The most important real estate advice for 2012-2013
Our forefathers used to say "location, location, location" when it came to buying property.
I say negotiation is the new “ buy line” because if you get a good deal, you have currency in the market.
You can buy in a less desirable location, add value and sell out for profit if you got a good price to begin with. You can buy prime property, but if you paid too much for it, you will spend a long time before you can cash out for better market value.
But one doesn’t negotiate just the price of the land or home anymore. It starts much sooner.
Recently, a spate of websites have popped up, allowing people to bid for the lowest Realtor®. The premise is that you input info, pay the site to post, and watch the Realtors scramble for your listing.
This whole idea is so ludicrous I will not even mention them to give them any advertising. Who buys such an important service based solely on price and expects to come out ahead?
Do you buy a car looking for the cheapest there is available, regardless if it’s a Bugatti , or an MDX or Pacer? Do you hire any old accountant who will file your taxes based solely on their rate? Would you accept any lawyer to defend or represent you based solely on the cost? I sure as heck hope not.
What you must do, is find the good ones and negotiate their price. Interview a few agents, find one you can trust and can work with. They don’t need to be your friend -- sometimes, you are better with a pit bull than a Bambi at the negotiating table, and sometimes the sweet smiling ones turn out to be the little gremlin negotiators with pointy teeth. That’s what you want!
You don’t want just anyone, you want the best but, you want them for a good price.
This can be done and always has been done. It has nothing to do with the Competition Bureau lawsuit, which I will liken to a cat peeing on a territory.
Personally, I disagreed with that whole episode. As an example: what If I set up a fantastic used car lot and advertised like crazy and had great reviews and recommendations and standards of service that people liked so that everyone started to use my used car lot.
If Joe Blow wanted to sell his car on my lot, he darn well would have to follow my terms and pay me for it. The idea that he could just park his car on my lot and sell it freely is crazy, and a little unfair. He is welcome to set up his own lot and do all the leg work I did -- across the street. That is essentially what that was about. The Competition Bureau thought it was unfair to Joe Blow. In the end, nothing has changed: Joe Blow has a sign on my lot saying he has a car for sale down the street and doesn’t subscribe to my terms or fall under my rules.
They act like they won, but it's business-as-usual for all the agents. The car buyers “in the know” will still opt to come to my lot, as they are protected by my rules and standards. They may now be aware of Joe Blows car for sale, but they may not trust it and the information provided because it didn’t go through my standards.
Back to my point.
Negotiate with your agent
If I sell your house in one week with costs of only title search, measuring, and one great ad, should I charge the same as if it took three months with multiple ads in various papers, websites and handouts? I don’t think so. So right there you can add a clause in your contract with parameters on what you will pay for what. Many agents have done this. Here are a few more examples to discuss with your Realtor.
If I bring in the buyer and the seller and “double end”, why not make that beneficial to both parties not just the agent?
What if I sell your home and then you let me buy your new home? Again that’s two jobs for one client: how about a frequent transaction reduction?
Agents pay referral fees to other agents, so if you are referring yourself to them to buy that house you want? Why not get a 25 per cent referral reduction right there?
This isn’t rocket science and most agents will do this anyway -- if you negotiate. Remember you don’t always get what you deserve. You have to negotiate.
Just don’t put the cart before the horse. Find the agent you want, then to talk to her about what can be done to limit commission exposure.
You can also negotiate your mortgage. Haggling with a large bank can be a frustrating experience. That's why mortgage brokers were created. A good mortgage broker will get you a better mortgage than the bank will give you directly.
This has never made sense to me, since the bank pays the broker a commission, but it's true. A mortgage broker also has knowledge of what they have been able to negotiate for other clients, so they know how far they can push. Let them take on the heavy lifting and come back with the best deal they could find. If you enjoy playing one offer against another, you can do this yourself. But you just don’t have to.
So now you have your house sold and your new house bought with a great new mortgage. With the money saved, you can head to the stores to buy yourself some new furniture.
“Excuse me Miss, this fabric has a small tear in it, will you sell this at a discount?”