The other day I came upon an article titled “Confessions Of An Anonymous Victoria’s Secret Photoshopper”. Everybody knows that most fashion advertisements are photoshopped, but I like to be reminded every now and again that photos of the world’s sexiest women are usually fake.

The article is a real guilty pleasure if you have some time to read it click here, but these are the Coles Notes:

1. Retouching existed long before Photoshop: If a model is wearing a colour that doesn’t look good on a computer screen, a retoucher will flat out change the colour for the ad.
2. Body-fixing starts on set: Hair extensions are a staple at any photo shoot and a swimsuit model wears push up bra underneath the swimsuit, the push-up bra is later photoshopped out of the image.
3. No one’s body part looks like that: The model knows her skin will be photoshopped to look hairless, flawless and perfectly tanned anyway, so she may as well not bother shaving.
4. In the end, it’s just about selling: If consumers didn’t buy into the “sexy-fake” imagery, there wouldn’t be a need for Photoshop.

It’s a sad reality, but we as consumers are emotional, irrational and impressionable.

We see this kind of editing everywhere, in every industry. Whether it’s a lipstick, a car or a sports drink, every product is made to look more beautiful or desirable in one way or another.

Well, we’re seeing this in the real estate industry too. 

I can’t count the amount of times I’ve had a client lured in by beautiful MLS photos, which were captured using a special filter and good lighting. 

…By the newly renovated flooring, which is actually a sloppy quick fix for cosmetic purposes.

…By the designer furniture, that is in no way practical for actual living.

Sellers have to think about what image will create the strongest emotional response from a Buyer.

Psychologist Ernest Dichter who studied consumer behavior in the 1930s can help explain what motivates a Buyer. “Dichter understood that every product has an image, even a “soul”, and is bought not merely for the purpose it serves but for the values it seems to embody. Our possessions are extensions of our own personalities, which serve as a “kind of mirror which reflects our own image”. Dichter’s message to advertisers was: figure out the personality of a product, and you will understand how to market it.”[1]

If a Seller is effective in home staging and photography, the presentation of his home will create an image for the Buyer of the kind of life they will live if they buy the home. Thoughtful marketing of the kitchen, with high end Wolf appliances, fresh cut flowers and the right placement of hard cover cookbooks, can make a Buyer think she will become the next Julia Childs. Her guests will think of her as a sophisticated chef and posh hostess.

If the bathroom is staged to look like a spa, the Buyer might think she will never be stressed out again. She will forever be calm, and zen because any time she is faced with a problem all she has to do is pour herself a bubble bath and the problem will go away.

I fall for this over and over. Every time I buy an Adidas by Stella McCartney tennis dress, I do it because of how darn good Caroline Wozniacki looks in this dress. Heck, I might even hit a ball as well as she does! Of course, it’s never the case after I bring the dress home. I’m still lumpy and I still can’t serve a tennis ball properly. I know deep down that I may as well save the money I spend on the brand name and go for the generic no name athletic apparel, but I am an impressionable human being and I just can’t help it, I still think I will become Caroline if I wear the same dress.

“You would be amazed to find how often we mislead ourselves, regardless of how smart we think we are, when we attempt to explain why we are behaving the way we do,” Dichter observed in 1960, in his book “The Strategy of Desire”. He held that marketplace decisions are driven by emotions and subconscious whims and fears, and often have little to do with the product itself. Trained as a psychoanalyst, Dichter saw human motivation as an “iceberg”, with two-thirds hidden from view, even to the decision-maker. “What people actually spend their money on in most instances are psychological differences, illusory brand images,” he explained.[2]

This happens all the time for Home Buyers. They are willing to shell out thousands of extra dollars because of the perception that a home which shows beautifully is worth more. Once the staging is gone and the home is vacant, it feels bare and underwhelming and they can’t help but feel disappointed.

We can blame the marketing, but what lessons can we learn from this? 

As a Seller, you want to take every measure you can to appeal to a Buyer’s subconscious desires as Dichter proposes and give your home a desirable personality.

As a Buyer, you want to look beyond the bells and whistles of the home. Strip off the personality, examine the home closely and envision it without the furniture and décor. Don’t be so quick to dismiss a home that doesn’t show well either. The interior can always be improved, what can’t be changed is the physical location and layout of the home.

As a final analogy, when a model wears make-up at a photo shoot, the make-up hides her flaws and consumers don’t ever really know what she truly looks like. It’s the same for Home Buyers, in a Seller’s market they spend only minutes reviewing a property before they need to make a decision about it. Buyers aren’t always qualified to judge a house beyond all the make-up and glamour. It’s always valuable to bring in a Home Inspector to uncover the make-up and help the Buyer see the property for what it truly is. 

Donald Duck heard a rumour about buried gold. He grabbed his pickaxe in pursuit of finding the gold, which had always been a lifelong dream of his. He didn’t ask for help because he thought he could do it alone. He went out without any direction, and he dug for days.

On the first day, he got dirty. 

On the second day, he got tired.

On the third day, he got injured.

On the fourth day, he got depressed.

He had put in many hours, and he had given it every ounce of effort but on the fifth day, he lost hope, gave up his pursuit and went home.

Mickey Mouse heard about Donald’s quest. He also believed there was buried gold, but Mickey knew that this wasn’t going to be an easy endeavor. He knew he was going to need help and he wasn’t afraid to ask for it.

Mickey recruited a team of seven dwarfs. The dwarfs were highly skilled as they were precious mineral miners. They went back to the very spot Donald had left a day ago. They had specialized equipment and surveyed the land. They took measurements, land samples and made calculations. They determined that it wasn’t a rumour, there was gold, only it was three feet deeper. Had Donald continued for a fifth day, he would have struck the gold himself and his dream would have come true.

This is a common theme in real estate, especially for House Buyers in the Toronto market.

Patience, persistence and positive thinking are components in achieving the dream of owning real estate in Toronto. Quitting is just a decision away and it’s easy to lose hope after three times you’ve found the home of your dreams, three times you’ve been involved in a bidding war and three times you’ve been outbid. This is where persistence becomes the key to whether you achieve your goal or whether you give up on your goal. You never know when you will strike gold, wherever you are, it may only be three feet away. 

Frustration is a result of unmet expectations. Donald expected to find the gold on his own, and when the pursuit took longer than he expected, when he encountered obstacles he didn’t see coming, he began to feel the stress and giving up felt easier than continuing on. He made the decision to quit. Donald was focusing on how long it was taking him to reach his goal, and he was thinking of his hardships.

The lesson is that focusing on how long it takes to achieve a goal is not as important as how persistent you are. If Donald were more persistent, patient and positive, he would have seen a different outcome. The focus would have gone from defeat to success. His troubles wouldn’t have seemed as bad if he had gold to show for it. Once you have achieved a goal, it’s almost irrelevant how long it took, or how difficult the process was.

Mickey on the other hand knew the value of a good team. He had realistic expectations because he received advice from qualified professionals. In real estate, if you’re a Buyer, it’s the equivalent of hiring a trustworthy Realtor, Mortgage Broker, Home Inspector and Lawyer who will take the time to educate you on the process before you even start. This way, you will be prepared for what’s to come and you aware of the obstacles. You may expect the process to take a long time, and even take several tries at an offer.

For example, a Buyer who is prepared will know when a house is underpriced and set up for multiple offers and they will have assessed the neighbouring comparable properties which recently sold for a better sense of the home’s true value. A Buyer who is prepared will know that, to get a competitive advantage, he will need to do his due diligence: home inspection, mortgage approval or lawyer review before the offer date. That Buyer will rely on his team for their expertise and it will help him achieve his goal. A Buyer who is unprepared will take shots in the dark until one day he gives up.

Like Mickey, if you know a goal is worth pursuing and it is what you truly want then the formula for success is preparation, patience, persistence and positive thinking.

THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.

THE AUTHOR IS NOT LICENSED TO PRACTICE PSYCHOLOGY. THE RESEARCH FINDINGS REFERENCED IN THE COMMENTARY ARE USED TO MERELY UNDERSCORE THE AUTHOR’S OPINION AND OBSERVATIONS.

A (relatively) true story

When I met Marshall and a 7-month pregnant Lily back in 2012, they lived in a 700 square foot condo in Dowisetrepla with their two-year-old son Marvin.  They had come to the realization that they would need something bigger than a 1+den as Lily had an Eriksen the size of a 15 pound turkey growing inside of her.

On the verge the last minute, they asked for my help — sell the condo and buy a house to move into before the turkey-baby arrives in the midst of the city’s definite Seller’s Market. There were a few stipulations from the Mortgage Lender on top, the condo must be sold first. So, there is always the risk that they may be homeless if they don’t find a house before the closing date of the condo. Well, that’s a great idea for a sitcom right there, and not stressful at all.  Of course, this story has a few miraculous twists. The first one being that in Dowisetrepla (not exactly down wind of the sewage treatment plant, but maybe not the greatest neighbourhood the city has to offer) where condos might take 2-3 weeks to sell, we sold theirs in just 2 days, with 3 offers and $5,000 over asking made for a record breaking sale in the building.

Yes, all the powers of the Greek Gods combined to help us win that night.

It was the next stage of our journey that kept me up every night.  What if Lily gives birth… and they are… homeless.

And we saw houses. Many houses. We even saw a house with a stove in bathroom, a “stoveinkerator” as Lily called it. It was a combination of a stove, oven, sink and refrigerator. Every house we saw sold for thousands of dollars over asking, but the house with the stoveinkerator sold for a hundred thousand dollars over asking.  Where many teams might have quit, Team Lilymarshmanna trekked on when alas, another miracle! Like placing a bet on a racehorse named Slowpoke, we took a chance on a home that had lingered on the market for half a year. Many teams may have come to the conclusion that something bad must have happened in this home for it not to sell in a definite Seller’s Market, like a gruesome murder-suicide or five generations of chain smokers. But nay! Looks do deceive! Slowpoke is the fastest horse in the Kentucky Derby! And this house was a clear winner. While Marshall and Lily rejoiced in song and dance, I was on the phone with the Sellers, two brothers, Barney and Ted. Barney was the Realtor and Ted was the architect-designer, and for a reason still unknown to this day, they managed to screw up the sale of a perfectly good property. 

The two of them were in the flip and sell business, they were good at the flipping part, bad at the selling part. If I could out-negotiate a pair of half-wits (haha, because only half of them could do their job), then we were at the finish line of our house hunt. But all I remember from that evening was demanding over the phone they meet in half an hour or we take our offer and walk, then sitting in their office with their Mercedes key chains sparkling under the compact fluorescent light bulbs, and blinding me every time I glanced over there. Oh shoot, they drive fancy cars, if I were going to get these papers signed I would need the Greek Gods to come together again, in particular Caduceus, the Greek God of Negotiating. Under his guidance, the right words were exchanged and the papers were signed!

A week after the closing on their new house (yes, only one week), Lily and Marshall welcomed their second child, a baby girl they named Daisy. And they all lived happily ever after.

Well, life did throw them a curveball in 2014. Lily was an amateur painter and her lifelong dream was to sell art in Rome. When the opportunity to move to Rome and become an artist came about, they were on the first flight (or 31^st flight) out. Does it get any happier than that? Why, yes. Yes it does! We can end the story with our last final miracle. The Seller’s Market only became more and more aggressive in the past couple of years. A market that brought so much grief and anxiety now brought us joy and delight. For sale sign on the lawn, Buyers lined up, the house sold for $100,000 more than it sold for two years ago! Team Lilymarshmanna rejoice again!

If this isn’t a feel good happy real estate story, then I don’t know what is.

Thank you Marshall, Lily, Marvin and Daisy for the good times… you know who you are 😉

Disclaimer: The preceding commentary is the opinion of Hanna MacDonald and does not represent the interests or opinions of Right at Home Realty Inc., Brokerage or the Toronto Real Estate Board. Therefore, Right at Home Realty will not be held responsible and/or liable for any of the opinions herein.

Originally written by Hanna MacDonald for The Hudsucker: http://thehudsucker.com/2013/06/17/guest-writer-hanna-stecewicz-should-i-buy-a-condo-or-not/

“My cousin’s roomate’s mother-in-law’s neighbor told me condos are a bad investment…”

So what do you want to do?

You can keep renting that too cramped, too run-down, cigarette smoke infused apartment with that annoying, yogurt-stealing, privacy-invading roommate Becky. Or, you can go ahead and do some research on condos. Your cousin’s roomate’s mother-in-law’s neighbor could be right… in some cases. You certainly don’t want to end up with a poor investment. Last thing you need is your cousin and the rest of the family giving you “the I told you so” for the next eight months.

Image Credit: http://cdn.someecards.com

You shouldn’t give up though. So you don’t have enough income to buy that sensible 3 bed, 2 bath semi on a tree-lined street, but that doesn’t mean you have to waste money on rent for the next five years.

You can certainly be proud to own a condo, if you know what to look for. The first thing I always tell my clients is the cliché, LOCATION, LOCATION, LOCATION. In every major city, there are good neighborhoods and there are bad neighborhoods.  If you’ve lived in the city for a few years, you’ll know from experience which parts of town to stay away from. This is common sense.

What takes a little bit more consideration? For one, areas are becoming over-saturated  In Toronto, new condo development has gone into overdrive and it’s common to find 15 condo towers in close proximity to each other. This is a problem. It’s the simple economic model of supply and demand. When you have an area where it’s common to find 100 listings for sale within a particular complex at any given time, it’s a case of oversupply. Not only will it be hard to sell the condo with so much competition, you won’t see the same rate of appreciation in value as you would in a less concentrated area.

And secondly, remember you’re (hypothetically) moving out of an apartment, so move away from a neighborhood with a high number of apartment buildings. Surrounding real estate impacts the value of your property. You know how they say “it’s not good to be the nicest house on the block?” That’s because if you’re surrounded by inferior real estate, it brings down the value of your own property. Vice versa is true. If you have the “ugliest house on the block”, then the nicer properties on the block bring up the value of your home. The same is true for condo buildings. It’s better to be surrounded by million dollar homes than low-rent apartment buildings.

In real estate, ratios are important. Focus on neighborhoods with a low concentration of condos, a high concentration of amenities (theaters, restaurants, parks, fitness centers, shops), surrounded by more expensive real estate.

Once you’ve narrowed down on the location, you should focus on buildings that offer differentiation. Differentiation is a marketing term: It is the process of distinguishing an offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors’ products.

Imagine your roommate Becky comes home with a brand new purse. It’s the same mass-produced purse that your friend Jen has. In fact, your sister has that purse too and you’re pretty sure you’ve seen Amanda carry it. Everyone seems to have this exact same purse. So you don’t really care that Becky has it too. If you were going to buy a purse, you’d buy one that nobody else has.

Photo Credit: http://urbantoronto.ca

 The same goes for condos. If you buy a generic concrete and glass condo unit with the same floor plan and the same finishes as every other condo, it won’t be as desirable to a pool of future potential buyers than if you had loft with 13 foot ceilings or exposed brick walls, which is more rare.

When looking at condo buildings, age in important. You don’t want to buy a condo that’s too old or too young. A happy range in my opinion is 2-12 years. Pre-construction condos and new builds don’t have a reputation that you can rely on yet and older buildings require more maintenance.

Finally, after you’ve narrowed down on the location and you’ve narrowed down on the condo itself, you want to make sure the building has a good reputation. In Toronto, this stage is called due diligence and it happens when you make an offer. When an offer is made, it’s often made with conditions. One, the offer is conditional upon buyer arranging satisfactory financing and two, the offer is conditional upon the buyer’s lawyer reviewing and approving the status certificate.

I don’t expect anyone to know what a status certificate is. Although you should, especially if you’re making offers on condos. Consider every condo like a mini corporation run by a property management company and board of directors who are elected by the owners. Like corporations, every condo has financial statements that illustrate the condos financial stability. These statements highlight how much money is in the condo’s reserve fund, or bank account if you will, what the current maintenance fees are for the particular unit of interest, the budget for the current year, the forecasted expenses, and so on. Further, the status certificate will show whether or not there are any lawsuits, liens or special assessments against the condo. The last thing you want is to move into your new home and discover you owe the condo board $40,000 to go towards balcony repairs and a class action lawsuit because the glass falling off the balconies is killing pedestrians below and there isn’t enough money in the reserve to pay for it all.

Also, along with the status certificate is a boring 50+ page book on rules and by-laws. It’s good to read through this so you know what you can and cannot do. It would be a shame if you had to give away Feefee Puppy because 150 lb Mastiffs are prohibited inside the building.

If you do a bit of research, there is no reason why you have to listen to anyone when they say condos are a poor investment. I promise, you don’t need to participate in a bidding war against five over-caffeinated power-couples for that overvalued freehold house, and you don’t need to hide your yogurt from Becky anymore either. You can be happy owning a condo, and more importantly, you can be proud to tell your cousin how AWESOME your new condo is!

Disclaimer: The preceding commentary is the opinion of Hanna MacDonald and does not represent the interests or opinions of Right at Home Realty Inc., Brokerage or the Toronto Real Estate Board. Therefore, Right at Home Realty will not be held responsible and/or liable for any of the opinions herein.

At the end of April, I showed my client a condo townhouse at Don Mills and Lawrence. I grew up in a similar condo townhouse a block away, where my parents still live. I’ve seen the area change over the last decade. Where once there was a mall with outdated shops and senior citizens, there is now “Shops on Don Mills” with upscale restaurants and fashionistas. Over the last five years, I’ve been keeping up with the real estate values.

I supplied my client with the most recent sold data directly within this particular complex: condo townhouse A sold in October for $455,000, condo townhouse B sold for $429,000 in November, and there have not been any sales since.  There aren’t many of them, and they come in all states of repair. The one for sale was finished, and showed well. I suggested at $525,000, she might win if she went in firm, of course depending on how many Buyers would compete for it. It followed the formula for selling a house in the city. Price low, $479,000 in this case, clean it up, make it look pretty, open house Saturday and Sunday, take offers next week. 

The timing wasn’t right for my client to proceed, and even the situation wasn’t right, but of course I followed the events unfolding on offer night. My parents were curious; they wanted to know how this sale would impact their own investment one block over.

Offers started coming in days before the offer date, yet the Seller was not going to review any until the date that was set. By the end of offer night, there were 11 offers, at least. I texted my mother that it looks like it will be a record-breaking sale for our little condo complex. I guessed, at that point, that the condo townhouse would sell for closer to $550,000.

When it comes to real estate with a back yard, in Toronto, it’s a mess. Buyers are pushing themselves more every year.

The final sales price for this condo townhouse was $605,000. That is more than a record-breaking price. That is unreasonable. There is a $150,000 gap between this sale and the last highest sale in the fall. That is massive for our little condo complex. Thank goodness my client was absent from offer night. I wouldn’t have advised her to go that high; if we were involved, our participation wouldn’t have ended on a positive note.

There are people from many walks of life who will buy real estate this season. Some of them will afford what they purchase; others will stretch themselves to the point where it becomes risky. Outbidding every other buyer is difficult, but qualifying for the mortgage or keeping up with the monthly payments are more difficult. What happens if the appraisal only comes back at $525,000 and a Buyer now has to scramble and find another $80,000 to close on the property or risk breaching the contract and all the legal implications that follow? Buyers need to be careful. Buyers need to explore their options. That condo townhouse wasn’t the only option for my client.

Buyers can stay put, they can rent, live in condos, live in apartments, move outside the city, buy a fixer upper, renovate, buy in less popular neighbourhoods, they can forgo the parking spot, forgo the 2nd bathroom or the finished basement, or keep trying until they succeed. That condo townhouse doesn’t mean that every condo townhouse in that little condo complex is now worth $605,000. The next one may not have the right timing, may not have the same finishes, may not show as well, may not attract as many Buyers and may sell for $500,000.

What is important to me is to that my clients know they have options, and explore them. They should never put themselves in a dangerous position because of the pressure of the moment.

My parents immigrated from Poland. I grew up in a two-bedroom apartment and I shared a bedroom with my little sister. When I was 11, my parents bought a condo townhouse at Don Mills and Lawrence for $155,000. When my parents bought it, it wasn’t perfect or pretty.

Over time, they fixed it and reno’d it, planted a garden and furnished it well. It didn’t change overnight, just like the neighbourhood didn’t change overnight. When my parents purchased it, they didn’t know what the neighbourhood would become 15 years later, or that the value would reach $600,000. They purchased it because they could afford it, and what mattered to our family was the time we spent together. It didn’t matter to me that I had friends who lived in bigger homes, or newer homes, or Royal York for that matter. The house isn’t responsible for much of anything I am or have today.

It’s the people in my life that are responsible for my happiness. It’s not the house.

I will prepare my clients who want a backyard for what lies ahead for them, provide them with every ounce of research, and remind them on offer night, that’s it not about the house.

THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.

THE AUTHOR IS NOT LICENSED TO PRACTICE PSYCHOLOGY. THE RESEARCH FINDINGS REFERENCED IN THE COMMENTARY ARE USED TO MERELY UNDERSCORE THE AUTHOR’S OPINION AND OBSERVATIONS.

Fred Flintstone and his family lived at 301 Cobblestone Lane, Bedrock in a 2 bed, 1 bath bungalow with an attached garage and a wood-burning fireplace. The home was a cozy place for two, but when Wilma was pregnant with Pebbles, Fred decided to put the house up for sale and look for something a little bigger.

He listed his home for 100 clams. A number he thought was fair and reasonable based on past comparable sales.

Meanwhile, his best friend Barney Rubble and wife Betty were thinking about buying a new home. The market in Bedrock was slow, and as a result, there have not been that many sales in the year. When Betty saw the For Sale sign, she demanded Barney make an offer.

That night Betty and Barney argued over how many clams they should offer the Flintstones for their bungalow. Betty, who has a reputation for overspending, was insisting they pay the full asking price for fear of losing out on the home. Barney felt the opposite. He was frugal, and he just wanted to get a good deal.

The next morning, Barney made Fred an offer of 50 clams.

Fred Flintstone is generally quick to lose his temper, even over the most trivial matters, but this matter was far from trivial. Barney’s offer was not well received. Fred Flintstone was insulted, and that night the entire town of Bedrock could hear Fred’s outburst.

Barney returned home to Betty and told her that Fred had lost his temper again. Betty begged him to go back with a higher offer.

Half an hour later, Barney goes over to see Fred again with a much higher offer than before, hoping Fred will negotiate with him.  This time Fred refuses to speak with him and won’t even look at the offer. He is so angered by Barney and decides that under no circumstance will he sell this house to Barney, whether or not he is the sole and only Buyer.

In an emotionally charged decision, Fred takes the house off the market and decides to build an addition for the new baby addition instead. 

What lesson can we take from this fictional story set in the Stone Age? 

The situation is similar and the reverse to an economics experiment called “the Ultimatum Game”.

In the Ultimatum Game, a Proposer decides how to split a sum of money with a Responder. Let’s say the Proposer is given $100 and can choose to split the money with the Responder in any percentage the proposer would like. However, if the Responder rejects the proposal, both players get nothing.

Psychologists can gather insight into the human psyche from the outcome of this game.

What they found is that Proposers found success when they offered between 40%-50% to the Responder. When Proposers offered less, the Responders generally rejected the offers and both players ended up with nothing. 

Why would a person reject 30% and leave with nothing, when it’s economically irrational? Isn’t something is better than nothing? 

Informed, knowledgeable Responders may react to small ultimatum offers by perceiving them as unfair, feeling anger, and acting spitefully. They prefer to have nothing and punish the Proposer’s greed. Perhaps the line of thought is that they would only lose 30%, whereas their opponent will lose 70%.

Many psychological complexities can be drawn from the Ultimatum Game, especially if it’s a one-shot deal. The Proposer will have to work out the minimum offer that’s likely to be accepted. Most Proposers will act fairly, or appear to act fairly, as it’s a highly rational custom in a society where people have to work together.

In Fred Flintstone’s case, he is the Responder while Barney Rubble is the Proposer. He and Barney were the only two players, and it was somewhat of a one-shot deal. Barney offered Fred a sum that was far too low and unfair. Rather than take some time to cool down, Fred was quick to act and decided to punish Barney and took his house off the market. Neither Fred nor Barney ended up with anything and the deal was unsuccessful.

Does this happen in real estate in real life? Generally, Sellers don’t react well to low-ball offers if they perceive the amount to be unfair. Buyers are allowed to make as many offers to a Seller as they like, but once they’ve established a poor relationship, negotiating becomes more difficult.

The short lesson today is for Buyers. If you find a house you love, don’t risk spoiling the relationship between you and the Seller with a low-ball offer. You will have greater success if you offer a fair amount.

THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.

THE AUTHOR IS NOT LICENSED TO PRACTICE PSYCHOLOGY. THE RESEARCH FINDINGS REFERENCED IN THE COMMENTARY ARE USED TO MERELY UNDERSCORE THE AUTHOR’S OPINION AND OBSERVATIONS.

Rich Cousin Mildred (Milly) Pennybags was the daughter of Rich Uncle Pennybags, aka Mr. Monopoly, the Real Estate Mogul who built an empire across the country.  Upon the morning of her 21^st birthday, she gained access to her trust fund. Of course, she wanted to be just like her father, and she decided to invest in Real Estate as well.

As she was only 21 years old, she was naturally spontaneous and impulsive. She went on to Realtor.ca and booked an appointment with the Seller’s Realtor on the first million-dollar penthouse she saw, on the most posh street in town. That same evening, she gazed out from the Juliet balcony off the master bedroom. She saw herself following in the footsteps of her father. She must have it. And she must have it now. “I’ll take it!!!” she exclaimed.

She waived her $1,000,000 trust fund cheque at the Seller’s Realtor and demanded the Realtor draft up an offer immediately! No conditions!  Of course the Seller’s Agent was happy to oblige, his client the Seller had just received an unconditional offer for the full asking price.

That same night, the cash offer was accepted and Milly had a firm deal.

As closing day arrived, Milly received a set of keys. She grabbed her set of Louis Vuitton suitcases and a custom made Louis Vuitton hamster cage. She used her new fob to let herself into the lobby. As she walked across the marble floors, the concierge quickly stopped her. “Excuse me Mademoiselle, but you cannot bring that rat into the building”. “This is my darling pet hamster Penny, and of course I can, I am the new owner of penthouse 10!” “I’m afraid you are mistaken, it is against the condo bylaws to have any pets of any kind inside the building, have you not read the status certificate???”

Milly had no idea what a status certificate was.

“Oh, and this is an envelope for you from the Board of Directors”, finished the concierge. Milly opened envelope and read the letter.

April 25^th, 2014

Ms. Mildred Pennybags

118 Plaza Ave, Penthouse 10

M5R 1H5

RE: OUTSTANDING MAINTENANCE FEES AND SPECIAL ASSESSMENT FEES

Dear Ms. Pennybags,

Welcome to The Plaza.

This is a notice that your outstanding balance of $37,800 is due immediately. Enclosed is a statement of account for your reference.

Please arrange payment of this account within the next 5 business days.

Your prompt attention to this matter would be greatly appreciated. If you have any queries regarding this account, please contact our office as soon as possible.

If payment has recently been made, please accept our thanks and ignore this notice.

Regards,

Donald Trump
Trump Residential Services Incorporated

It turns out that the Sellers had reneged on paying their maintenance fees for the last 9 months, at $1.60/square foot (yikes! That’s high) and a 750 square foot condo, the maintenance fees in the amount of $10,800 are in arrears. As the new owner, the responsibility of paying the outstanding fees is passed onto Milly. Further, the building is in debt. As the condo turned 20, the elevator began to malfunction, the balconies needed renovations and the underground garage was scheduled for an overhaul in the coming months. The reserve fund is insufficient to cover the cost of the repairs. The Board of Directors has a history of running a budget deficit and overleveraging. Now they have charged a special assessment fee to all the owners to replenish the condo reserve fund so they can begin the repairs, before they become a liability. The special assessment fee is $27,000.

There was Milly, keys in one hand, a shock-inducing letter in the other, while the squeeking hamster in his Louis Vuitton cage was being carried out by the concierge.

Poor Rich Cousin Mildred, if only someone could have warned her of her erroneous investing.

Real Estate should never be an impulsive decision. One must be diligent before making any Real Estate purchase, never mind such a luxurious one.

The moral of the story is this: do your due diligence.

One: Hire your own Realtor who will represent your best interests, not the Seller’s. When you have your own Buyer Realtor, you can count on a full review and comparison of similar condos sold. This way you have the information you need to properly negotiate the best deal.

Two: Include every necessary condition to ensure you protect yourself from surprises on closing day. The two standard conditions in a condo sale and financing and status certificate review.

The status certificate is easy to brush off, especially if it’s a brand new condo. While on the outside, the physical condo may be perfect, but problems may be lurking beneath the surface.

A status certificate describes who is on the condo board, the property management company, the amount of money in the reserve fund (which goes towards paying condo expenses), the history of the condo maintenance fees, the annual budget, special assessments, lawsuits, condo deficiencies or repairs, and condo rules and regulations. The status certificate must be reviewed by a Real Estate Lawyer, who will warn you of financial difficulties the condo and Sellers are having, and any strict and limiting rules, such as the no pets condo bylaw.

Only after the status certificate is approved by a Lawyer, and the Mortgage Broker delivers a financing commitment letter from a Mortgage Lender, is it safe to firm up your deal.

Rich Cousin Mildred thought she was making a wise decision by investing in Real Estate like her father. Unfortunately for her, there are consequences to making an uneducated decision. Not only will she have to cough up a very large, additional sum of money, she will have to give up her pet hamster if she wants to live at The Plaza.

Although this is a story and Rich Cousin Mildred is a fictional character, sometime Buyers end up in tough positions when they don’t have all the information. When it comes to Real Estate, take your time. Do your research, and not only will you be happy, you will be confident you made a knowledgeable decision.

 THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.

What do you think of when you see this logo?

McDonalds — 1000 calorie big macs.

Nike — Just do it.

Disney — They lived happily ever after.

Hanna in the City – Question mark.

Madame Toastmaster, Fellow Toastmasters and Welcomed Guests,

Let me tell you a story about Hanna in the City.

It all started at the yacht club one night. It was right after race night, all the sailors were sitting at one table having dinner together. It was then that one of them began badmouthing all Realtors. I let the conversation play out, trying to decide whether or not it was a good idea to confess that I, myself, was a Realtor. At the last minute, I chimed in “I’m a Realtor.” That ended the conversation quickly. An awkward silence followed.

Why were all Realtors grouped together into the same category? Why was the perception that they’re all salespeople cold-calling strangers and chasing commission cheques? Better yet, how can I succeed in this field and change the negative perception into a positive one?

I didn’t want to be that stereotypical Realtor. Dialing a random phone number, and asking anyone with a pulse if they were thinking about buying real estate in the next 1-3 months made me cringe. I’d rather work at McDonalds.

The exams for a Real Estate license are easy enough for a fifth grader to pass and there are 35,000 Realtors in the GTA. I needed to differentiate myself from the bad ones. Thankfully, I have a BBA with a major in Marketing. I also spent two years of my life working at an ad agency until I finally couldn’t take it anymore and quit spontaneously in pursuit of a happier life. 

However, I learned skills I still use today to promote my business in a good light. 

I was qualified to create my own brand but I still had to decide what kind of a person did I want to be for myself, and for my clients? I simply wanted to be myself, honest and genuine and I wanted to treat my clients the way I would like to be treated. I wanted to create an all around happy experience for my clients, and I figured out how to do that in two steps.

Step one:

Decide on who do I work for and why?

I narrowed in on a demographic: Young Urban Professionals. I narrowed that down. 25-35 year olds who work downtown and want to live downtown. I narrowed that down even more: My friends, and my friend’s friends.

Why work with my friends? Because I love my friends. My friends already know I want the best for them, so it makes it very easy for them to trust me.

Helping my friends find their dream home, not just a house, makes me happy. The old adage about happiness is true, do what you love and rest will work out for you.

It’s funny how that works. While it did take some time, my business developed into referrals only. Friends tell their friends, who become my friends, and so my business grows.

Step two:

Start with one client and treat them how you would like to be treated. You must work towards understanding them and what constitutes their happiness. Every single time they are with you, they know that you genuinely want what’s best for them.

In order to foster that genuine relationship I teach my client everything there is to know about real estate. Answer his questions before he even thinks to ask them. He will feel informed and have confidence in me.

Hanna in the City — A happy real estate over-educator

Back to the story about the sailor who hated Realtors.  About a year after the initial rant, that same sailor approached the newly minted Hanna in the City and referred one of his best friends to me. I must have broken out of that stereotypical mold. My brand had changed his perception.

Take a moment to think about your brand, your personal brand. Who is the person you want to be tomorrow? Start being that person today. Think three words that describe the person you want to be. Write them down:

Optimistic

Spontaneous

Imaginative

Every decision you make, ask yourself if it’s in line with those three words. Be those three words everyday, and you will become the person you want to be.

Just do it.

THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.

Finding a Mortgage Professional is like finding a boyfriend (or girlfriend). You have to date a few to find “the one”. Whether you find someone online, or get set up by a mutual friend, you likely won’t commit right away. Maybe, your friend Rachel sets you up with Chandler the Mortgage Specialist, from TD bank on Tuesday and your other friend Monica sets you up with Joey the Mortgage Broker, from Dominion Lending Centres on Thursday. Both are charming, both are promising you the best mortgage and both want to be exclusive with you.

How do you tell them apart? If you thought a Mortgage Specialist and a Mortgage Broker/Agent were one and the same, they are not. They are opponents! And they are fighting for your love! Who will win your heart…er…business???

A Mortgage Specialist is an employee (of TD bank, for example). If you walk into your local TD branch, and request a Mortgage approval or pre-approval, you will meet your Mortgage Specialist. The Mortgage Specialist will ask you to fill out an application and submit a few financial documents. Once the documents are collected, the Mortgage Specialist submits them to the underwriter. At the end of the process, if you are approved, you will end up with a TD Mortgage.

If you and your whole family are long-term TD customers with a line of credit, credit cards, chequing and savings accounts, and a variety of other loans, then you may end up with preferential treatment and a favourable mortgage approval.

That’s fair, but what if you and TD are not in a committed relationship where each of you promises to be loyal to the other, in sickness and in health, through good times and through bad times.

When it comes to mortgages, it doesn’t always pay to be monogamous. It doesn’t pay to be polyamorous either. You can allow three suitors to court you, but no more than three. I’ll get back to this point later.

What if BMO is offering a better rate than TD? What if RBC, CIBC, HSBC, ING, Manulife Bank, PC Financial, Scotiabank, National Bank, Industrial Alliance or Desjardins are offering a better rate?

What if First National, MCAP, Street Capital, Home Trust, Merix Financial, ICICI Bank, CMLS, MonCana Bank, Radius Financial, RMG Mortgages, AGF Trust, B2B Bank or Xceed are offering better rates?

What if you’ve never even heard of these Lenders?

A Mortgage Broker is not an employee of any one particular Lender, but more like a freelancer who works with hundreds of Lenders to find you the best rate. He works for a Brokerage (like Dominion Lending Centres, for example) and (usually) gets paid a commission directly from the Lender only after the deal is closed. A Mortgage Broker will closely evaluate your financial and credit history and advise you on what terms (open, convertible, closed, variable open, variable convertible, variable protected), which options and features (buydown of mortgage rate, assumable mortgages, accelerated payments, extend and blend, portable mortgages and skipping mortgage payments) are best for you. The main point of difference is that a Mortgage Broker/Agent can find you the lowest rate on any particular day, out of hundreds of Lenders.

It’s like going to the airport and buying a ticket directly from the Air Canada booth at whatever price they’re selling for that day, or buying your ticket from a travel agent, or a discount website, on which ever airline will get you there for the best possible deal.

You’re responsible for your own success. When you’re in the market for that perfect mate… er… mortgage, you have to present yourself in the best possible light. In the mortgage world, you are only as good as the documents you submit for approval (your credit report, employment letters, pay stubs, NOAs, downpayment verification).

Based on the quality of these documents, the Lender will classify you as an A, B or C Borrower.

If your credit score is excellent, your income is verifiable and you have substantial savings for at least 20% (of the purchase price) deposit, then you’re an A Borrower and chances are you’ll get a favorable rate because the Lender will see you as a low risk Borrower.

Let’s say you’re an excellent catch, you don’t have to settle on working with the first Mortgage Professional you meet with. You can go on three mortgage dates, and then settle for the best one. Why limit the number of Mortgage Professionals you meet with? It’s because every time you apply for an approval or pre-approval by a Mortgage Professional, that professional will want to pull your credit report because it is part of the criteria they need to evaluate you and determine the most suitable Lender. If your credit report is pulled repeatedly in a short period of time, the credit score begins to decline. If you are a truly polyamorous Borrower and you simply must go on 5, 10 or more mortgage dates (I don’t judge), then it’s better to download your own credit report from Equifax.ca. Instruct the Mortgage Professionals to use the credit report you provide them with and assert that you do not authorize them to pull it on their own.

I, personally, prefer working with the Mortgage Broker from a Brokerage rather than the Mortgage Specialist from a bank. I can expect a closer relationship with a Mortgage Broker. I know I can call him on his cell phone at 11pm and he will answer. I know that when I need something from him, he doesn’t need to run it by his boss, his boss’ boss and the legal department and every other senior in the office. It also doesn’t take him 4-5 days to deliver. If he doesn’t find me the best deal, then he doesn’t get paid. If he finds a better rate later, he will tell me and revise my approval. His only job is to secure a mortgage for me. He won’t try to upsell, cross sell or promote other products. I know that he always keeps my best interest in mind, and he will fight for my love.

When you find “the one”, you won’t want to let him go. If you haven’t found the one, keep looking. Even, if you think you found “the one”, but then you meet someone else, and decide that he’s “the NEW one”, it’s ok to dump “the OLD one”. It’s not the nicest thing to do, but hey, you have to do what’s right for you. Just make sure it’s not later than two weeks before your closing date because at that point the Mortgage Professional is sending the Mortgage Instructions to the Lawyers and the closing process is initiated. It’s the equivalent to standing at the alter, and the Officiant has asked you to repeat, “I take thee…”

THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.

Zoocasa sounds like a new Wildlife Centre. African Lion Safari meets Great Wolf Lodge, a place where you can ride a roller coaster and see a zebra at the same time.

Well if you’ve heard the ads on the radio, then you will know that Zoocasa is not a Wildlife Centre (but that would be cool). Zoocasa is in the Real Estate business. Owned by Rogers Communications Inc.

The commercials feature bizarre characters. Astrid and Anton are a sleek, model-couple who dress all in black and speak with a German accent.  

Stan and Sheila are a timid, shaky couple who seem nervous and unsure about speaking to the camera. 

To view the Stan and Sheila advertising masterpiece (and I use this term sarcastically), click here: http://rain43.com/work-items/zoocasa/

If you can’t be bothered, it goes something like this:

Voice Narrator: “Stan and Sheila were shy about finding a real estate agent but Zoocasa helped them find a top performer that really knew the area.”

Sheila (in a quiet unconfident tone): “We love our agent.”

Stan (looks like he’s zoned out): “Yeah..”

Sheila cuts him off: “Oh, we’re out of time. Next time.”

Then the tagline appears: Search all homes. Find top agents. Get cash back.

Alright… I have a Bachelor degree in Business Administration with a concentration in Marketing. I also spent two years of my life working at an ad agency until I finally couldn’t take it anymore and quit to pursue a happier and more rewarding life.

Even with my background in business, marketing, and real estate, I STILL don’t understand what the point of Zoocasa is, and which demographic they are targeting. If their demographic is an average Real Estate Buyer, then why are they hiring actors who portray people in an insulting manner?

I think Zoocasa’s advertising is stupid. I don’t care for Zoocasa either.

Zoocasa is a Real Estate Brokerage with a search engine for properties listed in Canada, helping Buyers find Top Agents, and offering a cash rebate.

I think they are more of a lead generator for Realtors who can’t find clients on their own. In fact, I doubt they would be licensed as a Brokerage if it weren’t for the lawsuit between the Toronto Real Estate Board and the Competition Bureau, but that’s a story for another day.

Seriously. They don’t have a physical office and they don’t employ Realtors. What they do is accumulate the contact information of people who sign up, and then distribute that information to Realtors who work for other Brokerages (Re/Max, Royal LePage, Century 21, etc.).

If one of these leads turns out to be a serious one and it results in a sale, then Zoocasa takes a 35% cut of that Realtor’s commission. Of that 35%, they take 20% for themselves as profit and give 15% back to the lead as a cash rebate.

I do not think these are “actual” top Realtors, but maybe my definition of a top Realtor is not the same as Zoocasa’s definition.

A top Realtor, in my opinion, is one who is so good at what he does, that he or she doesn’t need to prospect, knock on doors, cold call, let alone give away 35% of their commission to a lead generating website to do one deal. I’m not saying there is anything wrong with cutting commissions, or giving back to the client. Sometimes it’s necessary. However, a top Realtor is skilled enough to negotiate a greater amount off the asking price, saving his client money from the top.

If a Realtor relies on a lead generator to earn a living, it’s likely because that Realtor doesn’t have their own clients, and/or their past clients don’t refer enough of their friends to that Realtor. Why not? Maybe it’s because the Realtor is not all that good at his job? Maybe that Realtor puts their own interests ahead of his clients? I don’t know… I’m just guessing here. If a Realtor can successfully keep their clients happy, then the Realtor will always end up with new business because his past clients will gladly refer new clients..

In my opinion, a top Realtor, is one that doesn’t chase clients, because clients come to him all on their own.

This is just what I believe. I want to be this kind of Realtor. This is why I personally would go out of my way, and make it my mission to make just one client so gosh-darn happy and confident at the end of the buying process. Maybe then my client will tell all of their friends about how awesome their Realtor is. That’s how business grows.

Let’s examine this tagline again: Search all homes. Find top agents. Get cash back.

I think Zoocasa is nothing more than a well designed website. Yes, you can search all homes. Yes, if you sign up and buy your house with one of their outsourced Realtors then you will get some cash back. However, I don’t necessarily think you will be working with a “top” Realtor and that might cost you in other ways.

In conclusion, don’t take me at my word if you don’t know me. Go out there, ask questions and find a top Realtor who can prove that they are a top Realtor. Talking to his past clients always helps.

Happy House Hunting!

THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.