The Realty Game: Canadian Real Estate

By Dave Iacobucci

THE REALTY GAME is a comprehensive guide to Canadian real estate for anyone planning to buy or sell a property or is just curious about this competitive world. Based on a lifetime of experience, the author explains market conditions and trends through helpful examples and captivating stories.

Whether you are a first-time buyer or seller or have experience of your own, this book will give you the edge you need when the stakes are high. It offers essential tools and tips for negotiating deals, handling multiple offer situations, maximizing profits, and more.
Learn how to choose an ethical "Master" Real Estate professional and how to avoid "Buccaneer" agents who put their own interests ahead of yours.
Discover answers to questions like: Who's to blame for the high cost of housing in Toronto and Vancouver? What's the future for Canada's housing market?

The Realty Game is both a practical step by step handbook and an entertaining read about the opportunities and pitfalls of real estate in Canada.

• Language: English
• Publisher: Dave Iacobucci
• Release date: Sep 19, 2017
• ISBN: 9781773029092

Book preview

Cover-Front.jpg

Leaping Lena

Mother – Tutor – Mentor – Life Coach

Before its completion, it was obvious I would be dedicating this book to my incredible mother Lena. Just a few reasons come to mind for why my mother deserves this posthumous recognition. Her liveliness, sense of humour, enthusiasm, intelligence, tenacity, motivation, acute intuition, and her thirst for success were second to none.

Beginning her real estate career in the early 1960s, my mother was a natural pioneer for women’s rights and equality. Her focus was on self-worth, with little worry about the glass ceiling, defying all negative comments from anyone who dared tell her she might fail to reach her goals.

My mother encouraged me to be independent and to use my natural abilities to fulfill my life’s dreams. She taught me the importance of gender equality, ensuring that my skill set was balanced among domestic, manual, and entrepreneurial abilities. From cooking and cleaning to writing a binding contract, my mother had determination; her tutorage inspired me to have the highest expectations for my future and never give up trying to make a difference.

Thanks to her, I unwaveringly believe and know there is nothing I cannot achieve!

Thanks for having confidence in me, Mom!

Contents

1: A Young REALTOR® at Heart

2: The Masters, the Browsers, and the Buccaneers

Real Estate Agents: Getting Started

Real Estate Agent’s Licensing Course (B.C.)

Private Instruction

English Language Proficiency Requirement

Pre- and Post-Licensing Applied Practical Course

Brokerage Training

Part-Time Agents

Semi-Retired Agents

The Master Agents

The Browser Agents

The Buccaneer Agents

Non-Member Agents

Politics vs. the Real Estate Council

3: Choosing an Agent

Referrals

Personal Referral

Corporate Referral

Agent Referral

Disclosure of Remuneration

Advertising

Online Search

Real Estate Company

Open House

Agent Search

Part-Time and Semi-Retired

Evaluating Agents

Buyer’s/Seller’s Agent

A Buyer’s Search

A Seller’s Search

Research

Agents’ Good Reputation

Preparing for the Interview

Agent’s Area of Specialty

Agent’s Proximity

The Interviews!

Making the Appointments

4: Double-Ending: Who’s the Winner?

Limited Dual Agency (LDA)

Seller’s Reasons for LDA

Seller’s Disadvantages with LDA

Buyer’s Reasons for LDA

Buyer’s Disadvantages with LDA

No-Agency (N-A)

Seller’s Advantages with N-A

Seller’s Disadvantages with N-A

Buyer’s Advantages with N-A

Buyer’s Disadvantages with N-A

Dual Agency Commission

Agency Overview

5: Hot Listings and Competitive Offers

Hot Listings

First Viewing

Pre-Offer Preparation

Competing Buyers

What to Offer

Pricing Game

Price or Terms

Offer Presentation Date

Multiple Offer Aftermath

6: A Buyer’s Edge: Making the Deal

Lawyers and BC Notaries Public

Financing

Lenders

Mortgage Brokers

Home Inspectors

Buying Criteria

Open Houses

Finding an Agent

Exclusive Buyer’s Agency Contract

Getting Started

Sold Properties

MLS® Auto-Notification

Viewing Properties

Keep Your Agent Informed

When to Write an Offer

Pre-Offer Preparation

Strata Properties

Detached Housing

Writing the Offer: Attached and Detached

Chattels or Fixtures

Deposit

Purchase Price

Non-Competing Offers

Multiple Offers

Offer Presentation

Wireless Offers

Personally Presented Offers

Revoking an Offer

Subject Precedents

Home Inspection

Removing Subjects

Possession Date

7: A Seller’s Edge: King of the Castle

Seller’s Lawyer

Property Research

Finding a Real Estate Agent

Specialization

Strata and Detached

Proximity

Assistants

Hands-on Showings

Direct Cell Number

Part-Time and Semi-Retired

Commission

Advertising

Open House

Showings

Tenant-Occupied Properties

Buyer Handouts

Real Estate Agent’s Marketing Plan

Pricing Strategy

Bully Offers

Invitation to Treat

Home Staging

Pictures and Virtual Tours

Professional Photographers

Photo-Enhancing

Virtual Video Tours

Marketing Updates

CMA – Evaluation – Appraisal

Buying the Listing

Offer Presentations

Selling with No Agency (N-A)

Selling with Limited Dual Agency (LDA)

Selling an Unlisted Property

Listing Contract

Price Reductions

Summary

8: Buying a New Condo: Pre-Sales

Getting Started

Who’s Buying?

First-Time Buyers

Baby Boomers

Local and Foreign Investors

Speculators

Purchasing a Pre-sale

Does a Developer Represent You?

Developer’s Financing

An Invitation to Treat

VIPs

Pre-Sale Pricing

Opening Day

Signing the Contract

Rescinding an Offer

GST/Financing

Purchase Documents

Deposits

Assignments

Changes and Delays

Lawyers and Mortgage Brokers

Completion and Possession Dates

Pre-Inspection

Parking and Storage

Time to Pay

Moving In

Preventative Maintenance

9: Buying a Pre-Owned Condo

Pre-Owned vs. New

A Vacant Commodity

No GST

Reality vs. Virtual Reality

Your Neighbours

Rentals

Chattels or Fixtures

Getting Prepared

Strata Documents

Self-Managed Buildings

Being Informed

Common Areas

Research: Red Flags

Special Levies. Who Pays?

Pre-Offer Steps

CMA

Strata Document Requests

Buyer’s Agent’s Responsibilities

Depreciation Report

Strata Bylaws

Inspection

10: For an Agent’s Eyes Only

A Real Estate Agent’s Income

The Commission

Taking the Seller’s Blame

Taking the Buyer’s Blame

Home Inspection

Appraisals

Contract Condition Precedent

Contract of Purchase and Sale

Property Devaluates

Neighbours of Sold Properties

Attending a Funeral

A Watchful Eye

A Real Estate Agent’s Life

11: Our Home—Our Future

The Commodity

Market Predictions

Economists and Futurists

Owning vs. Renting

Foreign Homebuyers Tax

Canada: Equal for All

Glossary

Bibliography

THE REALTY GAME

Copyright

1: A Young REALTOR® at Heart

I was born in 1958, during a truly exciting decade in Canada. Of course, it’s pure coincidence I was given the opportunity of life at that particular time! Since 1958 is when I experienced my first view of the world, I feel it is appropriate to start this story from there.

For most families living in Canada, the ’50s and ’60s were full of opportunities. The sky was the limit, if you worked hard. In no way was my family an exception.

My father Danny, a skilled sheet-metal worker at the top of his trade, was a quick learner and enjoyed working with his hands. Through self-training my father soon diversified his manual skills, which led to furnace and ductwork installations, carpentry, plumbing, and even wiring and electrical. He worked hard, consistently and with diligence. His goal was simple — to complete all jobs efficiently and professionally. His honesty and integrity were always recognized by his customers who in turn referred his good name to others.

Price was never an issue with my father or with his customers. The bill was always fair and would be paid when the job was finished, with complete customer satisfaction. As was true with the majority of people at that time, the objectives of my father were not related to great wealth or business dominance. His ambitions were simple and honest—to ensure that he and his family would enjoy a comfortable lifestyle, which is what he and my mother would eventually accomplish.

On the other hand, my mother Lena was a proud, hardworking individual who had high ambitions and expectations of life. She had had a very difficult and challenging childhood that would help prepare her for the competitive business world for which she was destined.

Due to the challenging and dramatic times my family experienced in Canada during World War II, my mother’s childhood was cut short. No child should ever be robbed of a childhood, but my mother had had to accept it as a fact of life. She was an optimist and absorbed whatever she could to improve her lifestyle and get ahead. The hard-knocks training my mother learned as a child had developed in her an intense motivating driving force that eventually lead her to a successful real estate career.

My father could build, repair, or remodel almost anything. It was an obvious excellent partnership when, in 1963, my vibrant mother decided to take her chances in the Vancouver real estate market and become a licensed real estate agent.

Although I say she took her chances, in no way was it a risk for my mother. She was full of pep and determined to go all the way; no obstacle would be too great for her to leap—thus her nickname Leaping Lena.

She had an incredible energy level, which radiated around her like the rings of Saturn. My mother had the capability of being subtle, soft, affectionate, and aggressive all at the same time. She prided herself on her honesty and integrity and always said she put too much effort into finding the right property for her clients because they never wanted to resell! Basically, the more often our clients sell, the more sales we have, which in turn means increased earnings. Translation: A higher income!

Within her first year my mother reached Medallion Club status, the Vancouver Real Estate Board’s top qualifying level. Despite the fact that Lena was a rookie and that businesswomen were in a minority in 1963, my mother ignored the odds and just did it.

Needless to say, when it came to buying and selling real estate, my parents were an excellent working team. My mother knew and understood the real estate market inside and out and my father had the knowledge and capabilities to renovate each property.

The objective was to purchase a property with potential that just needed a facelift. Houses with structural damage were avoided because it is difficult to estimate the necessary work and costs without ripping out part of the exterior. An underestimated repair could take a big slice out of the profits.

My parents understood the risks and rarely took a blind leap, unless it was obvious what the costs of repair would be. So the two property entrepreneurs typically purchased good, solid homes that needed some updating such as a new bathroom, kitchen, flooring, heating system, and paint.

Although they could easily have undertaken the installation of a new roof, decks, stairs, and windows, the less there was to do, the better. Buyers’ expectations in those days were not as high as they are now and tastes were simpler. As with most renovators, the objective was to flip and sell the house quickly, for the highest price possible.

At that time, the market was civilized; buyers could actually take their time before jumping into a purchase. My parents were rarely under pressure to write an immediate offer. That convenience for the buyer would prove to be a huge luxury during the active real estate boom of the 2000s, which would soon impact the Canadian public and much of the world!

From the day I was born, my life revolved around real estate. I was weaned on real estate deals and it soon became part of my natural inclination. A day rarely went by without someone in my family mentioning something about a property sale, renovation, or a new house that was being built. I suppose that in many ways, I was lucky because I enjoyed hearing about real estate and seeing what could be done to a property to improve its appearance and value.

Perhaps I really had no choice. After all, from day one all I heard were conversations about the real estate market and its trends. I’m sure I bored my classmates in kindergarten when I expressed my concerns regarding acceptable yields for apartment investors and why parking spaces would become a premium!

At nine, I was given the opportunity to work with my father. Although I wasn’t sure what my title would be, I could now officially boast to my friends that I was in the construction business.

During the summer of 1968, I became part of the work force in the construction of a custom-built house my parents were building in East Vancouver that would eventually be our new family home. For my first important role, I was given the prestigious job of clean-up boy! Being a family member, I had hoped for a more elevated position, but I was a nine-year-old boy without a union card, so I just put my head down and got to it.

In time, I progressed from cleaning the floors to more skilled jobs such as framing, plumbing and painting. Although I had already decided that physical labour was not going to be my career choice, the experience I accumulated by working on my father’s renovations would prove invaluable when I finally made the choice to follow my mother’s avocation and become a REALTOR®¹.

I graduated from high school in 1976 and although I had managed a university acceptance average, I decided the academic path was not for me. Of course like many others, later on in life I found I enjoyed the scholastic environment. Studying and learning had transformed itself from being a boring chore to an exciting and enjoyable pastime.

After graduating I took on many different unskilled jobs from stuffing flyers into the newspapers at the Pacific Press, to installing wheels and exhaust systems on a Kenworth trucks assembly line, to my first entrepreneurial activity. I had recently purchased an exceptional 1969 Ford Ranchero GT, a rare find. In case you were wondering what a Ranchero is, it is a car-like vehicle with a pickup box that could be used to carry heavy loads. I decided I could make a business out of using it as a pickup.

I had noticed that one of the most time-consuming jobs in construction was taking the waste materials and rubble to the dump. At that time I don’t remember seeing any professional junk-removal companies and thought that I would take advantage of this unexploited niche market. I put an ad in the local newspaper, offering my services.

To my surprise I immediately started receiving calls! My new business was on its way to the Fortune 500 list! I had plenty of work, but after some time my poor Ranchero GT, which I really loved, was starting to show signs of fatigue. I had to decide whether to invest in a heavy loading truck or change my career.

It was at that point my mother suggested I become a real estate agent. She encouraged me and felt I had the ability to succeed.

There was nothing in this world that Lena could not see herself doing well. She was positive, ambitious, tenacious, and motivated. My mother played a vital role in my life and taught me the only limits we have are self-imposed.

I soon began to believe there was nothing I could not accomplish and I still feel that way today. As I had been witness to my mother’s real estate career since age five, I already had a very good understanding of the business—or at least that is what I thought. So perhaps becoming a real estate agent would be a good vocational choice. Besides, my junk-removal business was coming to an end and I very much wanted to move on to something that would be more of an intellectual challenge.

After thinking about what my mother had suggested, I decided to ask my father for his opinion at the table over one of my mother’s exceptional home-cooked meals. He placed his fork on his plate, looked up at me, and said, You’ll never make it.

Wow! Did that statement have an impact on me! I don’t remember what else was said but I have never forgotten my father’s words.

Even back then I was quite a confident lad and unwilling to allow anyone to interfere with my plans. My mother’s message that I was capable of doing anything in life was already engraved in me and I was now even more determined to become a professional real estate agent.

Of course, being young, I was also feisty and competitive, so I made a promise to myself that I was going to show my father he was wrong. He had never discouraged me from doing any of the many crazy projects I had done over the years. That was why I was so shocked to hear his candid response. Who knows if it was reverse psychology? Perhaps it was his way of encouraging me to get off my butt and get working on my future.

Every now and then, I remind my father of what he said that night. When I do, he never says much and we both just end up smiling. The fact is that whether he meant what he said, I was immediately more motivated and ready to enter the competitive world of real estate.

So in 1978 I signed up with the Real Estate Council to take the pre-licensing course that would take one year to complete. The course consisted of writing completed essays in reference to each chapter of the real estate manual. All students were expected to mail or deliver the completed essay for marking; in those days, fax machines and emails were not available for home use. When a student had successfully completed the term, he or she could then challenge the written exam.

The exam room was located in the Faculty of Commerce and Business Administration building at the University of British Columbia. I studied and crammed as much information as I could. Although much of the study material would not be relevant in the real world of real estate sales, to acquire my licence I needed to study it all and pass the exam.

My friend Audrey, a health nut, suggested my memory would improve and perhaps even be more reliable during the exam if I ate a peanut butter and lecithin sandwich before the test. Lecithin, she said, can assist and perhaps improve memory. I enjoyed weight training and learning about different health alternatives and decided I had nothing to lose by eating a power-packed sandwich before the exam.

I had already learned about the importance of being relaxed during any type of challenge. As it would take me an hour to get to the campus, on the day of my exam I decided to leave home early, drive to Jericho Beach, and chill out.

Knowing Jericho Beach was only 10 minutes from the Faculty of Commerce building where I would be writing my exam gave me peace of mind. I found a quiet, secluded area, sat down on a comfortable log, admired the beautiful Vancouver coast and skyline, and ate my carefully prepared peanut butter and lecithin memory-promoting sandwich.

After a quiet 30 minutes, it was time to go write the exam. As I approached the campus, my mind went completely blank. I had forgotten where the exam was to be written!

After I parked, I frantically ran around the campus asking students where the real estate exam was being held. Luckily I found someone going to the same building and we went there together. So much for the memory-boosting peanut butter and lecithin sandwich!

Within a few weeks I received the fantastic news from the Real Estate Council that I had passed! It was a wonderful special day for me that brought hopes for a bright future. So at the tender age of 20, I became a licensed real estate agent!

Without hesitation, my mother and I leapt into action. We had already decided it would be best for me to join the company where she was working, A.E. Le Page, later Royal LePage, a name more familiar to people today.

To maintain family harmony, my mother would continue to work out of the Vancouver East office and I would begin my career at the North Burnaby branch. My mother had pre-arranged it with the acting manager who was going to introduce me into the competitive world of real estate.

Back in those days, image was not that important; the word branding meant something tattooed on a cattle rancher’s livestock. Image did have meaning to my parents. As a reward for my new career choice, they gave me their old 1973 American Motors four-door chocolate-brown Matador—a plain vehicle with roll-up windows often used by police forces in the early ’70s as a standard black-and-white patrol cruiser. It hadn’t even looked good when it was new!

Because my mother had used the car for seven successful years in real estate, it only made sense that it would be good enough for me.

Unlike my parents, I am a car lover and appreciate fine automobiles. Between the ages of 16 and 18, I had already owned and driven some wonderful cars such as a 1967 Camaro, a 1968 Mustang, and a 1964 Corvette. Even though I appreciated my parents’ practical gift, the Matador wasn’t my image of the cool car of a successful agent.

My mother told me a successful man needs to look the part so she took it upon herself to purchase my new wardrobe for me at a local well-known discount department store. She came home with boxes of shirts, suits, jackets, and even shoes.

Once again, her expertise and astuteness proved a great success. Almost everything fit me, and even looked presentable. Back in those days, most men wore a suit and tie, so it was off with the casual wear and on to a more professional look. At times, friends and fellow real estate agents complimented me on my attire and often asked where I bought my suits. I never had the nerve to confess my mother had selected all my clothing for me.

There I was, a young buck of 20 with my dashing off-the-peg brown suit, driving my 1973 dark brown Matador with the window down, arm hanging out, and my ’70s-style big hair blowing in the wind. It was a memorable and exciting time for me that I shall cherish forever.

My office manager Chuck was an excellent teacher and coach. He showed me the real estate ropes and instructed me in what I needed to know to excel. He taught me how to write a legal and binding contract, create a listing presentation, and prepare an evaluation (similar to an appraisal). Chuck even accompanied me on a few listing appointments to ensure my presentation was professional and competitive.

One of the reasons I decided to join A.E. LePage was their excellent training program and support team. Of course, in return they took 50 percent of my commission. Although that did not give me a warm feeling inside, at the time and even now, I feel I received excellent value for money. If it were not for the extensive training they gave me, I might not have reached the same respectable level of success that I did.

One of the big concerns and pet peeves I have in today’s ever-changing real estate industry is that new recruits are just tossed into the bullpen and expected to fend for themselves. Brokerages no longer feel the need to provide post-licensing courses or training programs to new real estate agents.

That should raise several red flags and warnings for the general public. I will speak about this in more depth in Chapter 2 – The Masters, The Browsers, and The Buccaneers and in Chapter 3 – Choosing an agent.

Of course, extensive and perhaps more personal training was provided free of charge by my mother. She was nonstop, constantly discussing real estate with me. My mother and I had strong business ties and both very much enjoyed chatting about new listings, the latest sales, and even office gossip. To complement the academic training I was receiving from my manager, my mother concentrated her efforts on the more practical side of the business—effective and competitive salesmanship.

Those skills could not simply be learned or acquired through studying or theory. They were hardcore, hands-on techniques that could only be perfected through trial and error. Those valuable and useful skills would take me years to perfect through many client transactions. To secure my future, time was of the essence to start working on honing them.

Although my mother was by then taking on a lighter workload, when I was finally able to join her at client meetings I quickly came to realize why she had been nicknamed Leaping Lena. Her effectiveness with clients was unerring and spot-on. Experience is something no one can teach you; it must be learned by actively working in a particular trade. It takes time, patience, intuition, and tenacity. My mother had all those qualities and I was absorbing all the wealth of information she could provide.

She taught me to be honest and fair with everyone, which of course included clients and without question all real estate professionals. My mother said if I was not fair and honourable with other agents, word would soon get around in the industry and come back to tarnish my reputation.

In the early days of real estate, that was part of the unwritten code of honour. Although most industries have their inefficient and dubious members, in general most agents were great.

Whether we worked out of the same office or not, most of us knew one another and understood the importance of good public relations. We were all very much aware of the possibility that one day we could be negotiating a contract together. Trust previously established would increase the odds for a successful sale that would benefit all parties involved.

Unfortunately, that no longer seems to be the case, which may be why there is so much mistrust in the real estate industry today. During the past 12 years I have heard about the same agents committing the same mistakes and repeating apparently unethical acts, over and over again. I cannot be the only one who is aware of those practices. It amazes me that they are rarely suspended or lose their licence. It appears memories are conveniently blocked and many no longer consider it important if a particular agent has a bad reputation.

That leads me to the very tender topic of the rules of cooperation and code of ethics as set out and mandated by The Canadian Real Estate Association and their respective boards. Although I understand why the important rules were created, it sometimes appears they are counteractive to their original intent and purpose.

Some of the reasons for their existence are to prevent anti-competitive practice in the real estate industry, to govern the sector, and to ensure no one defames their competition. Although, I feel that is a good measure in theory, in many ways it has allowed the dishonest to continue practising their unethical activities and has basically gagged other professionals from warning anyone about them. In the old days, word got around about an unscrupulous agent; that would help us protect our clients’ interests. These days, it is unethical to