Real estate in Calgary - another bubble?

[Cappy]

Originally Posted by blankall

I had great experiences buying properties both times with my realtor. They directed me to focus in on properties, I would never have found on my own. They also helped me win a bidding war. I obviously didn't have to pay their commissions on the buying side.

As a seller, I'd imagine staging and marketing your home is where the realtor comes in, or in a slow market, actually finding the buyers. A good realtor should be adding value to your sale.

I do agree that a lot realtors are awful though. You just need a good one.

But you do pay their commission. Its baked into the purchase price.

[blankall]

Originally Posted by Cappy

But you do pay their commission. Its baked into the purchase price.

The purchase price is always the most anyone will pay. I'm competing against other buyers, and the person willing to pay the most wins. It doesn't matter where that money gets cut up at the end.

Especially under the circumstances I bought, of a massive bidding war. It's not as though the buyer would sell the place for $25k less if they weren't paying a buyer's real estate commission fee. The sale price was X. I had the best bid.

[blankall]

Originally Posted by troutman

Imagine being a realtor acting for a buyer now. Multiple showings, multiple offers written, no deals for their clients.

When they do sell a place they get a much higher commission. I don't feel sorry for real estate agents having to do actual work.

[greyshep]

Originally Posted by troutman

Imagine being a realtor acting for a buyer now. Multiple showings, multiple offers written, no deals for their clients.

So basically its a trough of folks with lottery tickets in their hands looking for flush clients that they can win with.

I cant really make myself feel sorry for any realtor in this kind of market.

[troutman]

Originally Posted by blankall

When they do sell a place they get a much higher commission. I don't feel sorry for real estate agents having to do actual work.

Not sure what you mean. Usually listing agent and buyers agent get the same commission. Quite often the seller agent offers a discount to get the deal, especially in this market.

[Winsor_Pilates]

Originally Posted by Tron_fdc

Wouldn't that be like an actual sales job? Spend countless hours building out proposals, going through stacks of paperwork clients send in with their RFQ's, build out a quote, and watch it go to someone else who bid it lower. Happens to me all the time.

I'd give my left testy to hit 100% conversion on my quotes.

Realtors in a busy market are happy and don't need much sympathy.
But your example is acquiring a client, not doing work for them.

That's more like the Realtor getting the client in the first place. We usually also have to prepare bunch of stuff, go through an interview process and often lose out to a discount agent, someone's cousin or an agent who promises a commission kick back to the buyer.
So it's no where near 100% conversion.

Now once we've secured a client is the stage Troutman mentioned.
Even then that buyer may never buy a place, a listing may never sell. Any costs involved in marketing, photos, print, industry fees, staging is burned regardless. Not to mention time.
It's no where near 100% conversion, where as most sales jobs have some guaranteed compensation at that point, billable hours etc.

In your example, once the client has committed to working with you, do you get paid for your time? Or can your potentially do work for them for a year and still get nothing?

[I-Hate-Hulse]

How much do the selling / buying agents pay back to the owner of the brokerage for their cut - 50%?

[The Yen Man]

Originally Posted by The Fisher Account

My house has gone up in value so quickly that I can't really afford to move/upgrade. So now I just get to enjoy higher property taxes

#firstworldproblems

That's not really how property taxes go though, unless the values in your community went up higher relative to the overall Calgary market values.

[Winsor_Pilates]

Originally Posted by I-Hate-Hulse

How much do the selling / buying agents pay back to the owner of the brokerage for their cut - 50%?

Depends on the brokerage.
A lot of the newer ones or online MLM type ones are next to nothing. Maybe $100-$200 per deal.
The more international ones or luxury market brands can be 10-30% per deal; often tiered structures where it drops after a certain level of production each year.
No one is near 50% though anymore.

[The Fisher Account]

Originally Posted by The Yen Man

That's not really how property taxes go though, unless the values in your community went up higher relative to the overall Calgary market values.

It did.

[sketchyt]

By far the person who has provided me the most value in buying/selling homes was my real estate lawyer. You know, someone actually trained and has a real obligation to look after my best interests.

[username]

Originally Posted by Winsor_Pilates

No one is near 50% though anymore.

At my company, a tech/real estate firm in the US, we have split commissions that in some situations start out much higher than 50%. That said, an agent is a full time employee, not a contractor, thus receives full benefits, paid time off, a commission draw for those pay periods they don't have commissions and all their realtor expenses are fully paid (licences, photos etc).

[stampsx2]

Anybody else think we start seeing price increases in real estate because of the boc’s decision to cut interest rates?

I’m thinking we get increased real estate activity but we see rents starting to drop. It will be a few years before rents get back to where they were pre pandemic because landlords will be slow to drop prices. Thoughts?

[nik-]

Originally Posted by stampsx2

Anybody else think we start seeing price increases in real estate because of the boc’s decision to cut interest rates?

I’m thinking we get increased real estate activity but we see rents starting to drop. It will be a few years before rents get back to where they were pre pandemic because landlords will be slow to drop prices. Thoughts?

What market forces are going to cause this exactly?

[blankall]

Originally Posted by nik-

What market forces are going to cause this exactly?

1.4 million new Canadians per year. Less than enough housing to house 1.4 million new Canadians per year.

Lots of new dollars printed during Covid. The value of the Canadian dollar has been permanently decreased.

[nik-]

Originally Posted by blankall

1.4 million new Canadians per year. Less than enough housing to house 1.4 million new Canadians per year.

Lots of new dollars printed during Covid. The value of the Canadian dollar has been permanently decreased.

So in this reality how does rent ever go back to Pre-Covid levels?

[GreenLantern2814]

Originally Posted by nik-

So in this reality how does rent ever go back to Pre-Covid levels?

They don’t.

Buy a condo, kids - 5% down is all it takes.

[Manhattanboy]

I'm blown away by the recent asking prices at the high end of the market.

$5m and $6m homes just listed in the inner city - Mount Royal and Britannia.

Are these people crazy? This is Calgary. Not Toronto or Vancouver.

[Bigtime]

Originally Posted by Manhattanboy

I'm blown away by the recent asking prices at the high end of the market.

$5m and $6m homes just listed in the inner city - Mount Royal and Britannia.

Are these people crazy? This is Calgary. Not Toronto or Vancouver.

Crescent Road NW, $9.9 million...

https://www.realtor.ca/real-estate/2...lgary-rosedale

[blankall]

Originally Posted by nik-

So in this reality how does rent ever go back to Pre-Covid levels?

Not typically the way inflation works. The best you can hope for is that salaries also go up to march the new rent and home prices. This process typically takes many years though, and the people at the bottom are typically hurt the most by it.