With all the number crunching I do for for Canadians and their mortgages along with the sale of a home. Well, one question always comes up…. “Why pay all those Real Estate fees?

I decided to do some research and found some answers pretty quick………. This story below pretty much explains it for us.

Colby Sambrotto, who founded FSBO, just sold his Chelsea apartment for $2.15million

The founder and former CEO of a website helping people to sell their own homes has found a buyer for his own apartment with the help of a traditional real estate broker.

ForSaleByOwner.com creator Colby Sambrotto even paid the standard 6% commission after selling his two-bedroom New York condo for $2.15 million.

According to the Wall Street Journal, Mr Sambrotto spent six months trying to sell the apartment in trendy Chelsea through online listings and classified adverts.

But the DIY home selling guru eventually decided to turn the sale over to a professional.

Not only did broker Jesse Buckler set the price $150,000 higher than the  original asking price, he went on to lure the elusive buyer Mr Sambrotto’s self-help methods had failed to attract.

The Journal said the 2,000-square-foot apartment at The Lion’s Head building near Sixth Avenue is now under contract.

I also found this great outlook from The KCM Blog

His personal experience helps refute some of the myths Sambrotto has been espousing for over a decade. Let’s look at two of those myths:

Myth #1 – You Will Pocket More Money Selling on Your Own

Most FSBO sites say you can save the commission by selling on your own. What happened in Sambrotto’s sale?

From the WSJ article:

“The broker, Jesse Buckler, said he told Mr. Sambrotto the apartment in the Lion’s Head building on West 19th Street near Sixth Avenue was priced too low and wasn’t drawing the right buyers.

By May, it went into contract, he said, after attracting multiple offers. It closed in the last few days for $150,000 more than the original asking price.”

Myth #2 – The Internet Alone Can Sell Your Home

Many have said that, with the introduction of home search on the internet, hiring an agent is no longer a necessity. What happened to the FSBO guru when he attempted to only depend on the internet?

From the WSJ article:

“Looking to move his family to the suburbs, [Mr. Sambrotto] said he carefully staged his apartment for sale himself, and put it on the market. But after using a mix of websites to publicize his apartment, he said he had only ‘middling success’ and switched to a broker because many buyers were so reliant on brokers.”

Bottom Line

There is a reason the real estate industry has been around for centuries: it performs a valuable service.

If you are a Realtor, you shouldn’t have to explain to your client what your value is… use this post to do that.

This seems to be the number 1 issue with my Realtor friends in the London and surrounding area…. if this hasn’t happened to you, then prepare ahead, because I see this more and more each week !…… here’s a 6 minute video that can help you.

Click here to link to my YouTube channel

Here’s the Best question you can ask to prepare yourself and see just how concrete your clients “Pre-Approval” is ……
Realtor:  “So I assume you are Pre-approved before we go house shopping? ”

Clients:   ” Yes, ______ Bank said I could look for $350,000

Realtor:  “Can I ask.. I always wonder what is best… are you pre approved for a Fixed or a variable rate Mortgage?”

If your client does not know the difference, then…DING DING DING , raise a RED flag!!…. Here’s why…

5 Year Fixed rate for qualifying is 3.89% (ish)

5 Year Variable rate for qualifying is 5.39% …. ( New Rule from Canadian Gov March 18 2011, must use BofC current MQR )

So… What does this mean?… here’s an example….

If a client makes $60,000 salary…. a 5 year fixed buys him a $265,000 house, but a 5 year Variable, he can only buy for $235,000

Now honestly ask yourself…. if your client doesn’t know this before you start showing him/her houses, well … what is your time worth ?

]]> http://www.themortgageteacher.ca/teachers-notes/real-estate-agents-need-to-know/feed/ 0 http://www.themortgageteacher.ca/teachers-notes/case-study-how-you-can-free-up-cash-or-pay-off-your-debts-sooner/ http://www.themortgageteacher.ca/teachers-notes/case-study-how-you-can-free-up-cash-or-pay-off-your-debts-sooner/#comments Mon, 08 Nov 2010 20:43:29 +0000 TheMortgageTeacher http://www.themortgageteacher.ca/?p=992 This case study shows a quick calculation of how a mortgage refinance can help you consolidate your debts at a lower interest rate and free up more cash OR simply help you pay off your mortgage quicker.

House Purchased in 2008 for $230,000 at a 4.9% fixed rate

Note: These figures are fictional and used for illustrative purposes. Please contact me to calculate savings in your particular circumstances.

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After consolidating debt and re-financing at today’s 5-year FIXED rate:

• Client frees up $781 per month (payment of $1,025 per month vs. $1,806) and
• Has $10,000 cash in hand to purchase a new vehicle, perform renovations, manage Christmas expenses, etc.

Alternately, if this home-owner had re-financed and continued to make their $1,806 monthly payment:

• They’d pay off $14,500 in principal per year – that’s an amazing $73,000 in 5 years!!!

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And these samples include any penalty fees you’d pay for breaking your mortgage early!!!

If you’re like most Canadians, it seems like your bills just keep increasing while your income stays the same. You make your payments on time but you’re noticing less money left over at the end of each month.

On the other hand, maybe you have no problems making your current debt payments but it seems like you’re just not paying them down quick enough. Each year you look at your mortgage statement and are shocked by the little amount of principal you’ve actually paid!

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Click here to contact me today and let me calculate how I can help you reach your goals faster!

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Now is when the deal gets serious, most have 7 – 10 days for financing, the goal by the end of this “waiver date” is to have your deal 100% done.

this quick video will help explain

Do I start looking online or looking at houses as I drive around ?…. Honestly, both. Ask around, let work associates know you are looking, announce on your social media status…. the more houses you can find, the better.

As far as calling a Realtor right away…… Click the video below and I’ll explain in 2 minutes.

” These tips will help you and your realtor shop with confidence at NO COST “.

The Mortgage Teacher.ca uses a blend of Traditional Media and all forms of social media such as Local Radio, Facebook, Twitter and Youtube combined with the unique website to make sure the Mortgage updates and info are easily accessible.

Please watch this quick video as AMP Michael Mullis explains why to use The Mortgage Teacher.ca ? … ( video below )

Thank you in advance for any comments.

After asking many of my current clients what they learned from me teaching them the difference between Fixed and Variable rate mortgages… Well I tried to sum it up in just 4 minutes for ya……

if you know someone else that is confused between “Fixed vs Variable” please forward this Video (Vlog)

This question could be better answered by using the tips I speak of in the below video.

Please click below to watch me answer ” How do I get my Current Payout ? “…. ( video below )

Know someone else battling a large penalty, forward this blog

Well many of us know the traditional 3 months interest penalty, but if the rates today are less then the rate you committed on, then you could be in for a very Unpleasant surprise,  be sure to contact me if you need some strategies to help avoid these extra fees and costs.

I’ll take 2 minutes to explain what IRD is in this video What is IRD and why is my Penalty so high?  ( video below )

feel free to forward this to someone you know who could use this