Best Practices

Buying and selling real estate can be a daunting and cumbersome activity, especially if you are trying to go about the task without the assistance of a professional real estate sales representative or broker. There are a lot of things that you can do to make your home or offer more appealing to potential buyers and sellers. Learn more about the best practices for sellers, buyers, and investors in today’s real estate market as suggested by leading industry professionals.   Buying and selling real estate can be a daunting and cumbersome activity, especially if you are trying to go about a task without the assistance of a professional real estate sales representative or broker.   Buying real estate without partnering up with a reputable agency can be considered in a few scenarios. Firstly, when a homeowner elects to sell privately whether the home premieres on the Multiple Listing Service (MLS) they may not co-operate with brokers and sales representatives. In other words, they may not pay a commission to the buyer’s representative. Now, if you are working with a REALTOR®, they have a fiduciary duty to conduct their business in your best interest. Hence, your broker or sales representative has a legally mandated obligation to show you a property regardless if they receive a commission or not. Alternatively, you can consider paying them in addition to the cost of the home if the numbers work out for your budget.   Secondly, when you transact among family or close friends, both buyer and seller should hire a real estate lawyer to prepare, review, and complete the transaction; as well as a knowledgeable and impartial third-party residential real estate appraiser to derive the market value of the property trading hands.   Lastly, if you have regular experience buying and selling real estate, working on your own transactions will give you greater control of the entire process. In the end, buying without representation may or may not save you money. Remember, the listing agent has a fiduciary duty to negotiate the best terms and conditions for the homeowner. This runs contrary to your goals as a buyer sitting at the opposite side of the negotiating table.   Here at HomeLife/Romano Realty Ltd., Brokerage, seasoned real estate sales representatives Max Ortoli, Nikki Lobello, and Sam Galloway weigh in and share their advice for buyers beginning their search.   “Before you begin touring neighbourhoods or visiting open houses, speak with a mortgage and get pre-approved,” guides veteran sales representative, Max Ortoli. Avoid surprises later in your search by establishing your budget. Max goes on to add that you should lay out your plan and not deviate from it. Max works to keep his clients as close as possible to rapid transit, which he emphasizes for end-users and investors alike. Being in close proximity to TTC subway or GO stations can bolster the value and marketability of your home when you look to refinancing, selling, or leasing. And, always think long-term! This point could not be stressed more. Whether real estate is purchased for the purposes of renting or as your primary residence, owning real estate is an investment in yourself. Traditionally speaking, real estate is a long-term investment. Consider your job or career stability and whether or not you plan on moving or disposing of your investment property in less than five years.   Nikki Lobello recommends aiming to strengthen your financial house before making any moves on the property ladder. “Save early by utilizing your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP).” If you have not opened a TFSA, you can contribute up to a maximum of $63,500. “It is especially crucial for first-time homebuyers to take advantage of their RRSP.” Each year you can contribute a maximum of 18 per cent of your annual income to your RRSP. Those that are deemed first-time homebuyers by the federal government can participate in the Home Buyer’s Plan by withdrawing a maximum of $35,000 as an interest-free loan for your home purchase if the property is going to be used as your principal residence. Additionally, first-time homebuyers may consider the Home Buyer’s Tax Credit. It represents a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief. Lastly, qualifying individuals purchasing their first home can apply to the Shared Equity Mortgage Provider Fund recently created by the federal government.   With your financial house in order, “Be completely honest and open about your needs and wants. You will not be able to get everything on your wish list. You will have to learn to compromise and weigh what is a greater priority for your lifestyle in order to achieve your goals.”   Turning to the current homeowners considering selling on their own, ask yourself the following questions:   1.     Do you want to be highly involved in the sales process? 2.     Are you confidant in your ability to negotiate with buyers or their representatives? 3.     Will you have time to coordinate and follow up with showings and open house attendees? 4.     Are you reasonable about your price expectations? The entire sales process requires your utmost attention because of everything from photography, marketing and advertising, negotiating, and continuous follow-up. You should know your neighbourhood, the factors affecting the value of your property, and the price at which comparable properties of sold. If you list too high, you will miss the mark and the majority of buyers in the market for your type of product.   Ultimately, selling your home yourself gives you control over the entire process, the price, lowers costs related to selling through an agency, and gives you flexibility for appointments. Sam Galloway points out that when selling your home, the acronym BBC should be top of mind.   Big. Declutter your living space, so that the interior flow is not interrupted and potential buyers enough space to roam around your home comfortably. Bright. Let as much natural light in as possible, paint the interior of your home white or off-white, and make sure all light fixtures are in good working order. In areas that have limited natural light, make use of lamps and upgrade light bulbs for a welcoming feature. Clean. Ensure all surfaces sparkle and shine.   Even if you have the time and wherewithal to tackle buying and selling real estate on your own, the proven path of hiring a broker or sales representative to work in your best interest is always before you. Appreciating the specific roles that brokers and sales representatives will help you partner with the right professional, ensure a smooth and efficient process that delivers you results within a timely manner.   When researching agents (otherwise known as brokerages), brokers, and sales representatives, shop around and explore your options. Focus on the following attributes:   Trust. Real estate professionals have a fiduciary responsibility to you which means they have the utmost duty of care when handling your personal information and your life’s goals. You should consider your broker or sales representative to be your confidant. They seek to know and hone in on your personal preferences and financial capabilities.   Experience. Knowledge of micro- and macro-economic factors are as important as their ability to know what to look for and how specific factors positively or negatively impact the value of real property. They should have a broad understanding of the buying and selling process, know what steps to take in order to get you the best price and terms for your purchase or sale, and provide you with   Reliability. Part of the job of a broker or sales representative is to build and sustain meaningful relationships with their clientele. Consider the frequency and method of communication a broker and sales representative utilize when conducting their business.   Ultimately, a professional real estate broker and sales representative should help calm your nerves, keep you focused on the target, and be able to provide you with a comprehensive program that is comprised of solutions that ensure your needs are met and your goals are achieved.