Posts by sheldonj:
- In Calgary it is quite common for buyers to have a walkthrough prior to closing on resale properties. This is unheard of in Edmonton. In fact, when I have had lawyers from Calgary handling the conveyancing they have questioned the lack of a walkthrough on the contract. My simple response is that you would have a hard time getting an offer accepted with a walkthrough (unless you are dealing with a private seller).
- In Calgary they regularly use the CBS codes on their keyboxes. This is an additional code that the buyer's agent must obtain from the sellers agent in order to open the keybox for a specific property. When I have used the CBS code here, not only have I had to teach every agent how to use the code, I get a fair bit of negative blowback on that extra step and in some cases miss out on showings.
- Jasper Avenue revitalization
- Central Park in the warehouse district
- River promenade works
- Improved Dowtown LRT connectivty
- More bike accessability
- Infrastructure upgrades
- Capital blvd upgrade
- Arena and entertainment district.
- Grant Macewan university growth
- The federal building upgrade
- Centennial plaza
- University of Alberta Downtown campus And more.
Limited Service Surprise
May 17th, 2012Limited service companies are often erroneously refered to as discount brokerages; the difference lies in the representation. With most limited service companies you are not a client but a customer, and therefore they cannot offer you any advice (if they do you become a client and then they owe all of the fiduciary duties that go with being a client). On the other hand, many "traditional" real estate companies will discount their fees for various reasons while still representing you as a client.
So what does that really mean? Here is an example. You are selling your home and you receive two offers, you ask for advice about the offers and which one is better. If you get advice from the company that you have listed your home with then you are their client. If they tell you they can't answer that question then you are just a customer and you are completely on your own. No big deal right? One of our agents was previously one of the top sales people with a limited service company in Edmonton, and has plenty of recent examples bad decisions made by homeowners with no guidance. In one case she observed a seller who took $45,000 less than market value because they didn't ask the right questions.
Whenever I meet with someone that has interviewed a limited service company, they tell me that company suggests they can ask less for their home to be more competitive, since they are saving money on commissions. So what are you saving if you lower your asking price? What you don't know is that from the moment you sign up with them and you don't get results, all you will hear is: "You need to go to the next plan up to get action." In other words, you need to spend more to get more service. Some of these companies will contact you every couple of days with the upsell options. I'm seeing more and more situations where people started out as a "mere posting" but by the time they were done they were charged significantly more. So their costs are now higher and their asking price is lower their net position is much worse.
I definitely understand the desire to save money, but life has a way of showing us time and again that you get what you pay for! Unless you don't do any research at all (but that's another story). Those little details that don't get handled correctly can actually sting you for thousands of dollars or even cost your entire sale.
Edmonton Real Estate Market Weekly Update – April 27/12
April 27th, 2012
Edmonton Real Estate Market Update
Here is our update on the Edmonton real estate market. (Previous week’s numbers are in brackets). For the past 7 days:
New listings: 536 (515, 493, 515)
# Sales: 311 (314, 245, 273)
Ratio: 58% (61%, 50%, 53%)
# Price changes: 285 (260, 267, 197)
# Expired/Off Market Listings: 66 (125, 82, 237)
Net loss/gain in listings this week: 159 (76, 166, 5)
Active single family home listings: 2924 (2831, 2809, 2714)
Active condo listings: 1887 (1836, 1764, 1696)
Homes 4-week running average: $393k ($394k, $392k, $389k)
Condos 4-week running average: $234k ($232k, $230k, $232k)
I would describe Edmonton's spring real estate market this year as fairly typical thus far - certainly when compared to the last 5 years as far as sales go. In certain cases it's difficult to make sense of what the values are since in some areas we are constantly dealing with multiple offers and in others there's very little activity. Sellers can be stubborn about reducing their price when they hear their friends in another area of Edmonton received multiple offers and (according to them) their friends home was way over priced.
Last week we had one multiple offer $30k over list price in Devon and our client still didn't get the property (actually that's a bit of a relief). A property I was supposed to show today that was listed a few days ago in the Riverbend area sold in the high $500's - $19k over list price. I caution you: this is not the norm for the entire Edmonton market, certain areas and types of housing are in higher demand than others.
One property we have had listed in Sherwood Park for sometime had no offers in 6 months and we have now had six and counting. If you are a buyer not interested in competing I'd suggest waiting until the fall market, or moving out of the hot zones. The only downside to that plan is there are often fewer properties on the market as well at that time so selection is reduced. As it's shaping up it could be a pretty hot summer for single family home sales, and I'm optimistic that we will see improvements in condo sales as condos look more attractive and less over heated.
Edmonton real estate listings and sales
Edmonton home prices
Edmonton: The epicenter of North America
April 25th, 2012From time to time people blather about whether or not Edmonton is a great place to live and where it stands on the world stage. Its an amazing place for people to live and for those who can't see the forest through the trees I'm truly sorry for you, but you really would be better off some where else. Not only is Edmonton an important city in terms of the world's economy, but for the new world (historically speaking) Edmonton is epic.
Great Plains
Believe it or not, Edmonton was once the epicenter for the new world. Long before the vikings stumbled onto Newfoundland, and eons before Coloumbus ever set sail, Edmonton was the spot for one of the most important discoveries in the history of man, and no, it wasn't oil. Just in case you think this is a joke, what I am about to tell you is a little known historical fact. According to Jared Diamond, who spoke at the windspear in Edmonton this some time ago, an amazing event took place but 14000 years ago or 12000 BC near Edmonton. The event he speaks of is the arrival of Man (most likely prodded off the cave couch by women) through the ice corridor from Alaska. In case you are too busy trolling real estate web sites to know who Jared Diamond is, he is currently professor of Geography and Physiology at UCLA and is the best selling author of "Guns, Germs and Steel," and "Collapse: How societies chose to fail or succeed."
He suggests that as people migrated southwards they did so via a corridor in the glaciers that would have been thousands of feet high. They were most likely driven by their need to find more food. In his mind the corridor ended somewhere in the vicinity of Edmonton, and it was a beautiful sight for the new arrivals to the see plains with herds of bison, plenty of food and warmer, open spaces. Now I know some of you may doubt his theory, however the renowned author and scientist has won the american National Medal of Science so I'm going to go with him on this.
And now you know the beginning of the story of Edmonton on the world scene.
My Agent wants me to sign a Buyer Brokerage Agreement
April 23rd, 2012I recently did a post about buyer brokerage agreements and it seems they are becoming more and more common, as I’m getting asked by people who are looking to buy a home if they will have to sign one or if they will have the option to sign one. Some agents will not work with you unless they have a buyer brokerage agreement in place while others won’t use them at all. I’d suggest the latter are going to be the minority in the future.
I don't always use buyer brokerage agreements, but there are instances where I will require a signed agreement. I'm not sure how appealing working for free is to you but its not very appealing to me. Nathan in our office recently had clients who were buying a property for their daughter, and since they were paying for it they weren’t really concerned with what she wanted. What they did want was to see almost everything on the market - house, condo, anywhere in Edmonton between $350,000 and $450,000. At last count they had been out looking 9 times and had viewed about 50 properties and written several offers that were not accepted.
In this day of mere postings the likelihood of them picking a listing that offers the buyer's agent $1.00 in compensation for all their time and effort isn't that unlikely. In fact I almost think that it's a law in real estate that the more time I spend with someone who is looking to buy a property, the more likely it is that they will choose a property offering $1.00 in compensation. In a nutshell, that’s why I would consider using a buyer brokerage agreement in this case. It spells out what I’ll be paid and what my clients expect of me for that compensation. If you are a buyer like this, it will be increasingly more difficult to find an agent who will work as they used to (on the promise of compensation) without the protection of a buyer brokerage agreement.
This is one of the main reasons buyer brokerage agreements will become more common place. The competition bureau seems to want to model the Canadian real estate industry after the U.S. industry (cause that's worked so great for the U.S.). In the States buyer brokerage has been common place for well over a decade. In the end I won't be surprised if our MLS® looks like the states in a few years as well and thats a whole other story.
Unrestricted Free Agency
April 17th, 2012
Unrestricted Free Agent
This year is an interesting year for our brokerage: it’s the first time in 19 years that we will be unrestricted free agents. In our industry some agents change companies like kids change clothes. Every Monday morning I get the latest sheet from RECA showing the agents that changed brokerages that week, and each week it's a very long list.
In 1993, we took an unprecedented step of buying a franchise. Having been a successful independent real estate company in Edmonton since 1977, I saw the need for change. At that time we excitedly chose to go with Coldwell Banker based on our years of going to Hawaii and other places in the U.S., where we saw the strength of that brand.
Well 19 years have come and gone and our company has undergone a myriad of changes in that time, just as the ownership of the master franchisor has changed a number of times. What’s exciting for us is the possibility to revisit whether we should go back to our roots as an independent, stay with our existing franchisor, or look at other franchises and what they bring to the table. You just can’t do this everyday. We have had talks with one other franchisor that has basically said before you make a decision “let us pitch you one last time.” Their enthusiasm is encouraging as we believe they are a very respectable option for us.
Our situation is unique in that we have zero reliance on the franchisor to deliver us business or promotional materials. Our materials are created in house by our marketing director (who actually held a similar job with our Canadian head office during the 5 years she worked there). Our online presence which is pretty dominant in the Edmonton area is also her responsibility and she has been instrumental in making us a technology company introducing us to tablets over 6 years ago and probably making us the first transactional paperless office in Alberta. For certain we were the first office to have 100% of our agents using tablet PCs for which she has custom created presentation and marketing materials for our agents. In addition she has created a program whereby she assists our agents in the marketing of their clients' properties in order to increase the likelihood that they will sell.
She has taken us to the top of search engine rankings in just about every real estate related short and long tail search term in our marketplace. Consumers find her philosophy on marketing their homes very refreshing every time I meet with a potential seller they are impressed. She has taken us to other new heights as we were the top team for Coldwell Banker in Canada for 2010 and 2011 for total units sold. Throughout 2010 and 2011 our company consistently placed in the top 5 for offices in our size category of 1-10 agents worldwide (out of 900 offices on average in this size category).
I certainly have all kinds of love for Coldwell Banker as a brand and for numerous years bled blue and white. I have met some phenomenal people who have been great mentors and collaborators on deals, projects and ideas. In fact that is the one thing and the only thing that we would truly miss if we left Coldwell Banker. However, many of those great friends have gone elsewhere as well and we still collaborate no matter what brand is on their business cards.
I could go on about the innovations and leading edge stuff she has done for our company, and the great stuff that’s happening in our group, but that's not the point. We are so excited because chances to make operational strategic decisions like this don’t come around everyday. I think about it in terms of a great hockey player who’d like to play for the team he is with, but is also excited about what potential is unknown to him. All I know is the next six months are going to be extremely exciting as we peer in to our future.
$100 Off
March 13th, 2012
Price Reduced
On a recent post one of our regular readers was lamenting about a Calgary real estate agent who reduced their listing by $100.00. He added that real estate agents will do all kinds of tricks to get clients. In fairness, I don’t know anything about the situation or the agent but of course I’ve got my 2 cents to throw in.
First of all I don’t know whether the $100 it was client directed or something the agent came up with. Having a lot of clients I can tell you they don’t all think the same or have the same strategies - the diversity in personalites is immense. I have had clients list their properties at $301,000 - a huge mistake in this day and age of internet search - but ultimately the decision is theirs. I too have had clients request weird amounts for price reductions (and even stranger amounts for counter offers, but that's a whole other topic). However, when you think about what the seller and agent did by reducing their price by $100.00, while annoying it is actually a little savvy depending on what they are trying to do.
For example, MLXchange (the REALTOR® interface with MLS® data in Edmonton and Calgary) will automatically email that property out to buyers who have searches set up by their agents (if the agents have selected the option to inform their clients of properties that are reduced in price). This is one of several options that agents have available to them when setting up their clients searches.
So if the property in question was getting lots of looks and activity but its starting to slow down (we track all the online activity of our properties on REALTOR.ca, www.EdmontonRealEstate.pro and countless othersites) then they may have wanted people to take another look who have recently seen the property. If on the other hand there is little to no activity on the property, and they want to get an offer on it, then they are probably pissing into the wind so to speak if their intention is to actually sell the property.
I do know that it's my job to do what I can for my clients, and that sometimes means thinking outside of the box. As long as its allowed, it I don’t see the problem with it, although in this case it's probably not what I would've recommended.
Value is a Matter of Perspective
March 8th, 2012It's tough on young people starting out. Over the years I’ve helped hundreds of people buy their first home, and inevitably mom and dad show up in the picture at some point and the outcome never surprises me. As a father I understand that they want to protect their offspring, and some ask some very relevant questions while others... well lets just say you can tell they love their kids.
Recently I had one such experience where one of the parents told me quite emphatically the property my client wanted to buy in Westmount was WAY over priced. I’m a seasoned negotiator and have been in this position before so I didn’t bite all they way. I explained why I thought it was in the value range, but I could tell they were having none of that. It reminded me of that cartoon where you see the buyer who sees the home as a phone booth, the agent sees it for what it is and the seller sees it as the Taj Mahal.
Anyway, my client loved the property and was pretty disheartened and decided not to make an offer that night but she did call me a couple of days later ready to move forward on it. Unfortunately that very night while we debated the value of the home, the sellers and another buyer came to terms only $3000 thousand less than the list price.
Part of the process of looking at homes, is getting a feel for the market and understanding the current value of homes. After a few times out even the greenest buyers can start to pick out the over and under priced homes. When the parents come on the scene at the last minute, they haven't had the benefit of the research their children have put in to finding a home. So, if your parents are going to have a say in the home you purchase, be sure to bring them along on some of the house hunting trips, so they can get a feel for what is available in your price range.
The Difference Is? Calgary VS Edmonton
January 23rd, 2012I always like to tease my Calgary counterparts. When I was on the Real Estate Council of Alberta as a council member, the pre-meeting banter would always include some sort of comment welcoming the Calgary members from their carbon monoxide filled commute. They would counter with a humourous comment about Edmonton and on and on it went. My favorite joke was about a friend who left a pair of Flames tickets on his dashboard, and after a few minutes parked at 7-11 found his window was smashed. Their faces would give that expression of understanding and empathy, and then I would fire away with: “and he found two more Flames tickets on his dash."
Seriously though, it has often amazed me that even though Edmonton and Calgary brokerages are governed and regulated under the same Act, the way business is transacted in each city differs in a number of ways. Now I’m not trashing one city over another (besides Edmonton is clearly better) I'm just pointing out a difference in practice. The Calgary Real Estate Board recently decided that members no longer have to report pending sales, whereas in Edmonton we haven't had to report pending sales for quite some time. (When a conditional offer has been accepted by all parties it is considered pending). Once the conditions are removed then it's unconditional.
So whats the big deal?
Well, like many things it depends on perspective. If you are trying to sell your property and it's reported as pending, then it will not show up when agents search for properties unless they search for active and pending listings. In many cases a buyer might not be interested in viewing a property where the seller has the leverage of another deal, or they might not want to get emotionally invested in a property that already has a potential deal in place. So there would be a good chance your property would receive reduced activity. I say good chance because I can’t prove it definitively, but our experience shows it will not receive the full attention of the market place.
From the buyer's perspective you may want to know about all the homes on the market, whether they are pending or not. You could actually be looking at a pending listings and not even know it. If the seller is cautious that it is not a done deal, possibly because of the terms, or the buyer, or buyer's agent's credibility, or just a hunch, the seller may instruct their agent not to disclose other offers.
Whatever the case may be, this is one of those areas where Calgary and Edmonton have operated differently until now. Some other differences between practices in the two cities include:
These are just a couple of minor examples. I can’t even say one association is more proactive than the other; at times Edmonton has blazed the trail adopting new technologies and practices, and at other times Calgary has led the way. No matter what, it's still fun to tease my Calgary counterparts.
A December to Remember
January 10th, 2012I don't post a lot of personal stuff on our blog, or even very much daily business stuff, but we have had a lot going on over the past few months that I think we should share. Every year around December Sara and I spend a good deal of time on business planning. We look at the market conditions, what the market did in the year previous and try to reason out what we think might happen in the coming months and years. No we are not economists (if you read this blog you know why I had to say that). It just so happens we are and have been very good at predicting the number of sales overall. Fluctuations in price and sales numbers by types is a different story but we are working on that.
For the most part 2011 was a very good year. Our company grew adding a couple of really good experienced agents, and a couple of rookies while maintaining our strongest existing team members. We cut some dead weight including a couple of developers and builders who didn't fit our service and ethical standards. For one builder the straw that broke my back was a leaky fridge: during the inspection a leak was discovered, the builder told us it was repaired but when the single mom who bought the unit moved in it was still leaking. When we discussed this with the builder they told us "too bad it’s the buyer's problem now". I felt badly for the buyer's agent because they were relying on our word and reputation that the fridge was fixed when it wasn't, so they took it on the chin from their clients. Anyway, we offered to take care of the problem and then terminated all 24 listings we had with the builder. Probably not the smartest business move but when someone lies about a $250 fix the potential for bigger issues to damage our reputation with our other clients and other agents was serious enough to give them the boot. In any case that's the way it goes in business right? You win some and you lose some.
Other than that the year was uneventful until we found out we were pregnant. I say "we" metephorically for those of you who will point out that men can't get pregnant. In short order we found out we were having not one, but two. Ironically this news was delivered the same day my daughter entered her first day of high school. Needless to say it took me a few weeks to wrap my head around it all and just as we moved from acceptance to excitement we got some really bad news.
Sara's dad passed away suddenly at the beginning of December. John Maclennan was a former high school teacher, farmer, coach, hall of fame quarter back at McMaster University, conservationist and volunteer extraordinaire. At 74 John was in excellent shape, ate very well, and biked regularly. The week before John passed away my dad was taken to the Grey Nuns Cardiac care unit (to whom I must give koodoos to for excellent service and the care they gave my dad). He was in four 4 days while they deliberated the issues and the potential remedies.
So when news came about Sara's dad we were both in shock. The rest of the month was a whirlwind of travel back and forth to Ontario. The passing of John reminded me once again that life is so very precious, and it taught me a whole lot more than that. While I interceded the many phone calls that came to Sara's mom expressing their condolences, a message stuck with me because it was a recurring one: "You don't know me, and John probably wouldn't remember me, but he taught me at Nelson High School and I just wanted to say he had a profound impact on my life."
It just reaffirmed to me that we can make a positive impact on young people and strangers by the way we conduct ourselves and live our lives.
John's funeral was attended by politicians and business people from around Hamilton, farmers, teachers, neighbours and family. His friend who conducted the service told me there were over 500 people in attendance at the church service which was standing room only. There was an open mic session where former students and co-workers, neighbours, friends and family shared their favourite memories of John. Many of the students he used to have out to his farm to do "conditioning work" found that time they spent at the farm, and the time he gave to them was life altering, and many followed in his footsteps citing him as their inspiration. Many people proudly displayed the official "license to hug" John had issued them and I myself am a converted "hugger" thanks to John. I found I had never laughed and cried so much in one day. On the night of the funeral I flew back to Edmonton and those on the plane around me must of thought I was nuts as I would recall something someone had said about John and either laugh, or well up with tears.
I share this because we realize we haven't been as attentive to the blog for the last while as we normally are, but we have tried our best and we appreciate the support and willingness of people to share their thoughts and views. We are into the new year now and are about 3 months away from welcoming two new additions to our family. So if I can leave you with one thought its this: you can make a difference in someone's life with a smile, a hug, your support, or your time, and most of all by just listening. I can't help but think if I and others were more like John the world would be a better place.
John Alexander MacLennan
December 18, 1937- December 3, 2011
John MacLennan paddling the North Saskatchewan last summer,
and 50 years earlier in the same McMaster Football Jersey.
p.s. John received many awards including being inducted into McMaster University's sports hall of fame, and coaching Nelson high school to numerous provincial basketball championships. John loved teaching and he loved McMaster University where this summer he toured my daughter and I hoping that she might one day consider going there. He loved teaching so much he dedicated his body to McMaster's medial research program to help train tomorrow's doctors. As a farmer and a teacher John was "outstanding in his field."
Live Blog: I love #yegdt (downtown Edmonton)
December 15th, 2011Actually today is a rare event where I’m tweeting (@edmontonsheldon) more than blogging! It's not just about density it's about how you do it says Ken Greenberg who kicked of the the conference today with a dynamic speech encouraging vision and partnerships. He shared his perceptions about stadium projects and that they can only be successful if the wealth is shared. He talked about mistakes they are trying to fix in Toronto and acknowledged that spaces for Universities are critical. He stressed that cities are becoming their own resorts for those who can't afford to travel, and that the suburbs need to be retrofitted. His conclusion is that a paradigm shift is needed from the way things have been done in the past. He also addressed some really good questions that I’ll address later on gentrification, affordability, seniors and transportation.
Then we saw the plans for the new Royal Alberta museum unveiled, with discussion about the airport lands. Gary Klassen the GM of sustainable development Edmonton pointed out that Downtown encompasses 1% of the land in the city but is responsible for 10% of the tax revenue.
Several projects have been discussed so far.
I’ll add more detail as I can for each of these projects and their impact on the real estate market in Edmonton when I have a chance.
