Real Estate for Virgins

I was going to call it Real Estate for Dummies...but that wouldn't be nice!  By virgins, I mean those who haven't bought and sold for awhile or those brand new to real estate. 

The first home I ever bought I called the fellow who had the sign in the lawn of the place we liked.  This, in spite of the fact another Realtor had been showing us homes.  It was simply a lack of understanding of how the system worked...as was the time we bought a For Sale By Owner not understanding that the Realtor we were then using could negotiate on our behalf on a private sale.  So, to clarify a few easy things.

1.  The Multiple Listing Service in BC allows for any licenced Realtor to show you any listed property.  You can choose a Realtor you trust and that "gets" you and your needs and they can act as your champion.  You don't have to call listing companies.

2.  Your Realtor can show you private sale homes and homes utilizing other modes of Internet promotion.  A Realtor can agree with a seller on their fee and you can have the agency protection and skillful help of your ally and Realtor.

3.  The commission payable to Realtors is usually paid by the seller.  This is not to penalize sellers, it is to allow for easier financing.  Commissions are generally considered part of the purchase price; so really the buyers share the cost in a way that allows them to roll it into their mortgage rather than paying separately.

4.  Skill equals dollars.  It is tempting to think you are saving money by choosing a company that advertises low commissions.  Be careful and interview other companies before making a decision.  Some models rely on volume and you don't want to be at risk of having your home undervalued.  A fine Realtor will make sure you receive the best price and attract the most buyers.  ALWAYS ask for back up information on pricing and any claims made.

5.  The multiple listing service is a reciprocal agreement with other Realtors.  If I list a home I offer half of the commission amount to the Realtor that brings a buyer.  This greatly enhances your chance of selling.  Be sure that the Realtor you pick is well respected by their peers and offers a fair and respectful amount to cooperating brokerages.

6.  Unless they have additional licensing, a Realtor cannot act as a property manager.

7.  A Realtor MUST disclose to all parties all remuneration.  There can be no undisclosed "kick backs" or any other incentives not in the best interest of clients.

8.  If your Realtor is not a good communicator; run.  If they don't stay closely in touch with you, you have to wonder how well they stay in touch with potential buyers and other Realtors on your behalf.

9.  You don't have to worry about what you tell your Realtor; we are bound by a fiduciary duty to protect your confidences.

10.  You should trust in your gut, that the one you chosen to do business with would NEVER put their pay cheque ahead of your best interests.

Referrals require reseach and relationship!

So, what DO you know about the person you're referring to someone else?  What is your personal experience of their service?  What is your awareness of their background and training?

Random referrals can so easily backfire and result in a foisting the wrong person on the right job.  This is my trepidation involving any "referral groups."  These are a collection of individuals seeking to mutually benefit each other professionally.  Could be fantastic....but make certain if you are referred to anyone that the person referring you does business with that professional themselves!

A great rule of thumb is to never refer anyone who you haven't or wouldn't use yourself.  And, even if you loved their work, best to make the recommendation with an encouragement for the person to research for themselves.

I had clients wanting renovations done and they knew I was having some work done at my home.  I was happy to make the introduction between them and my carpenter but first I invited them to come over and see the work first hand.  Further, I recommended that they interview the professional on his pricing, timing, background in what they needed, etc.  Once I made the introduction, my role was done!  It was up to them to determine if he was the right person for their job.

Many of us have learned the hard way that if we heartily promote someone and that someone doesn't do a good job the bad smell traces back to us!

I never recommend a single inspector or lender, lawyer or notary.  Rather I include names of individuals I have had great experience with and that I trust implicitly.  I may favour one over another based on knowing the client; but it is always good practice to provide choice.  Then it is up to the client to decide.  I would never blindly recommend anyone for anything; nevermind based on receiving a benefit from that person or organization.

Likewise when referring clients to a REALTOR in another area, its so important for your local REALTOR to first have a relationship with that other person -- and to have researched the person to make sure the "fit" is right.  If not in person, certainly over the phone, REALTORS can be interviewed and vetted.  If they don't communicate in a timely fashion with me I surely know they are not going to be a good fit for anyone I do business with!

Referring someone to a client, and having that client have a superb experience with them, is deeply satisfying.  And the sweet scent of that experience also traces back to us!

Next time anyone recommends a professional, do ask them, "what do you base this referral on?  Have you used this person?"  Make sure it's not just "I'll scratch your back, you scratch mine" kind of referral.

And....you know that caution about not doing business with family members or people related to colleagues of yours?  Be afraid.  Be very afraid.  There's a good reason we are cautioned about this!  Never doubt that a botched job can ruin a friendship.