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When you're looking for help buying or selling
property, it's important to remember that the terms "real estate
agent" and "Realtor" are not synonymous. Realtors
can provide an extra level of service, and to be a Realtor you must
be a member of the Canadian Real Estate Association. CREA is
a non-profit trade organization that promotes high professional standards
in real estate information, education and professional standards.
The Canadian Real Estate Association also has
earned a strong reputation for actively championing private property
rights and working to make home ownership affordable and accessible.
Code of Ethics
CREA members adhere to a strict code
of ethics founded on the principle of providing fair and honest
service to all consumers. Realtor business practices are monitored
at local board levels. Arbitration and disciplinary systems are
in place to address complaints from the public or board members.
This local oversight keeps Realtors directly
accountable to the individual consumers they serve. Real estate
licensees who are not Realtors, work solely under provincial
licensing regulations.
Definitions
Realtor
A Realtor (or REALTOR) is a licensed real estate
agent who is a member of the Canadian Real Estate Association
(CREA)
a membership organization of some 68,000 real estate agents in
Canada. A licensed real
estate agent does not have to be a member of CREA to practice
real estate.
Broker
In real estate, a broker has earned a broker's
license. Many brokers own their own real estate office and are "brokers
of record," with other real estate agents "hanging their
license" under the broker of record. An Associate
Broker is affiliated with a firm without holding ownership.
Many of the same questions, hesitations and
strategies connected with seeking out professional assistance in
any field — whether you're looking for a doctor, dentist, lawyer
or accountant — come into play when you're selecting a real
estate agent. Some people find an agent through a family member
or friend. This is often a reliable approach. But you might not
always find the most compatible assistance this way. And in a transaction
as important and intensive as buying and selling a home, that can
be critical.
A referral from a family member or friend doesn't
guarantee a perfect match. Just think of something as simple as
a movie or restaurant recommendation. Your close friends rave about
a new Chinese food place downtown — so you check it out. Could
this possibly be the same restaurant they were describing? Mediocre
service. No chopsticks. Bland flavours. It's the same restaurant.
Same cook. Same waiters. Just different perceptions.
Regardless of how you get an agent's name, it
might be worth interviewing at least a couple before you make a
final decision — or at least arming yourself with some criteria
to go over with any agent who has been recommended to you.
A few things to look for:
- If you're looking for an agent to list your
home, be wary of anyone who suggests they can get an unreasonably
high sales price. An agent might use a high listing price to secure
a contract, only to seek a lower price later, after little traffic
is generated at the initial price level. Meanwhile, you've lost
what can be the most critical time period in selling a home —
the first weeks immediately after it's listed.
- Check on experience, education and productivity.
As with most professions, experience pays in real estate. Experienced
agents know the market and the marketing process. They'll have the
best chance of quickly and smoothly helping you to buy or sell your
home.
Designations — such as the Registered
Relocation Specialist (RRS); —
suggest an expertise and commitment that goes beyond just earning
and maintaining a real estate license.
The number of transactions an agent is handling
monthly or yearly is going to give you an indication of how committed
the agent is to the profession. Is the agent a part-timer who's
just dabbling in real estate sales — or is the agent a full-time
professional whose livelihood depends entirely on an ability to
successfully and repeatedly close real estate transactions?
- If you're a buyer — does the agent offer
buyer agency? More and more buyers are deciding they want full contractual
representation on the same level as the seller. Be sure to discuss
buyer agency with any agent you're thinking about working with.
- Does the agent know the market? Is the agent
active in soliciting business in your neighbourhood? Do you see the
agent's yard signs around the neighbourhood?
- Is the agent part of a national network? This
can be especially important if you're selling in one city in preparation
of moving to another. Your selling agent can refer you to a professional,
compatible agent in your destination city — and keep in close
contact with that agent so both your selling and buying efforts
are closely coordinated.
- And a final point: Does the agent seem primarily
interested in sharing expertise and market knowledge in an honest
and straightforward manner? Or does the agent seem more interested
in telling you what you want to hear — or spend a lot of effort
trying to market additional products and services? The worst time
to secure the services of a "yes-man" or an agent who
seems to have a bit too many irons in the fire is when you're entering
a transaction involving something as expensive as your home. You
need straightforward, reliable information — even if it's not
necessarily flattering regarding the home you're selling —
or very encouraging regarding a home you think you might want to
buy.
Beyond Home Inspectors
Home inspectors who primarily focus on structural integrity and
working systems might not be qualified to conduct specialized inspections
for radon, asbestos and lead paint — substances that in recent
years have emerged as the most common environmental concerns for
home buyers. Testing for these substances typically requires a specialist
who will charge a fee beyond the basic cost of a general home inspection.
As with any other inspection issue, the estimated
expense of remedying a toxic substance situation may have already
been factored into the home's listing price. Other times, the outcome
of an inspection might become a negotiating point.
A Few Quick Facts on Radon
- Radon is a tasteless, odourless gas.
- It is a proven carcinogen and ranks second
only to cigarette smoking as a cause of lung cancer.
- If you have a radon problem, it is usually
easy and inexpensive to abate.
- There are a number of radon sampling devices
that you can buy, or you can have a professional company conduct
tests.
- Radon is measured in pico Curies per litre (pCi/L). The
Canadian Environment Agency recommends that remedial action be taken when
a residence exceeds a radon level of twenty pCi/L.
Asbestos
- Many older homes have asbestos insulation
in walls and ceilings, wrapped around hot water pipes or in exterior
shingles.
- Is it dangerous?
If you suspect there may be asbestos in your home, you should
have a professional inspection. Generally, asbestos is considered
a health hazard when the material is friable, that is, when it
crumbles, releasing tiny fibres into the air.
- Removal of asbestos can be an expensive process
and must be conducted by trained and certified professionals.
But the presence of asbestos may not be a health hazard, and in
some cases, an asbestos hazard can be isolated without removal.
Urea Formaldehyde Foam Insulation (UFFI)
UFFI (commonly pronounced "you-fee")
was injected as a mixture of urea formaldehyde resin, an acidic
foaming agent, and a propellant, such as air. It was commonly
used in existing houses by injecting the foam into walls, where it
was impractical to provide conventional insulation. The
insulation was approved in Canada for use in exterior wood frame
walls only. It has a reasonably good R value (thermal
resistance).
The insulation was used in the 1970's, most
extensively from 1975 to 1978, during the period of the Canadian
Home Insulation Program (CHIP), when financial incentives were
offered by the government to upgrade home insulation levels.
The insulation was banned in December 1980, in Canada. It is
estimated that over 100,000 homes in Canada were insulated with
UFFI.
UFFI is one of the most thoroughly
investigated, and most innocuous building products we have
used. After the longest and most expensive civil case ever
held in Canada (8 years) was concluded in the Quebec Superior Court,
not only was there no basis for a settlement found, but the
plaintiffs were obligated to pay most of the costs. The
conclusion to be drawn from all of this is that UFFI has not been
shown to be a health concern.
I believe that the owners of homes with UFFI
installed should not be penalized financially and no stigma should
be attached to these homes. The UFFI clause should be dropped
from listings and offers. UFFI is simply not the problem it
was once feared to be.
There are Two Reasons For Pursuing Major Home
Improvement Projects:
Just Want To Do It — You want some new features in a home to
improve your family's quality of life, but you don't want to leave
your current home.
Really Need To Do It — You want to make your home more marketable
to maximize return (or minimize loss) and speed up the sale process.
In the right market conditions, a project might fit into both categories.
Other times, though, the two approaches will conflict:
Just Want To Do It — In situation A, the
project is perceived as a necessary or worthwhile improvement to
your family's lifestyle. Say you have two or three teenagers in
the family and the morning bathroom situation is completely out
of control. It doesn't matter if an additional bath generates a
150 percent return on investment or actually decreases the value
of the home (unlikely, unless you're a completely incompetent do-it-yourselfer
with a bizarre design sense). The economic impact just doesn't matter.
If you have the money for a new bath and you don't want to move
— you add the bath. It's that simple.
Or say you're a barbecue fiend and the only feature
missing from the dream home you've just purchased is a sprawling
backyard patio with a natural-gas grill custom-built with flagstone
and river rock. Again, return on investment just isn't going to
be a critical question. The improvement becomes more comparable
to purchasing a depreciating asset that you feel is a necessity
for your lifestyle — such as an automobile. When the barbecue
aficionado adds a deluxe patio to a home that's already the most
expensive property in the neighbourhood — perhaps destroying
the entire backyard in the process — there's a good chance
that very little of the cost will be recouped in a subsequent sale.
An even better example might be a pool. If you're
a person who simply has to have one — fine. Put in a pool.
But it's probably worth checking with a real estate professional
first, just to make sure you fully understand that adding the pool
might actually lessen the property's value and make it more difficult
to sell should you later decide to move. That's the reality in many
markets. That doesn't necessarily mean you shouldn't do it, especially
if you're planning to live in the home for the rest of your life.
It just means it's worth knowing the cost and saleability impacts
at the front end — even if they're not going to deter you from
pursuing the project.
Really Need To Do It — The "type-B"
home improvement project is pursued primarily to increase the property's
saleability. In turn, this often increases your return on investment.
A good real estate agent can advise you of possible improvements
that will attract more potential buyers and also pay for themselves
either through increasing the home's value or through shortening
the time it takes to sell the home.
Here we're typically talking about projects such
as: painting — either because the existing paint is in bad
shape or is an unusual color; replacing carpets — again because
of age, color or style; repairing or resurfacing a cracked driveway
or sidewalk; refacing kitchen cabinets; and trimming or removing
overgrown or unattractive landscaping.
While spending several thousand dollars on your
home right before you sell it might not sound very appealing, it's
not uncommon for the right work to more than pay for itself in a
higher selling price and shorter marketing time.
Consult with an experienced real estate agent
to learn what improvements will make your home more marketable in
comparison to similar properties that are now — or recently
have been — on the market in your area.
Perhaps the most challenging aspect of selling
a home is listing it at the correct price. It's one of several areas
where the assistance of a skilled real estate agent can more than
pay for itself.
Too High Can Be As Bad As Too Low
If the listing price is too high, you'll miss
out on a percentage of buyers looking in the price range where your
home should be. This is the flaw in thinking that you'll always
have the opportunity to accept a lower offer. Chances are the offers
won't even come in, because the buyers who would be most interested
in your home have been scared off by the price and aren't even taking
the time to look. By the time the price is corrected, you've already
lost exposure to a large group of potential buyers.
The listing price becomes even trickier to set
when prices are quickly rising or falling. It's critical to be aware
of where and how fast the market is moving — both when setting
the price and when negotiating an offer. Again, an experienced,
well-trained agent is always in touch with market trends —
often even to a greater extent than appraisers, who typically focus
on what a property is worth if sold as-is, right now.
Agent Education, Experience Critical
When working with a real estate agent, it's
critical that you have full confidence in that agent's experience
and education. A skilled, knowledgeable agent should be able to
explain to you exactly why your home needs to be priced at a certain
level — compared to recent listings and sales of homes similar
to yours.
Experienced agents also know exactly what the
current pool of buyers are looking for in relation to particular
styles and price ranges of properties. A skilled agent can recommend
changes that will enhance the saleability of your home, thus increasing
the price — and/or decreasing the length of time before a sale.
Little Touches Can Generate Big Returns
Some of these changes may be cosmetic, involving literally no expense
on your part. It might be as simple as moving out some of your furniture
and adjusting window coverings to best display desirable qualities
of the home. Other changes might demand an investment, but the cost
will likely more than pay for itself in the final sales price or
timeliness of the sale.
It's critical to keep all these aspects of pricing
in mind, regardless of whom you choose to list your home.
Below is a simple mortgage calculator that can give
you an estimate of your monthly mortgage cost. You can also check
out the Canadian
Mortgage website for up to date rate and several tools for your
use. Please be advised to get an exact cost you will need to contact
a financial institution.
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