Think about this for a moment. Do you think that a Realtor who deals in a higher volume will be able to devote the time, attention and above all, care that you want during such a major purchase? Us Realtors all have the same access to 99.9% of the same information after all so it’s unlikely that they will have some superior insights into the market that will make a noticeable difference to a home Buyer or Seller.  You want someone who has the time to take and return calls for your needs and in some cases have a long chat with you, other professionals on your behalf or would be Buyers (if you have a listing). Such conversations are often fast paced but they must not be rushed either as longer conversations often yield valuable info that no one thought to share at first.

Like any business, Realtors can make more money by increasing their volume. That is not the same thing as having the best service. Having lots of listings means that in addition to having lots of places that may potentially sell, means that they have their signs on many lawns. This also means that their contact info in more spots on various websites (like realtor.ca) advertising their services. All of this gives more would be buyers a reason to contact them. That Buyer may end up buying that house or another one. Either way they get a lead on a client and it is easier for the Realtor to make more money with less effort spent on things like getting to know their clients and communicating with them fully.

Now don’t get me wrong. I’m not saying that such a business plan is immoral. I’m saying that it’s incorrect to assume that  a bigger business has a better product. Here’s the self test: Think of a topic that you really know a lot about. Now think of the biggest company/player in that field. Now ask yourself if that company or person has the best skills or product. In almost every case the answer is simply “No.” (In my head, I think of cooking first and the answer to the question is McDonald’s. A great business plan for making money but not exactly a champion of quality.)

In short, hire the person and not a list of properties. This transaction is a big deal and you want it thoroughly handled, not rapidly processed.

Ryan Coffey

Essentially, as I’ve often heard from veterans in the real estate world, “There is no such thing as a good or a bad market.” When I first heard this, I was fairly new to the field and  I half dismissed it as salesman talk. After more experience and much more reflection I have come to agree with the statement. I do find it a little too succinct though. My way of wording it is “Whether the market is going up or down or sideways, it’s always good for somebody and bad for somebody else. It really depends on what cards you’re holding.” This is after all why we have the terms “Buyer’s market” or “Seller’s market”.

Market conditions are really only either good or bad for people who make their living building or selling homes. Slow (down) markets mean less business after all busy (up) markets mean more business. Yes, it really is that simple. For everyone else, from homeowners to investors it really depends on their financial situation and what their plans for the next few years are as there are strategies for all markets that will maximize their long term revenue/equity.

The thing about buying, is that there are no bad times to buy in terms of what the market is doing. There are only good times and better times to buy so long as you do it correctly. As always the most important factor is whether you can afford those payments. The rest is detail.

Ryan Coffey

Perhaps this is cheating, but this is one of a handful of posts that I keep referring clients to, so I think it is worth referring to within blog as well.

Click here for the post mentioned.

Ryan Coffey

In the system we use, and in these times, foreclosures typically sell at around the same price they would were they not a foreclosure. You may have some friend or an uncle or something who swears that they saved a bundle when they bought a foreclosure one time. This may very well be,  as it does happen. But it usually doesn’t and you can also occasionally get the same sort of deal on a conventionally sold house.

The process of buying a foreclosure in this part of the world is long and uncertain. The offers need to be subject free by the time it finally goes to the courtroom so you need to have already lined up all your investigation of the property, mortgage, home inspection and the like beforehand. And then in the courtroom you may be suddenly outbid. All that work, effort, waiting and money so that you will potentially (often) have to start over again. Oh, and by the way, since the bank is the one you’re buying it from (who never lived there) just who are you going to sue if it turns out that there is a major problem that wasn’t visible or known to anyone involved in the transaction at the time of inspection? Foreclosure listings are “as is, where is”.

There is one type of buyer who I think foreclosures are right for. The sort of buyer who already makes a living in real estate investment. They probably already own a couple of rental properties and make the rest of their income by fixing up and eventually selling properties when the market is right. They are the sort of buyer who knows what a place is really worth, what it will take to fix it up (as foreclosures are more often than not in poor condition) and above all are familiar enough with the real estate process to know what to expect and not be surprised or otherwise greatly excited by what does or doesn’t happen.

So, if any of this is news to you and the risk of  a property with a costly latent defect (with no one to sue over) outweighs potential benefits, I would say that foreclosures aren’t for you.

But here’s the golden tip: Divorces and deaths are where the real deals are most often found. Not always, but sometimes people are too upset to deal with the sale in a way the reaps the full financial benefits they could normally get. The caveat is that they can be time consuming and complicated as well, but are generally less so than foreclosures.

This is a sad topic, but human drama of all sorts is a situation that us Realtors work in daily.  Part of our job is keeping a cool head while surrounded by grief, excitement, joy, fear, anger, or other  emotional chaos so that our clients can get the best service possible whether they recognize it at the time or not. That’s my take on it anyway.

Ryan Coffey

Except… it’s not real estate investing advice per se. If you’re opening a retail business of some kind, “Location, location location.” definitely is a huge concern, but when buying a home or most kinds of investment properties, this is just one of various very important factors. I’m not exactly sure how this got twisted into real estate advice that is repeated ad nauseum by media outlets and ironically by the odd Realtor who puts it in a listing to emphasize one that property’s finer points. (Listings are ads after all.)

Sure, you can buy a place as a holding property because the location is such that the density is increasing in the area, there is clearly some gentrification going on and it is the last place in the area with a really good view. But there are other factors that are at least as important. Is the particular property worth the money they’re asking for it? Will it need a lot of expensive things fixed/maintained over the next few years? What if you find out that there is an old buried oil tank on the property, that it has a lot of faulty wiring, or extensive mould problems throughout?

Now here’s the kicker, what if you can barely afford the property and you find out that any of the serious issues above are true? Are you still going to buy the property because it has a great location? That’s flirting with bankruptcy in my eyes.

There’s no need to reduce real estate to a single snappy saying. The broader principles aren’t that complex (keep sifting through this blog and they will become clear in time) but the specifics that apply to each transaction are in fact super complex which is why we have Realtors, Lawyers, Mortgage Brokers, CMHC, Insurers and Home Inspectors involved with nearly every transaction. Ask us professionals for information that will help you with the decisions you make.  Making big decisions that are based on a generally misused proverb… is likely to end badly.

I am choosing this topic first not because it is the one that I see people hurting themselves with the most, but rather because it is the one that will simply not go away. The most common question people ask me  is after all “How’s the market?”.

My hypothesis of why the notion of good markets and bad markets is so firmly entrenched in the public mind is simply because we live in a world where most often people hear about real estate from media outlets or as part of some other sort of “news”. News by definition needs something new to talk about. The fundamentals of real estate change slowly if at all. So, what they hear about most often is not necessarily the most important stuff to understand, it’s just the stuff that has changed lately. Pump it full of drama and it’s ready for public consumption.

I explain my views on this is detail in the series  “When To Buy And Sell.” (Go to the oldest post in this section to start.) Having said all this I want to make it clear that I am not suggesting that what the market is doing will have no effect on you or your financial well being. I am saying that this is secondary to your financial standing as well as some other factors in most cases. One can pick these things apart and dissect it into a million peices. I do that a bit in the series mentioned above, and a lot more in my daily working life. In the end, it always comes back to the above for me.

So what is this viewpoint I have for homeowners you may ask? (Or maybe you’re just asking “Why don’t you get to the point already?”) Well,  the short of  is quite simple. What you can afford is more important than what the real estate market is doing. You have to remember that all the dramas about ups and downs are short term and that in the long term values rise. This simple truth is what makes real estate such a good investment for both homeowners and professional investors. It requires patience though.

When you can understand and appreciate the statement “There are no good markets or bad markets. I all depends on what cards you are holding.” then you are starting to hear where I am coming from. If it still sounds like a Zen koan (riddle) to you, then you need to keep reading.