtors.

If a home did come up for sale for below market value, there would be no need to list it with a realtor or MLS. Everyone knows someone who is looking to buy a home at a reasonable price.

Why list a home for below market value and pay the realtor commission, when you can just let it be known the property is for sale ?


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## kcowan (Jul 1, 2010)

Our friends have been trying to sell their home on West 49th by Arbutus for 3 years. It is on a double lot but also a busy street. Dropped the price 3 times. Never had an offer.


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## AltaRed (Jun 8, 2009)

Sags, I find a lot of this underpriced mantra hokey too but that argument is not worth re-opening. 

I do take exception though to any study that compares housing prices to income. It is not relevant. What is relevant is carrying cost to income ratio. If we returned to purchase criteria of 25 years ago, we'd have 25 year amortization, minimum 20-25% down payment and 6-10% interest rates.......which would drive house prices down by 50%. 

It is all politics and smoke and mirrors about relaxation of qualifying criteria increasing affordability. It doesn't change affordability at all. It merely increases housing prices to a new equilibrium and gives existing homeowners increased perceived value in their homes.


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## Just a Guy (Mar 27, 2012)

There is a big difference between wanting a new house at a reasonable value and someone actually looking and making offers on places. I very much doubt the “doubters” have actually even talked to a realtor in say the last ten years, but they are all armchair experts on housing sales. There are plenty of under market value properties on the market for a variety of reasons, not thousands, maybe not even hundreds all at the same time on the market in a particular city, but how many houses do you need to buy? Just one. 

People don’t begin usually by listing houses below market, some do to try to get a bidding war going. Prices usually start high, and the place sits...and sits...and sits. Sometimes they terminate the listing and resist (that’s why it’s good to pull the listing history and why I have my “watch list”. If a property has been listed a long time, or resisted a number of times, especially as a foreclosure, you can probably make a very low offer and have is considered.

Real estate is about patience, not a quick buck. Something a lot on this board don’t have. They spend 20 seconds looking at mls and then are market experts...

As for housing prices not being relative to income, remember such wisdom at your average 5 mortgage renewals over the life of your mortgage...what’s affordable today, may not be at any or all of those future renewals...but then again, I’m no armchair expert with no skin in the game.


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## sags (May 15, 2010)

AltaRed said:


> Sags, I find a lot of this underpriced mantra hokey too but that argument is not worth re-opening.
> 
> I do take exception though to any study that compares housing prices to income. It is not relevant. What is relevant is carrying cost to income ratio. If we returned to purchase criteria of 25 years ago, we'd have 25 year amortization, minimum 20-25% down payment and 6-10% interest rates.......which would drive house prices down by 50%.
> 
> It is all politics and smoke and mirrors about relaxation of qualifying criteria increasing affordability. It doesn't change affordability at all. It merely increases housing prices to a new equilibrium and gives existing homeowners increased perceived value in their homes.


The report ties incomes to affordability to prices

https://www.ctvnews.ca/canada/troub...-millennials-can-afford-says-report-1.4464569


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## Mukhang pera (Feb 26, 2016)

kcowan said:


> Our friends have been trying to sell their home on West 49th by Arbutus for 3 years. It is on a double lot but also a busy street. Dropped the price 3 times. Never had an offer.


It would seem, kc, that your friends are not destined to be successful RE investors - first the abandoned Gaspe property, now 49th and Arbutus. I think I'd rather buy on a quiet street on the east side than on a street like 49th on the west side. Worse, if it's actually at the intersection of those 2 busy streets. Now, buying 8 blocks north, at 41st and Arbutus (West Blvd.), some years ago might have been a prudent investment.

Actually, Gaspe sounds interesting. Any idea what your friend would take today, just to recover something? After all, it must be accruing some property tax and it's a wasting asset. If I can take a leaf from you-know-who's book and buy at a fire sale price, just maybe. I like the Gaspe and getting a place cheap that can also be an occasional summer rental might be worth a look.


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## james4beach (Nov 15, 2012)

AltaRed said:


> I do take exception though to any study that compares housing prices to income. It is not relevant. What is relevant is carrying cost to income ratio.


Why isn't home price to income relevant? It is for me... I refuse to take new debts at this stage in life, so I'm only buying a house if I can afford it (just like every other purchase I make in life). So my income absolutely is relevant to purchasing a home, because this measures how many years of savings let me buy the home.

I doubt I am alone in this, when I say that I don't care how low interest rates go and how "affordable" debt servicing becomes. If I didn't buy a home with 0% BoC rates and 3% mortgages then I sure as heck am not going to be talked into it at 2% mortgage rates.


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## AltaRed (Jun 8, 2009)

I was talking about studies that compare that ratio today with the same ratios decades ago. It is apples and oranges and thus meaningless.

Housing is priced at the margin of affordability. Relax the rules or lower interest rates and prices go up. Tighten them and house prices will eventually soften. It has always been that way.


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## lonewolf :) (Sep 13, 2016)

Bobcajun said:


> Hello,
> 
> 
> I am wondering what you would say to a real estate agent? Give me only the best deals you have?, for instance. I don't think so.


 Best to deal with one of the very very very few real estate agents that only represents the buyer. Warning some say they do but they really do not.


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## peterk (May 16, 2010)

Just a Guy said:


> Notice, I haven’t said go look at it until this point. As soon as you show interest to go look at it, the game changes. Your realtor gets paid to sell you the house, not to get you the best deal. As soon as you start looking, they will start putting on the pressure to buy in most cases. This is easier if you like the house. Try to keep the emotions out of it. Don’t be afraid to walk away, if you are you’ll probably pay too much.





Just a Guy said:


> My newer realtors often don’t want to write up the offers because they don’t think it would work. I tend to prove them wrong a lot.





Just a Guy said:


> Real estate is about patience, not a quick buck.


Along this vein, how does a first time home buyer go about picking a realtor, and then not pissing that realtor off over the course of several months?

I've never bought a house, but my criteria are: I want to look at a lot of houses, I am willing to wait a long time for the right house, I will not pay full price. I sound like a pain in the ***... How to start and maintain this relationship? Do I let him figure it out on his own that I'm going to be difficult? Or do I tell him what I'm about up front so he knows the score and he will manage his expectation about a quick sale and give up on harassing me to close on an average house I have no interest in...


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## Just a Guy (Mar 27, 2012)

Don’t sign an exclusive relationship and be willing to walk away from them. I don’t think I’d use the same realtors I use for buying my rentals as I would for my house, they are completely different types of places. The last time I purchased a home, I went through three or four different realtors because the first ones wouldn’t show me what I wanted, they kept up selling.


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## Bobcajun (May 15, 2018)

kcowan said:


> A friend of ours went to The Gaspe in the summer, fell in love and bought a waterfront property for $90k. She moved out of her apartment in Victoria but only lasted one winter. She never sold the place again. It was listed for 3 years and then she just gave up.


Hello K Cowan,
this is exactly the kind of situation I would like to avoid and that is why I am looking for a margin of safety in price. We have a family cottage on the St. Laurent in Gaspe and it is beautiful. But, the danger with all maritime places is sea rise. Last year the St. Laurent was sitting two feet from our front door. When you see villages like St. Flavie and others even further down the Gaspe even many houses were washed away. The same thing is true in Cape Breton. So, it is always wise to be a little aware of water side lots. You need to have a good look and a bit of local knowledge. That being said, the Gaspe seems to be much cheaper than Cape Breton. Why, I don't know. CApe Breton is certainly farther afield. But, Gaspe is largely French, perhaps that limits the interest. That being said, if you friends are simply interested in unloading it let me know. I will be up there this summer.
bob


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## sags (May 15, 2010)

Peterk......you best wait for a "buyer's market" to come along. 

This is amusing........"I won't pay full price". Good luck in a seller's markets where people are bidding 20% over the list price.


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## kcowan (Jul 1, 2010)

Mukhang pera said:


> It would seem, kc, that your friends are not destined to be successful RE investors - first the abandoned Gaspe property, now 49th and Arbutus. I think I'd rather buy on a quiet street on the east side than on a street like 49th on the west side. Worse, if it's actually at the intersection of those 2 busy streets. Now, buying 8 blocks north, at 41st and Arbutus (West Blvd.), some years ago might have been a prudent investment.


They are different friends. The 49th street property was purchased in 1977 for $75k, the value of the double lot at the time. It had a cottage on one half. They lived in the cottage for 10 years, then built a modern house with the idea that their parents from Virginia and Toronto would come out and stay with them. After one visit for each, they realized they overbuilt and started a B&B. (They have no kids.)

He is a Theoretical Physicist PhD. When they decided to sell, he said the buyer should pay to buy the B&B business so he was overpriced. Then he decided that the property could be rezoned for townhouses and priced that into their asking price. I suspect that all the area realtors avoid the place like the plague now. We stopped talking about it over a year ago.


Mukhang pera said:


> Actually, Gaspe sounds interesting. Any idea what your friend would take today, just to recover something? After all, it must be accruing some property tax and it's a wasting asset. If I can take a leaf from you-know-who's book and buy at a fire sale price, just maybe. I like the Gaspe and getting a place cheap that can also be an occasional summer rental might be worth a look.





Bobcajun said:


> But, Gaspe is largely French, perhaps that limits the interest. That being said, if you friends are simply interested in unloading it let me know. I will be up there this summer.
> bob


It has been many years and we no longer ask what is going on. I suspect it has been seized for non-payment of taxes/utilities but I will make an inquiry.


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## Mukhang pera (Feb 26, 2016)

kcowan said:


> They are different friends.


Yes, that was quite apparent. I'll agree that my reply you have quoted comes across as suggesting we are talking about the same person(s) in each case. 

I have never seen the attraction in buying on a busy street anywhere. To top it off, W. 49 is past the height of land sloping down to the airport. It would get airport noise. I owned a house on Adera St. near W. 49. It got airport noise. As a friend who has for many years lived on Olympic St. off SW Marine Drive remarked to me about 30 years ago: "The whole south slope gets it." When YVR announced it would build a third runway one mile closer to Vancouver, I got out. Nice area, with large lots. The lots in that part of S. Granville are now tax assessed at about $5 million. Crazy price to pay to sit on your back deck and hear heavy jets landing and taking off all day. You also hear them "running up" the jet engines starting every day around 5 a.m. Not only that, where we were, even though Churchill St. was the next street east and then Granville, Adera St. still got the Granville St. traffic noise. Particularly noticeable at night if the road was wet. But then, I suppose, cities overall are not known for peace and quiet. That's why we left.


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## Bobcajun (May 15, 2018)

Thanks for all the replies. It was kind of an impossible question. Especially in that area, where every house and property is quite different. Perhaps I will continue renting. Although, I could get just land with septic and well installed. I dont want the work and expense of doing that. Just bring a trailer. But, this is getting off on another flight. So, thanks very much for all you efforts and interesting ideas
bob


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## Longtimeago (Aug 8, 2018)

kcowan said:


> They are different friends. The 49th street property was purchased in 1977 for $75k, the value of the double lot at the time. It had a cottage on one half. They lived in the cottage for 10 years, then built a modern house with the idea that their parents from Virginia and Toronto would come out and stay with them. After one visit for each, they realized they overbuilt and started a B&B. (They have no kids.)
> 
> He is a Theoretical Physicist PhD. When they decided to sell, he said the buyer should pay to buy the B&B business so he was overpriced. Then he decided that the property could be rezoned for townhouses and priced that into their asking price. I suspect that all the area realtors avoid the place like the plague now. We stopped talking about it over a year ago.
> 
> It has been many years and we no longer ask what is going on. I suspect it has been seized for non-payment of taxes/utilities but I will make an inquiry.


I have always said that I have never met a PhD whose feet were on the ground. Meaning that they live in such a small world of their own, that they lose touch with the real world. Your friend is about as good an example as could be found. 

Just up the road from us there is a very attractive (from the outside) house for sale. It's been on and off the market now for believe it or not, 10 years. First, the inside is still as it mainly was when built in the 50s, so it needs a lot of renovating to bring it up to today's norms. Second and the real problem, it comes with 9 acres of land which is fine unless the seller is pricing based on it being prime farmland (which it is) but of course it isn't likely to be a farmer who wants to buy it. The land is in fact a negative factor in that as prime farm land it is currently worth around $12k per acre which means it adds $108k to the house price. Even renting the land out to a neighbouring farmer which would be possible, will not return $108k for many years. So the house sits, growing more outdated by the year and basically unsaleable unless the owner decides to sell it for what the market will pay, not what they think it is worth.

I have found that is the biggest problem when people cannot sell a house. It is the market that decides what a property is worth, not the owner. Years ago, I sold a house in Toronto in one week. At a friend's dinner party a few weeks later, the host introduced me to a guy who had been trying to sell a house in Oakville for over a year with no luck. When told I had sold in a week, he wanted to know how (it was at the time a buyer's market). My answer which he did not like, was that I priced it at what the market said it was worth. He of course had turned down a couple of offers which he considered 'too low' and 'insulting.' He wanted to list all the improvements they had made since buying the house and which according to him were worth 10s of thousands of dollars. I replied they were worth absolutely nothing unless someone was willing to pay him for them.

Generally speaking, any house that does not sell within 60 days has a problem which is usually easily identifiable by a good real estate agent. Over-priced, poorly presented, whatever but getting the seller to accept that shortcoming is not easy to do in many cases. So it sits unsold and the seller blames everyone and everything except their own stupidity.


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## AltaRed (Jun 8, 2009)

Longtimeago said:


> Generally speaking, any house that does not sell within 60 days has a problem which is usually easily identifiable by a good real estate agent. Over-priced, poorly presented, whatever but getting the seller to accept that shortcoming is not easy to do in many cases. So it sits unsold and the seller blames everyone and everything except their own stupidity.


I have seen that a number of times over the years in my 8+ house purchases. It is possible to see through a house that is poorly presented although that in itself raises the question of quality of care and maintenance over the years. The bigger problem is a house in which the seller has an unrealistic opinion on what it is worth, and in my experience, it has come down to 2 scenarios. The first one is the house that has been well kept but never updated. The seller doesn't understand that a new buyer is most likely looking at a complete gut of the interior and in that situation, I've often tagged it at about $100k (give or take) and won't offer a price that does not take that fully into account. The second scenario is where a seller has made many improvements and wants fully return on those improvements. Well... that is NOT going to happen because often the improvements are not a total net gain in home value, the improvements are not professional quality and/or they are done in poor taste in not keeping with the property's character. Generally speaking, if a seller has a materially large unrealistic view of value, I have skipped even making an offer.

In our current house, we did a kitchen reno 4 years ago at a cost circa $40k and just last year, an ensuite reno at about $25k. Our house is of a quality and location that renos much less in cost than what we spent would have been money poorly spent. New owners would have a move-in expectation of this quality OR would (and might still) want a complete re-do anyway. We know we won't get $65k of incremental value out of the house when we sell. Perhaps half of that at best. We did the renos for ourselves.....


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## peterk (May 16, 2010)

Just a Guy said:


> Don’t sign an exclusive relationship and be willing to walk away from them. I don’t think I’d use the same realtors I use for buying my rentals as I would for my house, they are completely different types of places. The last time I purchased a home, *I went through three or four different realtors because the first ones wouldn’t show me what I wanted, they kept up selling*.


What does this mean exactly? I'm not quite sure, what did they do wrong?

How do you start a realtor relationship without signing their exclusive agent contract (which they'll no doubt pitch to me in the very first or 2nd talk?)



sags said:


> Peterk......you best wait for a "buyer's market" to come along.
> 
> This is amusing........"I won't pay full price". Good luck in a seller's markets where people are bidding 20% over the list price.


I'm in Alberta, so it IS a buyer's market here luckily! I suspect (though don't know exactly) that there is at least a 50k spread between house prices, when comparing, say, an average seller who's in no hurry, and a typical buyer who will pay full price vs. a desperate motivated seller and an in-no-rush miserly buyer. I plan to be in the latter category.


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## AltaRed (Jun 8, 2009)

I've never signed any agreement (as a buyer) with any RE agent in all the 40 years of buying houses. You pick an agent from a combination of prior buyer referrals/recommendations, googling comments/reviews and the realtor's website, and then have an hour or so sit down with the individual to get a feel for the person's character and whether they are willing to work with you on comparables, etc. And your specific criteria, including budget, purchasing power, etc. Can be a bit intimidating the first few times but just have to remember that YOU are the customer, YOU hold the power of the money, etc, etc. Depending on your timeline, an agent should be sending you listings each week (or immediately if perceived a perfect property) that match your criteria including price range, and following up occasionally with you on which listings are most interesting, and not. Frequency depends on your timeline to buy, e.g. this month, next 6 months, or when perfect property comes along. You should only be making appointments to view a home that really could be 'the one'. Viewing 50 properties just to view them is a total waste of everyone's time.

You have no obligation to stay with that realtor for any period of time, but it is only fair to work with one realtor at a time.


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## Just a Guy (Mar 27, 2012)

Peterk,

If they try to force you to sign an exclusive agreement, look for a different one who doesn’t require it. If they are good, they get my business. As for what they did wrong, I told them a price range and type of property I was interested in, it was rural property, they wanted to try to get me to buy places that costs double or triple what I initially stated. While I could afford them, they weren’t what I asked for. 

Some of these properties had been resold several times by the same realtors because people they sold it to found out they cost a lot to run in the long term. Rural properties are different than urban ones. Many people get sucked into the dream, and suffer when reality hits.


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## Longtimeago (Aug 8, 2018)

AltaRed said:


> I have seen that a number of times over the years in my 8+ house purchases. It is possible to see through a house that is poorly presented although that in itself raises the question of quality of care and maintenance over the years. The bigger problem is a house in which the seller has an unrealistic opinion on what it is worth, and in my experience, it has come down to 2 scenarios. The first one is the house that has been well kept but never updated. The seller doesn't understand that a new buyer is most likely looking at a complete gut of the interior and in that situation, I've often tagged it at about $100k (give or take) and won't offer a price that does not take that fully into account. The second scenario is where a seller has made many improvements and wants fully return on those improvements. Well... that is NOT going to happen because often the improvements are not a total net gain in home value, the improvements are not professional quality and/or they are done in poor taste in not keeping with the property's character. Generally speaking, if a seller has a materially large unrealistic view of value, I have skipped even making an offer.
> 
> In our current house, we did a kitchen reno 4 years ago at a cost circa $40k and just last year, an ensuite reno at about $25k. Our house is of a quality and location that renos much less in cost than what we spent would have been money poorly spent. New owners would have a move-in expectation of this quality OR would (and might still) want a complete re-do anyway. We know we won't get $65k of incremental value out of the house when we sell. Perhaps half of that at best. We did the renos for ourselves.....


Yes, many people seem to think reno costs should be 100% recoverable when they sell and that is simply not the case at all. We just put in a new paver driveway for $23k, someone buying may see the 'curb appeal' of that vs. say asphalt or concrete slab, but they don't expect to pay an additional $25k to get it. The difference is makes is when they see two houses both pretty equal but one 'looks better' than the other for the same price. Houses are basically priced per square foot in a given market and that doesn't change simply because someone did a bathroom reno, but a nicer bathroom will change which one someone picks over the other.

How people value any aspect of a house is pretty interesting to observe. For example, a house with a swimming pool may be harder to sell than one without a pool! Why, because many people have had exposure to a house with a pool either their own or a friend or family member's home. They see it as a big time user to maintain and that is a negative when you have very limited free time available to you in your hectic life. 

Here is a blog showing the average return on various aspects of home improvements. Also keep in mind, that a reno done 10 years ago is no longer a reno, it's 'old'.
https://woolcott.ca/blog/does-a-swimming-pool-increase-or-decrease-the-value-of-a-home/


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## sags (May 15, 2010)

The home seller pays one commission to the listing agent.

If you involve another agent as a "buyer's agent", the commission is split between the two agents and their two brokerages.

The more the commission gets divided up, the less opportunity for a buyer to entice the real estate commission be reduced to sell the home.


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## Mukhang pera (Feb 26, 2016)

sags said:


> The home seller pays one commission to the listing agent.
> 
> If you involve another agent as a "buyer's agent", the commission is split between the two agents and their two brokerages.
> 
> The more the commission gets divided up, the less opportunity for a buyer to entice the real estate commission be reduced to sell the home.


And, if you are the purchaser, the more the commission gets carved up, the less your chance of getting the place you want or at the price you want. I learned that lesson in buying a house in 1979. We had just sold a Vancouver house and so, of course, the agent who sold our place, a self-sacrificing charitable bloke, graciously offered to show us houses. It was nice to be chauffeured around and escorted through various properties.

Although our agent was happy to cast a wide net and show us houses darn near anywhere on the West Side, we had set our sights on a few quite specific parts of Kerrisdale/MacKenzie Heights/Quilchena. So much so that we used a highlighter pen to mark on a map specific blocks that we found appealing. Properties were selling quickly then and we realized that if we waited around for "our" realtor to find us what we wanted, it could take awhile. So, after work every evening, we would take our map and drive the mapped out areas, looking for new "For Sale" signs. And, one evening, _mirabile dictu_, there appeared before our eyes a for sale sign that had not graced that lawn lo 24 hours before. 

So we returned home and called our realtor. Alas, in those dark days there were no cell phones, so we had to return home and resort to a black box phone with a dial on it. We related to our lad that Mr. Hans Gust of Royal Trust had just posted our dream home for sale. So our point man dutifully called Hans, only to be told that Hans, in his unbridled haste to serve his client's interests, had, in fact, placed the for sale sign tad prematurely and the place was not quite ready to show. Our man pointed out to us that Hans was perhaps being somewhat economical with the truth and that a more candid explanation would have been that he was distinctly disinclined to share commission with our agent, and he preferred to sell to a buyer who was not represented by another agent. So I forthwith got on the blower with old Hans and, sure enuff, we got in that very evening and bought the place. Bringing our own realtor to the table was not going to help us at all. Lesson learned.


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## peterk (May 16, 2010)

Mukhang pera said:


> Our man pointed out to us that Hans was perhaps being somewhat economical with the truth and that a more candid explanation would have been that he was distinctly disinclined to share commission with our agent, and he preferred to sell to a buyer who was not represented by another agent. So I forthwith got on the blower with old Hans and, sure enuff, we got in that very evening and bought the place. Bringing our own realtor to the table was not going to help us at all. Lesson learned.


Hmm, so find the house I want and call the listing realtor to arrange a showing? I sure can do that. Not seeing much value in a buyer's agent to be honest. A buddy bought a house and it sounded like he still had to do all his own communication work with the bank, lawyer, city, etc.

It's pretty clear the buyer's agent is there to grease and pressure home shoppers into buying whatever, fast. So long as realtors both act as buyer's agent and seller's agent at some point throughout their works, the entire industry increases sales and commissions and everybody profits.


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## fireseeker (Jul 24, 2017)

peterk said:


> It's pretty clear the buyer's agent is there to grease and pressure home shoppers into buying whatever, fast. So long as realtors both act as buyer's agent and seller's agent at some point throughout their works, the entire industry increases sales and commissions and everybody profits.


And you think the selling agent won't be pressuring home buyers to act fast?? They're the selling agent.
Imagine a scenario where there's a railway track two blocks away and you happen to view the house when trains aren't running. Will the selling agent alert you that four times a day it will sound like a freight train is running through your living room?
Or what if it's an urban block where the city is no longer issuing on-street parking permits. Will the selling agent tell you that you won't get parking?

I realize that a savvy buyer can figure out many of these things themselves.
But using the listing agent is subjecting yourself to a blatant conflict of interest. Only one person profits from a conflict of interest -- and it isn't you.
https://www.cbc.ca/news/canada/toronto/double-ending-real-estate-ontario-1.4342837


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## AltaRed (Jun 8, 2009)

Dual agency (as this is called) is a sure way to get sucker punched from the inherent conflict of interest. It's been banned in BC https://www.vancourier.com/real-estate/realtor-ban-on-dual-agency-comes-into-force-1.23336011

As noted, a dual agency agent isn't going to voluntarily disclose those railroad tracks or for that green space being rezoned for a federal prison. They have to be truthful in direct responses but that is it. That said, a buyer's agent has an obligation to disclose known information about the property and in the adjacent community that is not readily apparent to a potential buyer. Some are more conscientious than others.

That all said, RE agents want to make a sale and collect commissions, so the seller's agent could be leaning on their client to accept a presented offer, and a buyer's agent could be recommending an offer price that is higher than market. Which it is why it is important to do some research on picking an agent to represent you. I have had some excellent agents over the years who have, for example, suggested starting at a more favourable price to me, either a lower offer as a buyer, or listing higher as a seller... using a list of recent comparables and adding/deleting depending on condition, specific location, etc. Using comparables, it is not all that hard to get within a reasonable window, e.g. 3-5% variance grey zone, of a fair price.


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## kcowan (Jul 1, 2010)

We have only bought 7 homes but we have experienced the dark underbelly of realtors. All good advice on this thread so far. In one situation, our buyer's agent was pushing back when I said I wanted to offer 77% of asking price. So I said "Fine! I can find an agent that will!" while DW had a much different take.

So she presented our offer and eventually I settled on 79% including the family room furnishings. My experience in all 7 transactions is that you have leverage on buying but never on selling.

(In our last sale, the PV realtor said that US$299k was the most he would recommend and probably accept $289k. I said I was uncomfortable with his market assessment and that I would list it for $329k. We had 2 offers. One was full price but had a 6 month closing. I countered with a 15% down up from 10% and added a week to his closing time. He walked. Then we got an offer for $315k which is settling on July 3rd.)

The moral is that any realtor is not aligned with your interests. Spend the time to understand your market. Your wallet will reward you.

Here is the listing


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## Mukhang pera (Feb 26, 2016)

kcowan said:


> The moral is that any realtor is not aligned with your interests. Spend the time to understand your market. Your wallet will reward you.


In a nutshell, that sums it up.


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## peterk (May 16, 2010)

fireseeker said:


> And you think the selling agent won't be pressuring home buyers to act fast?? They're the selling agent.
> Imagine a scenario where there's a railway track two blocks away and you happen to view the house when trains aren't running. Will the selling agent alert you that four times a day it will sound like a freight train is running through your living room?
> Or what if it's an urban block where the city is no longer issuing on-street parking permits. Will the selling agent tell you that you won't get parking?
> 
> ...





AltaRed said:


> Dual agency (as this is called) is a sure way to get sucker punched from the inherent conflict of interest. It's been banned in BC https://www.vancourier.com/real-estate/realtor-ban-on-dual-agency-comes-into-force-1.23336011
> 
> As noted, a dual agency agent isn't going to voluntarily disclose those railroad tracks or for that green space being rezoned for a federal prison. They have to be truthful in direct responses but that is it. That said, a buyer's agent has an obligation to disclose known information about the property and in the adjacent community that is not readily apparent to a potential buyer. Some are more conscientious than others.
> 
> That all said, RE agents want to make a sale and collect commissions, so the seller's agent could be leaning on their client to accept a presented offer, and a buyer's agent could be recommending an offer price that is higher than market. Which it is why it is important to do some research on picking an agent to represent you. I have had some excellent agents over the years who have, for example, suggested starting at a more favourable price to me, either a lower offer as a buyer, or listing higher as a seller... using a list of recent comparables and adding/deleting depending on condition, specific location, etc. Using comparables, it is not all that hard to get within a reasonable window, e.g. 3-5% variance grey zone, of a fair price.


Good stuff guys. Though none of those things sound like particularly scary warnings to me. I know where the train tracks are (trick questions - there aren't any here!) and I've always known to be wary of things like big flat empty fields behind a house (would a realtor actually have any inside information about future zoning changes? more than the city website? I doubt it) This is reminding me of the (hilarious) realtor.ca commercials about all the "hidden information" that they have.

On the selling realtor side, at least then I know who I'm negotiating with, it is adversarial, and I have no advisor with ulterior motives. His incentive to convince the seller to take my (lower) offer vs. someone else's is obvious. All the commission for him.

All that said, I'd probably still get a realtor as a first time homebuyer, just incase I'm being an idiot, but it does at times seem like another potential avenue for someone to wear me down, manipulate me, pit my wife against me (will be watching for that one), lie to me, and ultimately cost me $20k that I didn't need to pay. 

This whole thing seem damned ridiculous. Sure the fact that more and more rules are being implemented about realtor transparency and proper representation for their clients sounds good on the surface, but isn't that just a way to entrench this sales methodology even deeper in a more official way? There are zero things you buy in this world in which you expect to deal with anyone other than a salesperson. Why on earth would buying a house be any different? The idea that a commissioned based salesperson's associate could ever properly represent or advise a buyer is laughable. We all know what has come of that in the banking industry.

Side question - Can I/why can't I just hire a "real estate advisor" for $150/hr to find houses for me, tell me his secret info he's got about what the real price should be, and give me ALL the available info without concern, because he knows if he just convinces me to buy the first house we look at that he'll be able to bill less hours? I'll go ahead and assume the answer is something like "Because Remax lobbied the governments to shut that **** down".


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## kcowan (Jul 1, 2010)

When we were buying house #4, we found a nice 3-level home backing onto the woods just south of Highway 7 east of Bayview. The listing agent claimed it was green space. We could find no mention of it in the agricultural reserve. So we took a pass. Within 5 years, Ontario Hydro built one of those massive towers, taking down all the trees and opening up the view to the future Hwy 407.

We always invested extra time when buying because it was a major capital expense. We never found a fully-informed real estate agent. We were amazed when we knew more than them and it was their full-time job.


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## Longtimeago (Aug 8, 2018)

It's always interesting to see how people view real estate agents. The reality is they come in all shapes and sizes just like everything else. 

Someone mentioned the seller pays the commission to the agent/s. Not true actually. It is the buyer who pays the commission IN the price they buy for. That the commission is deducted from what the buyer pays and the balance then goes to the seller, does not mean the seller 'paid' the commission. No money came out of the seller's pocket, all the money came out of the buyer's pocket and that is how you determine who paid for something.

That the objectives of a seller's agent and those of a buyer's agent will differ by individual agent is also a fact. A single agent transaction with the agent acting for both parties can work if that particular agent remains unbiased and attempts to achieve a 'win/win' result for both parties. How many can and do do that is all that is in question. That a buyer's agent can and will act in the best interest of the buyer can and does also happen depending on that individual agent. You cannot lump all agents into the same pile any more than you can in any other kind of transaction.

I have seen a buyer's agent refuse to show a property to a client because they knew there were issues with the property (like railway tracks). A seller's agent for that property MUST show you the property as they are acting on the seller's behalf, not on you as the buyer's behalf. I am also quite sure that in most of not all Provinces, an agent, whether buyer's or seller's, MUST by law disclose any shortcomings (like railway traffic) to you that they are aware of. So comments about an agent not telling you about something are simply uninformed opinions, not facts. 

I have seen seller's agents refuse to take an offer to their client and I am sure some buyer's agents would do the same. The example by kcowan of an agent (whether buyer's or seller's) of 77% of asking price does not indicate to me the 'dark underbelly of realtors' necessarily. There are many reasons why a realtor might refuse to convey an offer unless forced to do so. Depending on Province, this may or may not be allowed by law. In some cases a realtor must by law present all offers as instructed. But I disagree with that as always being the right thing to do as it ASSUMES the buyer knows what they are doing in regard to the seller's view of things.

Good realtors are professionals. If your auto mechanic tells you that you need new brakes, you can say no, I don't need them yet. But if your mechanic is telling you the truth, how stupid is it to ignore that advice? The same is true of a good realtor, it is their job to know what the situation is that you are not aware of. It is not uncommon for a seller to refuse a 'low ball' offer and refuse to even look at a second offer from that potential buyer if they feel insulted by the first offer. It is NOT the job of a good realtor to simply follow a buyer's instructions, it is the realtor's job to ADVISE the buyer. If you don't want a realtor's advice, then why are you paying them to begin with?

Sellers and buyers who think they know better than their realtor are either foolish or simply do not trust their realtor to act in their best interests. If the latter, then you have the wrong realtor. Do not lump all realtors into one category, find a realtor that you trust is going to act in your best interest. A professional realtor who is good at what they do, is like any other professional that you hire to act on your behalf. They do have 'inside knowledge' that you do not have. 

Too often, I think people do not spend enough time choosing a realtor that they trust to work on their behalf and that is not a short-coming of realtors, that is a shortcoming of the buyer or seller themselves. Incompetent or self-serving realtors would not last long if buyers and sellers paid more attention to who they chose to work with.


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## Just a Guy (Mar 27, 2012)

People seem to assume realtors have access to secret information, in fact most are no more informed than their experience gives them.

I recently looked at a place which overlooked a ravine, just been renovated, looked fantastic, been around a long time, and was very cheap reasonably speaking. Another unit in the same complex was up for sale, but it included all the condo docs in the listing which I proceeded to read, my realtor didn’t. There were a lot of things “not” being said in the minutes which started to send up red flags (I’ve read enough of those minutes in the past to know when scandals are being covered up). 

A third unit came up cheap and I contacted the property manager (since I’ve worked with a lot of property managers over the years, I knew the one for the building) and was able to find out the problems. Turns out most of the renovations had been poorly done and had to be redone, but the real kicker was the building was full of asbestos. It was everywhere, in the drywall, the walls, coating the pipes, everywhere. You couldn’t even cut exploratory holes to find leaks without abatement, so they left the leaks alone allowing mould to grow.

The complex was lipstick on a pig, and a nightmare for decades of special assessments...not a single realtor I know of, other than mine now since I told him, knew about this because they don’t do the research. If they had, they couldn’t sell places in there without disclosure...if they don’t know, they don’t have to disclose, and it takes work to do the research on the thousands of buildings in each city. It’s a fairly unrealistic expectation for a realtor to accomplish. Most of these people failed at other jobs, have little more than a high school education and are looking for a quick buck.


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## sags (May 15, 2010)

Realtor contracts require the home seller to disclose material problems with the property. It isn't the realtor's obligation to know every possible problem that could exist.

It is the listing agent who signs a contract regarding their fees with the seller. It is the seller's lawyer who distributes the commission.

The theory that buyer's pay the real estate commission assumes the buyer pays the market value of the property plus 5% real estate fee. (or whatever it is)

I think the fees are included in the market price, so it is the seller who is paying them.


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## Longtimeago (Aug 8, 2018)

Just a Guy said:


> People seem to assume realtors have access to secret information, in fact most are no more informed than their experience gives them.
> 
> I recently looked at a place which overlooked a ravine, just been renovated, looked fantastic, been around a long time, and was very cheap reasonably speaking. Another unit in the same complex was up for sale, but it included all the condo docs in the listing which I proceeded to read, my realtor didn’t. There were a lot of things “not” being said in the minutes which started to send up red flags (I’ve read enough of those minutes in the past to know when scandals are being covered up).
> 
> ...


There is a difference between someone thinking a realtor has access to 'secret information' and someone understanding that a good realtor has 'knowledge and experience' of all aspects of the real estate industry. The average home buyer does not have that knowledge and experience obviously. It is no different than an auto mechanic having knowledge of a car that the average car owner does not have. 

What I expect a good realtor to know about and advise me on, has nothing to do with what I expect of myself. In your example of the condo property with asbestos, I do not necessarily expect the realtor to know about that but I do expect it to come out before the sale is completed. First, if the condo owner knows and tells the selling agent, it will have to be disclosed by that agent. Second, I expect any good buyer's agent to tell the potential buyer to have a property survey included in any offer they make, which would of course reveal it.

I will repeat, MY job is to find a realtor I trust to work with. It will not be someone who 'failed at other jobs, have little more than a high school education and are looking for a quick buck.' I have no difficulty separating the wheat from the chaff.

As for reading the condo minutes, bylaws and rules, I do not expect a realtor to do that for me, but I do expect any good realtor to advise their client to do so before making any offer. It is the buyer's job to do that and any buyer that does not, has no one to blame but themselves if they do not.


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## Longtimeago (Aug 8, 2018)

sags said:


> Realtor contracts require the home seller to disclose material problems with the property. It isn't the realtor's obligation to know every possible problem that could exist.
> 
> It is the listing agent who signs a contract regarding their fees with the seller. It is the seller's lawyer who distributes the commission.
> 
> ...


Sags, as someone with some common sense, I do not need to argue semantics with anyone to know who PAYS when something is sold. The BUYER pays. Again, all you have to ask is who puts their hand in their pocket. When a property is sold, money goes INTO the seller's pocket and INTO the realtor's pocket and comes OUT of the buyer's pocket.

It doesn't matter if the buyer's 100% payment is divided up among a dozen people involved in the transaction, the entire 100% still came out of the buyer's pocket and no one else's. Don't waste any more time trying to get your head around this.


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## AltaRed (Jun 8, 2009)

^+1 A realtor has certain obligations and responsibilities, including guidance on what due diligence the buyer should do, but not to do the due diligence. Realtors come in all colours, qualifications and experience. I look for at least 10 years of experience, standing in their organization and the type of product range they are focused on. The latter can be important. Example: When we researched for an agent for our Okanagan purchase, it would have been easy to migrate to the one with splashy website, sales records and number of listing signs, but that same person also focused on high end properties well above our price range. That person would NOT have provided us with the service that we would expect


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## sags (May 15, 2010)

Longtimeago said:


> Sags, as someone with some common sense, I do not need to argue semantics with anyone to know who PAYS when something is sold. The BUYER pays. Again, all you have to ask is who puts their hand in their pocket. When a property is sold, money goes INTO the seller's pocket and INTO the realtor's pocket and comes OUT of the buyer's pocket.
> 
> It doesn't matter if the buyer's 100% payment is divided up among a dozen people involved in the transaction, the entire 100% still came out of the buyer's pocket and no one else's. Don't waste any more time trying to get your head around this.


Seller A sells their home for $100,000 privately with no realtor involvement. 

Seller A sells their home for $100,000 with a realtor charging 5% commission.

The buyer paid the same price regardless. The seller with a realtor received 5% less after realtor fees.


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## Just a Guy (Mar 27, 2012)

Longtimeago, 

You’re assuming the owners know about the asbestos or other deficiencies...many times they don’t. Very few condo owners spend any time at a board meeting, or doing any research into their most expensive investment. There are a lot of properties which never disclose deficiencies because no one officially knows about them.


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## Longtimeago (Aug 8, 2018)

sags said:


> Seller A sells their home for $100,000 privately with no realtor involvement.
> 
> Seller A sells their home for $100,000 with a realtor charging 5% commission.
> 
> The buyer paid the same price regardless. The seller with a realtor received 5% less after realtor fees.


Hilarious. Who puts their hand in their pocket sags? Whether the seller gets more or less of the money is irrelevant to who PAYS. Like I said, don't try to get your head around this, it is obvious you are having difficulty with it. Just keep it simple, who pays ALL of the money that is changing hands, regardless of how much goes where. The agents commission ALWAYS comes out of the money the buyer pays.


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## Longtimeago (Aug 8, 2018)

Just a Guy said:


> Longtimeago,
> 
> You’re assuming the owners know about the asbestos or other deficiencies...many times they don’t. Very few condo owners spend any time at a board meeting, or doing any research into their most expensive investment. There are a lot of properties which never disclose deficiencies because no one officially knows about them.


No, I'm not assuming anything Just a Guy. The seller and their agent may not know as you say, that is why the buyer's agent should be advising the potential buyer to include a property survey in any offer. The survey will turn up the problem if it has not already been disclosed. As AltaRed has noted, it is the agent's job to advise the buyer of the BUYER'S responsibility to do their due diligence, it is not he agent's job to do the buyer's due diligence. 

I do agree that a great many condo buyers do not do their due diligence but that is on them, not on the agent. I saw first hand during our short time living in a condo, just how few did read the condo bylaws and rules before or even after buying, as well as just how few attended any board meetings. 

As President of the condo board, I had some owners come knocking at my door to ask questions AFTER they had got a notice of a contravention of a bylaw or rule. First I would tell them that coming to my door was NOT OK to do. Second I would ask them if they had READ their condo bylaws and rules before coming to my door. Third I would tell them to go and read them and then follow the process as outlined if they had a question they wanted to ask or follow the process to raise an objection if they chose that path. The process did not include knocking on my door for anything.

Being on a condo board is a truly thankless job.


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## AltaRed (Jun 8, 2009)

Longtimeago said:


> The agents commission ALWAYS comes out of the money the buyer pays.


Or out of the money that the vendor receives. It has always been my opinion that the one with the money holds the power on how and when, and how much to part with it. Taken to the extreme in RE, a buyer never has to buy, but sometimes a seller has to sell. That all said, it is a circular argument like the 'chicken and the egg' and not worthy of debate.


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## Just a Guy (Mar 27, 2012)

This is why the deposit is almost always made out to the realtor, to ensure they get paid first.


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## Longtimeago (Aug 8, 2018)

AltaRed said:


> ^+1 A realtor has certain obligations and responsibilities, including guidance on what due diligence the buyer should do, but not to do the due diligence. Realtors come in all colours, qualifications and experience. I look for at least 10 years of experience, standing in their organization and the type of product range they are focused on. The latter can be important. Example: When we researched for an agent for our Okanagan purchase, it would have been easy to migrate to the one with splashy website, sales records and number of listing signs, but that same person also focused on high end properties well above our price range. That person would NOT have provided us with the service that we would expect


Having myself spent most of my working career in sales, I see things from that perspective obviously. I do get quite annoyed when people with NO sales experience of their own, THINK they know all there is to know about any sales process of any kind. Sales people (including realtors) do indeed come in all shapes and sizes as you say, just like in any other industry.

It is the potential buyer's job to figure out who they want to do business with and have enough common sense to realize that not all realtors are created equal. Just as it is the car owner's job to figure out which auto mechanic they trust to work on their car. When someone gets 'ripped off' by an auto mechanic, they blame the auto mechanic, they never seem to blame themselves for not spending more time making sure they picked an honest mechanic to do business with in the first place.

I have had realtors both save me money when buying and get me more money when selling. I have also interviewed quite a few realtors with whom I knew within a few minutes, I would not do business with. 

One note re your criteria of looking for a track record of 10 years or more. Normally I would agree with that or at least 5 years or so but just as realtors come in all shapes and sizes, so does my 'feel' for someone I trust. I'm thinking of a realtor I went with when selling a house in the UK. He was my choice out of half a dozen I had visit our home to potentially list the property. This guy was a farmer who had to give up the farm finally as it was no longer capable of providing a living for his family. He told me up front when asked that he had just started in real estate and had yet to make a single sale. But what I saw in him was a man who really wanted to succeed and who would not see us as just another listing. Also a man who was not afraid to WORK.

Real estate sales work differently in the UK and one difference is that there is no MLS, each agency has it's own listings and no one else can show them to a potential buyer. As a buyer you have to go from agency to agency to see their listings. Another difference is that the lawyers fees are greater than the realtor's commission on a sale. The realtor gets a commission of 1-1.5% of the sale price. The realtor's job is basically to get people to make an appointment to view your property. You show your own property, the agent isn't even there when you do. Quite different eh.

I told this agent that I wanted only qualified buyers, no tire kickers, no open houses. I also told him that I would pay 2.5% commission on the sale, not 1.5%. That's called giving them an incentive to work for you before any other listing they have. Unheard of actually. The commission in an agency is divided between your listing agent, the agency owner and any other agent in that agency if they bring the actual buyer in. Needless to say, the agency owner and every agent in that agency sat up when they heard I would pay 2.5%. 

We had 6-7 viewings within a couple of weeks and of those 4 were prepared to make an offer. I know from talking to the agency owner later what happened. Our agent was in that office every day from opening to closing and grabbed every potential buyer that walked in the door and screened them in regards to our property. He had a 3 page glossy brochure made up (I still have a copy of it) that was as good as any such brochure I have ever seen. All of the viewings were buyers he found, not any from any other agent. He with the help of the agency owner who was a long experienced realtor, played the 4 potential buyers like violins as they saying goes. They turned it into a bidding war and we ended up with considerably more than the asking price. 

So my first point is that experience of an agent does not necessarily mean you will get the hardest worker working for you. My second point is that the seller can also 'sell' to the agent meaning sell the agent on wanting to sell your property over any other property. :encouragement:


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## AltaRed (Jun 8, 2009)

RE experiences vary, just like in anything else. It's like arguing which automotive brand is best.


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