Reflecting on 2012
But let's talk about real estate for a moment. It's time to reflect on 2012. I had a couple of career first time events.
First time for me, hopefully not the last, a buyer walked into a listing and offered full price (inspection was the only condition). The sellers and I were absolutely gob smacked. The house had been on the market for over a year with several price reductions. The sellers had switched agents and came to me looking for a deal on the listing commission as they were dropping their price again and needed to save as much as they could. One month later, a buyer was on the doorstep and loved the house so much she offered full price. The sellers did very well with commission savings on this sale. With my listings, I offer the standard rate of $3% of the 1st 100k & 1.5% balance for commission to the buyers agents to keep my listings competitive with all the other listings on the market. If I represent the buyer, this amount drops to 1%. So the sellers ended up saving on both the listing and buying ends of the commission, plus a full price offer.
Perhaps the strangest component of this scenario is the buyer had no Internet and found the listing through one of my paper ads. Print ads account for about 2% of real estate sales and a lot of agents don't like to put the cash out for ads with such a poor return. I have to admit that I wasn't happy paying the expensive fees for print ads ($12k spent in 2011, print advertising for my listings only). Needless to say, I will be continuing with print ads for my listings because you just never know which advertising method will reach the customer.
Second, I had my own house on the market. This is the first time since I became a REALTOR in 2006 that I've sold my own property. I chose to list with Bruce McCalla instead of listing my own house. Bruce and I do a lot of work together and it felt right. My insurance won't cover me if I list my own house anyway. It was an exhausting process. I started preparing the house in May. I painted the house inside and out, cleared out truck loads of stuff we didn't need anymore, and staged a couple of rooms that needed help. I spent two and a half months just getting the house ready and looking it's finest. We listed in July and our 2 bedroom, 1200 sq.ft. house in Gordon Head hit the market for $510k. We had offers almost immediately but the offered price never exceeded $460k. We dropped our listing price to $499k, $489k, and finally to $484,900. Our assessed value was $493k. I'd put $30k into the house over 5 years. It was immaculate. But, after five offers, the best we could get was $465k.
It took us 115 days to sell. Gordon Head is one of our strongholds in Victoria. The area has a reputation of holding its value and properties usually sell quickly. I knew the market was bad but the repeated low offers really drove the point home. Many of my clients didn't even get the low offers last year so maybe Gordon Head is still strong after all. My wife and I are house sitting for the next four months in James Bay. This will give us a good period of time to watch the market before we make our next move. Economists aren't exactly painting a rosy picture of what's ahead. Sad state of affairs when the "hot" property on the block is fielding offers $40-50k below listing price.
By the way, I have the same complaints that my clients have while their property is on the market. Agents were often late for scheduled appointments, someone dropped something on my kitchen floor and chipped the laminate floor, someone eating potato chips left a pile of broken chips behind my couch (who eats while viewing?), the inspector went one hour over his allotted time, my signs disappeared - you name it! I hear the complaints all the time. I get it. Trust me. Some people are just disorganized and others are plain ignorant.
For my business in 2013, I remain optimistic. I'm getting another MLS award for 2012, the third year in a row. I know I'm doing the right things. I represent my properties very well and my advertising system is working. I continue to sell even in these slow markets. I own a branch of Fair Realty at 1564 Fort St and I really enjoy having a professional area to meet with clients and agents. I'm at a point in my career where I can have a partner and will start interviewing candidates for this soon. In March, I'm writing the managing broker exam. I've completed the course already but didn't have time to write the exam during the process of getting my house sold. I really want to recruit more agents to Fair Realty. I think it's a great deal and I really enjoy working for this brokerage.
Happy New Year! Stay positive! Stay focused! Don't worry! Be Happy! :)
All the best,