Agent Will

There is a common mantra repeated by Realtors everywhere that real estate is local. They say this to overcome objections that prices are somehow too high in a specific area, especially in light of the fact that national media nowadays slams the prices as being too high. After all, what does the market in Toronto, Saskatchewan, Arizona, Florida, California, or even Surrey have to do with Vancouver? Or even more specifically what does the condo market in downtown Vancouver have to do with the detached housing market in North Van? Nothing?

Nothing.

Just like your neighbour’s house has nothing to do with yours. You see, real estate is not local. It’s personal. Last I checked there are only two parties (and their representatives) who sign a contract of purchase and sale. The Seller and the Buyer. Two parties with a personal interest and stakes involved.

Sure, we think of the market as a whole group of people who move in a general direction all together but the fact is that that macro view of things is wrong when it comes to selling or buying a home.

When you contact a realtor to get an evaluation of your home they are only able, and rightfully so, to give you a general market consensus. Doing so gives you the best odds at getting the best price. It does not, however, account for the odd chance that a rebel member of the buying community will not personally view the home as you do, worth much more. That, however, is a very small chance and is why a good realtor will sit down with you, assess your needs and wants, and come to a happy conclusion.

I have lost a listing before to a realtor who overpriced a home, badly. We, my partner and I , waited to pick up the listing again when it expired. Only it didn’t expire. Well, it did but at the last minute a couple viewed the home on their own, without representation, and made an offer through the listing realtor at full price. We couldn’t believe that realtor’s luck. He did nothing to close the deal and was gifted an overpriced sale making the sellers very happy. Good for them. Really. And had the buyers been represented I have no doubt they would have saved 10s of thousands of dollars. I have no idea if they know this nor if they care about that fact. For them the home was what they wanted and they were willing to pay the price asked. Real Estate is personal.

Another example is of a party I was representing. We found a place that was terrific in so many ways and they made an offer. The offer made was about $50k below ask. This is a lowball only in terms that the asking was so high. In fact, the offer was the highest price paid per square foot in the building and should have been looked at as a godsend. Instead it was declined and the listing expired a couple of weeks later (after being on the market for almost a year). The sellers could not see past their own greed to accept what was a very profitable and lucrative deal for them. They didn’t live there. It was vacant and costing them money to hold every day. We made an impersonal, rational, demonstrable offer that in hindsight really irritates my clients that it wasn’t accepted. I have no idea what the sellers were thinking but this is not the first time I’ve come across people with listings that they do not wish to sell. Real Estate is personal.

And that’s the problem. While you may be attached to your piece of property, you may feel it’s worth $X, you have to depersonalize the transaction. Real Estate should never be personal. It’s business. That is one benefit to having a good realtor on your side. They try to minimize the personification you are putting on the deal. You have your views, the other party has theirs. Take no offense and look at it with cold steely eyes. The first word in Real Estate is “Real”.

Don’t get personal. Get Real.

I have a very strong suspicion that Sellers are going to be getting a reeducation on valuations in the market place very soon. Prices may be up year over year but they are not up month over month. They really are not. Remember that the average sales price can get skewed by a very expensive property selling. Just look at the weekly stats and I see from week to week the average fluctuate +/- as much as $80k. That doesn’t mean prices rose 20% in a week or fell 20%. It means some very high priced properties were sold or not that week. Overall prices are flat for 2008. And, yes, the only number that matters is comparable sales. Not asking prices. Sales.

Don’t get personal. Get Real. When you want to sell I hope you talk with a realtor who is also able to get real and speak to you in real terms. Even if the truth opposes your personal views.