1% Realty Option

[SivoxII]

Our neighbours have placed their home on the market in the last couple of weeks. With the decline in the market and the "1% realty" option, I personally think they will struggle to get the price they are hoping for (especially as they have been working constantly on the house in 1½ years!!)

[scotty]

Hey sivoux what is the 1% realty option

[shazr]

Its a slightly troubling time in the market at the moment, and the media really doesn't help!!

Scotty, in answer to the 1% realty option, its pretty much as it sounds you pay 1% of the sale price, but most of the agents that work this system have a minimum fee that they charge, for example if you are listing a condo, lets say at $275,000 its more likely that you will be subject to paying the min fee ( I understand that its around $5k, but that could vary!)

Its always been a bit of a 'subject of discussion' with Realtors, as some, are less likely to show properties that are listed with 1% agents, as the commission for the buyers agent is pretty low, so the listing agent quite often 'double ends' the deal. But, in this market I think that any Agent would be willing to show any houses as we all know, in the long run you want to keep the client happy for future business!

[Brell]

Commission "filtering" is a sad but true occurence in the real estate world...

It is important to keep in mind - that as a buyer.... you have little to no say over the amount of commission that a Realtor makes by successfully transacting a property for you. The Realtor does, however, have to disclose the amount or method of calculation that thier brokerage will expect to get from the Sellers Brokerage.(Before you sign the Offer)

The commission is included in the price written on the contract -so not over and above... This too... can be confusing as you will have some Buyers agents saying that their services are "free" - well... last time I checked.. the Buyer was paying the bill - so you could argue that the fee is included - but "free" seems a bit of a stretch to me.

My advice is to ask any Realtor you are interviewing about how they work. Will they show you all the properties listed? - not likely since there are thousands.... How will they decide what they send to you? What about properties offered for sale with "discount" service providers and or For Sale By Owners?

It works way better to have a frank conversation up front about what your expectations are... and if the person you are meeting with is not receptive.. look further. There are service driven professionals out there who will treat you the way you want to be treated.

[SivoxII]

Our neighbours are now working with another real estate company (after walking away from the 1% option ... as they didn't manage one single viewing). They have had 2-3 viewing since, but still no great interest - and this is after a complete home renovation from top to bottom!!

... perhaps the price is still an issue in this delicate market??

[Clayton Paxman]

Interesting question Sivox. I'm wondering what the % fall in prices over the Atalantic is compared to here in the UK?

It's doubly interesting if you consider the following:

(This isn't reflecting any particular area or the credit/mortgage options)...

1: It's a buyer's market. With prices falling, the option is 'buy' at a point that is right for you - on the gamble that prices will rise again.

2: People may now be waiting longer to try and save on purchase prices, actually wanting prices down
(a kind of self fulfilling prophecy - if demand slows enough prices will usually drop)

3: There will be a point (logically) through this when prices will stabilise and perhaps start creeping up - demand will increase as prices drop, and the increased demand will then reflect opposite).

SO, for the savvy, it's a great time to put money into real estate by buying - particularly when prices and interest rates are low - but it all depends on your 'desires' for the long term.

Now, for Kelowna specifically - looking at this forum, and the number of people moving (or looking to) the area - does the market seriously hamper them? Or, is it actually good (property wise) in that they mat save a few $ on original price estimates for property?
(If a family are looking to (for instance) make a transatlantic move, then the current prices are not an issue as much as they may be for others, since the decision on buying has surely been taken on that information).

This may be a good thing for an area like Kelowna, where people new to the area 'have' to purchase a property - they cannot rent indefinitely - so - if they save money, that means a little extra left over that could be spent elsewhere in the town, 'boosting' the area in other ways than purely through the property market.

Of course, none of this helps the person attempting to sell (and perhaps lose money) - but it's interesting to ponder the whole picture.....

[tracie107]

Well we have seen so many houses drop in price that my hubby is kicking himself that we didn't rent for longer or that we came over at this time. However, there is no way that I would've wanted, nor could we anyway, have stayed in the UK for 9 months longer - just no way. We have seen a few houses that when we arrived in May 08 they were listed at $550,000, then they were listed at $450,000 now they are $399,000 .

Surely people are not willing to loose this sort of money, at a bad economic time like this, as I know I wouldn't. Or perhaps this shows how overpriced they were in the first place.

[Clayton Paxman]

HI Tracie

Well, it's all 'relative' as when prices are high, so is the cost of your 'new' house - the reason most people sell. Of course, like everything else, best to choose your price, buy and 'forget'. You could name a thousand and one things to purchase. Bet is that next time you look it's half the price you paid