Real estate has long been a part of Alex Balikoev's life. As a child in Russia he was fascinated by the construction of buildings, and turned to real estate upon immigrating to Toronto. Now he is consistently rated in the top Toronto agents on Yelp.
Alex Balikoev has been in real estate in one form or another all of his life.
Born into a family of Russian civil engineers, he actually benefited from Moscow's lax rules in the 1990s as far as a child's ability to be on a construction site. It was on these sites he became enamoured by and passionate about everything to do with buildings and how they are constructed.
When he immigrated to Toronto in 2001, it seemed only natural that one of his first jobs out of university would be for a real estate marketing company. It was sometime while working there that a switch flipped in his head when he asked himself, “Why am I producing these materials for other real estate agents when I could be producing them for myself?”
Now, as a real estate agent himself, his team is routinely noted for their exemplary customer service, with individuals posting on Yelp that Balikoev routinely sells their homes for way over-asking or if they're selling, he continually finds properties for a price within his clients’ budgets.
He chatted with Toronto Storeys about how he frequently pulls both off and why he thinks the province’s new rent control rules in the Tenancy Act will actually make rent more expensive, not more affordable.
What initially got you into real estate?
I come from a family of civil engineers who are always on construction sites. I mean my mother, father, grandfather, grandmother — everyone was always on the construction site. I was always in half-done buildings as a kid. But it was a different country at a different time, so kids could be taken through the construction site no problem. That's where I found my passion for real estate. After graduating with a business administration degree and a computer science degree, I worked for a marketing company that focused exclusively on marketing solutions for new home sales. That was my second step toward a real estate career.
While I was working for this company, my friend was getting his real estate license at the time. I thought you know what, I'm creating all this marketing material for this company, why can't I just do that for myself? I love houses so much, I know the structure and when I was in school, I worked on construction sites in the summer, so I know the bones of the houses and I'm not just one of those sleazy salespeople. This would be a great match. I got my license and the rest is history. I've been in real estate — of one form or another — my entire life.
You're within the top 3 best real estate agents in Toronto on Yelp. What do you do that compels clients to give you rave reviews?
Ever since I was working for that marketing company, I've been hearing how overwhelmed real estate agents are, so early in the game I started hiring a team (assistants, buyer agents, etc.) so I didn't spread myself too thin and I wasn't trying to get all the deals myself and get all the money myself. I started sharing with other agents and growing the team early on. This allowed us to service our clients much, much better and give them much more time. There's a limited amount of people you can serve in a day or in a month and you don't want to go over your maximum capacity, but a lot of agents do. This is where they lack quality and this is where their clients get disappointed. It's very important to hire help and find like-minded people who will help you out. Build your team early and that's what will help you provide better customer service and give your clients all the attention they need.
Many of your clients said the reason they like you is you either sold their home way over their asking price or you found them a home that was well within their budget. How do you do these things?
We stand by what we do. As I put it to my clients, any property in the world always has people who are ready to buy it at the market price, no matter what you do. However, there are only a small number of emotional buyers out there for your particular property. Our job is to identify the emotional buyer who will buy your property before we list it.
For example if it's a rundown house and no builder or renovator will buy it because it's too rundown, it's probably going to be picked up by a creative person who wants to create an environment of their own. Before putting the house on the market, we target specifically this type of person. We decorate it for those buyers, we market it toward those buyers and we try to create their dream. All it takes to get the higher price over asking is this one emotional buyer. At the end of the day, we usually get $20,000 to $60,000 more than asking and though it doesn't reflect on our commission much, we know it means a lot to the seller, and it feeds our egos too.
When we work with buyers, we set expectations right away. We are professionals who know the market well. I see five to seven properties every day of my life, so no matter who the buyer is, I probably have seen 100 times more properties than they have in their lifetime. When a buyer creates a beautiful “dream home” picture in their head, they become emotional and will spend more money than their rational mind allows for a home they “have just got to have.” We try to educate our buyers on how to remove this emotional factor that makes people pay more for things that aren't actually worth the extra money for the house. Then we're on the buyer's side. We know the tricks of the sellers.
If we walk into a big beautiful property that will attract a lot of emotional buyers, we try to tell our buyer that maybe this isn't the property they want to put an offer on. We try to make sure our buyers aren't competing for properties. We try to find properties that are underdogs — the ones that can be decorated to our buyers’ expectations cheaply and quickly, but will not attract multiple buyers, which will help the property sell cheaper. We try to understand our buyers’ needs and look for the properties, which can be brought up to those needs at either no or low cost. We do this instead of looking for a property that already meets all our buyers’ needs and are going to be $20,000 to $60,000 more than those properties where you have to work a little harder to see the finished vision. Ultimately, this strategy saves a lot of money for our buyer.
What is your opinion of the current Toronto market? Is the Toronto Real Estate Board doing enough to support it?
The Toronto Real Estate Board is doing a lot to support agents in Toronto, but they can do more and they definitely have to modernize. The tools the TREB provides to its members are dated. Those real estate agents that are ahead of their competition are using tools that are way more advanced than what the TREB can even think of.
To put things in perspective, when you run a team or work in a group or a technologically advanced brokerage, you have an opportunity to go to conferences in the U.S. and see what's going on there and internationally, so you can bring these technologies back to your business. But this is not available to a lot of other agents. The majority of agents are single operators from quieter, more rural markets. These are realtors who are doing three to four deals a year and they don't have the means to go and see what's out there. They are more reliant on the TREB. TREB could be a little more up to date with the new developments in the industry, so they can support these smaller agencies and agents.
What about the provincial and municipal government, are they doing enough to support the Toronto market?
Well, when it comes to the recent changes to The Tenancy Act, I think a lot of people supported those changes without realizing the negative impact they will have on tenants too. But, I think in another six months, a lot of people who voted for those changes are going to change their mind completely. But unfortunately, it will be too late. I read in the news, one of the biggest developers in the city was planning to put 1,000 rental units in the heart of the city on King Street West, but they've cancelled that plan and they will be putting in condos instead. The reason for that is the new changes to the Tenancy Act.
Building rental housing wasn't a very profitable business in the last 10 or 15 years, so there weren't very many developers who decided to build rental housing — maybe two or three buildings a year and that's it. Then, when the Toronto market started changing and rental buildings started to become more profitable, the Liberal government made these changes to the Tenancy Act, which killed any desire from businesses to invest in rental housing because these rules make it so unattractive. As a result, we will get more condos, more investors and less affordable housing.