The real estate section of today's Globe has an article headlined "Under the Gun" It starts off with an example of a couple in court because they got badly screwed around by unscrupulous-sounding agents. Then to the lady in the main photo who has burned through 4 agents who "failed" to sell it. We get a little dose of an agent defending their services, then into a Queen's professor who pretty much slags the current MLS setup. Ouch. Allow me to pull a couple of things out of the article that you may have missed in the whole "agents are useless crooks who are about to get their comeuppance" flavour of the thing.
First of all, the court case. Sounds like the agents failed to disclose "multiple representation" or "dual agency" and failed to disclose a family relationship between an agent and a buyer/seller. If true, nail them.
Or maybe they disclosed but did a poor job (accidentally or on purpose) of explaining and/or the sellers didn't read or pay attention to what they were signing. If true, nail both sides.
In any case, what the hell does a single anecdote of unethical behaviour have to do with the state of the industry? That was rhetorical; the answer is "It doesn't". Every profession has its baddies ... the occasional accountant steals, the occasional lawyer steals or screws up, the occasional financial analyst runs a massive Ponzi scheme. Shouldn't happen but it does.
Next up, the lady who burned through four agents who couldn't sell her house. Sounds like every time she went with one who said he "had clients who were interested" or "had contacts". Four times? We all have contacts and clients. That's not how you pick an agent. At least not four times.
So she decided to sell it herself, thereby supporting the "real estate is messed up and needs to change so that people have more options" theory. Well, she did have an option and she tried it (selling it herself). That didn't work either. Her bottom line: "She is now planning to list with [another] agent" but apparently using different selection criteria.
If you burn through four agents, plus yourself, and are working on number five, this is NOT an indication of systemic flaws in the industry. Even if you are cosmicly incompetent in selecting professional advisors, your house will eventually sell on MLS ... unless ... Unless your market truly stinks (not true here ... this was Calgary, not Detroit) or the house is seriously overpriced (I'm putting my money on this one).
And at the risk of being repetitive, she's about to hire an agent!
Finally, the prof. He says a rival database to MLS could give better information, the industry is protectionist, the consumer should have do-it-yourself choices, etc. But what would he do if selling his house? "I would probably pay full commission for the full service ... I know I would be able to find somebody really really good".
I am not saying our system is perfect. I am not saying that all agents are expert and professional. But here's a summary of this article from one perspective:
A certain number of agents behave badly. A lady in Calgary is learning that selling a home involves more than putting a sign on the lawn, and requires some care in selecting an appropriate representative. And an expert observer who seems to think big changes are needed would use a good traditional approach to selling his own home. Hmm.
P.S. Why is this called "Part 2"? Check it out.
Showing posts with label choices. Show all posts
Showing posts with label choices. Show all posts
Friday, February 19, 2010
Tuesday, February 9, 2010
Competition vs. MLS ... part 1
So, the government (in the form of the Competition Bureau) wants to open up access to the data on the MLS system which is the property of organized real estate via CREA (Canadian Real Estate Association).
The idea is that the MLS system, built and operated by organized real estate, is the focal point for such a huge percentage of real estate sales in Canada that it is impossible for alternative approaches or systems to establish themselves and compete.
Theoretically, easier and more open access to this data would create lots of options for people to handle much more of the buy/sell process themselves at a much lower financial cost.
I’m going to rattle on for a post or two with some thoughts and perspective that I don’t expect to see very clearly expressed in the media. I might even be right about some of it.
And I’m actually still thinking some of it through. I understand the value of competition and I know that real estate commissions represent a lot of money, and there are probably changes that should be made to the MLS system.
But I think that I’m going to conclude that what the competition folks are after is wrong-headed and will leave homebuyers and sellers with weaker service, more risk, more confusion and will not ultimately save them any money.
So, if this interests you, follow the blog or subscribe or whatever. I’ll try to get at least one piece on this topic up daily for a week or so. And I would love it if you got in on the conversation.
Final thing today … here’s the official Royal LePage thought for the day:
Royal LePage Position
Royal LePage Real Estate Services believes that CREA and the MLS system are important components in Canada's real estate market. It is important to note:
1. The real estate market in Canada is highly competitive, and includes a wide variety of companies with diverse and innovative business models and price structures
2. There are other channels through which buyers and sellers can participate in the market, including online and do-it-yourself options
3. The organized structure and efficient attributes of the Canadian real estate industry are recognized globally, and many emerging markets would like to adopt a similar system.
Consumer protection and trust are the hallmarks of our business, and we will advocate strongly for our business, our partners, and our customers.
The idea is that the MLS system, built and operated by organized real estate, is the focal point for such a huge percentage of real estate sales in Canada that it is impossible for alternative approaches or systems to establish themselves and compete.
Theoretically, easier and more open access to this data would create lots of options for people to handle much more of the buy/sell process themselves at a much lower financial cost.
I’m going to rattle on for a post or two with some thoughts and perspective that I don’t expect to see very clearly expressed in the media. I might even be right about some of it.
And I’m actually still thinking some of it through. I understand the value of competition and I know that real estate commissions represent a lot of money, and there are probably changes that should be made to the MLS system.
But I think that I’m going to conclude that what the competition folks are after is wrong-headed and will leave homebuyers and sellers with weaker service, more risk, more confusion and will not ultimately save them any money.
So, if this interests you, follow the blog or subscribe or whatever. I’ll try to get at least one piece on this topic up daily for a week or so. And I would love it if you got in on the conversation.
Final thing today … here’s the official Royal LePage thought for the day:
Royal LePage Position
Royal LePage Real Estate Services believes that CREA and the MLS system are important components in Canada's real estate market. It is important to note:
1. The real estate market in Canada is highly competitive, and includes a wide variety of companies with diverse and innovative business models and price structures
2. There are other channels through which buyers and sellers can participate in the market, including online and do-it-yourself options
3. The organized structure and efficient attributes of the Canadian real estate industry are recognized globally, and many emerging markets would like to adopt a similar system.
Consumer protection and trust are the hallmarks of our business, and we will advocate strongly for our business, our partners, and our customers.
Monday, October 12, 2009
The Other Hand: Staging, Stats, and Skipped Bits
Here I go again with my lectures about looking reasonably carefully before jumping to conclusions and "answers".
A good agent who is also a great marketer dropped a card in our mailbox the other day with a two-sided pitch on the benefits of home staging. We absolutely believe that staging has become almost essential for most homes in today's market.
I have a pet rant about staging, but it's pointless to bore you with it -- whether I "like" universal staging doesn't matter; it usually works if done right; and since everybody else is going to do it, you pretty much have to do it as well.
But the amount and type of staging depends on the market, the particular home and other circumstances.
Like selecting an agent and nearly everything else in real estate, staging has a whole bunch of "art" and "situation" about it.
A nice survey-based table showing how much you will "make" on a given staging activity looks very scientific and "factual". If only it were that simple. The piece in my mailbox gives examples such as "Update kitchen and bathrooms" at a cost of $1404-$1828 yielding a price increase of $3216-$3934. To the author's credit, a source is noted: "HomeGain survey of 2000 sales representatives nationwide..."
My bank account seems to drop more than $1828 by just speaking to a contractor, let alone actually doing a kitchen reno. Note it says "updating". They are probably talking about a countertop and sink, some paint and a few other bits. Now if you have to deal with solidly laid out-of-fashion ceramic tile on the floor, a nice 70's era "Florida ceiling" and avocado appliances ... well, start by adding another zero to the cost.
Then there's that HomeGain survey itself. HomeGain is an American real estate marketing firm. Their survey was of sales representatives in the U.S. and appears to have come out in 2007 as the market was beginning to badly misbehave down there. Not sure how big a difference any of those things make, but they give me pause.
[The HomeGain survey results can be found in a very useful HomeGain guide that you can download here ]
On the other side of the card, another survey result: professionally staged homes sell 80% faster!
Again, all credit to the agent for noting the source. StagedHomes.com is an organization involved in the training, accreditation and promotion of stagers.
The data was gathered during the period when BOTH Canadian and American markets were slumping. The bit not mentioned in the source-credit: 55% of the homes were vacant!
And the 80% differential is between 37 days to sell for the staged home vs. 6 months for the others! The average days-on-market for the entire Toronto area in September was a very-low 27 days.
To summarize, I'm not dissing staging. It's important and works when done right in the right situation. But the "proof" in these statistics and surveys is far from conclusive. Really I'm just illustrating a caveat for many things in real estate ... and life, for that matter:
Wiser people than I have warned about the tendency to try to make decisions and issues as simple as we want them to be, rather than dealing with the complexity that truly comprises them.
"If a string has one end, then it has another end"
"Policy [or rules] are for the guidance of wise men, and the strict adherence of fools".
A good agent who is also a great marketer dropped a card in our mailbox the other day with a two-sided pitch on the benefits of home staging. We absolutely believe that staging has become almost essential for most homes in today's market.
I have a pet rant about staging, but it's pointless to bore you with it -- whether I "like" universal staging doesn't matter; it usually works if done right; and since everybody else is going to do it, you pretty much have to do it as well.
But the amount and type of staging depends on the market, the particular home and other circumstances.
Like selecting an agent and nearly everything else in real estate, staging has a whole bunch of "art" and "situation" about it.
A nice survey-based table showing how much you will "make" on a given staging activity looks very scientific and "factual". If only it were that simple. The piece in my mailbox gives examples such as "Update kitchen and bathrooms" at a cost of $1404-$1828 yielding a price increase of $3216-$3934. To the author's credit, a source is noted: "HomeGain survey of 2000 sales representatives nationwide..."
My bank account seems to drop more than $1828 by just speaking to a contractor, let alone actually doing a kitchen reno. Note it says "updating". They are probably talking about a countertop and sink, some paint and a few other bits. Now if you have to deal with solidly laid out-of-fashion ceramic tile on the floor, a nice 70's era "Florida ceiling" and avocado appliances ... well, start by adding another zero to the cost.
Then there's that HomeGain survey itself. HomeGain is an American real estate marketing firm. Their survey was of sales representatives in the U.S. and appears to have come out in 2007 as the market was beginning to badly misbehave down there. Not sure how big a difference any of those things make, but they give me pause.
[The HomeGain survey results can be found in a very useful HomeGain guide that you can download here ]
On the other side of the card, another survey result: professionally staged homes sell 80% faster!
Again, all credit to the agent for noting the source. StagedHomes.com is an organization involved in the training, accreditation and promotion of stagers.
The data was gathered during the period when BOTH Canadian and American markets were slumping. The bit not mentioned in the source-credit: 55% of the homes were vacant!
And the 80% differential is between 37 days to sell for the staged home vs. 6 months for the others! The average days-on-market for the entire Toronto area in September was a very-low 27 days.
To summarize, I'm not dissing staging. It's important and works when done right in the right situation. But the "proof" in these statistics and surveys is far from conclusive. Really I'm just illustrating a caveat for many things in real estate ... and life, for that matter:
Wiser people than I have warned about the tendency to try to make decisions and issues as simple as we want them to be, rather than dealing with the complexity that truly comprises them.
"If a string has one end, then it has another end"
"Policy [or rules] are for the guidance of wise men, and the strict adherence of fools".
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