2017 has been absolutely crazy thus far in the Toronto real estate market, and I think my blogs have accurately reflected that.
But the biggest problem, aside from the rising prices and lack of inventory, is how offers and specifically multiple offers, and/or bully offers, are being handled.
This week, I’ll cover this in two parts – how offers shouldn’t be handled in Monday’s blog, and how offers should be handled in Wednesday’s blog.
So basically you’ll hate all real estate agents after reading Monday’s post, and then you’ll think I’m patting myself on the back a wee bit too much after Wednesday’s blog…
Last Monday was an interesting afternoon.
I took my buyer clients to see a property on Dundas Street – a multi-unit, investment property, priced at $599,000, with offers, according to the listing, being reviewed nine days later.
We walked through the main floor, and when we came outside to head around to the back unit, I encountered a man on the street that seemed really interested in the property.
He kept asking me questions, as I kept trying to politely move along with my clients, but he piqued my interest when he told me, in a very thick accept, “Why you show dis house? Dis fuggeen sell two dayze ‘go.”
It sold two days ago – is that what you said?
The man went on to tell me that he was “the guy” in this area, owned 40 properties, and nothing happened in this area without his knowing.
“Dis agent,” he told me, “Dis guy ees joke. Work in 905, no here. He no care bout anybody, anything. He make a deal dayze ‘go.”
The man pointed to the agent’s photo on the FOR SALE sign and said, “Look at eem. He like teenager, not even hairz on his balls. Ju tink he care about your ‘rules’ and all dat? He mak’a sale, no tell anybody.”
This guy was so real, that he couldn’t be fake.
I ended up chatting with him a bit more after my clients had seen the house, and left. He checked out – he really did own 40 properties, and as I found out later on, this house really did sell two days previous.
And what amazed me, or maybe no longer does, in this market, is not so much that the house was sold eleven days before the scheduled offer date, with no advance notice. But rather that this agent, and/or the brokerage, didn’t have the decency to call agents who had booked appointments, to tell them they were going on a fool’s errand.
That Monday afternoon, I wasted an hour of my time showing a house that had already sold two days before-hand.
This is how a lot of agents in today’s industry choose to transact.
And the man I met on the street was right. This agent didn’t care, and he’s not looking to build a brand, a reputation, a good standing, and a career. He’s looking to do a deal today, and then take tomorrow as it comes.
I wrote a blog last week called, “It’s Official: Every Property In Toronto Has An Offer Date.”
It was my cynical take on the market, and the fact that those properties that don’t actually have an offer date, are basically entertaining offers the very second they hit MLS.
And in this blog, and many others this year, I talked about how bully offers are making for an insane 2017 market.
Every day, when a property hits the market with an “offer date” scheduled six or seven days later, buyers and their agents scramble to to get into the property asap, and try to make a bully offer the same day.
What it means, for the most part, is that most properties with “offer dates” scheduled for six or seven days later, really have offers now.
Some agents are writing “Seller Will Not Entertain Pre-Emptive Offers” on the MLS listing, but that doesn’t stop buyers and their agents from submitting them anyways.
So while you might be quick to blame a buyer agent for submitting an offer on a listing that clearly specifies, “seller will not entertain,” the conversation is really about how the listing agent chooses to respond.
Call me naive when I say this, but I’ve always thought that real estate agents need to work together, not against each other. You’re as good as your reputation in this business, or better. So I can’t understand why any agent, experienced or new, would take short-cuts, or even go out of their way to make enemies in an industry where having friends is so powerful.
Some agents are truly out to make money today, while sacrificing tomorrow.
And while I understand how hard it is out there in 2017, I still think that agents need to keep focused on the long term, and avoid jumping in the mud with the people who will be out of the business in a couple years.
To start 2017, we noticed a new problem with how some agents are choosing to work with bully offers, and it was extremely troubling.
When a bully offer is registered on a property that has a set offer date, it’s the listing agent’s responsibility to inform “anyone who has expressed an interest in the property.” We’ve discussed this before in other blogs, but for the most part, consider that the bare minimum an agent needs to do is call the buyer agents who have booked showings.
That’s a rule, folks. It’s not a suggestion.
So imagine our response when we started to see this early in January:
You reserve this right?
It’s like reserving the right cheat on your Grade 12 final exam.
Just because you reserve the right, doesn’t make it okay.
Now, I’m a pretty responsible person, so when there’s a matter in question, I often seek a second opinion, or go to greater lengths to satisfy myself of the correct answer. So after reading this on MLS, I told my wife, “Hey babe, I’m just letting you know what I reserve the right to sleep with high-class escorts at the Sheraton Hotel on weekday afternoons.”
In the end, it seemed my hypothesis was correct.
You’re not allowed to reserve the right to review pre-emptive offers, without informing others.
It’s a complete slap in the face to your “colleagues” who are booking showings on your listing.
The entire underlying principle of the “Multiple Listing Service” is cooperation.
So when somebody uses the MLS system, and basically says, “I’m not going to cooperate with you,” they’re thumbing their nose at the system.
When this listing hit MLS, the broker/manager of this company was flooded with calls.
That listing was edited within 12 hours.
But it didn’t stop the trend from continuing, as I saw this a few days later:
But the following listing took things to yet another level.
The underlined text says basically the same thing – “without informing others,” which is pretty bad.
But what else do you notice?
Look where this was written.
Under the “Mortgage Comments.”
Was that meant to be sneaky, or was that just their attempt to use all the space provided on other information?
Unfortunately, it’s the former. You get 243 characters in the “Brokerage Remarks” section, and they could have fit the underlined portion, but chose not to.
So not only do you have a listing agent who is pointing out that they plan on making their own rules, but they try to make sure you don’t notice.
If you’re pointing out that you’re not playing by the rules, why try to hide it?
Perhaps the problem is, in this market, some of these agents don’t know they’re not playing by the rules. Maybe they figure that they just get to make their own rules up as they go.
There’s this sentiment out there that “the seller holds all the cards.”
Notice that in all three listings, they say “The seller” in respect to who is reserving this right.
Blame the seller. It’s the seller who wants this, not the listing agent.
I think all real estate agents agree that the seller should get to do as he or she feels fit, but this is where we get into a grey area, since the seller, at the behest of the agent, isn’t playing by the rules.
It’s just too easy for agents to claim, “It’s not my fault – it’s my seller!”
That argument just can’t hold water anymore.
Now as bad as the above is, it’s the exception to the rule.
I called it a “trend,” but we saw maybe a handful of cases, and I’m proud to say that the management of Bosley Real Estate was instrumental in the crackdown of these practices, spending hours on the phone with TREB, RECO, and other brokers and owners.
But the mere fact that listing agents are trying this garbage shows that we’re quickly losing respect for each other, and going a level beyond “dog-eat-dog,” whatever that may be.
I’ve been involved in a few multiple offer melee’s this year, and I’m not seeing them handled as well as they could be.
Many of you have been through this process.
Offers are at 7:00pm, presented in person at the property, and the street is lined with cars.
Agents go in one at a time to present, and some agents – although I vehemently disagree with this approach, actually bring their buyers with them. Why add the anxiety, stress, and drama? What could the buyers possibly need to be there in the car for?
Personally, I think in 2017, with technology where it is, the in-person presentation is ridiculous.
Especially when you have 20 offers on a property.
A colleague of mine was on an offer last week, and with offers at 7:00pm, she was in her car outside the house until 12:20am.
There were 22 offers on that property.
If all agents presented in person, that’s about 14 1/2 minutes per offer.
But the part that bothers me is, the agent didn’t call her until 12:20am, but she lost by over 15%.
Why wouldn’t an agent make a courtesy call, and let the “badly-beaten” agents go home?
Another colleague of mine was on an offer with 17 competing bids, and after reviewing them all, the listing agent sent ALL EIGHTEEN offers back for a “second round.”
Why not tell the holders of the “dummy offers” around the list price that they can go home?
In 2017, I’ve seen it all, folks.
Bully offers are out of control.
Listing agents aren’t keeping buyer agents informed.
In-person offer presentations are going all night.
I know I’m giving the realtor-haters ammunition here, but remember that this isn’t an attempt to paint the whole industry with the same brush, but rather to point out the actions that could easily be done without.
So on Wednesday, let me explain how I am personally handling listings, multiple offers, bully offers, and the offer process in 2017.
It might sound a bit self-congratulatory, but I’m convinced that if I set an example, others will follow.
And we have to start somewhere, right?