This is what I wanted to tell a fellow agent last week when he was going on and on about the wonders of pre-construction condos.
I can’t believe I never drew this comparison before…
When I was 19-years-old, I had my life I planned out. My goal, my job, and my future were all the same: I was going to open a nightclub.
All I thought about was opening a nightclub. Morning, noon, and night.
At 19-years-old, my clubbing-buddy and I went to a different nightclub every Friday night, and I bartended at the infamous “Shark City” at Yonge & Eglinton every Saturday night.
My life was perfect.
It wasn’t the loud music, the women (who I was unsuccessful with…), or the smell of stale alcohol that kept me coming back, but rather it was the status or the relentless pursuit of greater status.
I loved shaking hands, getting names, dropping names of people I didn’t even know, all in attempts to bypass the line, get into the private areas, or score myself something free.
I loved working the system, and the results were fruitful. I was finally good at something!
Thankfully, this phase of my life lasted less than 12 months, and eventually, I woke up from this moronic dream I was having. Hey, can you blame me? I was a KID!
But you know what?
A large percentage of Realtors suffer from the same affliction.
The pursuit of that “you are special” status is rampant in a certain segment of our industry. Can you guess which segment?
Yep, you’re right – pre-construction condo sales.
Let’s delve off onto a tangent for a moment here, and let me ask a question: how do you get somebody to pay 1000% of a product’s actual value? I mean real, quantifiable value – like advertised and sold at that price, value. The answer: make them feel special.
How do you get 20-something kids to pay $300 for “bottle service” at nightclubs when all they get in return is a $30 bottle of booze?
Well, you make them feel special!
You give them a “special” area that you call V.I.P., even though it’s no different from the rest of the club, and you give them other items of little to no value, like a bucket of ice, a tray of glasses, and two-dollars worth of gingerale and coke.
It actually works in reverse, when you think about it.
In order to have the RIGHT to pay 1000% of fair market value, you have to call and reserve a booth the night before!
It’s amazing, and I can’t believe people fall for it, in this day-and-age.
But the same thing happens with pre-construction condos. It’s exactly the same, except the participants are older and, supposedly, smarter.
Last week, I was at a seminar with a slew of Realtors interested in condos, and one agent stuck out from the rest.
He went on and on about pre-construction, and in a good light, even though the rest of us had just finished talking about how we don’t sell pre-construction; even though we had just spent ten minutes discussing the risks and the problems!
He presented to the rest of us, the “New Condo Guide” – you know that farce of a publication that is really just a collection of ads from unscrupulous developers? Then he suggested that this is a great way to find out about new projects before they debut, and (wait for it….), get the jump on other agents trying to become V.I.P.’s.
Ah yes, the very important persons! The agent discussed with us how “important” it is to know who to talk to, and where to approach people in order to get onto these coveted lists!
“It’s amazing – you can get in ahead of people – all those people lined up outside, sometimes in the snow!”
We sat there and shook our heads, looking around for somebody to connect and subsequently roll eyes with.
“It’s so important these days to be a V.I.P. and get in first, because, you know, there is the pre-sale, but now there, like, the pre-pre-sales! And these are way more important! It’s so important to be in the front of the line!”
Then came this beauty: “Sometimes, I even search on Craigslist to find advertisements for VIP pre-sales because a lot of other agents aren’t doing this!”
You get the idea, right?
Do I need to paraphrase this gentleman even further?
A colleague of mine who has been in the business for 30-years and who is one of the top agents in the city of Toronto, and who is far more outspoken than even I, said what we all wanted to say, “You know, if you could take all the time, energy, and effort that you’ve put into this nonsense, and put it into selling actual condos – you’d be very successful.”
I don’t think this guy really absorbed what we were saying.
A room full of experienced agents, all among the top in the city, were sending the same message: “We do not sell pre-construction.”
But this one agent went on and on about the importance of attending pre-pre “launch” parties, in order to meet the right people, get his name on the list, and be able to attend the pre-pre “sales” parties.
It’s just like the nightclub business.
How do you get kids to pay $300 for a bottle of $30 booze? Make them feel important.
How do you get Realtors to sell an over-priced product that has more red flags than the United Nations? Make them feel important.
Why do we spontaneously buy our ladies flowers when they least expect it? To make them feel special.
People love feeling special!
And when it comes to Realtors, who are in a competitive, comparative business, they really want to feel special!
So by all means – give them “line bypass” and put their names on the “list.” Give them a badge that says “VIP” and let them come to the “pre-pre” party before anybody else.
THAT is how you get Realtors to sell an inferior product! Make them feel important!
It’s no different from nightclubs.
The feeling of walking by 200 people in line outside “Musik” and smiling at the bouncer as he un-clips that velvet rope and lets you inside is the exact same feeling as walking by 500 morons who are lined up to put down a deposit on an over-priced condominium that might never be built. Just as the club-goer forgets that he or she is going to pay $25 to get inside just for the ‘privilege’ of buying a $30 bottle of booze for $300, the Realtor forgets that paying $350,000 for a condo worth $350,000 – that takes 4 years to be built and is unsellable in that time period – is a fool’s game, and he or she is being taken advantage of.
I wanted to tell this guy at the seminar, “Go start a night club.”
It’s the exact same thing. The same mentality, same mindset, and the same con.
As that old saying goes, “If you’re sitting at the poker table and you can’t figure out who the sucker is within the first ten minutes, that means you are the sucker.”
Well, when a room full of people of championing against the sale of pre-construction condos to our “valued clients” who trust us, and you are the only person opposed, then, well, as the saying goes…
Quit your job, and go start a nightclub.
At least if you own the club, you’re guaranteed to be at the front of the line…