Norma Walton, 8 Reasons That Receivership Sales are Always at a Discount

Unfortunately I am something of an expert on receivership sales.  Back in 2013, my ex-partner petitioned our real estate portfolio into receivership without notice to our lenders. As a result, almost every property was sold via receivership or power of sale for a significant discount off the fair market value, all in a rising real estate market.  During that process, I became painfully aware of the eight reasons that Receivership sales are always at a discount.

Reason # 1:  Negative Publicity

Placing a property under receivership requires a court order.  Court proceedings are public.  As a result, there is publicity surrounding receivership sales.  When someone hears that a property went into receivership, the perception is usually that there must be something wrong with the property.  Generally receivership sales are ordered when there is controversy and contention between warring factions, be they partners, a lender and borrower, or family members.  This perceived stigma detrimentally impacts the property.  Negative publicity will reduce a property’s value.

Reason # 2:  The Process

In a private sale transaction, typically one buyer negotiates with one seller to purchase a property.  Receivers don’t have that option; they must run a sales process.  This usually means offering the property to market for a specified period of time with specific advertisements in specific publications, a real estate listing, and an offering to customers of the Receiver’s firm.  Receivers generally want to review all offers at the same time.  This tender process is a disincentive to a lot of potential purchasers.  Potential purchasers prefer to deal one on one with the seller of the property.  Most purchasers don’t want to be put in a competing arena with other purchasers.  Hence the process that Receivers need to run turns away many potential purchasers.

Reason # 3:  Uncertainty

Obtaining approval for a Receivership sale requires a Judge’s approval.  The Judge has a number of competing interests to address and if one of the parties objects to the sale, that objection often delays or stops the sale from being approved.  As a result, there is very little certainty in putting in an offer for a property being sold via receivership.  Until the sale has closed, the sale may be cancelled at any time.  This lack of ability to plan causes many purchasers to not bother offering in the first place.  The end result is so dependent on forces beyond the purchaser’s control that it discourages some purchasers from buying.

Reason # 4:  Higher Deposit Requirements

Receivers want certainty even though they cannot offer the purchasers certainty.  As a result, they usually require at least 10% of the proposed purchase price to be tendered with the offer to purchase during the tender process.  Generally the deposit cheque must be certified.  Hence a purchaser, before knowing if his or her offer is even going to be accepted, has to go to the bank and obtain certified funds for 10% of the proposed purchase price just to offer.  This is a major disincentive for many buyers and thus reduces the pool of potential buyers.

Reason # 5:  Complex Purchase Agreements

The standard TREB or OREA form is fairly straight forward.  Once you have dealt with it a few times, it is user friendly.  Not so with receivership forms.  Offers to purchase through receivership are typically at least four times as long as the OREA form.  They are full of legal language explaining all of the ways the Receiver can exit the deal and everything that must occur before closing.  A prospective purchaser usually requires legal advice just to understand the agreement before he or she can sign.  The need to seek legal advice before offering is a disincentive and reduces the pool of potential purchasers.

Reason # 6:  No Warranties or Representations

A Receiver cannot give warranties or representations.  As a result, a purchaser of a property under receivership takes the property “as is, where is”.  That means the purchaser must be comfortable with more risk than in a normal private real estate transaction.  A Receiver cannot represent the rents being collected on a commercial property, for example, nor can he or she warrant the status of the building systems in any capacity.  They guarantee nothing!  That reduces prices because purchasers must shoulder more risk than in a private sale transaction where there are almost always representations and warranties.

Reason # 7:  Lack of Specific Property Knowledge

The Receiver did not purchase the property.  They generally have not run it very long if at all.  They are not real estate experts.  They generally don’t understand the strategic buyers of a property or its highest and best use.  Their expertise is in accounting.  As a result, the property is generally not marketed as effectively as it would have been if a private owner sold it.  The person who bought it can usually market it better than a Receiver.  This lack of expertise reduces property value.

Reason # 8:  Firm Offers are Preferred

Receivers have to go to Court to recommend that a Judge accept a purchase agreement.  This takes a lot of coordination, effort and paperwork.  As a result, they ideally want to present firm offers.  Otherwise the purchaser could exit the deal after all that time and money is spent to secure approval.  Receivers generally won’t accept anything other than firm offers from purchasers.  This puts purchasers in a position to have to waive all conditions even though they may not have a good sense of the property and its perils.  Having to provide a firm offer instead of a conditional one always discounts prices.

 

Our real estate portfolio was sold at 70 cents on the dollar in a rising real estate market.  Watching that process made me acutely aware that it is a legal fiction that fair market value is ever achieved through a Receivership sale.  The eight reasons listed above guarantee that Receivership sales will always trade at a discount.

End of Toys R Us Leaving Glut of Vacant Space in Lower Quality Locations

The glut of vacant retail real estate space is only going to grow as consumers’ preference for the online versus brick-and-mortar shopping experience continues to claim victims. Toys R Us is the latest and not unexpected retailer demise, and its planned liquidation of as many as 700 stores across the United States is expected to leave millions of square feet of space vacant.

Nothing’s certain about the extent of the potential damage, though, as the company is still trying to negotiate possible rescues. One would combine its 200 top U.S. performers with its Canadian operations, for example.

Either way, there’s still going to be a lot of retail space available, even though landlords should have anticipated the closing given the chain’s long-standing issues. What will make the outlook murkier, though, is the patchwork strategy Toys R Us has used in choosing sites for its stores.

Many of the holes that will be created with the Toys R Us closing will be at strip shopping centers. A percentage of strip malls in the U.S. are in fact doing well – like those that have managed a solid tenant mix of Internet-resistant stores and other concerns like restaurants and specialized medical services like physical therapy services.

But over half of the Toys R Us locations in the U.S. are in what the real estate industry considers low quality, and that will be troublesome to landlords looking to fill their space at similar rates (if they are able to fill them at all).

And it’s not just the quality of the malls that’s an issue. The average Toys R Us space is around 30,000 square feet, when the biggest retail demand seems to be for 25,000 square feet or less. Retailers of a similar size to the chain that might otherwise be interested in the better locations are staying where they are and remodeling or refocusing on their digital capabilities. And while smaller stores are in Target’s sights, it’s eyeing cities and college towns for its expansion – not necessarily where Toys R Us has been situated.

Meanwhile, if the future of the chain’s Canadian operations seems appreciably brighter than in the U.S., it may be due to the “location, location, location” emphasis of the expansion strategy that started in the 1980s.

The Toys R Us Canadian footprint has been far different than in the U.S., with many in prime locations and a mix of big and smaller stores. While some of the properties may have below-market rents, landlord exposures would still be far less than they would be with such older retailers as Sears.

The slow demise of Toys R Us is a story that is still unfolding, and the impact on the commercial real estate market is just one of its various complications. It will be interesting to see how much creative use is made of the space – and how many and for how long lesser locations stay vacant.

Secondary Mortgage Market in GTA – Weighing the Pros and Cons

Home sales in the Greater Toronto Area (GTA) have decreased this year compared to last. The Toronto Real Estate Board reported that sales were down almost 35 percent in February 2018 compared to February 2017. In addition, prices have dropped, with the average sales price falling 12.4 percent for all housing types.

As 2018 moves forward, buyers are getting used to the new mortgage rules and the government regulations that went into effect on January 1 of this year. Home buyers are adjusting to the new housing market measures and have had to recalibrate their plans because of the higher interest rates and new mortgage stress testing guidelines.

What that means is that realtors have to be creative if they’re going to make sales in this market.

For both buyers and realtors, the secondary mortgage market can provide an alternative to traditional bank mortgages, one that in many instances, should be considered. Obtaining a mortgage from an alternative lender is frequently easier and quicker than getting a traditional mortgage. While it is true that buyers often need to have a larger down payment, and the loans are generally more expensive, the secondary mortgage market can provide a solution for buyers who are looking for a different course of action and for realtors who want to help their clients.

One of the great advantages of the secondary mortgage market is that it can provide a short-term solution for buyers who can then, at a later date, make different arrangements, perhaps through a traditional bank mortgage.

For example, a GTA home might have been selling for $1.4million a year ago, and today that same home will likely go for $1.05 million. If a buyer is putting 25 percent down, they will carry a mortgage of $787,500. Most secondary mortgages have a duration of one year or less. So, at 8 percent per year, the buyer is paying in one year 4 percent extra on the mortgage, or $31,496. That means effectively that the property costs an extra $31,496. That’s not really significant since the buyer could close in a buyer’s market that’s discounted. In a year’s time, the buyers can investigate refinancing with a traditional bank mortgage, and will hopefully be in a much better situation.

Realtors who want to guide buyers towards the secondary mortgage market should exercise caution, however, and recommend alternative lenders only to those buyers who can carry such a mortgage and have the financial resources and income ability to refinance within a year.

I would also recommend that GTA realtors who are interested in offering advice about the secondary mortgage market establish direct relationships with alternative lenders rather than with mortgage brokers; brokers will often charge substantial fees, which can add to the costs incurred by the buyers.

Although sales in the GTA market have taken a downturn, there are still a number of ways for both buyers and realtors to take advantage of the market conditions.

Toronto Real Estate Shows No Signs of Slowing

It’s no secret that Toronto is arguably Canada’s hottest real estate market, and there appears to be few signs that the city’s market is going to soften anytime soon.

Spurred on by population growth and an influx of residents into the city’s downtown core and adjacent area, Toronto’s housing market has continued to make gains, even as similar markets across the country, most notably Vancouver, have begun to settle.

In the last year alone, the average cost of a home increased by 22 percent, according to the Toronto Real Estate Board’s (TREB) benchmark index. As of January 2017, the average selling price of a home in the GTA was roughly $770,745, an increase of approximately $140,552 from 2016.

In addition to the home sector experiencing double digit gains, low-rise housing (detached, semi-detached and townhomes) experienced large gains as well, with the year-over-year price growing by 26 to 28 percent between 2016 and 2017. 

The current and long standing sellers’ market and the high demand for housing in the GTA has also sparked heated bidding wars. Of the 17,862 homes sold in Toronto in 2016, 37 percent or 6,583 sold over asking.

In the last few weeks, there have been multiple stories in the local media of homes selling for hundreds of thousands above listing price; there was even a home in the Don Mills and Lawrence area that sold for a million over the asking price.

“It just gets back to the fact that while we’ve seen sellers’ market conditions over the last two or three years, they only grew stronger this year,” says Jason Mercer, director of market analysis for TREB. “And if we don’t see any sort of change on the supply side we should continue to see upward pressure on home prices.”

Ironically, as Mercer notes, there is a lack of available housing options, which is in part fueling price increases in the real estate market.  However, according to Statistics Canada there are roughly 99,000 unoccupied homes and units in the GTA.

While many speculate that the great number of empty homes is a result of foreign buyers purchasing Toronto real estate as a long-term investment, data from the most recent census proves otherwise.

Yes, foreign buyers do account for a small amount of the unhabituated units; however a large majority of the vacant homes are owned by  Canadians who have purchased a second home or condo as an investment property. These second homes are most often used for temporary or short term rentals like Airbnb.

Whether it is foreign buyers or local residents, Toronto city council is looking into imposing an empty home tax similar to the one that was established in Vancouver in the late 2016. The tax, which would be imposed on homes that remain empty over a long period of time, is meant to inspire those holding on to properties in hopes of maximizing their selling dollars to sell the surplus homes or find permanent tenants.

Whether city council will impose the new tax remains to be seen, however there is no disputing that Toronto’s real estate market is moving into another year of record prices.

How Realtors Can Maximize Their Income Stream

Let’s face it, many of us would all like to begin to earn or increase our supplementary income stream. While finding ways to earn a little extra income has become easier with the internet and better communication tools, it can still be challenging to find long term paths toward supplementary income.

This is especially true for realtors, who often work well beyond the standard eight hour business day chauffeuring clients to and from potential homes, creating marketing and promotional material for properties they are selling, and even staging homes for owners.

From my experience at AccessEasyFunds working in the area of realtor commission advances, for real estate professionals the best way to boost their income is to use the many skills they already have.

One of the easiest ways to increase cash flow is to branch out. Instead of specializing in one neighbourhood or city, begin to research and study adjacent areas and jurisdictions, so you can begin to offer your services in those areas.

Use existing clients to introduce you to friends and family in nearby neighbourhoods who may be interested in selling. Word of mouth is a proven way to generate more business in the real estate industry and the extra clients will help increase your revenue.

Another way to increase revenue is to expand into the real estate referral business. As your personal client roster grows, you will begin to have repeat clients who will come to you when the want to upsize or downsize or who will refer their children or parents to you. Sometimes these clients may also ask for help with moving to another city or community.

As a real estate referral specialist you simply access the real estate databases that you already subscribe and are a member to and generate a list or a specific referral for your client. The referral can be based on a select list of pre-determined criteria that can include the prospective realtor’s history, standing and status with local real estate boards and associations.

Referral specialists then match the buyer with the suitable agent and earn a portion of the sales commission fee, which is roughly 20 to 30 percent.

For those who want to expand their real estate business, attaining a brokerage license is also a viable option. Obtaining a brokerage license allows you to open your own real estate office and collect commissions from agents who work out of your brokerage. Like opening a referral business, brokers also earn a percentage of the realtor’s commission, anywhere from 5 to 50 percent.

Depending on the city and country you live in, the rules pertaining to establishing a brokerage may differ. However, it is well worth the time finding out the specific requirements especially if you believe you can find a large amount of agents who would work for you.

There is an old saying about working smarter not harder to attain your goals, and using the skills that you already possess is one of the best ways to work smarter and earn extra income.

Norma Walton, Nine Reasons to Invest in Real Estate

Many people want to own real estate.  People seem to know intuitively that it is a good investment.  But what are the logical reasons that you should consider investing in real estate?

  1. Canada is a stable, attractive country

Canada is a free and democratic country that is attractive and welcoming to immigrants.  Immigration coupled with Canada’s birth rate means that Canada’s population grows about 1.2% per year.  Toronto and Vancouver are destination cities and as such are not affordable for most Canadians, but there are lots of smaller cities in Canada where real estate is affordable.  Real estate anywhere in Canada is generally attractive assuming you pay a fair price for what you purchase.  As Canada’s population increases, there are more and more people wanting to buy property here.

canada-flag

  1. Low mortgage rates support real estate ownership

Since 2008 low interest rates have been a reality.  Given the current global uncertainty, it seems unlikely rates will increase significantly any time soon.  Low interest rates translate into affordable monthly payments.  Low carrying costs make it less risky for you to own real estate.  The less you have to cover, the less you have to charge in rent to make your investment cash flow positive.

  1. Real estate earnings are taxed preferentially

Real estate is one of the few investments, aside from owning your own business, where you can write off part of the cash flow you receive.  Your principal residence is generally tax exempt in Canada, and investment property is also taxed preferentially. You can depreciate your rental house or building as long as you own it.  That depreciation expense usually eliminates or minimizes any income tax you would otherwise owe on your income from your property, hence providing you with free cash flow that is not taxable upon receipt.

  1. Leverage can be used when purchasing property

Most people pay for their real estate partially through savings and partially through mortgage debt secured against the property.  This means that with savings of about $50,000, you can generally purchase a property worth $200,000.  You pay the $50,000 down and take out a mortgage for the $150,000, thus purchasing an asset worth four times your savings.  If the property is a rental property, then ideally your rental income pays the monthly payments on the mortgage until the mortgage is paid in full.  Hence you are using leverage to purchase an asset worth more than the amount of your savings.

debt-free-sign

  1. Real estate ownership gives you control over your investment

A lot of people fret and worry when they give someone else control of their money.  The beauty of owning real estate is that you control the investment.  You own the property and you are the only one who can determine what happens with that property.  You choose the house or building you wish to purchase; you decide to whom you want to rent your property; and you manage and fix it up the way you want to.  You have control over every decision to be made.

  1. Your actions can add value

Real estate can be a very active investment.  If you are handy and knowledgeable, you can purchase a property in need of renovation or fixing up or demolishing or subdividing.  That type of repositioning of property has the potential to dramatically increase the value of what you purchased, sometimes doubling or tripling the value of your initial purchase price.  It is gratifying when your direct actions increase the value of what you purchased.

renovation

  1. Property makes a good long term investment

Real estate historically goes up.  So long as you intend to hold your property long term and ensure the carrying costs are affordable for you to hold it long term, the odds are that your real estate will be worth far more, often many multiples more, when you want to retire than when you purchased it.  This makes it a great way to create wealth over time.

  1. Land is a fixed resource

“Buy land, they’re not making it anymore” said Will Rogers.  That quote still applies today. Any freehold purchase you make takes advantage of the scarcity of land.  There is a fixed amount of it so the more people want it, the higher its value because the supply is fixed.

land

  1. Real estate should continue to make you money when you are sleeping

If you are smart and a bit lucky, your rental real estate investments should become passive investments over time such that they make you money when you sleep.  The objective is that your property should provide free cash flow without your having to put hours in to make that money, and your property should increase in value year over year, creating capital gains.

It is comforting that our visceral belief about real estate being a good investment can be backed up with logical reasons why that belief is true.

Seizing Opportunity in the Midst of Uncertainty

Despite recent reports painting a bleak picture for the Alberta economy, there are a number of people, myself included, working to change the economic volatility that’s plagued the province for the last 8 months into opportunity for all Albertans.

While the oil slump has definitely impacted Alberta’s economy, it by no means has defeated the spirit or sense of resolve here. This undaunted perseverance is manifesting itself in other industries and sectors — real estate and property development being one of them.

Earlier this month, two luxury condominiums in of the Calgary’s prominent riverfront developments broke a three year downtrend when the units sold for $8.4 million and $5.2 million respectively. The record-setting prices for the 5,000-square-foot and 3,000-square-foot condos located in the same building not only marked the highest prices paid for condo units in the city for three years, it also signaled the city’s steady economic progression out of uncertainty.

This upward trend was further solidified when Calgary’s real estate sales figures for the last year were released in early July by the Alberta Real Estate Association. According to the data, “Overall sales for homes in excess of $1 million, including condos and semi-detached and detached houses, have climbed 8.6 percent this year compared with last year with 317 sold by the end of June 2016.”

There has also been a number of developments in the residential rental property sector over the last year, a sector I know well. When I founded Strategic Group, I built the company around the philosophy of “Creating value others can’t, by seeing what others don’t.” In September this year, myself, Riaz Mamdani, and Strategic Group will officially unveil our most ambitious project to date: a five-storey wood frame residential building, the first of its kind in Alberta history.

The 69 unit building, with a coffee shop and five work-live units on the ground floor, is located on the corner of Centre Street and 20th Avenue N.E. and will add much needed housing options for the population dense area.

The concept of the state-of-the-art wood framed building was made possible after the city’s 2014 announcement stating they would begin accepting variance applications for buildings (up to six-storeys) featuring wood-frame designs.

Aside from offering a unique aesthetic element to any neighbourhood, using wood to build taller buildings is cost effective, easily sustainable and can provide housing solutions for areas that are suffering from urban sprawl or density issues.

Building vertically has proven to be the answer in many different building situations and with municipalities across the country approving the building of low-rise wood frame buildings, I think we will see more unique wood frames sprouting up across the country.

Rollin Stanley, the manager of Calgary’s city planning department, recently told the Calgary Herald using low-rise buildings along transit corridors allows for greater density leading to community revitalization and more affordable housing options.

“Wood projects are more sustainable than concrete, it’s a renewable resource and, particularly when you look at where we live, we have access to wood,” said Stanley. “So that’s a terrific local resource we can capitalize on instead of building all these smaller buildings out of concrete.”

5 Realtor Marketing Tips to Build Lasting Relationships

For real estate agents being able to market themselves as well as they can market houses is a key step to business success. Promoting yourself successfully involves building lasting personal and professional relationships, marketing your best attributes and following some time-honored techniques for finding and retaining clients.

It’s a well-known fact that, people prefer to buy things, especially big ticket items like cars and homes from people they like, trust and respect. Add to that, the statistic, that the average person will only purchase real estate two or three times over their lifetime it’s easy to see why it is particularly important for relators to establish an enduring relationship with their clients.

Larry Weltman’s Realtor Tips

1. Stay in Touch With Clients

Sending out a monthly newsletter featuring helpful home ownership tips and links to articles will help foster a relationship that stretches beyond the closing day. This technique can also make a realtor appear approachable and knowledgeable, traits that encourage word of mouth advertising repeat business.

2. Send Out Real Estate Marketing Postcards

Sending out real estate marketing postcards on regular intervals will inspire interest in your business, and raise brand awareness as well.

There are a number of ways to utilize the postcard marketing strategy, a popular way amongst many realtors is using images of a house they have sold in the area to entice homeowners to sell with them.

3. Save Your Clients Some Money

New Jersey-based, real estate broker Ken Baris has taught his sales associates to throw neighborhood get-togethers at which homeowners file petition papers to lower their property taxes. The papers are prepared by the realtor who tells the homeowners what sections to fill out while at the event.

Partygoers fill in a few items in the paperwork, enjoy some wine, and then wait for their petitions to be approved by city council.

“People will remember you if you’ve helped them save cash,” Baris says.

4. Market Wisely

A strategically placed billboard or even a clever marketing item can bring in business and create interest.

Angie Matessa, a real estate agent in Ohio realized that using moving materials to market her business drew in more business and helped clients remember her. Matessa personalizes moving tape with her company logo, her name, and her phone number, “I give tape to someone when we start looking at houses,” Matessa says.

She then gives them more tape once they start the moving process. The tape often remains on the boxes for months and years to come with her business number and name just in case they need to contact her again.

5. Start A Referral Program

Offering perks is a good way to get word of mouth referrals from existing clients. Give past clients and your list of contacts an incentive to refer business to you, gift cards to Home Depot or furnishing stores, or a gift certificate for landscaping or snow removal services are great incentives. 

Create a page on your website outlining your offer, mention it on your business card and add some info about your referral program to your email signature. Incentivizing is a great way of differentiating yourself from your competition in a heavily saturated market.

Norm Walton, House Rich or House Poor

Some days Torontonians love their real estate…and some days Torontonians hate their real estate.  That love-hate relationship can even happen all on the same day.

What is to love?

  • Toronto’s real estate is coveted internationally
  • There are approximately 100,000 new Canadians moving into the Greater Toronto Area each year, all needing housing
  • Toronto is cheaper than other major international cities
  • Toronto’s stock of freehold houses is relatively new and in decent shape relative to other large cities
  • Toronto is a fairly safe city
  • Toronto is the most multicultural city in the world and welcomes all people
  • Investments in improving residential houses in Toronto pays off when the property is then sold or refinanced

What is to hate?

traffic

  • There are no affordable freehold houses in Toronto
  • In a city of more than 2.6 million people, there are a mere handful of detached freehold houses for sale at any point in time, most of them adjacent to housing projects in far less desirable neighbourhoods in Toronto and even in those neighbourhoods, most freehold houses sell for closer to $1 million
  • Torontonians pay a large proportion of their take home pay on their housing costs, with most households paying at least 33% of take home pay on housing
  • Average mortgage costs in some higher end neighbourhoods are more than $10,000 per month
  • Average house costs in some higher end neighbourhoods are more than $2.5 million
  • The trend is to buy a house for $1 million plus and rip down whatever is there now to build a monster house to the maximum allowable density
  • Transaction costs in Toronto are far higher than surrounding areas because Toronto tacks on a city land transfer tax of about 1.5% of value in addition to the provincial tax of another 1.5% of value
  • There is a large number of condominium projects in the works and even the price points for condominiums is at least $250,000 for a tiny bachelor unit along with significant monthly common element fees

monster house 2

Predictions for the future:

  • In my opinion, Toronto’s freehold real estate will continue to increase in value over the long term given the demographics
  • Monster houses will continue to be built in higher end neighbourhoods, occupied by between two and four people at a ratio of 1 person per 1500 to 3000 square feet
  • There will continue to be a flight of young families and retirees to communities west, north and east of the city because they cannot possibly afford to live in the city
  • Basement apartments will be built in existing houses due to the immense demand for affordable rental housing of any kind and the need for homeowners to supplement their income to pay their mortgages
  • Despite the recent push by all levels of government to improve transit, commute times will continue to climb for those workers who live outside Toronto but work in the city and congestion on highways will worsen
  • The surrounding communities will benefit from an influx of numerous new residents as these bedroom communities evolve into hubs of their own over time
Happy young family spending time together outside in green nature.
Happy young family spending time together outside in green nature.

As illustrated above, the insatiable appetite for Toronto’s freehold real estate has both pros and cons.  Hence in the same day you can both love the market and hate the market.  The course of Toronto’s market seems unstoppable regardless of your personal views.  Hence you should probably either get on board with the lack of affordability in Toronto and embrace the city’s offerings or start looking for a house in the surrounding region and ensure your car has no kilometer restrictions on trade in.

yorkville

Tips on Selling a Home in the Dead of Winter

As all of us know, especially those of us on the east coast, it’s been a pretty cold winter. In fact, it hasn’t just been a pretty cold winter, it’s been one of the coldest, snowiest winters in decades. And, as is typical in the season, we’ve seen the weather affect economic activity. We’ve seen schools and businesses experience their typical snow days; we’ve seen the level of trade and commerce slow; and we’ve seen the Canadian real estate market, which was in a frenzy with activity in the latter half of 2013, experience its wintry lull.

It’s this last point – the winter lull that’s common in the real estate sector – which I’d like to discuss, specifically as it relates to real estate agents. I work at AccessEasyFunds, Canada’s leading commission advance company. (A commission advance is a service whereby AccessEasyFunds purchases a portion of a real estate agent’s sales commission, at an affordable discount, so that the agent can advance the date upon which he or she receives payment of his or her commission). As a Client Service Representative who’s been with AccessEasyFunds since its very beginning, I’ve worked directly with Canadian real estate agents for many years and have seen firsthand how difficult the winter season can be for them.

It’s not easy selling a home, and it’s certainly not easy selling a home in the dead of a cold winter. Frustration can build just as cash flow ebbs. For this reason, I thought it would be timely and fitting to offer a few tips that may help agents in this challenging time of year.

Make sure the home and the front pathway to the home is clear of ice and snow.

This should be real estate lesson 101 in selling a home in winter. No one, and especially potential buyers, wants to be struggling through ice and snow just to reach the front door of a for-sale house. So, if you’re inviting any prospective buyers to a home you’re selling, or more critically, if you’re hosting an open house, make sure the property’s walkway and driveway are clear of snow and ice and is a safe walk way! And for added measure, make sure that the sidewalk in front of the home is also clear.

Use the winter weather to your advantage – make the seller’s home as cozy as possible.

Like the smell and taste of hot chocolate or warm chocolate chip cookies on a cold winter day? I’m sure you do, and there’s a very good chance that potential buyers of the home you are representing also do.

A key to successfully selling a home in the winter is to make it as comfortable as possible, so that when prospective buyers enter the seller’s house, they immediately feel a sense of welcome and coziness.

There are some of things you can do to create that cozy environment: you can try the well-known strategy of baking cookies during either an open house or when prospective buyers are planning to visit; if the home includes a fireplace, have it lit and burning; and finally, adjust the home’s temperature to a comfortable and warm setting.

Regarding this last point, many sellers are hesitant about keeping a home’s temperature at a warm level out of fear of the potential spike in energy costs it may cause. Sellers who have already vacated their home are particularly wary about warming a home because of their concern that the thermostat may be left at a high temperature after all the prospective buyers have finished viewing the property.

To a seller is should be very important their home be warm and inviting when buyers come and visit. After coming in from the cold and snow, no prospective buyer wants to feel just as cold in the home they are thinking of purchasing.

A good thermostat can be time controlled to heat up and cool down after showings.

Light is everything, especially in the wintertime.

What’s one other thing that’s typical of the winter season besides the season’s cold weather? Well, it’s the season’s gray, short days. Unfortunately, this is another aspect of the season that can put selling a home and attracting a buyer in the squeeze.

As many of us know, no one wants to enter a home that’s dark or gray.

Therefore, if you’re showing a home to a potential buyer on a cold, gray day, make sure the home is well lit. Take advantage of what natural light the day offers by opening all the home’s curtains. Furthermore, turn on all the home’s lights, or at least a fair majority of them. Finally, attention to detail is always an ingredient to success, so beyond the last two points, make sure to clean or dust the lamps in each room in the house and replace all the bulbs in the home with ones of the highest wattage that can safely be accommodated.

DISCLAIMER:

The above content is strictly for general information purposes. The author is a not a licensed real estate agent. You should contact and hire a suitably qualified licensed real estate agent with respect to obtaining any advice and making any decisions pertaining to selling and buying real estate.