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What is the Difference Between a Deposit and a Down Payment?

 

In my years as a real estate professional in Steinbach and much of SouthEastern Manitoba, I’ve helped many people navigate the myriad of confusing things that come up while shopping for their next home.

One of the most common questions is, “What’s the difference between a deposit and a down payment?”

 

Allow me to help clear that up.

 

What is a Deposit (and Why should I Make One?)

A deposit is money that accompanies the Offer to Purchase. Basically, it’s trust money, the point of which is to show that you are serious about offering to buy the house, and can be trusted not to waste the seller’s time or somehow torpedo their efforts to sell their house to others. Your money says you will not change your mind and, if you do, you’re willing to compensate them for their wasted time.

What Happens to the Deposit If Your Offer is NOT Accepted?

Nothing. The cheque will not be cashed. It will be returned to you.

What Happens to the Deposit If Your Offer IS Accepted?

If your offer to purchase is accepted, the Cheque will be deposited into the listing broker’s trust account. Later, when the deal goes through and the purchase becomes official, the funds are forwarded to the lawyer’s office and distributed toward the purchase price according to standard practice.

TIP: Bigger deposits give you an advantage. The bigger your deposit, the more seriously the Seller will take you and your offer.

                What happens if they deposit our check and then we can’t meet the conditions on the offer?    (What if we don’t get financing? What if the home inspection fails? What if…?)                   

We will fill out a simple form requesting the deposit to be released and the funds will be returned to you.

 

 

What is a Down Payment?

The down payment is what your lender will require of you before approving your mortgage. This is between you and the lender and does not involve the real estate agent or seller.

For a traditional mortgage you will need 5% of the sale price for a down payment.

When arranging your down payment, if you can manage to put down 20% of the purchase price (or more), you will avoid the cost of paying an insurer like CMHC or Genworth.

If you do not have sufficient down payment available and you have a steady job, stable income, and a good credit rating, I can hook you up with a mobile specialist who has different products available and you may possibly be eligible to buy without a full down payment.

 

There are LOADS of other questions that crop up in real estate.
Good news – I have some awesome resources to set you up for a successful and pleasant buying experience.

Check out my HomeBuyer’s Information Package HERE 

 

 

Should I wait until the Spring Market to List?

5 Questions We’re Dying To Ask About Real Estate Commissions

 

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Talking to Real Estate agents about commissions can be kind of… uncomfortable.
To discuss commissions with an agent can feel like asking them to hand over their paycheck for inspection and approval. It’s much easier to just swallow the questions and go with whatever the agent says, isn’t it?

But I know you still have those questions. And I care about helping you make informed decisions. I hate seeing people get manipulated or taken advantage of just because they don’t know the facts.

So let’s do it. Let’s talk about some of those burning questions about REALTOR® commissions.

What is the going rate for commissions? You won’t like this answer. It’s negotiable. One of the considerations is what competing sellers are offering as a commission to competing agents who may have a buyer for their property. In areas where properties frequently sell in a week, the commission my be lower than in an area where it frequently takes months. The main reason for this is that the longer a property is listed, the more it will cost the agent to market it. Those costs need to be reflected in the commission. I have personally charged as low as 3% for a family member (we still offer 2.5% to the selling agent) and as high as 7%. For the record, if I did not give birth to you, I will absolutely not list as low as three percent for you regardless of where or what you are selling!

Why do commissions vary so much?
There are a few reasons for the variation. One is local market. Other considerations are:
-What the agent offers. If no marketing is planned, the commission may be less. More marketing will cost the agent and need to be paid for out of their commission.
-Greed. Whether it’s wanting the high dollar (through a higher commission) or to get the most listings (perhaps through a lower commission), it’s a factor sometimes.
-Negotiation. Sometimes a client can negotiate a commission up or down to get the services they want.                               -There may be more than one person being paid to work for you. Some teams have administrative staff working behind the scenes that also get paid.

How much do Realtors Make?
Not as much as you think. The commission charged is shared between broker of the listing agent and the broker of the selling agent. Often it is shared 50/50. (At 5% that would leave the broker with 2.5%) The broker then pays the sales staff a percentage of that amount. That percentage varies depending on the office policies and agreements between office and agent. Most work on a commission split which can be as high as 50% of their paycheck! Subtract all the advertising and marketing expenses (professional photography, advertising, signage, etc.) incurred to sell the property. (This can range from hundreds to thousands of dollars)

Out of what’s left, the agent must pay mandatory licensing fees, franchise fees and, very often, they are also required to pay rent and fees to their broker. You know – office space, etc. Then there is just the everyday business expenses like vehicle insurance, car payments, phone bill, internet, fuel, office supplies, etc. Do the math. These kinds of numbers are why it’s a dog-eat-dog business. This is the stuff that sends a lot of newbies packing in their first year.

When all is said and done the Real Estate Professional may only net approximately 20%-30% of the gross commission collected at the end of the year. Hopefully that will be enough to cover the income tax payable to the government.

Are Commissions negotiable? Yes, but if you’re going to negotiate, I have three words for you. Do it carefully.
It can be risky to demand of and stomp on someone who you expect to work for you.
Not unlike offending the dentist with all the sharp tools in your mouth, or blasting the restaurant cook and demanding a new meal, making huffy demands is risky.  What you don’t know about commissions – and the message they send to other agents – is dangerous to your deal.
Basically, if you’re going to negotiate, basically be respectful. Real estate agents are people too. And some of them really do have your best interests at heart.

Why should I pay that much just to have them sell it in a week? Review the answer to “How much do REALTORS® make?” Those numbers all apply whether the property sells in a week or 10months. The only difference is that the 10 months didn’t come by and eat up all the agent’s profits. Good for them. They got paid.
So did you. Go celebrate!

HINT, HINT, NUDGE, NUDGE…Perhaps it may be important to ask the question, “What services do you offer at that commission?” There is a vast difference in what services different agents offer at the same commission. You can pay the same commission to many agents but you won’t get 5 star service from all of them.

Don’t make the mistake of being so focused on how to get the lowest commission just to find out that you got no VALUE for the commission. 

In conclusion, most Real Estate Professionals will charge you the same Commissions as the competitors. You can hire a rookie or an experienced agent for the same commission. It would seem more logical to look for the agent who will do the most work for their commissions.

Of course you will want to be sure that their work results in sales.

So, ask.

I will make it easy to ask us. You can request our digital pre-listing package ,otherwise known as a resumé, to learn about our services and qualifications.

Tina Plett, Sutton Group-Kilkenny Real Estate

 

 

A Gardening Lesson from Dogs

 

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I love getting dirt under my fingernails in the flower garden.

And the way dirt crumbles in my hand.

I especially love the way weeds pull right out sometimes, root and all.

Recently, when I was down on my hands and knees digging in the dirt, my little dog joined me. At first, she supervised nearby for a few minutes, possibly to see what treasure I would unearth. As I continued pressing my hands and tools into the soil, pulling out weeds, and humming, she decided to dive in right next to me.

She claimed a patch of weeds right beside me and set her paws to furiously digging. Dirt and leaves flew everywhere, even onto me. I paused my weeding to watch (while guarding my eyes from flinging flecks of dirt). She worked and worked, finally digging a little pit for herself. Then she stood in the middle of it and plunked herself down, nestling as deeply as she could into the cool earth.

I smiled, petted her, and returned to pulling weeds.

In the quiet, I thought about how she and I were both digging in the garden but for different reasons. I want the flowers to be visible and not crowded out by weeds, and she wants a cool place to sit.

We all have different motivations for doing what we do.

Many people can do the same thing, but for different reasons.

I’m a real estate agent, but my why might surprise you.

It’s not for the money (It’s not as much as you think anyway)

It’s not for the glamour (People tend to see agents more as salespeople than industry professionals)

And it’s definitely not for the primo hours and awesome vacation times (Days off can be hard to come by. Heck, attending a wedding uninterrupted can be hard to come by!)

No, I’m an agent in spite of all these challenges.

Because I’m a helper and encourager at heart, and I love, love, love to help people find their perfect-for-them home. As an agent, I get to protect people from pitfalls, walk them through scary and difficult circumstances, and make them super crazy happy.

Those are the things that satisfy my soul that I count as excellent results, and that drive me forward each day.

What motivates you in your work?

The Shocking Thing a Difficult Client Said to Me

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I LOVE my job – It’s got adventure, variety, and the deep satisfaction of helping people find their perfect-for-them home.

Last month put that love to the test though, I’ve gotta say. From every angle, side, and corner, various Boogiemen leapt from the shadows.

Here are a couple of general examples of conversations that may or may not have happened recently.

Client: “Hi, Tina?”
Me: “Hi, how are you?”
Client: “Hurry!!! I NEED to see this house RIGHT NOW!!!!”
Me: “Umm… you know people still live in it and need some notice, right? They might have babies napping or–”
Client: “–I don’t care! I’m parked outside of their house right now! Get over here!”
Me: *bangs head on desk*

 

Me: “Hi. My client would like to make an offer on your listing”
Agent: “We already have someone else interested.”
Me: “Uh… it’s for sale, is it not?”
Agent: “Yes, but they don’t want offers.”
Me: (I wonder if the agent is blocking offers from other buyers so they can double end the deal… His clients wouldn’t appreciate that. Too bad they’ll never know. Man, I can’t wait until they make that illegal (like they are about to in Ontario.) In the meantime…

Me: “Okay, I’ll bring an offer. My buyer will pay every dollar the seller is asking and then some.”
Agent: “Go ahead, but they’re not going to take it.”
Me: *bangs head on desk*

 

But then there was the buyer who said something shocking to me this week.
We’d been working together to find them a house, and it was… difficult. They did not have access to internet and that felt crippling. They’d had a nightmarish, stressful relationship with the builder of their home right from day one. For years, that stress robbed them of the joy of living in their custom built home. Now they just wanted out.

Because of their worn-down, stressful state, they were not only deeply sad and exhausted, but also in a desperate hurry. Not a good combination. They had three weeks to find a new house.

Three weeks!!

That’s like giving yourself ten minutes for a 1-hour grocery shop. It’s insane. Like, reality TV, run through the aisles like a madman, plowing down women and children kind of crazy.

So here we were. Dashing like madmen.

Desperate ones.

Whose hair was on fire.

The hardest part for me was seeing how the anxiety had pulled their faces into hard lines over the years. They weren’t the most expressive people, and I’d never seen them smile. Not once. Years of annoyance can make a person cranky and it made me sad that their home-owning experience had done that.

Plus, knowing they would probably settle, desperate for a new house, I was sad they would likely repeat the disappointing experience of owning a home they didn’t want.

We hunted. Looked at loads of houses. In person.

Loads.

When we finally came across the one that struck them as home, I was excited because I knew something about it they didn’t.

“Ah, I know the guy who built that house. He’s a new, young builder trying hard to please people. He does quality work and treats people well.” I said.

That was all they needed to know – that they’d be treated well for once.

The buying process was difficult – sometimes it seems like agents don’t want to sell their listings, and this was one of those times. After working and working at it though, we did manage to get the house.

*   *  *

One week after the couple moved into their new home, I was walking up their sidewalk to check in. (They appreciated the personal face-to-face approach.) As I neared the front door, I wondered if this stressed out, anxious, desperate couple with their faces pulled in hard lines would have anything good to say about our working together. Had it been pleasant at all? Would they feel they had been treated well or that the whole thing was worth it?

With all these thoughts swirling in my mind, I rang the bell. The door opened, and there stood before me a woman I almost didn’t recognize. Where before a permanent frown had been carved into her face now shone a relaxed, upturned smile. Her eyes that had looked dead and empty now seemed to shine, almost laugh.

I mentally willed my mouth not to gape open in shock. “How’s the new house?” I asked.

That’s when she said what I never thought I’d hear from her.

Her smile expanded into a full out grin. “It feels like home.” She sighed and her eyes went dreamy, “I’m happy.”

I nearly cried on the spot. “Wow – after a week it’s feeling like home already?”

“From the first day it felt like home.” She raised a palm to her chest as though speaking of a loved one, “Tina, the chains have come off and we are free. … I’m happy. So happy. The grandchildren love it here too!”

I almost burst into tears. She was happy?

That moment was worth every difficult, head-banging, hair-pulling moment before it.

THIS. This is why I do what I do. This is why I love working as a real estate agent.

I floated back to my car and through the rest of my week, grateful for the reminder, blessed by the satisfaction of having helped someone and then being able to see that dramatic transformation.

These are the moments that fuel us through the hard days, aren’t they?

 

What one memory or thought keeps you going through your hair-pulling days?

 

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You Only Drown in Water if You Stay There (How to Recharge in the Face of Obstacles)

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We all face obstacles.

A controlling parent, a cheating colleague, lying clients, or a bullying boss.

When you’re in it, especially if stress and difficulty come from multiple sides, it can feel like the most miserable isolation. But the truth is that none of us is alone. We all struggle.

So what do you do when the pressure becomes relentless and you start to feel like you’re drowning in negativity?

You don’t drown in water by being in it. You drown in water by staying in it.
-Edwin Louis Cole

Many years ago, I was in just such a place – drenched in deep, extreme negativity. The enormous personal stress resulted in my losing 50lbs in a month. I couldn’t eat – my body wouldn’t allow it.  My insides felt shaky – like I’d swallowed a phone stuck on vibrate. And all I could think about was the very difficult circumstance that was turning my heart inside out.

Then something happened that changed my life.

A friend noticed and did something. She saw what a mess I was and how it was damaging my body.

“You need to go to a doctor!” she said.

I insisted that I didn’t – that I could handle it. She insisted more though, and made me go. She drove me to the doctor’s office. She sat with me in the room. She forced me to get help.

And it rescued me.

Most of the stress and difficulty we face in our work and relationships isn’t that extreme. But it’s critical to recognize when we’re maxed out on stress and negativity, and to take action before we make things worse – for others and for ourselves.

 

How to Recharge in the Face of Obstacles

Be Your Own Friend

I was lucky that time to have a friend not only notice, but then help me initiate change.

We can’t wait for a masked hero to arrive though. Most of the time we have to be our own friend, noticing that we are a mess and that something has to give.

 

Give Yourself Permission

I don’t know why we find it so hard to give ourselves permission to be wounded; to feel hurt. I’ve got news for you: humans hurt, hearts break, and we’re not robots who can flick a switch to make it all stop.

Healing can only happen when we realize we need it.

Needing help does not mean you’re weak. In fact, it’s what’s going to strengthen you. Admitting your wounds is itself an act of strength and the next step to progress – no guilt required. Give yourself permission to need help.

 

Rest

There is a time to take a break. When you’re slammed from all different sides, it’s tough to pull out a smile. We have to recognize when our bodies, emotions, thoughts need a break.

When we are in a bad mental state, we’re probably not the most effective in our work and relationships anyway. We need to invest in our own well being with the gift of a rest.

 

Let It Look Different

Know that your rest and recharge time doesn’t have to look like sunbathing on a beach in Cancun.
It doesn’t have to be two weeks long. Do and be what refreshes you.

For some, it’s going to be retreating to a cabin with a stack of romance novels. Or others it looks like camping out in a recliner for a few days, refusing to cook or clean, so their body can heal.

Recently, I took a break to recharge, and spent that time attending classes, learning online, brainstorming my brand positioning, and product development. That – especially the brand positioning and marketing – is what revives my motivation. It refreshes my confidence in my abilities to excel, and fires me up to work with renewed gusto.

What refreshes you will be different than what works for others and that’s okay.

I’m curious – how to you recharge when facing obstacles?

What is Virtual Staging?

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What is Virtual Staging?

Virtual Staging is the use of software to stage the photos of a home. The key to doing this well is to have good quality photos to begin with and then have a skilled Stager do the decorating.

When would you use Virtual Staging?

Virtual staging would only be done in a VACANT HOUSE.

What is the benefit of Virtual Staging?

  • NO added costs to hire a stager
  • NO added cost to get content insurance for furniture
  • NO damaged walls from moving furniture in and out
  • No risk of furniture being stolen or vandalized
  • Increased perception of value
  • Buyer is able to picture what the space is to be used for

See the difference in the following examples:

This first photo is an odd room. The window does not appear to belong to a specific room. We cannot see what is behind the wall. Can you see how these two options help clarify the use of this space?

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Koroluwka Rd LR2

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43 Pine St. LR1

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When Weeds Hide Beneath the Surface (Plus FREE Devotional Download!)

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I finally found time to get to my flower garden.

The sun was shining, ground moist from recent rain, and I was ready to clear out tall weeds to reveal beautiful, black soil.

Down on my knees, as I pulled weed after weed, I saw a particularly large dandelion. Wanting to pull it out by the root to remove it completely, I grabbed my handy root-digger-upper tool and had at it.

Just when I thought I had it, I heard and felt the root snap off.

The dandelion plant and some of the root came up. I looked into the hole. There it was, deep inside, a portion of the root that would stay.

I continued pulling weeds out by the root and when I was finished, the soil looked black and beautiful.

But I knew that, underneath that beautiful, pristine surface, were roots that would sprout weeds again – especially that one, big dandelion root. I didn’t remove it, I didn’t kill it, the weed is still there.

And it got me thinking about us, about me, and how we can have a certain appearance of goodness or having it together, but still have issues. And if we don’t take care of those deep down inside issues by finding and removing the root, they will keep cropping up.

I tossed weed greens aside and continued pulling others as I wondered about one of my own issues. In recent months, I’ve been prone to feel angry inside. I don’t act on it, let me be super clear on that – I don’t retaliate when I feel wronged, I don’t jump to verbally defend myself, and don’t become offensive or defensive in my speech or actions.

I want to be clear because this is my blog as a professional, but I’m also a human who experiences emotions. And I want to share that with you. I want to be real with you.

As I pulled weed after weed, root after root, I wondered what could be at the root of my anger. Was it a healthy response to injustices? An indicator that I need to find a way to de-stress? A response to physical pain? I wasn’t sure.  So I became prayerful about it, driven to search my motives. I want to grow, not just in my skills as a professional, but also in my faith and character as a woman.
Here’s what I know about weeds. They’ll always be there. Remove one, and another will crop up.

But if the weeds in our personal lives leave us in search of understanding of ourselves and others, they’ve benefited us.

When we discover hidden roots in our lives, ignoring them only makes them come back stronger. When we do the work of exploring and unearthing them though, we’ll grow stronger in faith and character. Our garden won’t just have the appearance of being weed-free, but it will, more and more, truly BE weed-free.

While we’re talking about faith and gardening, I’d like to let you in on something my friend Kim is doing. 

 

Blog Post Advert

 

In the meantime… what is one insight you’ve discovered in your garden this year?

 

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The Man Whose House No Real Estate Agent Would Sell

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This tale might be fictional, but it’s based on several real, local people and events.
On things that actually, really happen around here.
Bill had been turned away from every brokerage in town. No one was willing to sell his house for him.

No agent, whether moral or shady, would touch it.

And it wasn’t because of the property;  the home and yard were in great shape.
The problem wasn’t the location.  Actually, it was a highly desirable place.

Buyers were searching for a property like his.

Still, no one would list it.

Why? Because Bill insisted on selling it for double its value.

Double.

Seriously.

What was worth $300,000 in the local market, he decided he would get $600,000. And he was completely dead serious.

So he left office after office, unable to find the agent who would invest their marketing dollars in such. No one was willing to torpedo their own reputation by listing such an impossibility.

Bill returned to his home and promptly stuck a sign in the yard. If no one would help him, he would do it himself.

Two things can happen at this point, and neither is a good thing.

  • Bill could sell the house to an unsuspecting private buyer who doesn’t realize it’s a horrible deal. Because ‘hey, it’s a private sale, so it must be cheaper’. Umm, no.Either the buyers come up with cash for the inflated price and buy something without any promise of equity for years and years and years or, more likely, the bank looks at the deal, and refuses to fund the mortgage. Because paying double is insane.
  • Or, most likely, and what happens most of the time, the property sits. And sits. And sits.
    Because people aren’t stupid. No one will pay double. Or even 30% more than it’s worth.

 

Look, if this forewarns you about anything, let it be this.

 

  • Beware: private sales aren’t always on the up and up.
  • Buying without an agent to protect you is risky
  • And, if you’re selling, for Pete’s sake, remember people aren’t idiots – not buyers, not agents – and be reasonable. People (and banks) will only pay what things are actually, legitimately worth. Anything more is flat out greed.

 

Have you ever purchased an over-priced home? Why?

How to Compete with Colleagues without Steam Rolling or Hair Pulling (And Why Competing Agents are Your BEST Customers!)

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There are a lot of weird things about the real estate profession.

Like working side by side with your direct competitors under the same unified banner.
You’re on a team, but you’re also not.

Sure, there’s camaraderie, all of us being members of the real estate ‘sisterhood’, but here’s the thing.

Sometimes sisters fight.

Insecurities, miscommunication, and outright jealousy and fear can cause a lot of problems among humans. Even real estate agents. Even competitors.

We can’t avoid it, really. So the trick then isn’t to avoid competition or miscommunication, it’s trying to figure out how to disagree like grownups, and compete with sportsmanship.

I’ve seen my share of office feuds, both between agents in the same office and agents in different brokerages. Sometimes it’s frustrating to watch, other times it’s heartbreaking to watch someone flush their reputation and professional relationships down the crapper for a measly paycheque.
I’ve seen people huff and puff about ‘how dare so-and-so talk to THEIR client’ when the truth is that was never ‘their’ client. (Because first, people are not property to be claimed by real estate agents and second, saying hello to someone in the store does not a client or piece of property make) *rant over*
I’ve also been to countless meetings with other agents and was met with snarky attitudes, snide comments, and outright belligerence. Once I got over the shock of a fully grown adult behaving like a toddler in wingtips, I stored it in my memory as evidence of an important truth – one we all need to learn.

Agents, we need to get it through our thick, competitive heads, that we don’t need to steamroll and pull each other’s hair to make it!

We need to realize other agents are our not our enemies – they’re our best customers!

Why Competing Agents are our BEST Customers
1) They Cover You on a Day Off

Without some degree of teamwork (or shirking our clients), we won’t get a day off. We need each other. If you expect another agent to do anything on your behalf, you’d best maintain those relationships.
Someone whose client you poached, whose deal you tanked, or who you simply treated with disdain is not going to jump to help you.

2) They Bring Referrals!

Referrals from other agents is a huge resource for leads. Winnipeg agents occasionally send me leads so they don’t have to drive all the way to Steinbach for a showing. I absolutely want those! But, when I sell a house as a result of that referral, I absolutely give a referral fee to that agent. I treat them well and reward them for their efforts to work with me. And the people they send my way? I treat them with excellence too. Know what happens? Those agents don’t hesitate to send me referrals in the future.
(If I’d choose to be snippy, cheap, or treat their would-be clients poorly though, I could not expect that referral source to keep flowing!)

3) They Understand Loyalty

Some people put a lot of energy into ‘protecting’ their clients from being ‘snagged’ by another agent. I have a list of problems with this. Why would any agent put so much work into keeping someone who is so apparently disloyal (clients aren’t objects to be kept on a shelf anyway), when it’s so much easier, efficient, and rewarding to work with people you like and who like you – clients and agents.

Cultivate those relationships, and reap loyalty. (and so much more.)

We need every office to be willing to work with us – to be willing to bring offers and show our houses.

If another agent thinks you’re a pain in the a#$ to work with though, they might just resist showing your houses. They might just try to steer their clients to other options to avoid the unpleasant, sarcastic, snarky-attitude-ridden experience that is meeting with you.

4) Repeat Business. Like… A LOT.

Another huge reason other agents are our best customers is because they can repeatedly write offers on our listings. A buyer or seller will only do business with us once every few years at the most generally, but a realtor can do business with us many times!

Bottom line: We need each other. Let’s act like it.

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