McClelland Minute - October 18, 2009

Myth Busting

These days a lot of people are quite interested in the nuances of real estate, both as it affects their own properties and as a profession.  We hear a lot of opinions, some of which are quite incorrect in my opinion.  I hope to share some of my thoughts with you here.

MYTH #1 - Real estate is just a sales game.  Yes, the end point is facilitating a successful trade for our client, and some Realtors appear to love the “chase” of the deal more than the transaction itself, but most of us are truly interested in helping our clients achieve their goals.  I was unprepared for the intensity of emotions that is the everyday reality of our business.  There are a number of reasons that people buy and sell real estate, not all of them happy - relationships break down; job loss; age, disability or illness; death of a loved one; or a transfer is forced upon a family that is quite happy in the present community.  All of these and more are everyday reasons for listing property for sale.

MYTH #2 - Realtors earn their commission by marketing properties.  True, but that is only a small part of the service we provide.  The first step is assisting the client in determining a realistic market value of their property.  The second is creating a marketing strategy that addresses not only the attributes of the property, but also defining the target demographics – who would be interested in a property like this and how can we get that information to them efficiently?  Third is executing that plan in a thoughtful and progressive way.  This may include advice to the seller on how to properly present their property as first impressions really do count.  Fourth is assisting buyers and their agents to obtain information about the property offered for sale that will allow them to make an informed opinion about its value and utility for their needs.  Fifth is supporting clients during negotiations on offers.  Sixth is assisting both buyers and sellers through the condition removal phase and solving problems that may arise.  Seventh is conveying written instructions about the completed contract to banks, lawyers, insurance companies, and relocation firms.  And finally, on the day of possession, ensuring that the terms of that contract is fulfilled for both parties.

MYTH #3 - When listing a property for sale it is best to start high to allow room for negotiating.  If you start high, particularly in this market, prospective buyers won’t even bother coming for a look.  If we can’t get them in your house, you won’t get any offers.  Simple as that!  Stick close to fair market value and you will negotiate from a position of strength.

MYTH #4 - When making an offer on a property, start low, you never know you might get a bargain.  This strategy only works if you are very confident that the property is substantially overpriced, otherwise you will likely antagonize the vendor unnecessarily, making them dig in even harder on their asking price.  Do your homework with your Realtor and determine the appropriate range of value.  Start at the low end of the range and be prepared to negotiate respectfully.  If not treated in kind, then walk away.  There will always be another property that will meet your needs.

Vern McClelland is associate broker with RE/MAX of Lloydminster.  If you have questions or comments on this article or other real estate matters, he can be reached at 780.808.2700 or through the McClelland Group website www.mcclelland.ca

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