After just over three years, I am hanging up my hat as a real estate agent. It was a great experience but I am making far more money “on the side” than in real estate itself.
I want to thank everyone who supported my efforts. There were far fewer people who wholeheartedly supported me than you’d think, so that makes each supporter extra special.
In the most recent (Early Spring 2012) issue of Home Digest, author Jim Campbell delves into the topic of trust. It is not a review of ethics but an observation that in today’s complex world we rely on trust far more than we used to.
I am almost never in agreement with these “slippery slope” theories about how the world is so much worse today than it was it the good old days. But Campbell does a great job of moving from our trust in technological advancements like plasma TVs and USB memory sticks (the inner workings of 
which are completely hidden from us) to our trust in legal documents.
In today’s complex and harried world, people often don’t want to know the details of the things they are signing. In my field, real estate, we are talking about the biggest purchase someone may ever make. I encourage all my clients to read the documents they are signing. I further try to go through the documents clause by clause. However, even with such a big purchase, many clients feel that they don’t need to know it all. Some prefer to rely on trust.
Every day we are asked to sign things that may or may not bind us to terms that we wouldn’t agree with if we fully understood them. In fact, modern “terms of use” licenses often never even require a signature and just by opening or using a product we are implicitly agreeing to the terms.
Campbell’s point is that a signature today represents trust in the sales representative or the lawyer far more than it represents actual knowledge of what is being signed.
All our lives, we’ve been warned to watch out for the fine print. Often the lawyers have added so many things to a standard agreement that it is ALL fine print. Sometimes, Campbell points out, there is ultra-fine print — presumably much more dangerous than the fine print.
I watch the reaction of salespeople when I actually read the things they put in front of me to sign. Most are annoyed that I am slowing things down. In fact, in Campbell’s article, he asserts that if we actually stopped to understand all the agreements we are being asked to make, the world would “grind to a halt”. I want my clients to trust me, but I believe the best way I can earn that trust is to ensure that they are entering into any deal with eyes wide open and full knowledge of the contents and terms of the deal: no matter how long it takes.
When I first made the leap into my current real estate career, I did a skills inventory and concluded that I would be suited to the job.
I looked at my project management experience and my ongoing fascination with language, including legalese. I looked at my communications and public speaking experience. Finally I looked at my ability to get technology working for myself and others.
What I didn’t realize at the time was that my earlier experiences in life also come into play in this career: retail sales is an obvious one that seemed so long ago as to be irrelevant (yet it comes up almost every day), and journalism.
Journalism? Yes, I now realize that those skills are very relevant. I am not the only person with on-air broadcasting experience and interviewing skills to get into real estate. Lance Chilton and Jim Tatti, two high-profile broadcasters in the Greater Toronto Area are real estate agents now. Asking the right questions and getting to the bottom of things are critical in any real estate transaction. Knowing how to frame a story and present the facts are also key skills.
The lesson of course is that your life experiences accumulate to make you who you are. I’m just happy to have a strong sense that nothing I did was “wasted effort”.
My wife and I occasionally try to come up with a price for our house. At one time this was an endeavor borne out of curiosity. Now, with our lives changing in different ways, we are looking at it a little more seriously.
With training as a respiratory therapist, my wife found it very difficult to remain dispassionate and professional when our child had trouble breathing. 
As a real estate sales representative, I have the training and insight to do market evaluations. But I suppose I face a similar challenge to remain dispassionate while evaluating our own home.
If you have poured money into a place, you want to recoup that investment. Unfortunately, renovations rarely get back all the money they cost (although kitchens, bathrooms, and general repainting are the best investments when viewed from this perspective). If your neighbor’s house sold for some astronomical sum, you want to get that much for your home too. If you have debt, you want to be able to at least retire the debt on the home, and hopefully pay off all your other debt too. You may have a “profit” target or a retirement nest egg amount you want to achieve.
So most people have a number in mind when they put their house on the market. There’s really nothing wrong with that. Sure, every real estate professional has a story or two about the “unreasonable” homeowner who wanted to get more than their house was worth. But everyone has their own motivations for selling their homes and for moving. Choosing to demand a particular price and accepting that you might not get that is perfectly fine. In fact, in a negotiation, that’s a pretty strong position to take: “If you’re not willing to pay what I want, then we have nothing to talk about.” If you really mean it, and actually are willing to walk away — that’s fine. But you have to realize that your house may not sell at all.
The sad situations arise when someone must sell their home by a deadline but truly believes that the market should bear their chosen price. They see lots of evidence to the contrary, but continue to lay blame on other factors rather than reducing the asking price. The house goes unsold and they end up actually losing far more money in the long run.
This is a trap that anyone (REALTORS® included) can fall into.
from the Ontario Real Estate Association
On HGTV this morning I saw the following (which I have severely paraphrased):
Potential Tenant: “It’s a great place but the bedroom is no bigger than what we have now, so it will be a tight squeeze.”
Real Estate Agent: “The apartment meets all of their criteria and I have some ideas about how to make the bedroom work for them.”
Potential Tenant: “It’s a little beyond our price range but we’re still considering it.”
Real Estate Agent: “Here’s a plan for the bedroom: simple shapes and lighter paint on the walls will create the illusion of more space.”
Potential Tenant: “With the ideas our agent showed us for creating more space in the bedroom, we’ll take it.”
I was a little confused by the edited show. I couldn’t understand why they would choose these snippets of conversation that seem to be disconnected. On the one hand the potential tenants are concerned about the amount of space in bedroom, which they know is not any physically bigger than their current bedroom.
The real estate agent, by her own words, is only creating the “illusion” of space and yet the tenants interpret that as having solved their problem.
If you’re selling a home, you want it to show to its best advantage. Thus, paint and mirrors that open up a room and make it seem bigger or wide-angle photography — these are ways to “market” the home. But as a buyer, you would still need to take measurements and be sure that your furniture fits or your plans for the room will physically work.
When you see a home full of someone’s stuff (even in a de-cluttered place) the sense of space will be very different from seeing the same home vacant and empty. You may think the rooms are bigger or smaller depending on how your spatial awareness works. Once again, nothing beats actual measurements.
Finance Minister Jim Flaherty introduced some new rules last year that affect the way Canadians borrow money going forward. You may have heard how real estate speculators will be affected by these rules more than the average mortgage holder or home buyer. For example, starting March 18, if your down payment is less than 20 per cent you will be able to take no more than 30 years to repay the loan, down from the current maximum of 35 years. That does affect a home buyer’s maximum affordable home price or increases the mortgage payment amount. But it saves a ton of interest over the long-haul, something that speculators care less about than average homeowners.
Also, something I haven’t seen mentioned in detail are the rules about home equity lines of credit. Did you know that as part of the new package of legislation, the government is “encouraging banks to lend responsibly”? Thus, as of April 18th, the government will no longer offer banks the insurance to cover losses from customers with lines of credit.
There are several possible results that we may see after April 18th. Interest rates on new home equity credit lines could rise. It could become tougher to qualify for one. Or both.
The reaction to these rules among real estate and mortgage industry insiders has been mixed. Clearly some say that this will negatively impact their business. But many recognize the healthy “caution” that this emphasizes in Canada and steers us even farther away from having a U.S.-style mortgage meltdown sometime in the future.
From the New York Times: “Eighty percent of people across the country who bought a new home last year used the Internet while house hunting, and they rated photographs as the most 
useful tool in their search, according to a survey of buyers and sellers by the National Association of Realtors. The survey also found that 24 percent of home buyers got their first glimpses of their new homes on the Web, up from a mere 2 percent in 1997.”
My dad was a professional photographer but I have allowed my photography skills (and the equipment I should have to take really great pictures) to wither away. So when I am listing a home, I hire someone to give the home a fighting chance in the visual world of the Internet. Merely having photographs is an important first step. People need to be able to see the home. But to really make a difference you need: a wide-angle lens, good lighting, intelligent angles, and enhanced contrast.
Often when a window lets in so much sunlight that the details of the room are washed out, you need to be able to compensate. Sometimes this is done in Photoshop and sometimes it is done on the spot with an experienced photographer. Similar problems arise when the room is not lit well enough and its features cannot be discerned at all. Again, experience counts.
Timely photos are also important. The current condition of the home is a good thing to reflect — and it is expected in the instantaneous world of the Internet. However, many people in the industry make a compelling point that summer photos for a winter listing can provide an “alternative” view of the home.
The latest trend in real estate advertising is to feature “concept” photos: a family enjoying the backyard or a dog lounging on the porch. The argument is that these kinds of photos give potential buyers a glimpse into what life would be like if they were to buy the home. I am perhaps old-fashioned in this regard. I believe the photos should be generic enough that people can inject their own fantasies into them — which follows the same theory as home staging: uncluttered and neutral is better.
In recent business history, spurred on by the open access of the Internet, traditional gatekeepers have been falling by the wayside. The most prominent is the recording industry. They are the folks that put music on various sorts of plastic discs and are kicking themselves that they let Steve Jobs talk them into iTunes.
In my business, real estate, the Canadian Competition Bureau went after the Canadian Real Estate Association for the seemingly anti-competitive way homes are listed for sale. In fact, the main complaint was about “limiting consumer choice” because of the rules governing the way the member-to-member listing database was run. Making parts of MLS® public meant that everyone got a glimpse as to how useful the database was and everyone wanted to participate. If you’re selling your home on Craigslist or kijiji you likely won’t get as many truly motivated buyers as you would through MLS®. Thus, it is said, consumer choice was limited.
I am not about to argue the merits of the Competition Bureau’s claims or the general sense in the public that real estate agents are just a bunch of crooks. But I would like to point out the similarities of public reaction to any gatekeeper — what has been referred to as a “copyright middleman”. Whether it is a recording industry or a real estate association, the idea is not to artificially increase the scarcity of data but to ensure there’s value added to it.
For example, buying an album used to be an experience: an album cover was a piece of art — that’s additional value over and above the recorded data (music). In the music business (which is not dying by the way, but growing in huge ways — distinct from the recording industry which is clearly shrinking), time spent with the artists is a scarcity. Concerts, personal appearances, and even dinners with the artist are things that are actually paid for by fans. Fan-bases are grown by wide distribution of a non-scarce product.
In real estate, the listing, the photos of the home, and the data describing the home are non-scarce entities — these things can be copied and distributed widely. I maintain that they should be distributed as widely as possible to generate interest in the home. However, MLS® still has a key role to play: ensuring the quality of the data, reputation, and connections between real estate professionals — those are scarce resources and are quite valuable. Any home data appearing on other websites simply doesn’t have the “trust factor” that a genuine MLS® listing has. The Toronto Real Estate Board, for example, spends a lot of time and money tracking down and correcting listing errors, as well as counseling and disciplining members who violate the rules.
My own role I see not as a gatekeeper, but as an enabler: helping people to understand the data, apply it to their own situation, and personal interaction with potential buyers and other agents.
Selling your own home, like many do-it-yourself endeavors, is a worthy pursuit. But some people don’t have the time, patience, or talent for fielding inquiries, hosting open houses, following up, writing up offers, reviewing offers, negotiating counter offers, and so on. There have always been home sales by owners. There have always been discount real estate brokerages who leave much of the process in the hands of the buyer or seller. There will always be premium services where every step of the transaction is handled by the real estate agent.
In the future, there will be less of a role for “guardians of the data” and more of a role for “helpers and guides”.
Plenty of people recognize the value of real estate as an investment. There is no doubt Donald Trump got rich with real estate. But I firmly believe that a rich life can be had even if you never sell your home again.
The slogan I picked for my business is “Home in on your dream.” I focus on the fulfillment of people’s desire for the “ideal” home. As I progress along this career, I more clearly understand that compromises are made all the time, even when people have the intention of making this home their last home ever. Because circumstances change, your plans to never move again can be foiled by forces beyond your control.
For starters, you may have to “settle” for something right now even though it isn’t perfect. This can be for a number of different reasons:
Then there are the actual buying choices you may need to make, which are lesser compromises:
Finally, there are life changes or even realizations that modify your view on the perfect home:
Please note that many of the “problems” with a home can be solved. Major renovations or rebuilds are not impossible, but most people find them too expensive, time-consuming, or risky.
Even the best dreams are tempered by reality. That’s no reason to give up on your goals. If you shoot for the stars you’re sure to hit the silver lining on a cloud or two.
This Flash game is a grand simplification, but it is kind of cute.
