In favor of the “starter home” concept

I am glad June is over. Last month was definitely a whirlwind, hence the lack of activity on my blog.

Thanks to the Vancouver red hot real-estate market, my condo sold for over-asking and in less than a week!

It is definitely a sellers’ market at the moment. As a buyer, I felt the pinch. On several occasions, I wasn’t fast enough and the property was already sold. At other times, there was a bidding war I was not willing to enter.

I ended-up finding the right condo when I increased my budget by $ 10 000. Luckily, I did not find myself into a bidding war and was able to put subjects in my offer.

To ensure I could actually afford my new place, I used a couple of tools: Ratehub and the real life ratio by Rob Carrick.

I also contemplated going back to renting. I would also have been able to afford a nice place, but finally decided against it. After further number-crunching, it simply does not make sense for me financially.

During the whole process, I ensured I did not make any of these previous mistakes or these ones. I also had the right Realtor.

Which, somehow, brings me to the next point. I have gained a whole new appreciation and perspective on the concept of “starter home”.

I now see this as “trial and error”. Let me elaborate a bit.

As a first-time home buyer, I knew nothing about real-estate, mortgages and the whole process. It was a steep learning curve and I felt overwhelmed.

Money was also tighter. I pretty much put all my savings in the purchase and then some.

I also wasn’t sure of what I actually needed in a home, and living in Vancouver, I had to adjust my expectations big time.

My current condo’s layout is not that functional. It has 2 bathrooms and it is one too many for me. The walk-in closet in the master bedroom is also too small. First-world problems, I know!

Unfortunately, the Realtor I randomly chose back then was not really helpful and did not give me sound advice. I ended-up buying in my current building, in a neighborhood I wasn’t thrilled about.

For my second purchase, I did not go with bigger, but with smarter and better. I ditched the second bathroom in favor of a den, the layout is way more functional and both building and neighborhood are much better. I am not going to see any special levy anytime soon in my new home.

I am really exited about moving-in -and by extension moving-out of my current building-. I hope that it will be more of a “permanent” home for years to come.

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Choosing a Realtor when selling

I can’t believe it is almost June. Life has certainly taken precedence over this blog lately. Getting my condo ready for sale took longer than expected. I also ran into a few somewhat unexpected issues.

All is now sorted and my condo is about to be listed. Choosing the right Realtor can make or break a sale, therefore should not be done lightly. One of the keys is to ask them plenty of questions, the more the better. You also need to do your own research about them.

  • Your Realtor needs to have a track of sales. This sounds obvious, but it is not always easy to verify. Don’t just rely on what the Realtor says. Ask for some tangible proof. If you live in the Greater Vancouver area, you can check the Medallion Club. The site lists the top 10% of sellers.
  • Real-estate needs to be their full-time job. Real-estate involves more than just selling or assist in buying. The regulations are also constantly changing and you need someone who is up-to-date and licensed.
  • They need to to be working where your property is. Each city and neighborhood are different. Buyers and prices will vary. If a Realtor doesn’t know the city and the neighborhood, they won’t be able to market and sell it at the right time, for the right price.
  • They need to charge a regular commission. The standard in BC is 7 % on the first 100K and 2.5% on the remaining balance. A Realtor splits the commission with the buyer’s agent. Some brokerage firms charge a flat dollar amount or they charge 2 or 3%. From a financial perspective, it is very tempting, but you are not helping yourself here. Let me elaborate a bit. If a Realtor charges you 2 or 3% of the selling price, the buyer’s agent is not getting much. I saw listings with a buyer’s commission at 0.5%…ridiculous! Buyers’ agents are not going to show your property if they won’t make any money! You probably won’t get much from your Realtor either, in terms of Marketing and Advertising. Ultimately, you get what you pay for.
  • They need to give you a realistic listing price. This is the most important point, and sometimes, the most difficult point for the seller. A lot of home owners have an inflated idea of what their home is worth. In a red hot market like Vancouver, it can be really exacerbated. Unfortunately, plenty of Realtors are more than happy to go along. It is called “buying a listing”. You are not helping yourself either here. If the price is too high, your home will linger on the market until your lower the price. Doing so will hit you further as prospective buyers may think you are desperate and open to low offers. Ask for a Comparable Market Analysis – CMA or Comps-. A CMA will tell you the recent sale price of similar homes in the area.
  • They need to have an actual marketing strategy. A sign on your lawn and a listing on the MLS won’t cut it those days. A new listing will get the most attention in the first month. After that, it becomes somewhat stale. Ask them how and where they will market your property, both online and offline.

Selling your home can be an emotional roller-coaster, particularly when you are attached to it. Choosing the right realtor can help you alleviate the stress. Ultimately, you need to work with someone you like and are comfortable with….as well as someone who does all of the above.