Here are your options:

a) Buyer agents
b) Listing agents
c) The market Gods
d) All of the above

Oh, wait, I haven’t even told you the question yet…

Remember back in high school or university when you wrote multiple-choice tests, there was always that one kid who put up his hand and asked, “Sir, is there any penalty for guessing?”

I never understood what that meant, and I don’t think the kid did either.  I mean, how does the teacher know if you’re guessing or if you really, truly believe in your answer?

Then one day in university, our professor announced that for this test, and this test only, the incorrect answers would be subtracted from the correct answers.

Hence a “penalty for guessing.”

If you’re absolutely sure of the answer, then circle that letter!  Er, fill in the bubble on your scan card in HBII pencil.

If you have no idea what the correct answer is, then leave it blank, and don’t risk the incorrect answer being subtracted from the correct ones.

Is there any penalty for guessing in real estate?

Let’s say a condo is listed at $599,900 but it’s “worth” $800,000.  And let’s say that some of the test-writers, aka the buyer agents, have no clue what it’s worth.

Is there a penalty for guessing?

Let’s say they submit an offer for $675,000 and guess.

But there are many other guessers as well!  There’s a guesser at $625,000, there’s one at $650,000, there are three guessers close to $700,000, and when all is said and done, there are 18 offers on this condo, 12-15 of which don’t really have a chance of being successful, and this condo, apparently “worth” $800,000, sells for $840,000.

Is there a penalty for guessing?

Damn right there is!

One of the biggest problems in the real estate market right now is that nobody knows what anything is worth.

And a property is, supposedly, “worth” what somebody is willing to pay.

Ergo, a property is going to sell for what one person out there is going to pay, above and beyond everybody else.

It’s always been this way.  This is nothing new.

But what’s new, as I’ve ranted and raved about on this blog so far in 2022, is that buyer agents themselves are simply giving up.  They have no clue what properties are worth.

So who’s fault is this anyways?

Is it the fault of listing agents for under-pricing?

Is it the fault of buyer agents for not having experience?

Is it the fault of the market Gods for pushing prices up 7% every month?

Or is it a combination of all of the above?

As I said, the tactic of under-pricing has been around since before I started in real estate, but we’re at the point now where nobody knows what anything is worth, but more to the point, nobody tries.

Last month, I penned a similar rant about the state of buyer agents in this industry, which was meant to be less of a frustrated venting tirade and more of a “warning” of sorts to active buyers who read my blog regularly.  With 65,000 agents licensed in the GTA vying for 90,000 – 100,000 transactions per year, suffice it to say, many have no experience; past or present.

I lamented how most buyer agents simply pick up the phone, call the listing agent, and ask, “What’s this property going to sell for?”

There are variations of that question, but they all have one thing in common: they show that the buyer agent has no clue and won’t try to get one.

With that in mind, I started this week with an experiment.

I brought out four listings for condominiums and I put a small sticky-note up on my computer monitor in the office.  Every time an agent called me to ask what a property was going to sell for, what the sellers expectations were, or a similar question with the same query, I kept a tally.

I took that sticky-note home on Thursday night.  It’s currently 11:46pm and this is up to date:

The reason I only received six calls about the price for Lisgar is because it sold on the first night of the listing via bully offer.  Otherwise, I would have received twenty calls on that place, I just know it.

George was listed on Wednesday so there were bound to be fewer calls, although maybe a 2-bedroom, 2-bathroom is easier to price.

There are direct comparable sales for Iceboat, not to mention other units currently on the market, and yet I’ve received nine calls from agents asking about the price.

But Yonge?  Oh, man.  Just……..wow.

Every time my phone rings, I tell my team, “This is going to be about Yonge.”

I’ve had 23 agents call and ask about the price of Yonge, and many of them haven’t shown the property yet.

Just think about that for a moment: agents haven’t even been inside the house, nor have they taken their clients on a tour, and yet they’re calling and asking, “What does your seller expect to get for this property?”

From that, I conclude that many simply can’t do the job with which they’ve been tasked as an agent effectively representing a buyer-client.

An agent called me on Iceboat Terrace, which is listed for $549,900, and said, “What’s the price?”

I said, “$549,900.”

She replied, “No, I mean what’s the price this is going to sell for?”

I told her, quite honestly, “I have no idea.  In this market, nothing would surprise me.  That’s why we have offer dates: to find out.”

She then said, “My buyer wants me to ask you the true price; the real price of this condo, because she doesn’t want to waste her time seeing it, and I don’t want to waste my time showing it to her.”

Alright, hold on.  Before we lambaste this agent for being lazy, let’s dissect that.

Her buyer doesn’t want to waste her time seeing the property, which is annoyingly listed well below fair market value, if she can’t afford it.

Can we blame her?

Who would want to waste their time?

As listing agents, we have created this system that wastes the collective time and energy of thousands and thousands of buyers out there, by under-pricing properties and listing them for numbers that aren’t in any way realistic.

But at the same time, there is a way to avoid all these wasted efforts, and that’s simply for buyer agents to do their job, and for buyers to hire agents that are capable.

I was filming my Pick5 video earlier today and I got a call from an agent who asked, again, about Iceboat Terrace.  She asked me what the unit was going to sell for, and, as I usually do, I said that we would find out on offer night.

She asked, “Well, what did the last one sell for?”

I said, “I don’t know; are you in front of your computer?”

She said that she was not, and then she blurted out, “I haven’t done any research.”

It would be funny if it weren’t so sad.  I constantly rant, “These agents don’t do any research!” and yet here was an agent that was giving me the line, “I haven’t done any research” as an excuse for her not knowing something.

It was more than an excuse.  It was a justification.

I said to her, “Jenny, listen, with due respect, and I mean that, you need to spend five minutes on MLS and look up the history of the building before calling me.”

She interjected and yelled, “If you can’t spend ten seconds to answer one little question then what kind of agent are you?”

Alright, hold on.  Let’s dissect this.

Is it my job to answer her question?  When I take on a listing, and when I owe “fiduciary duties” to my seller-client, does doing research for buyer agents fall under that job description?

So what if I told her, “The last comparable sale sold for $650,000.”  Then what if she follows up with, “And how much has the market appreciated since then?”

What if she asks, “How many floors higher or lower is this unit than the comparable sale, and what price adjustment would you make for that?”

What if she asks, “What premium would you place on your unit because of the staging and marketing, based on your recent experiences with similar properties you have listed?”

Where does it end?

I was nice.  Trust me, I asked Tara and Matthew who were within earshot of this call.

“Jenny, I’m encouraging you to do research,” I pleaded.  “I’m trying to empower you to help your buyer client!”

This isn’t paraphrasing, folks.  This is verbatim.

I find myself talking so slowly, quietly, and rationally with these folks, which is the complete opposite of how I actually want to.  But that’s the job!  I’m a listing agent; I need to keep buyer agents happy!  I need them to like me and to want to work with me.  Apologies for being verbose here, but I know a lot of buyer agents look forward to bringing offers on my listings and working with me on offer night because they know I’m fair, I communicate, and I respect them and their time.  I know this because they tell me.

So I don’t jump down the throats of agents who call me, but rather I try, in my own way, to help them.

That last agent, “Jenny,” hung up on me.

It might be a loss except that she hadn’t even shown the property.

And this is what’s happening all over the GTA right now: agents are sitting at their computers, looking at new listings, and simply picking up the phone and calling the listing agent to ask, “What do you think this is going to sell for?”

If I had to come up with a list of people I love, it would be a short one, but it might look like this:

a) My family
b) My friends
c) The agent who writes this on her listings:

This isn’t rude, folks.  This is necessary.

This is what you might call “tough love.”

This is going to help the agents who’s first instinct is to pick up the phone and call the listing agent, to actually do their jobs.

Earlier this week, I showed clients a property that was listed for sale at $2,388,000.

We submitted a bully offer on this property for $2,950,000.

That’s a lot, right?  It’s too much, you say?  $562,000 over asking?

Well, we ended up losing to a bid just over $3 Million.

Now, how did myself and the winning buyer-agent know that this property was worth somewhere between $2.95M – $3.0M, even though it was listed for $2,388,000?

Experience.  Research.  Analysis.

The first is gained; the latter two are available to every buyer agent out there.

And if a buyer agent has no experience, can’t do any analysis, and refuses to do research, then is it the job of the listing agent to do it for them?

This is the cautionary tale I was attempting to tell in a blog post last month, which probably came off more like a misplaced rant from an agent who likes to throw lightning bolts at little people at the bottom of a mountaintop, but now do you see what I’m getting at?

The February TRREB stats have been released, and as I’ll show you in a blog post on Monday, the average home price in Toronto has increased by 7.4%, month-over-month from January to February, and that’s after a 7.3% month-over-month increase from December to January.

Prices are escalating quickly and it’s tough to know what anything is worth.

But listing agents are often in the same boat as buyer agents when it comes to pricing.

Both the buyer agent and listing agent have access to the exact same data and could, if they were so inclined, do the exact same analysis.

Where their conclusions might differ depends on experience in the market, past and present.  It depends on their “feel” for what’s going on.  It depends on their level of production on both the buy-side and the sell-side, and how ingrained they are in the current market.  It depends on their relationships with other real estate agents as well and the ability to talk shop, share insights, and cooperate.

So the idea that a buyer agent has the “right” to force a listing agent to these insights or to “talk shop” is tantamount to your Grade-Twelve calculus teacher taking you aside and saying that because you got 95% on your test and Jimmy only got 40% on his test, he’d like you to take 10% off your grade and give it to Jimmy so he can pass the class.

Not my job, Jimmy!

Vladamir Guerrero Jr. doesn’t let the fringe relief pitcher on the Detroit Tigers strike him out because Vladdy is afraid the pitcher might otherwise get sent to the minor leagues.

Buyers in this market should be asking their agents for an analysis of a potential or predicted sale price for a property.  Otherwise, how do they know if their agent is doing his or her job?

I received a call today from an agent on an $899,000 listing.  He said, “My client has a budget of $840,000.”

First of all, how many properties in Toronto are selling $50,000 under the list price after two days on the market?

But more importantly, I told him, “My clients paid $910,000 for this property three years ago.”

He said, “Oh, okay, I didn’t see that.”

No kidding, he didn’t see that.  He never ran a search for the very property he was calling to inquire about.

But is it my fault for listing the property at $899,000 when they paid $910,000 three years ago?

Tell me that it is.  Go on.  Many of you want to.  You hate how real estate is listed and sold in this city, and the idea that somebody would price a property for less than they bought it for, when the market has gone up, leaves a sour taste in your mouth.

However, to think that this property is going to sell for $899,000, when there’s an offer date, and when we’re in the 2022 market, and of course – when it sold for $910,000, is a level of stupidity that simply can’t be cured, and for that, I have no time.

For buyer agents in this city to act like those described above, putting zero effort into research and analysis, refusing to run a simple search of the building or neighbourhood (let alone the property itself!) answers the question, who’s fault is it anyway?

Buyers, be careful out there!

It’s not the listing agents or the market that can have the largest negative impact on your housing search, but rather those closest to you, whom you trust the most, for good or for worse…

Postscript:

An agent read my blog this morning and sent me this:

This is ridiculous.

It’s like a doctor saying, “I’m prescribing you a placebo” and expecting the placebo effect to still take place…