WAC d Episode 2
You know what your home is worth … now what?
So the journey continues.
You’ve decided to make a move.
You’ve had a few agents in with their opinions on the value of your
property. So what next?
The transition of selling and buying a property is
definitely not as easy as it seems.
Unlike a first time buyer where there’s nothing to sell and/or little
pressure to get a specific closing date on the purchase, when you have to sell
one property to make the move to a new one, it can be riddled with
challenges. The key is to understand
what those challenges are and manage them accordingly. THAT’s where a good agent can make ALL the
difference. So my friends, BEFORE you
sign on the proverbial dotted line, make sure you understand the PROCESS and
philosophy your agent has. ***Dirty Little
Secret Alert*** some agents could care less about sharing their process with
you – Smoke and Mirrors - Selling your home is all they are looking at. Sounds right, huh? Maybe not – the end doesn’t always justify
the means.
Essentially, there’s two ways you can make a move
1)
Sell First, Buy second
2)
Buy First, Sell Second
Seems pretty straight forward. If you question your agent which way they
think YOU should go, listen carefully. Does it make sense? Or is it “realtor-babble”? Because far too often, the process or plan is
never really articulated ***Dirty Little Secret Alert*** They have no plan.
Sell First, Buy
Second
So let me paint this first scenario for you …… You’ve
figured out the price (after a whole bunch of time talking pricing strategy –
that’s a different segment). You’ve got the sign on the lawn and you are open
for offers. Lo and Behold you HAVE
one! Yippeee! You sell your home for a price that makes
you happy. Again, Yipppeeee!!! Now it’s time to find the next house….. so
out you go in the car with the agent to search for that dream home. Buuuuuuut, and yes, there IS a but ….. you
can’t seem to find what you were hoping for!
You’ve just become the Agent’s next victim. Yes, I said, VICTIM. What he failed to tell you was that the 5
bedroom, 4 bath home that you THOUGHT you could afford…. Is beyond your price
range OR rarely comes up on the market.
You thought your dream home was in the $900K range, but it’s really at
the $1.5 mill range….. Feeling a bit sick? Wouldn’t you have liked to know that
BEFORE you sold your home? Thought so
….. but here’s the big kicker… now you
HAVE to buy something. You’re far more
likely to settle or feel pressure to make a purchase you may not feel all that
excited about. And better yet? The Agent got paid…. Twice. Whether you love the new house or not… they
got paid.
Buy First, Sell
Second
The second scenario has you buying your dream home
first. You based your range on what the
agent “thinks” you’ll get on the sale of your current home – which was a “feel
good” number – and you’re now faced with taking less (and in some cases MUCH
less) than you anticipated. How many times have you heard someone say “My Agent
said I have to drop the price, the market has changed”. Well, now, no matter what, you have to sell –
or be the owner of two homes. Bet that “feel good” number doesn’t feel so good
now, huh? The thrill of buying a new
home doesn’t seem so thrilling anymore. ***Dirty Little Secret Alert*** Although there are specific reasons why your
home’s price was affected by the market, a total market shift is unlikely. And THAT is one of the conversation points on the
pitfall side that Agents never address or give a potential seller the
opportunity to understand. But by and large, “the market changed” is a load of “bull
cookies”. An agent knows that you’ve
invested your emotion into the new house and knows that the “price reduction” conversation
will be met with little push back… you have to sell… and he knows it. And let’s face it, no one drops the price if
they don’t have to.
These are the classic scenarios you see all the time. An agent that doesn’t fully explain the
process or the pitfalls. Buying first
has its pitfalls and Selling first has its pitfalls. But if you don’t know those pitfalls how can
you make a decision that is best for you?
***Dirty little secret alert*** Many agents don’t know the pitfalls
themselves and can’t guide you through any potential minefields.
So which one is better?
It depends. It depends on YOUR
situation and YOUR comfort level. And
that’s my point. An experience,
professional Agent can anticipate scenarios that sellers/buyers don’t. Our job is to ensure that you have ALL the
education and information to make an informed decision for your particular
circumstance. A good Agent can save you time,
money and heartache …. a not so good Agent can bring you nothing BUT heartache
…. And cost you thousands in the end. I know I’ve saved some clients from
themselves --- it’s a pretty emotional thing to buy a house and we are here to
guide, counsel and advise. Not MAKE the
decisions, but help clients make INFORMED decisions. You’ll never completely eliminate risk in any
endeavour, but you can certainly minimize it … a good agent does just that.
So without any further ado, in my humble opinion this is the
process I follow to ensure my client’s success:
1)
Based on
the potential sale price of your home (assuming you didn’t fall for the “feel
good” price”), take it to you mortgage broker or bank and see, based on your
current financial situation, at what price range you can comfortably afford.
So now you have a range of purchase price and you KNOW what
the monthly payment can look like.
Excellent, but that’s not where the information gathering ends.
2)
BEFORE you even consider which direction to go –
Buy First or Sell First, get out window shopping – WITH your Agent. Yes, browsing for homes – with NO intention
of purchasing (did you hear every part time agent gasp????) Many agents skip this step – it’s not a
revenue generating exercise (PS, they think it’s a waste of their time). Yet, THIS is where you decide HOW you want
to make the transition or whether to make the move at all! Did you see a lot of homes that you would have
considered buying? Does what you want to
purchase exist in the marketplace in abundance?
Are you looking for a specific street/style of home that isn’t available
often? Can you afford the neighbourhoods
you like? These are some of the hot
button reasons on whether you choose to sell first or buy first – without that
info, you are relying on Lady Luck to align your stars.
My point is ….after
you and your agent have completed the Orientation, I guarantee you will have
one of two reactions –
“Wow, I saw some great stuff out there”
Or
“Holy sh*t, I’m not living in any of those!”
So then you are equipped to make the decision of sell first,
buy first or …. Wait for it …. every agent’s nightmare…. Do nothing at all. Yes, NOT MOVE!!!! I know!!
You’ve just passed out….an Agent that is supportive of a decision not to
move. But a decision based on
information. From everyone’s
perspective, isn’t it better to figure out you CAN’T or don’t WANT to move based
on real facts? I’ve often had clients
that make that very decision and then resurface in a year or two when the
information or circumstances have changed.
It’s not about my timing, it’s about theirs.
So when speaking with your potential Agent, ask them how
they work. They should be able to
provide you with information on how and why they would suggest you buy first or
sell first (or stay put). THOSE are the professionals that don’t NEED your
business, but they WANT your business. If
your agent can’t articulate what their process is (and it makes logical sense),
or doesn’t see the need to explain it (the classic, “don’t worry” we’ll look
after everything make me completely worry!) or hasn’t demonstrated an understanding of the potential pitfalls
(and have a plan that anticipates them), then maybe you take a pass on that
agent. Lord knows, there’s 55,000
Realtors in Toronto …. But less than 10% make a living at it. Make sure you find the one that can safely
steer you to the shore not look at you like you’re their next meal!
Until next week when we talk about Full Time vs
Part Time Agents and why you should care.