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WESTERN INVESTOR DECEMBER 2011 www.westerninvestor.com
Don’t let foreign negotiating nuances – like lowball offers and wanting your new sofa – derail home sales
can be actively avoided or managed to make grounds may assign different value to property sure that the deal doesn’t suffer. attributes. For example, landscaping isn’t valued the $POUSBDUT same way across the board, and some buyers While a contract is legally binding in place a tremendous amount of value on having Canada, buyers from outside of North America “in-law� suites. may take contracts and timelines more casuWhen negotiating across cultures, it may ally. be helpful to understand that certain attributes As a seller, you can ask your real estate agent of your home may make your home particuto proactively reach out to the buyer’s agent to larly attractive or unattractive. You may wish confirm that everyone is on the same page. to stage your home to appeal to certain ethnic buyers, or adjust your negotiation strategy mum net worth of $1.6 milaccordingly. /FHPUJBUJPO lion) can be found. So it’s no In some cultures, it’s common wonder that sellers and real business practice to start nego- -BOHVBHF estate agents alike are actively tiations with a “lowball� offer Often buyers will use a broker who speaks the looking to market their homes and to negotiate very aggres- same language, but this doesn’t necessarily to this lucrative, emerging marsively throughout the process. mean that he or she is fluent in Canadian culket. Under these circumstances, ture or business practices. According to Statistics motivated sellers need to be For sellers, this means that their agent may Canada, seven out of 10 prepared to work through a need to do “double duty,� acting as cultural foreign-born residents choose lengthier negotiation process, translator between agents and the buyer. to live in Toronto, Metro one that may involve several In these situations it’s that much more imporVancouver or Montreal. It’s rounds of counter-offers before tant to be working with an agent with in-depth no surprise that cosmopolitan, both parties arrive at an accept- experience in both local and foreign markets multicultural Vancouver has able agreement. and with a solid understanding of how values ROSS McCREDIE attracted investors and newStay focused on tangible and trends vary from country to country. comers from around the world for decades, goals – your target selling price, subjects and Despite the barriers, there are enormous including the recent, “third wave� of buyers close dates – and slowly move the negotiation opportunities to be had in conducting sales from mainland China who have ignited the in the right direction. with international buyers and investors who are real estate markets on the Vancouver westside, instrumental in supporting economic growth Richmond, Coquitlam and West Vancouver. 8IBU¤T JODMVEFE and stability in Canadian real estate markets. Good schools, a mild climate, a well-estab- JO UIF TBMF Working with an agent well versed in facililished Asian community and an immigration Some foreign buyers and real estate investors tating these transactions and having patience policy that is well-regarded has attracted many may implicitly assume that furniture, artwork and open-mindedness throughout the process to Vancouver’s real estate market while China and other personal artifacts are included in the can save you a big headache – and your new tries to reign in property speculation at home. sale of a home. sofa, too.X Increasingly, we’re seeing that today’s home Others will explicitly ask for these items in sellers understand the globalization of real their offer, without realizing that this is unusual Ross McCredie is president and chief execuestate markets and that foreign investment and and may negatively impact the chances of com- tive officer of Sotheby’s International Realty immigration play an important role in support- ing to an agreement. Canada, the country’s leading luxury real ing economic growth and stability. When you’re negotiating an offer with a estate brokerage. McCredie acquired the masbuyer who may not be familiar with Canadian ter franchise for Sotheby’s International Realty $PNNPO QJUGBMMT real estate norms it’s important to avoid misun- for Canada in 2004 and, in 2007, founded Home sellers also need to understand that this derstanding by ensuring that your agent clearly Blueprint Global Marketing as the preferred means being educated and prepared to engage explains what is included in the real estate con- project marketing company for the Sotheby’s in cross-cultural negotiations with buyers. tract and to draw up contractual addendums for network worldwide. Sotheby’s International When dealing with negotiations between other items as needed. Realty Canada has offices in 18 major cities and buyers and sellers from different cultural and resort communities and markets high-end backgrounds, it’s not uncommon for our agents 7BMVF homes and real estate developments around to encounter a handful of potential pitfalls that Buyers and sellers of different cultural back- the world.
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month after putting their home up for sale, John and Sarah of Vancouver were excited when their real estate agent called to let them know that they had received an offer.
Their excitement quickly turned to dismay, however, when they received the offer. Not only was it so far below their home’s appraised value that it was both insulting and financially impossible to consider, the real estate agent representing the buyers insisted that his clients, who had recently arrived from overseas and wanted a home that was “ready to go,� wanted that price to include all of the dining room, living room and bedroom furniture. Disillusioned but willing to negotiate, John and Sarah countered at a price that they considered fair market value. Frustrated by the back-and-forth negotiations that were taking weeks instead of days, and shocked that there didn’t seem to be any respect for their family’s personal possessions, John and Sarah eventually withdrew from negotiations. The potential buyers were genuinely surprised and disappointed that the negotiations, which they thought were moving along well, were stopped so suddenly. While this story is unfortunate, it isn’t unusual in today’s global real estate market. With a significant portion of Canadian luxury real estate sales driven by foreign investment and immigration, savvy Canadian sellers are shifting their efforts to target these international buyers. Nowhere is this trend stronger than in British Columbia, where, according to Cameron Muir, chief economist of the BC Real Estate Association, close to 55 per cent of Canada’s investor-class immigrants (those with a mini-
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FORECLOSURE FOR SALE DIRECT FROM LENDER INCREDIBLE FINANCING TERMS AVAILABLE WATERFRONT TOFINO MOTEL 23 UNITS - SPLIT ZONING ON HIGHWAY AND ON THE WATERFRONT BLOWOUT PRICE $850,000 60 ACRE DEVELOPMENT SITE WITH INCREDIBLE TOFINO HARBOUR VIEWS PROPERTY LOCATED IN THE MUNICIPALITY OF TOFINO $4,500,000 20 ACRE SITE WITH HIGHWAY FRONTAGE AND TOFINO HARBOUR VIEWS LOCATED IN THE MUNICIPALITY OF TOFINO $1,800,000
THESE PROPERTIES MUST BE SOLD CONTACT DAVID BECKINGHAM 604-351-3662 or beckingham@shaw.ca
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