1 Million Page Views
I was happily surprised when I checked our analytics yesterday. Our Edmonton MLS® Search web site - edmontonrealestate.pro - reached a new milestone and got over 1 million page views in the month of January! Thanks to everyone who uses the site to find real estate in Edmonton! We will continue to improve the site and add new features as long as people keep using it. With the average time on site over ten minutes, people clearly like it. Our clients enjoy extra traffic to their listings, since our listings are featured at the top of the results whenever they are included in a user's search. That's the beauty of the Internet - a small company that focuses on quality and details can kick the big guy's butts.
Special Report: Year in Review and 2012 Forecast
We have finally completed our annual "Year in Review and 2012 Forecast." We will be emailing it out to subscribers and fans tomorrow (Jan. 24) afternoon. Don't miss out - subscribe or like us today!
The Difference Is? Calgary VS Edmonton
I always like to tease my Calgary counterparts. When I was on the Real Estate Council of Alberta as a council member, the pre-meeting banter would always include some sort of comment welcoming the Calgary members from their carbon monoxide filled commute. They would counter with a humourous comment about Edmonton and on and on it went. My favorite joke was about a friend who left a pair of Flames tickets on his dashboard, and after a few minutes parked at 7-11 found his window was smashed. Their faces would give that expression of understanding and empathy, and then I would fire away with: “and he found two more Flames tickets on his dash."
Seriously though, it has often amazed me that even though Edmonton and Calgary brokerages are governed and regulated under the same Act, the way business is transacted in each city differs in a number of ways. Now I’m not trashing one city over another (besides Edmonton is clearly better) I'm just pointing out a difference in practice. The Calgary Real Estate Board recently decided that members no longer have to report pending sales, whereas in Edmonton we haven't had to report pending sales for quite some time. (When a conditional offer has been accepted by all parties it is considered pending). Once the conditions are removed then it's unconditional.
So whats the big deal?
Well, like many things it depends on perspective. If you are trying to sell your property and it's reported as pending, then it will not show up when agents search for properties unless they search for active and pending listings. In many cases a buyer might not be interested in viewing a property where the seller has the leverage of another deal, or they might not want to get emotionally invested in a property that already has a potential deal in place. So there would be a good chance your property would receive reduced activity. I say good chance because I can’t prove it definitively, but our experience shows it will not receive the full attention of the market place.
From the buyer's perspective you may want to know about all the homes on the market, whether they are pending or not. You could actually be looking at a pending listings and not even know it. If the seller is cautious that it is not a done deal, possibly because of the terms, or the buyer, or buyer's agent's credibility, or just a hunch, the seller may instruct their agent not to disclose other offers.
Whatever the case may be, this is one of those areas where Calgary and Edmonton have operated differently until now. Some other differences between practices in the two cities include:
- In Calgary it is quite common for buyers to have a walkthrough prior to closing on resale properties. This is unheard of in Edmonton. In fact, when I have had lawyers from Calgary handling the conveyancing they have questioned the lack of a walkthrough on the contract. My simple response is that you would have a hard time getting an offer accepted with a walkthrough (unless you are dealing with a private seller).
- In Calgary they regularly use the CBS codes on their keyboxes. This is an additional code that the buyer's agent must obtain from the sellers agent in order to open the keybox for a specific property. When I have used the CBS code here, not only have I had to teach every agent how to use the code, I get a fair bit of negative blowback on that extra step and in some cases miss out on showings.
These are just a couple of minor examples. I can’t even say one association is more proactive than the other; at times Edmonton has blazed the trail adopting new technologies and practices, and at other times Calgary has led the way. No matter what, it's still fun to tease my Calgary counterparts.
The Pipes Aren’t Frozen on Our Web Site!
Damn its cold! What happened to that beautiful mild winter we were having? It seems like winter has arrived with a vengeance.
A person called in on one of our builder's properties this morning saying there were no tracks to the home but the upstairs balcony door was wide open. WOW! It was a sharp reminder that if you have a vacant property you will need to check on it frequently. Make sure the walks are shovelled and the heat is on. The last thing you want is a flood because of frozen pipes.
Depending on the home you may want to set the thermostat to a reasonable temperature, especially if it is going to be shown to potential buyers. There is nothing more uncomfortable for a buyer who has come to see your home at -30 to find out it's better outside.
The beauty of cold weather means our website traffic shoots through the roof as “property porn” goes to the next level. Whether these are actual people interested in buying or people that are just going stir crazy checking out www.edmontonrealestate.pro because they have nothing else to do remains to be seen. I do know I am answering a lot more questions about specific properties right now than normal.
A new way to research the home you’re thinking of buying
I had a mind blowing experience the other night. Seriously mind blowing. I was showing a home in the Westmount area - by any standards a decent and desireable mature area in Edmonton. While we were looking at and discussing the home, my client started listing off some very significant and specific information about the property.
Now, I have always encouraged my clients to do their research when they're interested in a property; talk to the neighbours, review the current title we provide, consider the property history and so on. I knew this client was very thorough, and wasn't surprised to learn she had done her research, but I was blown away by what she'd discovered! She told me that the owner's fiance hated the property, that they had recently spent thousands of dollars on new pipes for this "money pit," and among other issues they had already bought and moved into a new home.
I assumed she must have spoken with the neighbours, and that they were more gossipy than most, but she assured me she hadn't. "Facebook!" she laughingly cried! My jaw dropped: "No way!." She then detailed how she got the seller's name, and proceeded to look him up and found him on Facebook. His privacy settings prevented much of a look but she found his fiance was an open book. Lo and behold the fiance had been complaining about the home on Facebook for months on end, detailing every issue they faced with the aging property.
Before the private detective work my client was very interested in the property, but there is no way to put Pandora back in the box, and why would you? This is the type of information that is priceless. This same client has since discovered tidbits of information from Facebook about some of the other homes we've viewed, including the reasons homeowners are selling.
So, before you decide to dish your property on Facebook make sure you have secure privacy settings, or better yet don't post it online at all. I certainly know that I'll be checking Facebook for information for my clients in the future.
New home upgrades worth paying for, Part 6: Closets
This may be hard for some of our male readers to believe, but closets sell. A few years ago one of our clients (a guy) bought a home and renovated it to flip it. The workmanship was impecable. He built a mechanic's dream garage in the backyard - it was huge, heated, insulated, had it's own electrical pannel... the works. Sheldon and his dad evaluated the home and were impressed to say the least. When I went to photograph the home, I noticed something that all the men seemed to have overlooked - there was not a single closet in the entire home! No coat closets, linen closets, bedrooms closets, broom closets...no closets! When walls were removed and rooms were added, closets were forgotten. Luckily we were able to find a single father who overlooked the lack of closets in favour of the killer garage.
Ok so back on target... Over the years closets have grown in size, number and complexity in new homes, and today's buyers love having lots of places to store stuff. Think "Carrie Bradshaw" (if you don't know who that is refer to the paragraph above). On occasion I've seen a floor plan gone awry, with too much square footage taken up by closets - so what if the master bedroom has a walk in closet if you can't fit a single bed in the kid's bedrooms?
The point I'm trying to get at though, is it's not just the size of the closet that matters, but what's in the closet. A single wire rack or wooden shelf with one bar for hanging clothes on does not come close to maximizing the space.
Which closet screams "bring me your clothes, shoes, and accessories!" to you?
If you're unmoved by the above photos ask your wife, girlfriend, sister or mom for their opinion. The fact is, many new homes come with huge closets with only a single wire rack. Some builders have caught on and are putting custom closets, pantries and back entries - I can say from experience these "wow" buyers regularly.
New Home Upgrades Worth Paying For, Part 5: Green Upgrades
The jury is still out on the value of many "green" upgrades. There is simply not enough data to definitely say which green upgrades offer the best return on your investment. As building codes and government regulations change, something that was considered a green upgrade a few years ago may be required today. For example, if you replace a furnace in Edmonton today, it must be a high efficiency furnace, where 5 years ago everyone recommended a mid-efficiency furnace. We recently had a 65 year old home inspected that had wood chips for attic insulation, rated about an R8, where the building code today requires a much higher rating.
From personal experience only, I can tell you different buyers definitely place different values on green upgrades. A $40,000 geothermal system will be worth every penny and more to some buyers, and nothing to others. When you get right down to it, if two houses were identical in every way, except one had $50,000 of green upgrades, it is very unlikely that the upgraded home would would sell for $50,000 more than the other (all other variables being equal). When the average buyer looks at a resale home they see what's in front of them, not what is hidden in the walls, and the decision to buy comes down to price and a comparison of all the homes they've looked at.
So, what green upgrades are worth adding? In general the value of the home will determine the threshold for green upgrades. Putting triple-glazed, low-E, windows with UV coating on a $1 million home will get a higher ROI than they will on a $350,000 home. If you're considering green upgrades, the most important aspect to consider is the value it has to you. If you're planning on living in the home for many years, the ROI on your upgrades may be realized in energy savings, and the resale value will be less of an issue.
What is a holdback?
- A Mixed Martial arts move.
- A football play where the quarterback fakes a handoff.
- What middle age men do with their stomachs when they enter a room.
- A real estate term indicating money will be held back until certain items are completed.
If you guessed the answer is D then you are correct. Holdbacks are very common in real estate transactions although not all offers ask for them. Some common reasons for holdbacks are:
- The buyers have asked for, and the seller has agreed to provide a Real Property Report with evidence of municipal compliance and on possession day it wasn't available for whatever reason. In this case the lawyers will generally work out a reasonable comprise with the buyer's lawyer holding back some of the proceeds unitl they receive what’s needed.
- A delay in the registrations of the title at land titles. A similar situation to the above will occur.
- The seller has promised to complete, repair, do or remove something and a holdback of a certain value has been agreed to in advance on the offer to purchase. A few examples are:
- The seller is in the process of renovating/finishing the basement and a holdback is agreed to so that the buyer is protected that the work will be done properly by a certain time.
- The seller has a lot of crap on their property and the buyer wants to make sure it all gets removed. If it's significant enough a holdback may be in order.
- The property in question is a new property or one that is still under construction and want to ensure that the work is done to a certain standard, by a certain time.
There can be problems with holdbacks:
- If the amount of the holdback is not significant enough the seller may not be enough incentive for them to do what they agreed to do.
- If there is no deadline on the holdback the seller can take as long as they want and the money will remain in the buyer's lawyer's account.
- If the holdback agreement is worded poorly the outcome may not be clear or it could be written to favour one party over the other.
This is another one of those times when the experience of a good agent can be hugely beneficial to their client. Keep in mind the seller has to agree to the holdback; some builders will not even entertain the thought of a hold back in the purchase contract, no matter how much work is outstanding at the time of the agreement.
Paperwork Rant
Most of the problems I see related to potential agent misconduct, from outright fraud to simple mistakes, is almost always exacerbated by the client or injured party not having copies of the documents they signed. These agents know who they are and if I could boot them out of the industry I would. Sometimes it’s a matter of them wanting to save time (I’ve blogged about this before) so they’ll get their client to sign a blank amendment form, offer or whatever, and fill in the details later. Sometimes it's more surreptitious than that and people will sign completed documents but never receive copies of the final product.
Now, there is a small percentage of slime that conducts business this way. As in any industry you have those that steadfastly hold true to maintaing their clients best interests. There are in fact far more conscientious agents in the industry but this is a rant about the other guys. At the same time I ask myself WHO signs blank forms, and WHO executes offers or management agreements and is ok without getting a copy?Trusting people that’s who.
In just one recent instance a trusting buyer bought an investment property from a friend sight unseen based on certain financial specs. The seller also indicated they could and would mange the property but made no disclosures about the condition of the property. When the investor finally came to town to see the property he discovered hoarders were living there and that it had to be gutted from top to bottom, including replacing all the floors, most of the drywall and some ceilings. When he went to review his contracts he realized he didn’t have final copies (the seller ran the deal through his mortgage broker).
It is interesting from my persepctive how people treat their purchases differently depending on the type of purchase. Be it an investment property, vacation property, recreational property or their primary residence. People are often very diligent and involved when buying their home, but when it comes to buying properties in the U.S. or investment properties, for some reason that level of involvement drops. In and of itself completed the paperwork correctly and getting a copy will not prevent a problem, but generally it is good to have as it can establish the breeches that have occurred.
So all I’m say is a competent professional in my industry won’t have a problem with doing the following:
1. Taking the time to explain and complete the paperwork correctly so that you are not signing blank forms where anything could be added.
2. Providing documents for you to review in advance of signing.
3. Providing you with copies of all signed documents immediately.
If you suspect or know that you’ve dealt with the very small percentage who has not followed this methodology you should contact either the REALTORS® Association of Edmonton or The Real Estate Council of Alberta.
A very good way to avoid that situation is to:
- Deal with reputable practionshers who have been referred to you.
- Deal diligently with all your real estate acquisitions
- Verify information provided to you (honest and competent professionals will have no issue with you doing this because the information they are providing will stand up).
New Home Upgrades Worth Paying For, Part 4: Lot features
Vacant lot
There are 5 main factors that affect the value of your home: location, the home itself, the market conditions, your pricing strategy, and how well its marketed. Of course, the most important factor is location, and this means the lot itself, the neighbourhood, the city and the province. What can be tricky is deciding if a "premium" lot offered by the builder is actually worth the extra cost, and if it will improve your value when the time comes to sell.
Pie lot:
Most pie shaped lots are definitely worth the premium price - you get way more space than your neighbours, and more space between yourself and your neighbours. One downside is there tends to be less space for visitors to park, and there is generally not enough space between driveways for street parking. Another benefit though is that you have very little sidewalk to shovel in the winter. On the other hand, a reverse pie lot (where your front yard is wider than your back yard) is typically less desirable than a regular rectangular lot.
Lot orientation:
Most people prefer a lot where the back yard faces south, west or somewhere in between. This means you get the sun in your back yard for most of the day. You often seen owners of homes that have back yards facing north or east sitting in their front yards or driveways in the afternoons - a friend of mine calls them "garage people."
Green space:
A lot that backs onto green space is almost always worth a premium price. You have much more privacy, since your neighbours are so much further away. However, not all green spaces are created equal. Make sure you look into the restrictive covenants with regards to fences; some neighbourhoods require that the fencing along a green space be chain link. If you're on a fairly narrow green space with chain link fences, you actually end up with less privacy than you would backing onto other homes with a wooden fence. Siding onto green space gives you a little more space between you and your next door neighbour, but there will be foot traffic along the whole length of your lot
Corner lot:
Corner lots have to be assessed on a case by case basis as they can be more or less valuable depending on the situation. If you're on a corner lot siding onto a busy street it's less valuable. A definite downside to corner lots is sidewalk maintenance - in most cases you will have 3-4 times as much shovelling to do in the winter as your neighbours have to do on rectangular lots. However, in some cases the sidewalk along the side of your home is maintained by the city. So a corner lot, on a quiet street, with city maintenance can be quite valuable. In a city where it snows for half the year, shovelling is a major consideration for most home owners.
Walk out lot:
In general, a walk out lot has more value than a regular lot, but as in all cases there are some better than others. It is particularly important to find out what you back onto with a walk out lot: if you back onto a busy street or other homes your walk out home becomes a giant fishbowl towering over the neighbours for everyone to look in on. A severe slope can be less attractive to families, since kids will have to go down lots of stairs from the deck in order to play in the back yard (plus its harder to see them down there from inside the home). A shallow slope can lead what Sheldon calls an "alligator pit" where your walk out area is actually below grade - excellent landscaping is particularly important in this case.
Restrictive covenants:
No one likes to be restricted from doing what they want to do, but restrictions are generally a good thing when it comes to neighbourhoods. When you drive through a neighbourhood with no restrictions you get homes and fences in every shape, form colour and style under the sun. It usually ends up looking like a big mess. In general the more expensive the neighbourhood, the more restrictions you will find. Typical restrictions include the type and colour fencing, quality/type of exterior building materials, number and size of out buildings (garages, sheds etc), percent of coverage (how much space the home can take up on the lot), minimum number of trees, set backs, and height restrictions.
Power lines:
Whether you believe there are negative effects from living near power lines or not, your lot value will be lower if you're visibly close to large power lines. Perception is reality in real estate, and if power lines are the first thing a buyer sees when you're driving up to the home they will instantly discount it, if not take it off their list. The interesting thing is being just one block away can make all the difference in the world - the phrase "out of sight, out of mind" is really true in real estate.
So the most valuable lot in a subdivision would be a walk out pie lot, backing onto green space where the back yard faces south west and no power lines are visible.