Monday, November 28, 2011

How to choose a Real Estate Agent

Finding the right real estate agent to list a home can be a lot like finding a life partner - pick the right one and the experience can be positive. Choose the wrong agent and the experience can lead to months of frustration and an unsold house.

Ted Baker recently sold his mother's house and shares the trials and tribulations from his experience. Tony Joe, a real estate agent with Re/Max Camosun Oak Bay, was the listing agent and shares his insight on today's changing market.

For some people it's not difficult to choose a real estate agent - they pick one based on personal recommendation from friends and family. According to a report by the National Association of Realtors, more than half of home buyers found their agent this way.

"People typically go with people they know," says Joe, who has been selling for 20 years. "For the consumer's standpoint its all about networking. Unlike other areas of sales, real estate agents have access to the same inventory pool. What sets them apart is their level of experience, professionalism, knowledge and . marketing or negotiation style."

He says that more than 90 per cent of his business is from referrals, compared with the industry average of 50 per cent.

"Personality has a lot to do with it," says Baker, who used to do renovation work on homes. "One needs to be able to rely on the capability of the agent to get the job done."

To help you select an agent with the right skills, testimonials, experience, competence and reliability, here are a few pointers.


Information is power. Baker suggest people get an independent appraisal - which costs about $125 - to get an independent third-party evaluation of the property.

A pre-sale home inspection is also useful to identify and correct potential problems in a house. A buyer will likely uncover the same issue when they get the house inspected as a condition of the sale.


In order to secure a listing, some agents will purposely overvalue a home. They tell potential clients they can get more for a house than other agents.

Because the inflated house is more expensive than comparable homes, it will linger on the market until the price is lowered.

"Ask the real estate agent to justify the price," says Baker. "Ask to see listings of homes for sale in the last three to four months for comparison."


Increasingly people interview a number of agents to determine if the "chemistry" works.

"Ask about productivity," says Joe. "Real estate is a complicated process. Find out about the agent's knowledge and experience."


"When I interviewed different agents, I asked them 'What are you going to do for me?' " says Baker. Some agents have a detailed written plan about how they will advertise and market a property.


Any agent who has been selling for a while should have a list of happy customers. Many people would trust a recommendation by a friend or family member. As a last resort, a person can review a real estate agent's qualifications by viewing their website.


Real estate agents can be flexible as to the commission structure. Most charge six or seven per cent on the first $100,000 and three per cent on the balance. Some have a flat percentage of the total price. On a $500,000 house, with the above 7/3 calculation, a seller would pay the agent $19,000. Finding an agent who will sell for less will obviously affect the bottom line.

"The only question I regretted not asking was if the agent would reduce his commission if the house sold within 30 days," says Baker. "Because there would be less work involved - fewer open houses, fewer showings - shouldn't the cost of selling also go down?"

Also, when an offer is tendered and the parties are slightly apart, it is appropriate to ask if the agent is willing to forgo a portion of their commission in order to secure the sale.


One of the reasons a person lists a home with a real estate agent and the professional listing service is because he wants other real estate agents showing the home to their clients.

A listing agent who is generous in sharing the potential commission with others typically gets more house viewings.

"Not all agents work well with others," says Joe.


"An agent with 50 listings is spread out too thin," says Baker. "There's no way an agent with that many listings can put time into a sale."

He is more comfortable listing with an agent who has, at most, 10 listings to service.


It is important that the agent chosen has experience both in the property type and price range. If he primarily sells luxury houses, he is not likely going to have many buyers looking for an entry-level condominium, for example.


Baker says he recommends finding an agent who works within 15 kilometres of the listed home. "He will know the area and he will know the market better."


Here are a number of interview questions that people have posed to Tony Joe in his career:


How long have you been selling real estate full time?

How many transactions have you been involved with in your entire career?

How many transactions did you handle in the last calendar year?

How many transactions have you handled year-to-date?

Have you ever been subject of a disciplinary action?

Are you a listing agent or a buyer's agent?

If both, what is your percentage of listing sales to buyer sales?

Do you have a list of references to call and a list of testimonials? Can you have another professional real estate agent vouch for your business practices and integrity?

What price range do you generally work in?

Do you dual represent or "double end"?

Do you have a network of other productive agents from other firms which you work with?

Do you attend training and technical update seminars above and beyond the local minimum standards?

What would you say are your strongest attributes as an agent?

For people looking to buy a home

Are you experienced in multiple offer scenarios?

Do you have contacts in the mortgage business?

Is your negotiation style collaborative or confrontational?

Can you recommend building inspectors who will be critical and prepared to fail a house on inspection?

What is your after-sale support program?

For people looking to sell

What is your success rate (listings taken to sold)?

What is your list price to sell price ratio?

What is your average days on market?

What is your advertising strategy? Do you have a marketing plan?

Do you provide feedback from agents?

Tell me about a recent complicated transaction for which you found the solution.

© Copyright (c) The Victoria Times Colonist

Monday, November 21, 2011

Monday, November 14, 2011

We should be more like Edmonton

Toronto wishing it was more like Edmonton? Yes, folks...that’s right! Read on to see how the River City rivals other large Canadian cities in regards to its eco-friendliness.

We should be more like Edmonton

National Post • Nov. 12, 2011 Last Updated: Nov. 12, 2011 4:11 AM ET

Toronto doesn't wear its green badge on its sleeve - we leave that to Vancouver - but there's a lot to be proud of when it comes to our environmental initiatives.

There aren't many other Canadian cities, for instance, that have a functioning Green Bin program, let alone one that returns the finished compost back to residents free of charge at regularly scheduled Environment Days. And what other city boasts the ability to air-condition almost all of its downtown core during the summer, skyscrapers included, with borrowed lake water?

When compared to, say, Calgary - which just learned how to recycle two years ago - Toronto looks pretty good. Yes, it's transitioned from a transit-loving mayor to a carloving, gravy-hating mayor, meaning a lot of city-run green initiatives are on the chopping block, but as long as the Toronto Environment Office continues to exist, tangible progress should be made.

Having said this, another Canadian city is quietly outshining Toronto when it comes to truly innovative environmental practices. It's a city that, ironically, is neighbours with oh-hey-we-just-started-this recycling-thing Calgary. It's also considered the corporate base for those working in Alberta's tar sands and, earlier this year, it was named the homicide capital of Canada. Yes, we're talking about Edmonton.

It gets a bad reputation, if it gets any at all, but the city has a unique political advantage when it comes to the environment: It forms a left-leaning, NDP-voting pocket in an otherwise Conservative-voting province, and when it receives money from the Alberta government, which is wealthy enough to give at least some cash to its urban centres, Edmonton's council often allocates these funds to green initiatives.

One of these is the revitalization of the North Saskatchewan River Valley, which runs through the middle of Edmonton and - at 48 kilometres, with 22 parks along its route - represents the largest expanse of urban parkland in North America. In fact, there's a staff of eight urban park rangers enlisted to protect it. Like most rangers, their job is to protect people from nature, and nature from people (although this team must contend with more drunken inline skaters than lost hikers).

What's noteworthy, however, is that Edmonton actually puts aside money to ensure full-time supervision of its parks system, unlike Toronto, which has numerous volunteer associations dedicated to preserving the Don Valley river and ravines but limited resources devoted to monitoring any of it. Part of the reason may be that while Toronto tends to view its waterways as just one of its many natural features, Edmonton considers its so-called "Green Ribbon" to be part of its soul.

"We're constantly telling people, 'This is the jewel of our city,' " says Greg Komarniski, leader of the urban park ranger program in Edmonton. "We're immensely proud of it. The health of the river valley is not only important, it's very emblematic of who we are, what we're all about."
The city isn't just giving money to its physical green space. Much of Edmonton's financial support is reserved for less glamorous initiatives, usually involving garbage, and this is where it seriously goes over the top: Consider the Waste Management Centre of Excellence - an entire organization devoted to nothing but the pursuit of excellence within the field of trash.

It really is quite something to behold - and it should be noted that absolutely anyone can behold it, for free, usually with a guided tour thrown in and sometimes even a complimentary shuttle bus from downtown, because there's a policy around full transparency.

Within a single compound, there exists: A solid waste sorting facility, research and development labs (right now, they're looking into composting drywall), recycling plants for both household waste and construction/demolition waste, the largest co-composting facility in North America, an e-waste recycling factory, an Eco Station for drop-offs of hazardous waste and bulky items, a landfill with a built-in gas recovery system to capture and convert methane into electricity, a leachate treatment plant, a biosolids storage lagoon system and an education centre.

That's not all. Under construction is a waste-to-biofuels facility, the only one of its kind in the world, which will bump up Edmonton's diversion rate to more than 90% - as in, 90% of its garbage not going to landfill. When operating, it will convert 100,000 tonnes each year of non-recyclable and non-compostable waste into 36 million litres of ethanol, reducing Alberta's CO 2 output by reducing Alberta's CO 2 output by more than six million tonnes over the next 25 years and creating 180 green jobs.

Oh, and that remaining 10% comes from the leftover char at the biofuels facility, which could be used to pave local roads, meaning it's possible the city will hit a 100% waste diversion rate.

This project is being funded by the City of Edmonton, the Government of Alberta and Enerkem Alberta Biofuels, making it the latest in a string of successful public-private partnerships at the WMC. This type of arrangement - to which Torontonians often put up a fair amount of resistance, at least until there's a three month-long garbage strike in the middle of a hot summer - is precisely what Edmonton relies upon to remain competitive, innovative and profitable in the green sector.

"I definitely wouldn't say that we're innovative because we have more funds than other cities," says Connie Boyce, a representative for Edmonton's waste management services. "We're just as stretched for dollars as any other city. The reason we're innovative and have achieved what we have is due to private investment."

But it's also about perspective: Instead of looking at trash as something useless, the people of Edmonton began realizing a while ago that it can be something profitable - there's value, after all, in those empty glass bottles, broken computers and even an unfinished doughnut. Furthermore, a lot of money is saved when there are fewer trucks having to collect and transport waste to a landfill.

"We have strong leadership here and a general willingness to be progressive and green," Boyce says, "but public engagement has been an integral part of our system from the beginning."
Here in Toronto, there is plenty of demand for progressive environmental initiatives and even greater demand for the kind that might save us money, whether it applies to our waste (does anyone know where it goes these days?) or the Don River and surrounding parks system. The environment may not be a priority on Rob Ford's agenda, but co-operation between city council, the private sector and the general public - with transparency as the name of the game - could lead to huge steps forward.

Wednesday, November 9, 2011

Why it isn't a good idea to keep all your eggs in one basket!

Here’s a very interesting article written by a very knowledgeable mortgage broker in Ontario regarding why it’s often not a good choice to hold all of your bank accounts, mortgages, credit cards and loans with one institution...

The Americanization of Canadian Credit

by Dave Larock

I suppose it was inevitable that some of the more aggressive U.S. lending practices would make their way north of the border after our Big Five banks started buying up regional U.S. banks.
It’s probably just too tempting when two-thirds of Canadian mortgage borrowers still walk into their local branch and sign the mortgage contract put in front of them with few questions asked about the fine-print terms and conditions. That kind of blind loyalty has been very profitable for the Big Five over the years.
So why are Canadians always surprised when they learn later that the terms and conditions in their unread Big Five mortgage contracts are so heavily tilted in the bank’s favour?
I’ve provided many examples of what to watch for in previous posts (the whole Borrower Beware section of my blog is devoted to this subject), and today’s post will serve as my latest instalment. I’ll quote two new sections that were recently added to a Big Five lender’s standard charge terms, and then comment on each. (As an added bonus, I’ll also use a legible-sized font that can be read without a magnifying glass.)
Addition # 1: Bank May Appropriate Payments to Any Debt
It is hereby agreed that the bank shall have the right at any time to appropriate any payment made as a temporary or permanent reduction of any portion of the Indebtedness whether the same be represented by open account, overdraft or by any bills, notes or other instruments and whether then due or to become due and may from time to time revoke or alter such appropriation and appropriate such payment as a temporary or permanent reduction of any other portion of the Indebtedness as in its sole and uncontrolled discretion it may see fit.
Translation: This new clause allows the bank to take any payment you make on any one of your accounts and apply it to any of the other accounts you hold with them instead.
Implications: Let’s assume that the euro zone crisis blows up the global economic recovery and you lose your job. Without enough money to pay all of your bills, you decide to let an unsecured line-of-credit lapse while continuing to make regular payments on your mortgage. If both of these products are sourced from this bank, they can now take the payment you made on your mortgage and use it to pay your unsecured line of credit instead. This transfers the shortfall to your mortgage account, which has your house secured against it as collateral.
Now this Big Five lender can decide which of your accounts won’t get paid if you fall behind. If push comes to shove, they can basically force your mortgage into default and sell your house because you didn’t have enough money to pay your unsecured line-of-credit.
How many borrowers were aware that they were pledging their house as collateral against every credit product they have with this bank? And if this new clause means that your unsecured products (credit cards, lines-of-credit) are effectively being secured by your family home, why are you still being charged much higher interest rates for these products? Isn’t this a clear case of “Heads I win, tails you lose”?
Addition # 2: Charge Continuing Security
It is hereby agreed that this Charge may secure a current or running account and shall stand as a continuing security to the Bank for the payment of the Indebtedness and all interest, damages and Costs which may become due or payable to the Bank notwithstanding any fluctuation or change in the amount, nature or form of the Indebtedness or in the bills, notes or other obligations now or hereafter representing the same or any portion thereof or in the names of the parties to the said bills, notes or obligations of any of them.
Translation: When a lender gives you a mortgage, they register a first charge on your property’s title to ensure that if you ever sell your property, your real estate lawyer can’t cut you a cheque until their mortgage had been paid in full. Fair enough. But this new clause means that this Big Five bank can now insist that all of its accounts be paid in full before any sale proceeds are subsequently paid to you – even unsecured accounts that you never thought would be tied to your house.
Implications: Let’s assume that you are going through a divorce and your spouse racks up huge credit card bills during the separation period. When you sell the matrimonial home this bank can now legally insist that the money from that sale be used to pay off all of each borrower’s accounts, including your spouse’s supposedly unsecured credit card balance, without any additional authorization or consent by you. All for one and one for all!
The defence against both new clauses is the same. Don’t get your mortgage where you borrow for any other purpose if your real estate lawyer identifies these clauses, and confirms their implications, in your standard charge terms.
It’s clear that all of the talk about slowing growth and rising recession risks has some of the Big Five battening down the hatches by very quietly altering their mortgage terms and conditions. While each change may seem to affect only a small subset of borrowers, why take the chance that you might be one them when you can find better (or at least the same) rates at other lenders who don’t stack the deck against you?
Borrower beware, indeed.