Avoiding Disaster

Some advice for new Realtors: contrary to popular belief, NOT every single potential listing is worth taking.

You do get to choose when and where you work, so why not avoid the disasters?

There’s a saying in professional sports regarding trades – “The best trade is often the one you never made.”

The same can often be said in my business for buyers and sellers that you choose not to work with.

This blog post isn’t intended to rip apart buyers and sellers, nor is it being used as a forum to bitch and complain about the business, but rather I consider this an open letter to new Realtors who often feel as though they have to take anything that comes to them.

Every Realtor is an independent contractor, and every Realtor runs his or her business differently.

We work different hours, in different areas, and wear different clothes doing it!

Every Realtor is free to choose when they work, where they work, and with whom they work.

So I’m telling the rookies: sometimes, you can say “pass” on that nightmare listing, even if it costs you a sale.

A few months ago, I received an email from a young man in British Columbia, who was a licensed Realtor.  He told me that a friend of a friend was looking to sell his house in Toronto, and that he was going to “interview” several agents from Toronto to determine who to list the property with.

As a licensed Realtor, he was entitled to a referral fee for passing the business along, so there was something on the line for him!  The house had already been listed twice, unsuccessfully, and this young Realtor needed to choose carefully to ensure the property sold, making his friends happy, but also making his referral fee turn into something tangible.

He contacted me, and I guess you could say that I “won” the business, but I knew there would be some obstacles.

What I didn’t know, however, that the obstacles would be insurmountable, and I’d end up turning the business down even after I had “beat out” several other agents.

The property is on the outskirts of Toronto and isn’t in a high-demand area, but houses do sell regularly in this pocket, and if priced right, this property could find a buyer.

I looked up the sales history of the property and saw that it had been listed for $499,000 the year before, and then dropped to $489,000, but sat for almost six months.

I also noticed that similar properties were selling for $425,000, so suffice it to say, this property was a wee-bit over-priced.

The first obstacle I encountered was actually getting in touch with the seller.

I left voicemails every single day for a week, but never received a return-call.

I sent emails every single day for a week, but found nothing in my inbox.

I called the B.C. Realtor back again and told him that I was having trouble reaching the seller, and he put me in touch with the seller’s sister, who told me, “Call the seller in five minutes – I just told him to expect your call!”  I tried that, but nobody picked up.

How hard was it going to be to sell a house when I couldn’t even get in to meet the seller?

The seller called me a few days later, and there was a language barrier, to say the least.

I told him that I wanted to get in to see the house, which was a duplex, but he told me that the main-floor tenants had two massive, vicious dogs, and that I’d have to come by at 7pm when the sellers were home.  I asked him, “If we listed the house, how would we ensure that buyers and their agents could come see the property during the day without being attacked by these dogs?”  He told me, “They could only come at 7pm every night.  That’s the only way.”


So I’m supposed to sell a house with restrictions on showings so severe that buyers can only view it for one hour per day?

The seller also explained that the other tenants were shift-workers, and they didn’t want any visits during the day because they were sleeping.

That meant two-out-of-two units in this duplex weren’t viewable, and it meant that my job was slowly growing impossible.

I told the seller, the sister, and the referring Realtor that the only way to sell this house was to get the tenants out, fix the property up, stage it, and put it on the market.  But they weren’t interested in this idea, as the tenants were on leases, and they figured it would be too difficult and way too costly to get them out and lose potential rent.

There was no way I could sell this property with the two tenants in place.

You simply cannot restrict showings and limit your buyer pool and expect to come out with fair market value, let alone a sale at all.

But there was another potential catastrophe on the horizon; one that I fear many young Realtors would choose to ignore.  The seller explained to me that he had “moved out” of the duplex, which he owned, and “into the garage.”  I pictured him living in the garage, on a futon, sleeping next to raccoons, but he went on to say, “No, No – I do all the work myself!  I have electricity from the house, and I have a bathroom, and I make a kitchen!  I make a bedroom!  I make a living space and I do all myself!”

The word “lawsuit” was all I could think of.

I asked, “Did you have copies of the building permits?  Do you have inspection reports – electrical, plumbing, etc?”

The seller paused and then said, “Huh?”

Oh boy…

“What I need for?  I do all the work myself – good work!  I do very good work – my work is good for anybody, good for me, good for you, good for buyer!”

I asked the seller, “Did you get any sort of approval AT ALL?”  And he replied, “This my house, what when why I need approval to do what I want?”

Keep in mind – this was all during my very first conversation with the seller, and it took about ten days to actually get him on the phone!

So let’s review:

1) The house had already sat on the market, unsold for six months.
2) The seller refused to remove the tenants, who were paying well below market value, in an income property.
3) The main floor tenant had massive, vicious dogs that wouldn’t allow us to show the unit during the day.
4) The second floor tenant was a shift worker who also would not allow showings during the day.
5) The seller had built an illegal garage/guest-house with no permits or inspection of any type.
6) It was almost impossible to reach the seller, get into the property, or basically work on this transaction at all.

I ask all new Realtors: is this a listing that you want to take on?  Is it worth your time and efforts?

But it gets worse.

I asked the seller, “So what do you think the property is worth?  You had it on the market last year for $499,000 for several months and it didn’t sell, so what do you want to list it at today?”

I was thinking maybe $439,000, or something more in line with the two other duplexes on the street that had sold for around $425,000 earlier in the year.  I knew it would be VERY difficult to sell, what with the dog-fighting going on inside the house, but I also knew that the seller would likely scoff at my request to list at $424,900.

What I was NOT expecting, however, was his response: “Well, I think I like to list for over one-half one-million dollars.”

Come again?

“Five-twenty, five-thirty.  Something like that.”

I asked him, “If you couldn’t sell it last year for $489,000, how can you get $530,000 for it this year?”

He simply said, “Yes – five-hundred-thirty thousand.”

And that was about the moment that I said, “I can’t help this guy.”

I don’t want to come off as ungrateful for the referral, or for the opportunity to work on a seller’s behalf.

But the potential legal issues regarding the construction without approval or permits was something that would tie my hands.  If I were to list this house – whether or not it was over-priced by $100K, or whether or not we could get buyers in to see the units during the day due to the dogs – I would want to go through all the proper channels as far as the garage/guest-house is concerned.  The seller wasn’t willing to do so, and that was the real reason I couldn’t work on this transaction.

I’ll go the distance for my clients, but if they want me to break the law or help cover up potential litigious issues, then I’ll let somebody else do the job.

I enjoy a challenge, and I don’t want or expect every transaction to be an easy one.  I relish the opportunity to take a listing in a building/neighbourhood that is tough to sell in, or a second or third-hand listing.  But sometimes, the chips are just stacked so far against you, that there’s no point.

I actively try to avoid real estate disasters, and this transaction would have absolutely, positively been exactly that…


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  1. Sam says:

    These homes are great for low balls. However it would be a waste of my time as the seller does not seem motivated enough to sell.

  2. George says:

    Good story! I love clueless people. They make me feel so clueful.

  3. J says:

    David, out of curiousity, what is good form for listing a place with tenants? I’d imagine it goes a lot smoother when the landlord and tenant have a good relationship, but in situations where that is not the case, what can the landlord/selling agent do?

    1. Ralph Cramdown says:

      Pay the tenants to leave soon and without damaging anything.

  4. Perfect Fit says:

    As you’ve pointed out in the past, 20% of realtors sell 80% of the properties. Well, the same is basically true for clients. 20% of your clients generate 80% of your income. So the focus should be on those 20%. Further, there are about 20% of those low-income generating clients that will generate 80% of your workload/problems. Fire them! The amount of work and hassle generated by these low ROI PITA customers is NOT worth the low income that they provide. And no business person should be afraid to kick them to the curb.

  5. Joe Q. says:

    “Discretion is the better part of valour,” as they say.