Even if You Weren’t a Boy Scout…
Written by: Terry Smith
Published in Our Homes Magazine Spring 2013
I was skiing recently and having the usual small talk on the chairlift. Being in real estate, I might have been the one who brought up homes… My chairlift partner made an interesting comment about his home of the last 25 years. “Our previous home sold in 2 days so we were forced to find a new home faster than we expected. We didn’t really get exactly what we wanted.” When I asked him what he meant he said that if they had taken more time they would have, among other things, bought a home with a west facing backyard so they could put in a pool and enjoy long sunny days.
Interesting that someone would stay in a home for 25 years when they are aware that the home is not exactly right. Sometimes this is because a more preferred home is not affordable. But often, it is just because once you are settled in a home, the hassle of moving is more than you want to bear.
I have had many clients who do not want to start looking at properties until they know they are in a position to buy. Some don’t want to waste the agent’s time. Others don’t want to waste the seller’s time if they are not yet “serious”.
You may think you have it all figured out by constantly trolling MLS listings, but the fact is that this is really just an abstract guessing game. The problem with staying in the abstract until you list your home is that you could be caught in the same position as my chairlift partner. If you sell quickly and end up in a rush, all of the abstract thinking will have to suddenly convert to the concrete. This sudden conversion can lead to hasty decisions that turn out to be a misread of your real interests.
This is where the Boy Scout’s credo comes in – Be prepared! In my experience, the only way to really get to know the market and to test your wants is to go look at homes. This process can take some time. You may have multiple areas in mind that have some appeal. You may have different styles of homes that appeal to you. You may also have a flexible perspective on price where you might pay more or less depending on the location, features and benefits of a home.
So I encourage clients who are vaguely thinking about a future move to get involved in the market early. Spend time with your agent discussing wants and needs and go out and kick some tires in real homes. Push the boundaries. Look at different areas and types of homes. Test your real interest. Discover the pitfalls of certain homes and locations for you and find out what your sweet spot really is. You don’t have to look at enormous numbers of homes, but you do have to get out there and look at a bunch!
This way, when the time comes to really make a buying decision, you will trust yourself. You will know what good value looks like. You will know the types of homes to avoid. You will be in position to make a fully informed decision and purchase a home that will satisfy your needs for many years to come. With no regrets!
You Can’t Always Get What You Want
Written by: Terry Smith
Published in Our Homes Magazine Winter 2013
We have a lot of needs in our culture. We need a place to live, a car, a job, and lots of money to buy all kinds of things, from clothing to food, dining out, vacations, flat screen TVs, lots of pairs of shoes, concert tickets, Tim Hortons or Starbucks twice a day… The list goes on!
When it comes to buying a home, we each have different needs – some may need a certain type of location, others a certain size of home, others a certain number of bedrooms, still others a finished basement for their kids to hang out with friends. Some people have a very long list of needs, others might be shorter. We have all experienced the frustration of trying to get all our needs met in a home search. It can take months, or even years…
But what if we looked at it differently? What if we shifted our perspective? If you think about it, we actually live in a culture of want, not need. We may say that we NEED this or we need that, but the truth is that for most of us, we are living far beyond our needs and well into our wants. After all, our only real NEEDS are food and shelter (and hopefully love and friendship). Everything else, if we are honest about it, is a want.
When it comes to looking for a home, aside from the roof we hope to put over our heads, everything else on our list is really a want. The important thing about wants is that they are WANTS. This means that they are nice to have, maybe even hugely important to have, but sad as it is to say, they do not rise to the level of need. You may have heard the news – You can’t always get what you want – especially if your list of wants is long!
I recently helped clients new to Canada with their home search. They started with a long list of wants, the top of which was a certain location. Of course, as luck would have it, the other wants on their list were not terribly available at the price they wanted to pay, in the location they wanted. Imagine that! So to test their conviction about the various wants on their list, I took them to a bunch of other locations where the other wants were more available at their price point. What did I find? They were happy that the other wants were being met, but they didn’t like the locations. Imagine that…
Now, in this case, we had the benefit of time pressure to focus the mind. They needed to find a home (see, a real NEED – shelter!) within a fairly short time-frame. So we spent some time coming to terms with the truth of the search – they would have to make trade-offs between the various wants on their list. If they wanted this set of wants, they would have to forgo certain others. In other words, they were not likely to get everything they wanted, so they would have to focus on getting their most important wants met.
This actually became kind of a fun game as we tested the various wants. During each home visit, as they would voice their reactions, one of us would blurt out the guiding principle of the search – TRADE-OFFS! In the end, they came back to the original location and gave up some of the features they liked in the homes in other locations. And having gone through the process, with realism and eyes open, they made their final decision fairly quickly and with confidence that they had made the right trade-offs, satisfying their higher wants and leaving the lesser ones on the table.
Try this little shift in perspective next time you are looking for a home. Ask your agent to keep you honest about the trade-offs you’ll need to make. You’ll find the search easier, more fun and more fruitful. You can’t always get what you want. But if you try sometime, you just might find, you get what you need…
The Price is Right
Written by: Terry Smith
Published in Our Homes Magazine Fall 2012
When preparing to sell your home, there are several factors that need attention to ensure the best price. These can include painting, cleaning. repairing any damage, maybe even staging. These all require a realistic assessment of your home from the buyer’s perspective. We all seem to be adept at this part of the selling process, to greater or lesser degrees. Many of us have seen enough HGTV shows to “train us” to see our home with a more critical eye and accept that maybe it could use a bit of a lift!
But when setting the price, realism sometimes goes out the window. This is partly because we live in a fairly robust real estate market, which over time can lead to the expectation of unrealistic price inflation. And for many of us, our home is our biggest asset, so our perception of price is “charged” with emotion. What we WISH for can overpower our ability to judge the truth of our home’s value. “The house down the street sold for $X, and our house is much better than that house…” We’ve all said it. But is it true?
Maybe not… Yet setting a realistic listing price is probably the most important factor in getting the best price for your home. This might seem counter-intuitive. After all, pricing high feels good. It helps reinforce our WISH in terms of the value of our home. Just seeing that asking price gives us a sense of well- being. But alas, this is usually an illusion - an exercise in short-term pleasure for long-term pain. It usually ends in selling for less than if the starting price was more realistic.
How can this be, you say? After all, if the market “tells us” the price is too high, we can always drop it after a while. But if we start lower, we can never raise the price later! We don’t want to leave money on the table… This “logic” is tempting but is usually flawed and can lead to trouble.
Why? At any given time, there is a certain pool of potential buyers actively looking for a home like yours. Some are working with an agent who keeps them informed about new listings on a daily basis, some track the local Real Estate section, others check MLS online regularly. All these buyers will see your listing within the first few weeks or at most within 30-60 days. If it is priced realistically, these buyers will seriously consider your home during this period. You could have the potential for interest from multiple buyers. But if you are priced to high, this pool of buyers will largely ignore your home and the first 30-60 days will pass with no buyers stepping forward. Many will have gone on to buy other homes, while perhaps a few might be on the sidelines waiting for your price to drop. Not good.
Then what happens? Unless you want to deal with one of the price shoppers on the sidelines, you will have to wait for new buyers to enter the market. This is a process that by definition happens gradually, one buyer at a time. You will not have the benefit of the large pool of buyers you had when you first listed. The “buzz” of a new listing and the attention it creates will be gone. So the wait might be long… Notice how long some For Sale signs stay up? And the longer you’re on the market, the more chance your listing will be perceived as “stale” and you might then need to make a price reduction to coax some interest.
Don’t fall into the trap. Set the right price from the start. Ask your agent to give you a detailed and realistic assessment of where your home should be priced versus comparable properties, not just what they know you want to hear. Then resist the temptation to price higher. You’ll be glad you did. Price it right from the start and you may have a little short term emotional pain but long term pleasure in a higher SOLD price!
Written by: Terry Smith
Published in Our Homes Magazine Summer 2012
Selling houses looks a lot easier than it used to “back in the day”. Today we have more avenues for buyers to “come to us”. Everything seems to revolve around MLS, advertising and the internet. Just list the house, put it on MLS where everyone can see it online, buy some advertising and wait for the buyers to come.
This approach is powerful and efficient. It gets a lot of exposure for your home. The pictures look pretty and hopefully will tantalize prospective buyers. But this approach is also largely passive. And so it has limitations. Maybe it will take longer than you want and the price received will not be as much as you had hoped for. Or worse, maybe the buyers won’t come calling.
We’ve all seen For Sale signs that sit for too long. This is not a position you want to be in. It may cause you to have to drop your price below where it should be to get attention. That’s money out of your pocket!
If you really want to get the job done in the shortest time for the highest dollar, you need more than a passive approach. Your agent needs a second, complementary approach - a proactive selling strategy. This involves the opposite of “waiting for buyers to come”.
Hard as it may be to believe, the perfect buyer for your home may not be looking online or at the ads! Maybe they have a latent interest in moving, but not enough to be paying close attention to listings. If your home was brought to their attention, perhaps it would be just what they need to tip their latent interest into action! These buyers are not responsive to the passive approach, even with all the marketing guns-a-blazin!
Here you need a more hands on, surgical approach. This requires your agent to know your specific neighbourhood extremely well and to have the right contacts among other agents and the community in general, to go out and network directly to find potential buyers. This has the potential to uncover buyers who may not be actively looking. But it may also locate buyers who are actively searching but have overlooked your property for any number of reasons – maybe the photographs online didn’t appeal to them, maybe the description left out a key feature that seemed unimportant to you and your agent but could have been critical to the prospective buyer, maybe your home is perfect in all other ways but needs a bit of an exterior facelift to appeal to the perfect buyer’s tastes or maybe your home is located closer to important amenities than the buyer realizes from viewing the listing.
I had a recent sale that really illustrates this surgical approach. I listed a home exclusively and had instructions from the buyer not to put up a sign and to be very discreet in my selling efforts. The seller wanted to find a buyer, but did not want too many people to know the home was for sale. Definitely a challenge! Through networking, I connected with another agent who specializes in finding homes for buyers “under the radar”, homes that might not be actively available but could be a good fit for certain selective buyers. This agent had a buyer who did not need to move, but would love to if a very specific type of home became available. My exclusive listing turned out to be a perfect match, so the other agent and I were able to put the buyer and seller together.
In this case, the sale was made using a scalpel rather than a shotgun. While it is unusual to sell a home using only a scalpel, the benefit of selectively adding a scalpel to the traditional mass market approach is likely to give you a greater chance of selling your home more quickly for the highest price the market is willing to pay. Great agents understand this and can add real value to your selling process. Next time you are thinking of selling, discuss this approach with the agents you interview to be sure you put yourself in position to achieve the best outcome on your sale.
Put Your Best Foot Forward
Written by: Terry Smith
Published in Our Homes Magazine Spring 2012
The job of your real estate agent is to put you in the best possible position to elicit the highest offer the market is prepared to pay for your home. This is not just a matter of pricing the home correctly and getting it onto the market quickly. Nor just a matter of strong selling and negotiating skills with other agents and potential buyers. These things are very important, but your agent should really earn his or her money by correctly anticipating how the market will perceive your home and finding ways to improve the ultimate perception. Done effectively, this puts money in your pocket.
I have never listed a home, nor visited one that couldn’t be improved in some way to make it more attractive and valuable in the eyes of potential buyers. And here I am not just talking about the rip and tear renovation potential that can improve most homes. I’m talking about more subtle things.
We all love our homes and while many of us would concede that some improvements can be made, most of us think for the most part that our home is pretty darn perfect just the way it is, thank you very much… This is fine while we are living there. But when the time comes to sell, we have to stop thinking as OWNERS and try to put ourselves into the mindset of BUYERS. This is hard to do. This is where your agent needs to step up and add value with objectivity, creativity and insight.
A few examples might help. I had clients who had erected a wrought iron fence between their patio and pool to keep their kids away from the pool (there was another fence around the perimeter of the yard to deter outsiders). This fence effectively severed the home from the pool. The yard felt small and “caged in”. My advice was to remove the fence, so buyers could perceive one of the home’s best features - the large, beautiful yard - without having to” imagine it” through the fence.
I had other clients who had done a great interior renovation job but had grown weary and never finished the exterior. It needed painting and the garden needed sprucing up. We’ve all been there – we kind of overlook the stuff we haven’t gotten to yet – we’ll get to it later... But the buyer is not so forgiving. The home was a townhouse, so there wasn’t too much involved in correcting the exterior problems. We brought in a painter and my stager and I rolled up our sleeves and redesigned the garden. A few thousand dollars later and the exterior felt consistent with the interior of the house.
I sometimes get an architect to draw up floor plan changes where it is clear to me that potential buyers might be thrown off by the layout in a certain part of a home and I know that a modest investment by the buyer would eliminate the concern.
Then there is the notion of staging that most people are now pretty familiar with - decluttering, relocating furniture to better utilize spaces, softening spaces with fabric, art and accents, removing furniture that is too large. Virtually every home can use at least some of this to improve appeal to buyers.
These are just a few examples of the kinds of things that can make a big difference in both the speed and price of your sale. There is no general rulebook on how to achieve this. Each home is different and therefore the potential insights that might improve your ability to get maximum dollar from the market are unique to your home.
The key is to make sure you work with an agent who really adds value by actively anticipating buyer perceptions and putting your home in the best possible light, again using objectivity, creativity and insight. As with most things in life, effort and ingenuity yield returns, so the more effort your agent puts in up front, the more you will benefit with increased dollars in your pocket when it comes to putting up the SOLD sign!
Written by: Terry Smith
Published in Our Homes Magazine Winter 2012
We’ve all heard the expression “what goes around, comes around”. Usually we use this in reference to ties, as in “wow, that skinny tie you’re wearing looks just like the one my dad used to wear in the 60s!”, or wallpaper, as in “grasscloth is back in style…who knew?”. But I was thinking recently about another trend that took much longer to return – centuries, actually.
If you’ve ever visited Black Creek Pioneer Village or even the Thomas House at Lakeside Park in Old Oakville, you will have experienced a slice of family life from the early days of Canada. Small homes, simply built with few rooms. In fact, in many cases, there was only one room for living – commonly called the “keeping room” - and hardly anything else - maybe one bedroom for the parents and one other where all the kids would bunk down together.
The keeping room was where virtually everything happened. There was a huge fireplace for cooking. A table for food preparation. A large metal tub for washing dishes. A large table for eating. Maybe a few uncomfortable wooden chairs for sitting by the fire and chatting, or reading, or watching the Leafs game on a big screen TV (oh yah, sorry, that comes much later…). Everything happened in this one room mainly because when you’re clearing the land yourself and probably building yourself, you keep it simple. It was also easier to keep warm in the winter if you did everything in one space.
The few families with a bit of affluence started to live differently. They had enough money to design a home and have it built. The first thought when designing for this group was to get away from the common man idea of doing all the living in one space. Hey, we’re rich, let’s act like it. Let’s have a bunch of rooms, each with a special purpose. A parlour for meeting guests. A dining room for serving guests. A drawing room for….withdrawing after a fine meal! Maybe even a ballroom for dancing. And meal preparation? Put that in the basement or maybe even in a separate building where we don’t have to see the servants working. Too crass! This idea of specialty rooms took off and continued unabated through the growth of the middle class in the 20th century. Eventually, all houses were built this way, even for the common man!
But then a funny thing started to happen. People with enough money to have even more specialty rooms started wanting something new – a family room! Here they could just “be themselves” and live comfortably - get away from the stuffy formality of all their other fancy rooms. Gradually, most homes for people of greater means started to include family rooms, while paradoxically homes for the common man did not.
In their first incarnation, family rooms were distinct and separate from other rooms. The idea was to have a room for sitting comfortably and chatting, reading and, oh yah, watching the Leafs game… But after a while, this wasn’t enough. Hey, I’m working here in the kitchen and you are all in the family room and we can’t talk together…Let’s open the kitchen and family room and create one big space, where we can do all of our living. Sound familiar? While we no longer use the term “keeping room” (I guess “great room” might be the most common current term), the idea is the same – a room where EVERYTHING happens!
Today, most houses, whether for the affluent or the “common man”, have evolved so they have some form of this great room. And in many cases, even among the affluent, most of the other specialty rooms have been dropped, in favour of nicer and nicer great rooms. So interestingly, what we think of as new is actually old and what we think of as having been an innovation for the affluent was actually conceived by the common man, and not out of choice but out of necessity. There is probably some cosmic symmetry in all this…. The circle is complete. We’re back where we started. Something to contemplate…maybe with friends and family… in the keeping room!
More Than Meets the Eye
Written by: Terry Smith
Published in Our Homes Magazine Fall 2011
Real estate trends ebb and flow. In many communities, the current trend favours “new build”. Buyers want what they want. No compromises! They look at existing homes with a checklist of wants in their minds. Where’s the soaker tub? The marble and granite? The panelled library? The wine cellar? The theatre room? They’re not there. Better build new!
Of course, we can’t all have new. It might not be affordable. It might not be available in the locations we want to live in. And new homes often don’t have the character of older homes. So for many people the answer is to buck the trend and look at older homes with new eyes.
Here’s something I’ve observed over the years. When the vast majority of purchasers walk into a home, they see only what is there. If there is a beautifully proportioned living room, they notice it. If there are new windows. granite counters. stainless appliances, they notice. The things they often notice even more are things that disturb them. Maybe the bulge in the plaster. The ugly chandelier in the dining room. The blue tile in the bathroom… Not to mention the lack of a soaker tub or wine cellar. Sound familiar? We’ve all been there.
Home shopping can become a frustrating experience for these purchasers. They usually have a long and challenging list of wants, but very few homes come close to matching this list. So they look at home after home, hoping to get a decent match with their wish list, but find that almost every home falls short.
There are some purchasers who have an entirely different perspective. They realize that for most homes, there is more there than meets the eye. These purchasers tend to go from room to room, painting elaborate pictures in their mind’s eye of what COULD be. Sure, they notice what is currently there – the good, the bad and the ugly. But this is simply to see if the home is a good starting point upon which to create their dream home. If so, they begin immediately to imagine the changes they could make. The home becomes a partially painted canvas upon which they add their touches to create an entirely new picture. A soaker tub here… A wine cellar there…
This approach is much more creative and dramatically increases the pool of homes that might be a fit! Interestingly, it also opens the mind and suddenly a lot of the things that can throw a purchaser off – the plaster bulge, etc. – are seen for what they really are - minor issues to address in the process of making the home their dream home, rather than show stoppers.
Oh, but you say this just isn’t you; you couldn’t paint on a half empty canvas if your life depended on it? I beg to differ. I have found that most people can actually embrace this type of approach very effectively if they put their minds to it. If you need some support, get your friend with the good design eye involved. Collaborate. Make it fun. You will be surprised.
You should also find a real estate agent who has intimate knowledge of the area you are considering and has demonstrated an ability to help clients look critically and creatively at homes. This type of agent needs to be able to point out improvement ideas, identify risks and advise what the home could be worth after the changes. You might also want to consider getting an architect involved. A little investment in good design can go a long way and might actually save you money by not spinning your wheels. It can also be a good idea to develop a relationship with a contractor who can help you generally understand potential costs when you spot a home that could be for you.
Of course, this approach may not be for everyone. If it sounds like work, it might be better to just buy new. But if it gets your creative juices flowing and maybe piques your desire for a challenge, go for it. You’ll get the home of your dreams, likely at a lower cost than buying new, albeit with a bit of heart, soul and sweat tossed in!