Introductory guide to navigating this hot market
Date: September 3, 2015
Name: Introductory guide to navigating this hot market
Presenter: Gary Wong
Entrepreneurs often find there is a strong connection between real estate market and their business industries. However, many of them do not understand how to navigate the current real estate market. Social Butterfly Club Meetup Group and Bubble Tea Vancouver invite Gary Wong, the author of “The Book on Vancouver Real Estate” to share inside tips, guides and strategies to analyze the real estate market. In this presentation, Gary Wong will provide some guideline for entrepreneurs who are looking for some introductory knowledge about real estate.
Gary Wong is the author of “The Book on Vancouver Real Estate”. Wong is a full time land-development realtor, licensed under MacDonald Realty, that focuses on structuring, negotiation, implementation and acquisition. Moreover, Wong has the passion to help his clients to find the right property that aligns with their long term vision. Wong is certified in negotiation, and is awarded 2013 MacDonald Realty Sales Achievement Award and 2014 Award of Excellence.
Start of Real Estate Journey
Gary Wong shares before he became a professional realtor, he was having a hard time climbing the corporate ladder in his job position. Wong decided to go back to school to pursue MBA program for further education. After completing MBA program, the reality hit him and realized practical experience in real estate career is far beyond what he expected. Therefore, he decided to start his realtor career from scratch.
“Only can absorb when you admit you know nothing”
Wong was inspired by Jeremy Lin Youtube Channel and decided to take change his approach in his real estate career. He began to ask himself an important question: “How do I compete?”. He created his career with a simple business model that helps other, serves other, and add values to other.
The business model helped Wong gained market recognition. Afterwards, he met his first mentor and published his first book.
Wong’s Real Estate insights
First time home buyers need to watch out for pre-qualify. Wong emphasizes pre-qualify is just an estimate figures and it is not guarantee. Wong suggests all first time home buyers to get a written confirmation letter from lenders. They should also watch out for letters that contain “subject to”.
Many buyers use building war strategy. In this strategy, Wong believes buyers should figure out the market value first and their willingness to pay. The bidding war usually have subject offer and subject free bids. Ideally, subject free bids will win; however, if buyers can incorporate seller’s interests into the offer, they will increase the chance of winning the bid. Wong suggests buyers to photocopy their bank draft to show commitments to sellers, which can increase the chance of winning the offer.
Wong introduces three types of mortgage brokers.
- Mortgage broker who are working with independent brokerage firm
- Bank Mortgage broker who are promoting their bank products
- Bank Specialist who receives commission
Wong recommends buyers should never shop for the rate. They need to find the terms that fits their needs.
Simple Techniques that save thousands
Wong suggests buyers to look at the features and add values to it. They must be picky because they can find opportunity to squeeze something out to indicate to seller that it is moving condition. Wong also suggests all buyers to find a backup plan and never lock themselves into one offer.
Buyers should initiate home inspection. Home inspection can identify unknown issues and it is a good way to gain advantage in negotiation. Buyers can use the strategy of exaggerating the issue to push pressure on seller during negotiation. A concept Wong wants all his buyers to know is “expanding the pie”. This means they need to incorporate other services other than price. Buyers need to think outside of the box and figure out how to benefit sellers.
“Swap tangible with tangible”
Wong recommends buyers to submit two kinds of offers. The first offer should have the condition of subject to everything, and the second offer should be low price with subject free. This is a strategy to signal sellers that buyers are willing to adapt risks with low price. Furthermore, Wong believes time kills all deals.
The main benefit from a home inspector is to analyze the depreciation reports. The report contains problems with they building and plan to fixe it. Depreciation reports are mandated in the bylaw; however, home inspector cannot give any appraisal.
Wong suggests buyers to get home inspector every one and a half years. Wong believes all buyers should keep “3 always” in their mind during home inspection.
- Always get home inspector
- Always be there during the home inspection
- Always choose a good home inspector
It is important to read strata documents because the documents can give buyers the right information and condition about the property. Meeting minutes, AGM, and strata plan are also important. However, buyers need to be aware that if the condition is not in bylaw, strata cannot force it. But bylaw changes all the time.
The Right Realtor
- Wong believes there are 5 main characteristics that realtor should have
- Knowledgable and able to educate
- Willing to find answer
- Disclosure and ethical
- Build long term relationship
- Confident
Many buyers have difficulty to choose either to rent or buy properties. Wong shares a benefit that most people do not know about renting is that based on statistic, landlords usually charge below market rate on rent. In addition, it is not easy to kick tenant out of the property.
As for buying the property, buyers need to remember buying a home is not an asset, it is a liability.
Winter can be a slow season on real estate market and spring can be a high season on the market. Wong believes the real estate market is very similar to any business cycle, which means there is pros and cons in every season. To determine the best time to buy or sell, Wong provides an advice of “Buy when you are ready and sell when you are ready”.
Real estate investing is not simple. Wong indicates it depends on situations, conditions, and goals. There are many ways to invest in real estate. The bottom line is, entrepreneurs usually charge high rent by providing additional services to add values to clients.
As for pre sell properties, Wong suggests entrepreneurs to select the right units that provides more values in the future. As for town house or apportionment, Wong believes it is not a good investment for short term flipping. Moreover, entrepreneurs should renovate to add value, and not just do it for no reason.
Oil tank inspection is also important, especially for 1970 or older buildings. The life span of the oil tank is 25 years, which means oil tank might leak. If oil tank leaks, it might create potential lawsuits.
Another advice from Wong is not to low ball the offer. Sellers are emotional and buyers should be careful not to jeopardize the offer. There is bargain everywhere. People see overprice listing and they walk away. Mark people will give offer to overprice listings because of no competition. Many people believes in Feng Shui. Sellers should take caution to people who use Feng Shui during the negotiation.
Sell for top dollar
Wong has some tips for sellers to increase the impression of their properties.
- Make property as neutral as possible
- Provide professional staging and photography
- Focus on benefits and not the feature
- Paint a vision for the buyers
- Forecast of the real estate market in Vancouver
During early 2015, the Canadian government announced the decision to cancel China investment option for immigration. Many people predict the real estate market will drop significantly. However, the market did not slow down.
Wong analyzes that when China’s market goes up, people will buy and invest oversea properties. As a matter of fact, when China market goes down, people will still buy and invest oversea properties. This means the market in Vancouver will still go up. In addition, since the market is high, many locals are selling their homes for profits. The market will still go up and the competition will increase significantly.
