good morning guys. thank you for joining us for this presentation. lunch and learn for you guys. so the topic today is how to navigate thishot vancouver real estate market. my name is gary wong. i work with macdonald realty. i’m the author of the book on vancouverreal estate. just a little introduction about me—howi got in. i’m born and raised in vancouver.
went to ubc studied psychology and mandarin. worked at a bunch of entry level jobs beforegetting married before and then realizing i need to up my game a little bit. so i went back to school and did my mba. during that time, i had been tutoring a kidwhose father was a builder. and he said, ‘gary, why don’t you go intoreal estate. i’ll give you some houses to sell.’ kind of open the windows for me—opened thedoors for me coz i always wanted to go into real estate.
great opportunity but when i was growing up,my parent we’re like, ‘no, don’t go in, it’s super competitive, you need a largenetwork.’ they discouraged me. they wanted me to be the typical accountant,doctor or lawyer. but with the mba, i had the confidence. so i did the mba and i’ve gone to the realestate market. that was about 4 years ago. and then i had to—i did the industry analysisduring my mba on real estate industry. they said it’s the 80/20 rule.
basically, 20% of the realtors make the 80%of money. but after i did the industry analysis, i foundout it’s more like 95/5. so 5% of the realtors do 95% of the business. so i took all. when i was studying the mba, i targeted everythingi learned in the mba towards real estate so i found out how i was going to differentiatemyself and all that stuff. and then i wrote a 15-page business plan andstarted interviewing brokerages and found out that macdonald realty was the one forme. the book on vancouver real estate was writtenlast year.
i wrote it in response to lack of transparencyi saw in the industry. i guess you guys been watching the news andlearning about how real estate industry’s been in the hot seat. it’s about time that somebody blew the whistle. and it’s about to me there’s more transparencyin the industry. okay. let’s go forth towards today’s agenda. our topic’s about 20-30ins long and thenthe rest will be q&a. i have prepared some additional material incase i go through them quickly.
but we’ll talk about market trends. what’s the cause of the real estate boom? how to navigate a bidding war?-- which hasbeen pretty much the market for the past six months. rent or buy which is the age-old question. negotiations in this market. economic forecast and the question you’reall asking. so just a brief—market trends. i have vancouver west and vancouver east.
these are market stats that my company produces. when you look at these-- these are taken fromthe mls or the real estate board. this number is the price of a typical home. it’s called the hpi—home price index. so a typical house in vancouver rises about3 million dollars. this is march 2016, so last month. there’s 571 listings, 221 sales. so they calculate—they use this number andthen they calculate absorption ratio. absorption ratio is the number of homes thatsell—how long it takes to clear the inventory
in the market. so if this was like a hundred homes and 50homes sold, then it would take 2 months to clear the hundred homes. okay? it’s called the 2-month supply. 0-4.9 months is considered a seller’s market. 5-7.9 is considered a balanced market. and over 8 is considered a buyers’ market. so 571 divided by 221 is about 2.2 months.
2-point something supply. so at seller’s market, condos, typical condos$635,000, $939,000 for townhouse. 1-point something supply. and 1-point something supply. 1.1 right. vancouver east, same. it’s about 1.8 month supply for a house,condos. 1-pont-- 1 month supply and town homes. interesting, there were 27 listing on mlsbut 32 sold.
so that means there were 27 listings on mlsbut 5 sold for like under the table, exclusive listings, like pocket listings. so that’s how crazy it is. not only that the entire supply sell, buteven more than that. [crowd] same as condos. [gary] yea, that’s right. and just for the north vancouver--i have the stats for every single city. i’m just going to go through a couple foryou. north vancouver.
west vancouver. north vancouver, 1 month supply1.1, 0.7 1.4 million$400,000 $734,000west vancouver 2.8 millioncondos $822,000 and town homes, they didn’t have the numberfor that—for mls 2.4 3.0 in 1.2 monthsall of that are basically a seller’s market. for richmond, 1.4 million$400,000 $631,000interesting, 110 listings, 127 sales more.
1.9, 2.4. 0.9those are considered like a super strong seller’s market. unlike a seller’s market, you typicallysee around 4-month supply. the one’s with a super strong seller’smarket is what increases the price, actually. so 1 or 2 months or anything lesser than that,is a super strong seller’s market actually drives prices upwards. coquitlam1 million $300,000$491,000
1.4, 0.9, 0.7once again, listings 151, 164 sales. 45 listings 68 sales. pretty crazy. what does this mean for buyers and sellers? for sellers it’s great. they get to sell their homes in multiple biddingoffers—multiple offers, bidding wars. is it good for buyers? yes it’s good, in the sense that, whateveryou buy, it going to go up in value—like pretty quickly.
so, what is causing this boom? typically low currency, low oil prices andlow interest rates. it’s historically the lowest interest ratein vancouver in the past 13 years. i looked at global interest rates, vancouver’sinterest rates are pretty much like almost the lowest in word. there are only a handful of places in theworld that have lower mortgage rates than vancouver. low oil prices. it was actually a booming market before theoil dropped.
and before when the dollar was on par—2012. 2013—it was on par and foreigners kept comingand still buying everything. it was a pretty strong market. but now the currency dropped, it became ashopping spree for men like chinese and the asians and also americans started jumpingon board and europeans all over the place. what else, foreign demand-- asians, europeans,middle eastern investors. so a lot of investors are--they consideredit a bargain, they’re parking their money, safe heaven because vancouver’s rated top5 cities in the world to live in. i think it’s number 1 or number 2 rightnow.
local demand. children still want to live the same lifeas parents did. so a lot of them—they’re being forcedto buy condos. but a lot of them, because the home priceshave increased to a certain degree, what was considered a poor neighbourhood aseast vancouver— about 10 years ago, east vancouver was considereda poor neighbourhood. and people with lower income jobs, they wereall of a sudden became millionaires like their houses became million dollars. all of a sudden they have equity to give totheir children to buy properties.
so they’re competing against local peoplewho want to live the same lives as their parents buy houses. rich foreigners who became permanent residentsor gained new residence—canadian citizens in the past 20 years. so 1997 is when hong kong switched over frombritish rule to china, then a whole bunch immigrated to canada—to vancouver. and then in the early 2000s like the mainlandchinese as well as taiwanese started coming over. so they are—it’s not the mainland chinese; it’s the
local mainland chineseor the local hong kong chinese, local taiwanese that are super rich and they’re buying propertiesas well. low supply sellers are hesitant to sell becauseof the market keeps rising. so a lot of them—i talk to them, they saythat, ‘if i hold out a couple of months, it will worth a lot more. especially with the things that’s goingon with the news about the stipends. and they want to sell at the top but theydon’t really know when the top is. also, a lot of the concerns is that, if theysell, where are they going to buy? so that’s another reason.
downsizing. like i said, a lot of seniors who were onceliving in the richer areas of vancouver. they were paying low property taxes but thenwhen their houses started skyrocketing to 4-5-6 million dollars, they all of a suddenhad to pay $20,000-$30,000 property taxes. so all of a sudden, they want to downsizeand then they sell their homes, they over to the sunshine coast or they move to an apartmentlocally and they give the chunk of money to their children to help them with the downpayment. navigating a bidding war for buyers. obviously, subject-free offers is encouraged.
it’s not the safest way realtors are trainedto tell our clients to—make sure you have a subject offer to your home inspection. if we tell that to our buyers, they will coverour butt but it doesn’t really help our buyers get the home that they want becausethey lose usually. when i do meet with my clients, i tell themto write subject-free offers but i make sure that they have it pre-approved. but pre-approval doesn’t mean guaranteedfinancing. so there’s prequalify, pre-approval andthen actual confirmation—actual commitment. prequalification means you go to the bankand you say, ’how much can i borrow?’
they ask you a couple of questions and thenthey say, ‘okay you can borrow this amount—400,000.’ pre-approval means please fill out a creditapplication and then they do a—they process it. then you come back and they go, ‘okay youcan borrow 450,000—that’s pre-approval. commitment letter is you’ve actually writtenan offer on a property. you have a contract in place. you have the strata options. you send it over to the lender. and then they’re like, ‘okay we approveand we lend you 450,000.’
so prequalification is not very accurate. pre-approval is more accurate. you have to do credit application. but it’s not until you actually have thecontract and you give it to the bank and the lender actually writes a commitment letter--that’s when it’s very solidified. usually if so, if you’re giving a subject-freeoffer, obviously you don’t get the commitment letter, you would have to just base it withyour pre approval. home inspection. a lot of buyers are doing home inspectionsprior to writing their offers.
and one of the tricks is if you’re bidding—ifyou know there are 5-10 offers. if you know somebody has already done a homeinspection and they’re still writing an offer, chances are that means the home isokay-- unless that other buyer’s a builder. the other buyer’s a builder and they’regoing to tear it down. then they don’t really care what the homeinspection result. well they wouldn’t have done the home inspectionto begin with-- a builder usually doesn’t. for the condo, if you know somebody else haddone a home inspection, chances are, the property is in decent condition. play to the seller’s interest.
find out what the seller wants. have they bought a place yet? do they need a rent back? do they need to rent their home back for 6months? use that in writing your offers in order tomake your offer a little bit more competitive. it’s not all about the price. show sincerity. offer in writing, obviously, a lot of peopleare doing verbal offers these days. it’s not legally possible enforceable court.
it’s not encouraged as well. bank draft. when you present your offer, you want to presentin person, you want to have a copy of your bank draft to show that you’re serious. there had been cases in the past that peoplejust write offers and then they just take off. they write subject- free offers and then theydon’t even include their bank draft and then the next day the buyer just takes offand goes back to china. seller want to sue them but they can’t cozthey can’t find the person.
bank draft shows sincerity. letter of intent is encouraged as well. write them a letter why you want to buy theirproperty—a little bit about yourself. it’s just like a cover letter-- just thinkingoutside of the box. i recently did one with my client. we did a letter of intent, we did a video. like i just shot a video of themselves andsent to them with the offer as well. it gives the sellers some good vibes and goodwill. don’t hold back, you may only get one shot.
when you’re competing in a bidding war,if you’re lucky, the listing agent will go back to you again and say, ‘your offer’stoo low, would you like to increase it? if you’re lucky then great, you get thatsecond chance. but lot of times, you only get one shot. if there are 5 or 10 offers and you’re thebottom three, they might only solicit the top three and bring those guys up. know your market and competition. obviously, know how much the property’sworth and know how many offers there are. that’s really important.
make sure you know what things selling at. also, so you do call—so you talk to yourrealtor and find out what things are selling for. also find out where the trend is going. in this market, prices go up every few weeks. so it’s very important to know where themarket is heading. let your realtor play the game. when you’re negotiating in a bidding war,it’s very psychological. it’s very political.
if you are on the listing agent’s good side,then sometimes they reveal little tips and nuggets here and there to give you the upperhand. so let your realtor play the game. like kiss butt a little bit. just find a way to—just like that psychologicalgame there. navigating a bidding war if you’re a seller. number 1strategic pricing obviously don’t over price your home—youcould price it. there’s a few different strategy:price it low,
price it at market value,price it high, or price it a tiny bit below market valuein this market, most sellers are pricing a little bit below market value to generatea high number of bids. so, definitely you have to be careful howto price your home. just because it's a sellers’ market doesn’tmean you can just slap the ad on and mls, then it would sell. you have to still have to market it. you still have to write good sales copy--a good description for your listing. you still need to do high quality photography,videography-- if needed, floor plans-- all
that stuff. ‘coz, it's still about the first impression. we want to do a first—you want to do an open house. you want to impress the buyers. and then you want to get as much as interestand that kind of thing. so create boxing day frenzy-- very typicaland common in this market. even in a balanced market, a lot of peopleuse this strategy. they have one open house. they list the property on the market on tuesdayand then it shows up on the public mls on
thursday,and then open house saturday/sunday. then take offers on sunday night or take offerson monday night. so they want to create the boxing day frenzywhere you'd go into the open house and there’s 30 other groups with you. so then you feel like that there’s a competition--a frenzy, that kind of thing. that’s called the boxing day frenzy. set offer date and time which i mentioned. once again, let your realtor play the game. so the listing agent has got to play the gameand solicit.
if i were the listing agent, i would try tosolicit all the offers and not just the top 5. and i'll try to get over it all-- all tenof them. and be like, ‘you're pretty close, you justgot to move up a little bit.’ play the game and try to get the best pricefor the seller. so rent or buy. pros and cons for both. rent for pros, no fees. you don’t have to pay strata fees, propertytax, maintenance.
you don’t have to pay the mortgage, allthat stuff that’s a benefit. you don’t have to maintain the property. meaning if you’re sink breaks, if your faucetbreaks, if something broken, you just call your landlord and say, ‘can you fix this?’and then you don’t have to pay for any of that. hopefully you get a good landlord who willget it done quickly and not drag on. but free amenities-- if you get to stay ata high-end rental property and that have a really sophisticated amenities.
it’s a bonus. free amenities, no down payment. you don’t have to save up 200 grand/ 100grand. you get to save that and use that towardsother stuff like other investment as well. flexibility in relocation. you can pick up your bags and move out wheneveryou want. you’re not secured down by mortgage. below market value rent. probably 99% of landlords out there don’treally know how to maximize their rental property
business so they don’t really charge atmarket value for rent. so you’re often able to find landlords whoare overseas sellers and overseas homeowners. and they’re like, as long as you don’tkick and scream, they will charge you $500 below what it’s worth. so you can buy-- there are people living inyale town paying for $2100 for 2 bedrooms with a view. when the rent should be 3 grand, there area lot of those in vancouver. rental cons. paying landlord’s mortgage.
you’re essentially paying the landlords’mortgage. there’s no equity to the property. you don’t own any equity. your location is not stable so you can beasked to leave at any moment. obviously, with few months’ notice. number 3, landlord rules. not only that you have to follow the strataby-laws if you live in a condo. let’s say you live in a house, and partof your rental agreement, let’s say, your landlord imposes certain rules onto you.
you can’t renovate this, you can’t renovatethat. you can’t do this, or you can’t do that. it’s not your property. you have to ask for permission. you don’t own it. limited ability to renovate. for buying, pros and cons. pros. you get to own it—something that you own.
equity and appreciation. obviously, instead of putting money into rent,you’re putting money into the principal of your mortgage. you pay your mortgage but you get to takeadvantage of all the appreciation on your property. flexibility of a home. you can access the equity through a home equityline of credit, a.k.a heloc. you can also rent the property out. you can do a partial rental.
you can live upstairs and rent the basementsuite out. you can do a homestay if you want. you can rent it to students room by room. a lot of different ways. you live in a condo you also rent the extraroom out. you can rent the parking. a lot of different ways-- a lot of rentaloptions when you own the property. cons—you need a large down payment, usually. even the minimum down payment is 5%, stillthey chunk the change.
the last con, buying a liability. anybody read the rich dad poor dad? so rich dad poor dad, one of the key messagesis your house is not your asset. basically, buying an asset means buying somethingthat gives you money every month. when you buy a property, you’re buying aliability until you sell it then you make money. basically, every month, it’s taking moneyout of your pocket. mortgage or strata fee, maintenance fee, allthat up-keep. so negotiations in this market,work with a realtor who knows how to play
the game. get on the listing agent and seller’s goodside, i’ve mentioned that. learn seller’s motivation, we’ve talkedabout that. write strong offers, prices, dates, depositcharge. obviously write deposits typically 5% of theasking price. dates, you want to know if they need time--2monthsor 3 months completion. terms, you don’t want that many subjectclauses in this kind of market. get the accepted offer first, worry aboutthe small things later. try to get in-- you want to get the sellerattached to you first.
and then any small things, like if you wantthem to touch up the wall, if you want them to give a discount based on the mirrors brokenor whatever, talk about that after you get them to accept the offer. because they’re more likely to want to closethe deal after they’ve been onto your bait. present/negotiate offers in person with therealtor, if possible. it’s easier to say no to a buyer via email,it’s harder in person. economic forecast taken all this data-- takenfrom central one, credit union. it took it from imf, www.statcan.gc.ca-- bunchof other stuff. chinas gdp slowed down.
it was like 12-- in 2012, it was about 8%. and then 2017, forecast down to 6%--stillsignificantly higher than canada. in u.s., unemployment improves from unemploymentrate of 9% now it’s down to 5%. oil expected to gradually recover to $40-$60in the next few years. bank of canada overnight interest rates predictedto be 0.5% going up to 0.75% by 2018. bank of canada prime rate is coming at 2.7%. b.c.’s economy, gdp growth in 2016 predictedthe best in the country this year--better than alberta, obviously. the question you’re all asking, is therea real estate bubble?
is there an upcoming correction? here are some historical corrections. early 1980s where interest rates where about20%-- now, some of you might know about that. approximately, at that time prices the wentdown about 40%. 1997-2003, there’s 9/11, there we’re leakycondos, there’s a russian debt default situation, there’s an asian financial crisis. the market went down about 20%. great financial crisis in 2008—poor marketwent down about 20%. since then—since 2008, there has been nocorrection since people say, unproven real
estate cycle belief. every 7 years, there’s should be a correction—that’swhat they talk about. it’s not proven. so, is there a real estate bubble? are there economic factors pointing towardsit? based on, let’s see, this. and this is just a snap shot, i’ve a lotmore detail but i don’t want to shock you with information. there will be a correction.
but when? probably, when the interest rates go up. so when are the interest rates going to goup? well according to the feds in the u.s., andthe mortgage brokers out there, the economists, probably at least about two years—minimumtwo years. but that’s what they said 2 years ago. they also said it would go up 2 years ago. but then it primarily went down. so that was interesting.
and then oil went down. so i’m seeing-- i’m predicting that 20%-30%increase for the next 2 years at least. so by the time there is a correction, yourprice would still be more expensive than if you’ve bought now. does that mean everybody should buy now? no, not necessarily. coz i actually specialize in working withinvestors. i help clients build a short term and longterm real estate portfolio. i tell people—i sit them down and i findout what their long term goal is.
and then, i try to help them build financialfreedom through real estate. and it doesn’t necessarily mean, buy this,buy this, buy that-- could mean buying cash flow properties. like maybe buy and flip and all these variousstrategies that i wrote in my book—that i discussed in my book. so not necessarily buy now. you could also rent. there are a lot of veteran real estate investorsthat rent. there are also a lot of them that buy as well.
so that’s it for today, just a short presentation. you can get my blogs, market trend videos,market stats, real estate investing tips and strategies, my website, there’s my email,that’s my youtube channel there. there’s a hundred youtube videos out there. if you’re interested you can leave youremail. you can subscribe weekly/monthly real estateupdates. and questions? [crowd] how’s the marketing in fraser valleycompared to vancouver? obviously, vancouver is [inaudible] 28:50[gary] it’s crazier.
surrey as became as hot as vancouver west. so like going up 30% a year. [crowd] how about even further valleys likesurrey? [gary] i’m part of a real estate group calledreal investment network. it’s the largest real estate investing clubin western canada. they usually do a score card. they do a score card on different cities likedawson creek, fort mcmurray, and all these places. they recently did it one abbotsford.
they did it 40 out of 50. i can send that to you, whoever’s interested;just leave me your email. it’s crazy there. you can actually get positive cash flow inabbotsford. your cash flow—positive cash flow meansrent is greater than your mortgage and all your other expenses and you still get profit—likegreat profit. [crowd] how does that work within surrey,for example, when there’s still so much space and so many new high-rises being builtall the time, so it just increases number of people who are buying?
[gary] the population’s increasing about25000 a year. also a lot of migration from alberta to vancouverfor obvious reasons. and a lot of people moving out to the frasiervalley coz the companies are moving out to the fraser valley, too, because it’s cheaper. [crowd] can you give a bit about squamish? [gary] squamish is crazy too. very crazy. gone up like—i think like 20% in the past year. crazychilliwack.
squamish-- all those crazy places. this was news-- we heard that it was a crazymarket in those places about a year ago. it was crazy a year ago. it’s not new. what you see in the news, they say, ‘it’shot market, the news—‘ they usually news it about 2- 3months late. the stuff that they’re talking about shouldbe practices and all that’s stuff was years ago. [crowd] is coquitlam the same?
[gary] sorry. [crowd] coquitlam? [gary] coquitlam’s pretty hot-- crazy hot. [crowd] anything along the evergreen? there’s actually—can’t decipher what’sfor sale along the evergreen line. [gary] if you want to buy real estate--ifreal estate investing is your thing, buy near stadiums and buy near transit hotspots. by stadiums meaning, gm place or any stadium. obviously, schools is the key.
so if you look at all like the private schoolslike, crofton, and york house the prices skyrocketted. sometimes properties skyrocket 30% in 6 months. [crowd] why stadiums? [gary] stadiums? because the population—the amount of peoplethat conjugate there. if you look at panini [32:10] and you alsolook at gm place—it increase in population, the usually commercial businesses build aroundthe stadiums. people like easy commuting. the ‘wow’ factor is really high in thestadiums.
[crowd] gary, do you know how many singlefamilies homes there are in greater vancouver? in vancouver, there’s about 48,000 or somethinglike that. do you have an approximation of how many thereare inside the greater vancouver? [gary] not the exact number, but i have moreeconomic graphs that show the-- everybody knows the trend that increase densification. there are less houses than before. they’re trying to increase densification. and there’s just no land—no buildableland. so about 3 years ago, they did a presentation.
they showed us how toronto, calgary and victoria—they’rethe buildable land from 1980 to 2015. the chart showed an increase in buildableland for all those cities-- from hundred square kilometers to 2 thousand square kilometers. but vancouver was the one that didn’t increase. there was just no buildable land. there’s burns bog’s, stanley park—allthat amount. there’s no land. [crowd] i think the status something like48,000 single family homes in vancouver and with the population of whatever—the cityof vancouver population is- somewhere between
600,000 to a million, something like that. 600,000 plus and the population growing by10/20/30,000 per year but there’s only 48,000 homes. all the rest are condos and town houses andso a lot of people want a house. [gary] the basic demand and supply. not enough supply. the developers aren’t fast enough. there’s actually the current supply thatthe developers have, it’s not enough to cover the demand.
and not to mention, a lot of people buyingproperties aren’t renting them up. they’re just keeping them vacant, especiallydowntown. so that worsens the vacancy rate. the vacancy rate in greater vancouver is 0.8%. [crowd] so why do people just leave them vacant? [gary] because they just want to park theirmoney. they don’t want to deal with property venture. they just want to park their money. [crowd] because they can.
[gary] and whatever the liberal governmentis trying to block the mainland chinese or the asian investors, it’s not going to doanything. they increase the property transfer tax to3% for 2 million dollars and above. it’s only a difference of $10,000 or $5,000. it doesn’t threaten them at all. [crowd] it’s not like in the us, if youown a property and you’re a non-resident. your yearly property taxes will get higher. [gary] that’s right. [crowd] it’s not a free enterprise and it’sa lot harder because desirables--
[gary]that’s right. [crowd] like people in the ???? but they don’tleave them empty—some people do it because their taxes are so much higher if you’renot living in it. [35:50][gary] that’s right. [crowd] what are your thoughts on [???] tothe good desirable areas in downtown? [36:07][gary] the less desirable areas of downtown? [crowd] there’s a few double bits of candyand maine-ish area. and those places are quite affordable cozthey’re in a rough neighbourhood. so is that the next-- coz i know yale town,for example, for years ago, it was rough.
[gary] 20 years ago. [crowd] 20 years ago, okay. [gary] early 2000s. [crowd] so is the downtown east side the nextyale town? [gary] oh yeah. you know what, so renie, he bought a bunchof hastings like 15 years ago. 10 years ago he started buying them. coz he knew where the trend was going. he’s very good.
actually, right now it’s on the news talkingabout the buying of east hastings because they’re going to expand that entire area--rezoning and all that stuff. and all the condos, yea. so a couple, i think a year ago or 2 yearsago, strathcona village was on sale there, so like instantly. [crowd] coz they have a guess on there recently—wentfrom being so-so to being super like—[37:13] so downtown you say is next, it’s just sohard to imagine [gary] it will. it will.
if you’re trying to predict the upcomingareas, abbotsford, downtown east side, and areas such as surrey-- the farther ends ofsurrey. surrey is actually quite big—that land isactually quite large. [crowd] do you have any tips for first timebuyers? is it better time to buy now or is it betterto wait for a potential 2 year mark like michael? [gary] what i usually say-- one of the keychapters in my book is when’s the best time to buy or sell? and then i also did a youtube video on that. there’s this pros and cons in buying propertyat every season of the year.
at the end of the day, i tell my clients,‘buy when you’re ready to buy. sell when you’re ready to sell.’ don’t buy just because the news tells youto buy or the realtor tell you to buy. when you’re ready, buy. when you’re not ready--doesn’t matter if it’s the best deal in the world. there’ll be another deal. don’t worry about that. but it might be a little bit more.
couple of months—so in the market, it’sincreasing like 20% a year. every month you wait, you’re paying 1.5%more. so if the property’s $400,000, you’repaying like 8 grand or 6 grand more—every month you wait. but then, you don’t want buyer’s remorse—where you regret buying. and if you’re not ready financially to buy,that kind of thing. when i sit down with my clients, i find out,what’s their goal? what do they want? do they want to pay the premium for convenience?
or do they care about like, ‘i want to own6 properties in 10 years and then i want to rent.’ then i would strategically, basically, justlike-- so, i did my mba. just like in consulting, when you work asa consultant, you have the problem, you have your recommendations, you have your alternatives,you have your implementation plan. and you find out the client’s needs andthen you craft up a proposal to them. it’s not like just, ‘this one’s cheap,buy it.’ it’s not like that.
i mean, that’s what i do. i don’t know about other realtors. [crowd] but it’s different when you’relooking for their first home or if you’re doing it for more than just one. [crowd] yea. i also ask them, how long do you plan on livingthere?—on their first home. do you plan just buying it and then flippingin 2 years or 3 years? would you care if it makes money when youflip it? if you don’t care if you lose money or not,you might as well buy like the cheap $200,000
property with no rentals, maybe like age restrictions. you won’t make money when you sell it cozit’s highly undesirable but it’ll be cheap. so, depends on the person’s needs. any other questions? [crowd] what are your thoughts on the differencebetween the old place and then new place? [gary] old place or new place? house or condo? [crowd] yea, i guess condo. [gary] no worries.
[crowd] thank you very much. [gary] do you want a copy of my book? [crowd] i do. [gary] okay, comeback. for condos, old place aren’t bad. you just have to read the strata options--how long has it been maintained. if it’s maintained well, then you’re prettyset. new places, it’s convenient because it’snew or under new warranty. but old places aren’t bad either.
i also do like-- i have a huge deal aboutpre-sales. feel free to ask if you have questions aboutthose. [crowd] is there a competition less fiercethan on??? [41:42][gary] no, it’s not less fierce. it’s still pretty fierce. [crowd] i was going to say ??? like boxingday frenzy if you will. [gary.] somewhat. obviously, presells they charge higher.
they charge brand new prices. some of them price as if what will it be worthwhen it’s 2017. [crowd] when you’re ready to move in. [gary] exactly, they’ll price it that way. people think presell’s investing. no, it’s not. you just have to—in a hot market, anythinggoes up. you buy a piece of junk; it will go up—inthis market. but in a normal market, you have to be veryselective when it comes to presells.
you don’t just buy any of them. thanks guys for watching my video. please subscribe and share with your friends. email me if you have any more questions. thank you.
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