Real Talk!

The truth is, it is an opportune time to be a real estate investor- if you are smart about it and it’s not a bad time to sell, either… if you are smart about selling.

A March survey by the Royal Bank of Canada tells us that 48% of Canadians under 35 plan to buy a home within two years, compared with 36% last year. The first time buyer is a growing sector in the market. First-timers are anxious, but cautious… filled with dreams & worried about nightmares…. In short… they need coaching.

The most important thing for a first-time buyer is to get pre-qualified by a thorough mortgage lender and find out exactly what their prequalification means. Secondly, interview Realtors ® and find one you trust and relate to… and STICK WITH THEM. Sign Buyer Agency. Put a good Realtor ® to work for you… ask questions and get answers. & be honest and upfront with your Realtor ®.

Don’t be rushed… but don’t miss out on a good deal, either! The Canadian Real Estate Association Chief Economist, Gregory Klump recently said, “Increasingly cautious homebuyers and mortgage lenders means that active listings will take longer to sell in 2009 compared to previous years.” What this means is even when you’re prequalified, the property has to qualify, too & once you’ve selected a property, your mortgage lender will want to do a more in-depth application. Buyers and sellers need to allow a minimum of two weeks for lenders to “do their thing”. Be prepared.

Serious sellers understand what they need to do, too. I’m hearing all kinds of “there’s a new reality” stuff… but I don’t buy into the theory that buyers have the upper hand… it’s always been the same story:

A home or cottage is more likely to sell if it looks cared for, if there are no personal photos or implements in sight (hair brushes, tooth brushes), if the dog is absent (and you’ve poop’n’scooped), if the kitchen, bathroom and bedroom are clean and free of any sign of human occupation (dirty dishes/laundry and unmade beds are a huge turn-off), if it smells nice, if it’s tidy & clean, if the obvious stains and cracks have been mended, if the deficiencies have been disclosed and if it is priced well. (I’ve written, many times, about my motel/hotel room theory of home staging…. Because it works!)

Prospective buyers are looking for a good deal… and some are looking for a bargain. Something that has not been addressed is going to make them believe they can negotiate… and sometimes, this is enough to prevent a sale. At risk of sounding like a broken record… deficiencies like peeling paint, holes in the drywall, weedy gardens, carpet stains, ceiling stains, rickety stairs, yucky grout and other maintenance issues, can be overwhelming to a prospective buyer and often they will imagine the cost to remedy in epic proportion.

Sellers have to be objective. Step back and look at your home/cottage from a distance… and ask yourself, “Is this an inviting place?”… “Does it look cared-for?”…. “Have I optimized the appearance of my property?”. If you are brave, ask your friends and relatives for suggestions. Your Realtor ® will have some economical suggestions, too.

Inside, do the same. “Is this an inviting place?”… “Does it look cared-for?”… “Am I making the most of the space?”… “Is it cluttered?”… “Is it clean and tidy?”… “How does it smell?”… “Does it look fresh?”.

If you plan to paint, use neutral colour. Finish up anything you’ve started. Fix those lingering “to do” items. Gather up all of your related documentation…things like surveys, plans, deeds, great photos or maps, current tax and hydro bills, your insurance documents, well & septic certificates. Have your wood-burning appliances inspected. For a cottage: list what is included (and what is not included)… remove anything particularly special (or borrowed).

If you’ve had friends or family show an interest in your property, contact them BEFORE you list with a Realtor®. If you plan to ask a Realtor® for their opinion of the property value for the purpose of selling to an acquaintance, be up front about it.

Information has value.

Get copies of recent “Property Owners Association” or other special area organization publications. If you’ve been renting your cottage out, make a list of renters who may wish to continue renting. Make note of local churches and service times. If you’re on a school bus route, what time do they pick up?

Make notes on “how to operate” things like your pump and toilet, how you deal with your dock in the winter etc.- anything quirky or different about your place.

Mark the breakers or fuses on the hydro panel- make note of your meter number . Make a sketch of where your septic tank/bed is located. (Ensure access to the hot water tank, hydro panel, pump etc… prospective buyers want to see them.). If you know where your property corners are, mark them. Expect a home/property inspection as part of the deal.

Be prepared for all kinds of questions. “Why are you selling?” “What are the neighbours like?” “Do the water levels fluctuate?” “How often do you have to cut the grass?” “Where is the boat launch?” “What kind of fish are in the lake?” “Is there a public beach nearby?” “Where’s the nearest store-nearest gas station?” “Can you dive off the dock?” “What fun stuff is there, in the neighbourhood?”. “Can I use this in winter?”

And always keep in mind the basic definition of fair market value:

The price that an interested & informed, but not desperate, buyer would be willing to pay and an interested & informed, but not desperate, seller would be willing to accept on the open market assuming a reasonable period of time for an agreement to arise.