Radical changes coming for CREA

[RedlineBrett]

[quote user=bizaro86]

I'm not saying Realtor's aren't important, and their are many competent Realtor's out there. But it's not nearly as difficult to enter the field as the professions.




You are absolutely right - which makes those realtors with experience and educations that much more valuable relative to their competition.



There are transaction focused realtors - those that want to bang out deals same as some law firms are with closings. Stick a sign out front, get it shown, sell it. Not all that different from what a lawyer does with closings.



There is however a niche for consultations similar to what a lawyer/accountant would charge. Particularly when considered for investors. Stuff like portfolio managment, trade up / trade down strategy, market evaluation on the buy side etc. All this stuff many realtors do for free when trying to score a client but often times you get what you pay for and you hear what you want to hear!

 

[bizaro86]

[quote user=RedlineBrett]

There are transaction focused realtors - those that want to bang out deals same as some law firms are with closings. Stick a sign out front, get it shown, sell it. Not all that different from what a lawyer does with closings.



There is however a niche for consultations similar to what a lawyer/accountant would charge. Particularly when considered for investors. Stuff like portfolio managment, trade up / trade down strategy, market evaluation on the buy side etc. All this stuff many realtors do for free when trying to score a client but often times you get what you pay for and you hear what you want to hear!



Indeed. I use a lawyer that charges more than the bare bones fee, but I saved enough money using him on the first deal to pay for the incremental fee on the next 5. Professional advice can easily pay for itself if you use it correctly.



I could certainly see value in consultation from a professional investment realtor who wasn't in sales mode about some of those issues, especially from someone who had gone through those issues themselves and/or with other clients. (EG, I could use a 3 year strategy for trading some of my properties into better/bigger properties, but it's complicated when you consider marketing/financing/availability of properties) Very large investors (ie pension funds) have services like that, but there might be a niche for servicing smaller investors.



Regards,



Michael



PS I realized availability of properties doesn't make sense. It seems to me that there is a significant shortage of investment calibre properties in good Calgary neighbourhoods of medium size. Lots of single family properties available, and a reasonable amount of larger multi-family (10+ units) but not much in the duplex/fourplex range, which would be the natural stepping stone for many investors, myself included. A step up to a 10 plex is much bigger for financing/downpayment/management reasons, and will make it take longer for me to make the jump than if I could buy a decent 4 plex.

 

[bizaro86]

[quote user=RedlineBrett]You are absolutely right - which makes those realtors with experience and educations that much more valuable relative to their competition.





Which is why the compensation model for realtors is broken. Quality realtors are worth more than poor realtor's but they all get paid on a per transaction basis. Better realtors should get more per transaction than poor quality realtor's but a system encompassing that would be very difficult to implement.

 

[RedlineBrett]

[quote user=bizaro86]

PS I realized availability of properties doesn't make sense. It seems to me that there is a significant shortage of investment calibre properties in good Calgary neighbourhoods of medium size. Lots of single family properties available, and a reasonable amount of larger multi-family (10+ units) but not much in the duplex/fourplex range, which would be the natural stepping stone for many investors, myself included. A step up to a 10 plex is much bigger for financing/downpayment/management reasons, and will make it take longer for me to make the jump than if I could buy a decent 4 plex.




Very seldom do you see good clean rental property hit the open market in Calgary. Most owners of 'minimal issues' properties are smart investors and are not selling unless trying to trade up the property ladder.



Most of my clients that are in the duplex/fourplex game are putting their own suites in right now and refinancing the capital back out afterwards and then riding good assets with very low R&M expenses.



The mid-size multifamily market is also really tough. you don't get the 'economies of scale' until you get above 15 units in my opinion. Below that and the higher commercial rates make you no better off than a fourplex on residential rates.

 

[RedlineBrett]

[quote user=bizaro86][

Which is why the compensation model for realtors is broken. Quality realtors are worth more than poor realtor's but they all get paid on a per transaction basis. Better realtors should get more per transaction than poor quality realtor's but a system encompassing that would be very difficult to implement.




I wouldn't argue with a lot of what you're saying here.