The last few months brought one major life-changing decision after another for me, culminating in a decision to move to Edmonton. All these changes are very positive and exciting  (ok, except the part about it being -35C in Edmonton as I write this) but I will really miss writing about the Nanaimo real estate market.

I was thrilled when Janice stepped forward and expressed an interest in picking up where I left off and keeping this blog going. I have known Janice for a few years now and I am entirely confident that she will do a great job. She is a very professional and knowledgeable real estate agent with a fantastic reputation – I look forward to reading her insights into the local market and I am sure you will too.

Thank you from the bottom of my heart for your support - growing this blog has been a very rewarding experience because people like you take the time to read it.

Best of luck in all your real estate adventures!

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A ‘show cube’ is opening on Bowen Road (it’s right at the corner of Bowen and Meredith). When I drove past, it was still just being settled into place but it should be open now (Oct 15th)  or early next week. I’m looking forward to getting inside to see first hand what a 12×12 fully self-contained home feels like!

Global National did a piece on the news the other night (click here for the video link) where they mentioned the cube houses in conjunction with a story about modular homes used during the Olympics in Whistler being moved to Surrey as affordable housing for seniors and people with disabilities.

What struck me most watching this news clip was the jump in price since I first heard about the cube homes in February. At that time, the price was around $24,000 (as also quoted in this older news clip). That price has since doubled and for me, that changes things a lot. With a budget of $50,000 you can do some pretty serious renovations and possibly even build a larger carriage house. You could definitely buy one of the Home Depot pre-fab cottages and finish it really nicely.

A NorPine cottage from Home Depot

I think the cube house is a cool idea. I am thrilled that the City has approved it – I think that’s very forward-thinking and progressive and I give James Stuart credit for getting his idea accepted. While I am a little disappointed in the new price, I am looking forward to seeing the first ones popping up around town and I will definitely go out and check out the show suite in person.

You can follow James on Twitter here and check out his website here.

Between houses, the new agents were asking how I got started and what I did to build-up my business… the stuff you really want to know that’s not covered in the course. I told them I did 2-4 open houses every weekend and as many kiosk (at the shopping mall) and floor (when you get to be the ‘agent on duty’ at the office) shifts as possible. I made sure anyone I knew, knew I was in real estate. I kept in touch.  I went to networking meetings. I followed-up with every lead. 

That’s all true. It’s good advice and it’s the advice that I got when I first started, but it’s not the advice I wish I had remembered to give.  I wish I had told them to focus on being the agent they would want to work with.

It’s so easy to rush into the busy-ness of doing instead of first focussing on the substance of being. It’s reassuring to fill-up your calendar with activity. Anybody can put in the hours at open houses but, unless you first put in the hours of studying and learning and being clear about why you are there and what your purpose is, you are just a person who does a lot of open houses. What if you do meet a motivated buyer that day? What if they want to write an offer right then and there? Often times new agents are so busy doing all the generating-business-activities (generating busy-ness?) that they forget to do things like practice writing contracts and, at the end of the day, it’s the contracts we get paid for, not the open houses.

Deciding what you need to do becomes easier after you decide who you need to be. In order to be knowledgeable about your neighbourhood maybe spending a Saturday attending, rather than hosting, open houses makes sense. Blocking off some time to read or take courses will make you more of a professional than paying for a mass-mail campaign. Making your existing clients your first priority virtually guarantees the kind of repeat and referral business that you can’t drum-up anywhere else, so return phone calls immediately, take initiative and always put yourself in your clients’ shoes.

Be reliable, knowledgeable and professional… and then go out and try to meet new clients. That is what I try to do and that is the advice I will give to new agents from now on!

 The subject comes up all the time in the media and in conversation – what’s the market doing? The housing market is right up there with the weather and the price of gas. So here is a crash course on the different types of markets so you can sound oh-so-savvy next time the conversation turns to real estate.

Understanding Inventory

The idea that real estate agents control house prices (I’ve actually heard this!) is a myth. The current market value of your home is all about supply and demand, basic economics I’m afraid. To figure out how many months of inventory are on the market we divide the number of active listings by the number of sales in the month. The resulting number is how long it would take to sell all the houses currently on the market, assuming no more house were listed and assuming sales remained the same. Once we have this number, we determine what type of market we are in…

Seller’s Market

A seller’s market is characterized by fewer than 5 months of inventory on the market. This kind of market favours sellers because they have little competition and lots of demand. In this type of environment, sellers can list their homes at the higher end of their price bracket as a  seller’s market tends to drive prices up and buyers end up paying close to asking price. When you are buying in a seller’s market it is crucial to have your mortgage pre-approved before you go looking at houses (a good idea in any market) so that you are ready to jump when you find the right house. Do not expect the luxury of going back 3 times before writing an offer. Both buyers and sellers should be prepared for the possibility of multiple offers. Eventually more sellers will want to get in on the action, increasing the number of available listings and/or sales will drop off as prices increase.

Balanced Market

A balanced market is good news for everyone. There are 5 -7 months of inventory on the market and prices are stable. We have been enjoying a balanced market here for most of this year and I recently heard it described as a “Goldilocks market” – not too hot, not too cold, just right. Not a great market for sellers hoping to get that little bit extra, or for buyers looking at writing a lowball offer… but a good, healthy market for well-priced homes.

Buyer’s Market

We had a buyer’s market in the fall/winter of 2008 – great time to get into the market for the buyers who have faith that the market will improve. This type of market has more than 7 months of inventory – lots of houses for sale but few actual sales. Sellers have to price their homes aggressively if they hope to be one of the few sales and not just another house on the market. Buyer’s have lots to choose from and enjoy reduced prices and increased negotiating power. This is the kind of market where sellers really need to consider all offers seriously (always a good idea) and work on making their house stand out from the crowd. Eventually prices will come down enough to entice more buyers into the market and the buyer’s market will be over.

Understanding your niche

In order to really benefit from any discussion about the market you need to know what segment of the market you are in. The Canadian housing market is way too big and vague to be of any practical use. So is the provincial market for that matter. The graph at the top of this post is for single family homes in Nanaimo, it would be different for condos and potentially different for different prices ranges of single family homes. The more specific the information, the more useful it will be. If you are selling a waterfront home try to get stats for waterfront homes. A high end townhome? The local condo stats are good, but highend townhome stats would be better.

Our market right now…

Except for a couple brief dips into a seller’s market in the spring, we have enjoyed a balanced market here since January of this year. As you can see from the graph, the amount of inventory has been trending  a bit higher. Buyers and sellers should take  into consideration the fact that we are on the border of a buyer’s market but my feeling is that we will not actually cross over. Fall usually brings a little hustle and bustle as people get back into work mode and that, combined with some fantastic interest rates and stable prices, will (imho) keep us in balance. We’ll know more after the September stats are released…

MLS #304102

Situated on a level 3.16 acre lot, this home was custom built in 2005 by Osborne Contruction  for the present owners. From the beautiful hardwood floors to the cozy woodstove, the home exudes a warm and inviting kind of luxury.

Lots of extras like the high-end kitchen fawcett

 The outside living space has been just as thoughtfully designed as the interior – there are multiple decks, great landscaping and an extensive sprinkler system.

The property enjoys the privacy of some trees as well as a nice open lawn – room for horses?

2260 Peterson Road is in the River’s Edge community on Englishman River, near Parksville. There are 158 lots with a minimum size of 2.5 acres.  250 acres of the development property was donated to the Nature Trust of BC as well as acting as a buffer, this donated land provides residents access to the river – there is a great swimming spot just a 15 min walk from 2260 Peterson and lots of great walking trails. 

Englishman River

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I love the balance that has been struck at River’s Edge – the country feel has been preserved and some great extras have been snuck in, country living with peace of mind…

• Quiet and dark at night, lots of stars without the glare of the city + streetlights at the intersections for safety and ease.
• Peaceful living outside the City limits + the convenience of a community water system, no need for your own well.
• Rural setting + fire hydrants every 300m throughout the neighbourhood.
• Quiet streets + easy highway access for fire trucks and ambulances.

Check out MLS#304102 on www.realtor.ca for more details about this property – and don’t hesitate to contact me if you would like to arrange a viewing!

CREA is made up of over 96,000 paying members (real estate brokers and agents) and part of CREA’s mission statement is “to formulate, promote and foster consistent professional standards of business practice, integrity and ethical conduct among the membership”. As such, when you get your real estate license and become a member of this association, you agree to adhere to certain standards and to follow the rules.

The rules that are now being relaxed are the ones that insisted that real estate brokers take care of their sellers all the way through the sale process – not just post the listing on MLS and disappear. These rules were seen to be anti-competitive towards discount brokerages. Now, CREA members are allowed to offer exactly this type of limited service. Discount brokerages are permitted to put listings on www.realtor.ca without offering any other agency services.

I recently ran into this type of listing. I was arranging showings for several homes a buying client wanted to see, paging listing agents with the requested showing times. One of the houses (here on the Island) was listed through a company on the mainland.

1. I called the long distance number, was told the agent was not in and it would be best if I called his cell phone instead of leaving a message.
2. I called the cell phone and spoke to the agent who, in turn asked for my cell phone number. I gave it to him (this is not common practice here) but asked that he just page me through the office with the showing confirmation, as I was making these calls on a break during a course.
3. At the next break in the course, there was a voicemail on my cell phone – the seller would like me to call her.
4. I called the seller. She wanted to know why my client (who works 9-5) wanted to see the house at dinner time?  We could see the house after 7pm, or during the day or maybe sometime on the weekend. There was no lockbox on the house, she would be there to let us in.
5. I called my client to see if he wanted me to try to change the showing times for all the other houses so we could end up at this one at 7pm, or wait for another day.
6. I spoke to the seller again to say that my client had decided to skip her house (the house was only a ‘maybe’ online, and the difficulty in arranging the showing gave my client no confidence in negotiating a sale with this seller.)

6 phone calls, 2 of them long distance, to not show a house! I am all for innovative business models – we are, all of us in this industry, entrepreneurs and business people. However, I believe a large part of the success of the MLS system is due to CREA’s efforts to set and enforce standards of professionalism. I agree that discount brokerages should be allowed to offer a la carte real estate services. I don’t agree that the MLS system is the place for this to happen.

It would be great if there was the for-sale-by-owner listing website equivalent to the MLS. Lots of agents, myself included, are happy to approach privately listed homes on behalf of buying clients. Obviously, the real estate agents who pay for the MLS system are not going to fund the creation of a separate site for the consumers who don’t want to use their services. And the discount brokerages are not going to either because it would take a lot of work and money (MLS has been around for 50 years) and they wouldn’t make a go of it with their discounted fees.

So fine, bring on the discount brokerages and the for-sale-by-owners - they are not my main concern. My concern is that the end result of the Competition Bureau’s shake-up is going to be a step backwards in information sharing. The fact that you can currently go onto one site and expect accurate information regarding the majority of homes for sale across this huge country of ours is amazing. I think there is a very real possibility (in fact I know there is talk of) brokerages moving away from the MLS and putting the focus on their own sites. In this age of instant communication and increased information sharing we all want advances in co-operation not a retreat into individual brands.

Very often, discussions about what is happening between CREA and the Competition Bureau get nasty on both sides. If you are interested in hearing a calm, insightful discussion about the subject I recommend listening to investor Don Campbell (author of Real Estate Investing in Canada - not a real estate agent) share his thoughts on a radio show (click here to listen).

There is a lot of talk about offering consumers more choice. The reality is that this fight is between discount brokerages and CREA. The complaints to the Competition Bureau did not come from consumers. The $100 million and $750 million lawsuits against CREA were not filed by consumers. They all came from the Lawrence Dale and his associates.

My hope is that the changes that come are positive advances for consumers, my fear is that that’s like saying the divorce will be good for the kids. The big brokerages are looking to protect each other, lawyers are perking up and realizing they could be charging more by offering real estate services, and Lawrence Dale himself has admitted “I’m here for the dough. I’m not Ralph Nader trying to save the world.” 

We will just have to wait and see how it all plays out next spring…

October 1st, 2010 update here

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Turn the lights on.

Yup, all of them. Even in the daytime. All sellers should do this but most do not. It’s common sense – houses are easier to see when the lights are on. You know the buyers are coming over to have a good look at your house – turn the lights on for them.

• Pro: the house looks bright and inviting and will stand out from all the other dark, empty houses the buyer sees that day.
• Con: none - don’t complain about the hydro bill, it’s not going to go through the roof.

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Bake (or cheat)

Oatmeal muffin mix is a great one for a quick (just add water and fire it in the oven if you don’t want to eat them) fake-bake to make the house smell great. If you are really pressed for time, toasting raisin bread does the trick as well. If you are really ambitious, leaving a plate of fresh homemade cookies out is a nice welcome for buyers.

• Pro: while many buyers are suspicious of (or worse, allergic to) artificial air fresheners (what are they covering up?), I have yet to meet someone who is put-off by the smell of fresh baking. The house seems warm and inviting when you are greeted with pleasant aromas from the oven.
• Con: requires some effort and the smell burnt toast and/or muffins does not go over well.

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Depersonalize and de-clutter

Buyers look at your photos, your awards and your stuff. The more of this you have out, the more time they will spend looking at it instead of at your house. Your house is for sale, you are moving - start packing. Let your house be remembered as the one with the great ensuite, not as “oh, yeah.. was that the one with the stack of Maxim magazines in the bathroom?”

• Pro: buyers can focus on the house, better imagine themselves living there and you get a head start on your packing.
• Con: the house feels less like yours and you have to pay for storage (do not pack it in the closets – buyers look there too!)

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Stage your home

There is a reason why developers have a furnished show suite and why retailers spend a lot of time on their window displays – it’s not enough to have a great product, you’ve got to show it well to sell it. Same goes for the house. Staging is especially important for vacant properties – even just a few touches goes a long way towards helping buyers imagine living there.

• Pro: good staging highlights the best features of the house, draws buyers in and shows them how they could live there. Great staging makes the house look more expensive.
• Con: some expense depending on whether you hire a friend or a professional and how much furniture and accessories you need to rent/buy. 

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Put a plant in every room

If you don’t think you can handle keeping plants alive while you sell, go for fresh flowers and change them regularly. If you already have several house plants, make sure they are spread out throughout the house instead of all grouped together.

• Pro: plants bring life to the house in an unobtrusive kind of way.
• Con: none, you get to take the plants with you when you leave!

Those are my favourite home selling tricks and tips… got any you would like to share?

Recent studies show that the scale has tipped and, after decades of getting progressively larger, the average American and Canadian homes are now starting to get smaller. There is talk as well that this is not strictly fuelled by the recent economic mess, but also by an increased awareness of energy consumption and desire to build (and live) smarter. If the trend to smaller houses was purely a symptom of a hurt economy, this shift would likely be only temporary - much like the brief pull-back in house size in the early 80′s. However, if this marks the beginning of a shift in housing priorities, the recent drop in house size is only the beginning of a whole new era.

“With average homes shrinking down to size, we will see a heightened awareness of how and where money is spent. Mr. Potatohead, lick-and-stick architecture will give way to budgets you can touch and feel. People will stop spending money on gaudy entryways and gables for the sake of gables. They will instead build windows for the sake of cross-ventilation and lower utility bills. Houses will live–and breathe–better.” Marianne Cusato in her recent article for Forbes .

Marianne Cusato's Katrina Cottage

Could the silver lining to the worldwide wake-up call of 2008 be an increased demand for homes we can genuinely afford to live in? Will the demand shift towards smaller homes that are well-built, affordable to run and close to work and other amenities? If so, I believe we are entering an era in housing that will leave us all happier, healthier and wealthier than the McMansion ever did.

Making money from real estate, increasing the value of properties – that’s the fun stuff. It’s a game. It’s rewarding. The real power of a home is the tremendously positive impact it has on the lives of those who live in it.

All of us with a place of our own, whether it is rented, owned or mortgaged-to-the-hilt, are supremely fortunate. Imagine for a moment having to start over again from scratch – under the added burden of an illness or addiction or trauma. Human beings are amazingly resilient but how do you ever start to put things right when the basic human need for shelter is not met? I love that 4 walls and a roof – inanimate, unimaginative and easily provided – can be the base from which lives are transformed. It’s even more exciting to think that a permanent home has the possibility of breaking the cycle of kids who experience homelessness in childhood becoming adults who experience homelessness.

“Poverty leads to health and housing problems. Poor health and housing problems lead to cognitive deficiencies and school problems. Educational failure leads to poverty.” David Shipler, The Working Poor, describing the cycle of poverty.

For a moving reminder of the power of a home, I highly recommend this documentary that tells the stories of 8 very different people who have experienced and beaten homelessness.

The City of Nanaimo is a couple years into a 5 year plan to house the people in our community who find themselves without a place to call home. This year and next should mark the beginning of some of the new construction of affordable housing units, the goal being to have created 305 new units by the end of the project. More information on the City’s plan here. There are multiple non-profit societies and service clubs in Nanaimo that advocate for the homeless and operate subsidized housing complexes (all of which have waiting lists).  It is easy to criticize the slow and bureaucratic approach of organizations, but the work they do is important and should not be dismissed.  This very basic human right gets to be a complex political issue, but hopefully we are making progress towards being a community that finds homelessness unacceptable, and not just unsightly.

I have seen some horrific tenanted properties. Places that you can’t imagine a person living in, much less paying good money to live there. I am shocked by the landlords who profit from these places and apparently have no qualms about letting prospective buyers and their agents see what they are doing.

I am equally shocked by the hostile tenants who make showing the property unpleasant, if not impossible,  especially when the listing information states “tenant would like to stay.” On what planet would a buyer want to purchase a home that comes with a surly slob?

Having tenanted properties, whether it’s a suite in your home or a separate income property, can be very lucrative. It is a business, a hands-on investment, and as such there are a few key points to keep in mind as a landlord.

You are the owner.

The house is your investment. You are the only one who profits in the long run. You are fully responsible for your investment. In my opinion, expecting your tenants to not only pay for, but also maintain your investment is unrealistic. Have you ever paid to have a rental car serviced?

The tenant is the paying customer.

Nobody is doing anybody else a favour here. This is a cash transaction and it is your job to make sure your customers are happy and feel that they are getting good value for their dollar.

The house is the product you are offering.

Many landlords seem to forget that they get to set the bar. The condition of the house you are renting goes a long way towards determining the type of tenant you will attract. How many times have your heard, “good enough for tenants – they are just going to trash it anyway” in regards to some broken down appliance or ratty piece of furniture? This is the landlord deciding ahead of time that he will have tenants who will disrespect their home. Imagine if hotels had this attitude? I believe a good rule of thumb is to only rent places you would be willing to live in yourself.

Remember that you are in business for yourself when you are a landlord. Accept that every business has a certain amount of overhead and huge amounts of responsibility. Try treating you tenants like valued customers and see how the relationship changes. I pay a professional cleaning company to go in and maintain my investment while it is tenanted. For $150/mo I get peace of mind, and my customers are impressed – sounds like a win-win to me!