It’s no secret that I haven’t really touched the whole debate on discount brokers and/or people who want to sell their properties on their own.

Personally, I think that competition is the cornerstone of any free market and that allowing consumers to list their properties for sale with discount brokers is a fantastic idea. I might not be as optimistic about the use of these brokers, but that’s a topic for another day…

Last week, I attempted to complete a deal with a private seller, and it was one of the worst experiences of my career.

This past weekend, a couple clients of mine purchased a condo in the Yonge/Eglinton area after a search that spanned a period of almost five months.

We were very diligent and saw upwards of fifty properties in almost every building throughout the area.

I remember one unit that was brought to my attention on Redpath Avenue that for some reason was listed on the public MLS but not on our own broker version. After some digging, I realized that the seller had listed with a discount broker in Ottawa, and so while it appeared on the public MLS, not a single real estate agent in Toronto had access to the listing!

My clients went to see the property with the full knowledge that a seller who is listing his or her own property might have a few quirks and perhaps a couple tricks as well.

The lady selling this condo, which was a one-bedroom of about 600 square feet, had printed out a whole slew of past listings for 2-bedroom, 2-bathroom condos and had circled the sale prices! She then packaged these listings in a neat little portfolio to hand out to prospective buyers.

Did she think that would actually work?

Her condo was listed at $369,000 and was likely worth around $315,000.

Hey – it’s worth a shot, right?

I’m not going to sit here and say that 100.00% of all sellers should list their property for sale with a Realtor, on the MLS system, and with a full-service brokerage. That’s simply not the case.

Some sellers really are cut out to sell on their own. Few, but still some.

However, after the experience I had last week with the seller of a neighbouring condominium in the Yonge/Eglinton area, I realized that perhaps I’ve been giving sellers too much credit…

The seller, who we’ll call “Brandon,” had listed his condo for sale on Craigslist and Kijiji, which I find somewhat strange since very few, if any, condominiums in Toronto are sold via this method. He should have at the very least paid some discount broker to put it on MLS, but he was to cheap to even do that.

Brandon had made some very snazzy “OPEN HOUSE” signs and put them outside the building for all passer-byers to see, and my clients happened to walk inside and take a peak.

Brandon and his partner were both dressed in suits and were both very professional. They greeted the interested buyers as they came inside, and answered their questions very methodically.

My clients told Brandon that they were working with an agent under a buyer representation agreement, and Brandon said that he would be willing to pay a commission.

The next day, I phoned Brandon and let him know that I would like to submit an offer on behalf of my clients, but during our brief conversation, I determined that perhaps Brandon wasn’t quite as sharp as my clients had made him out to be.

Brandon wasn’t familiar with some of the basic terms that we use in real estate, or that anybody would use in contract law. He also wasn’t familiar with the offer procedure.

I told Brandon that we would like to submit an offer on his condo and have him look at it tonight. He agreed, but he said that he wanted to continue to try and sell the condo on his own. He said that he haid “daily appointments” and that he felt one of these people would buy his condo.

I asked Brandon, “So do you want to work with our offer, or do you want to sell the condo on your own?”

He replied, “Both.”

I told Brandon that it didn’t really work that way, and if he accepted our offer and somebody off the street also submitted an offer, then he couldn’t accept that offer – otherwise he’d have sold his condo twice!

Brandon said, “Well, no, you see, I would then just eliminate your offer and work with the other one.”

I very carefully explained to Brandon that if he accepted our offer, than he would be ACCEPTING our offer! Once it’s accepted, there’s no turning back. Brandon said, “Well, then, um, that’s not the way I want to do this.”

Brandon said that he would talk to his lawyer and get back to me, but he never did.

The next day I asked Brandon if he spoke with his lawyer, and he informed me that any “extra” services would cost him more than the $199 he was prepared to pay for a lawyer’s services. He further explained that the lawyer had agreed to look over an accepted agreement, but he wouldn’t give any further advice or else it would cost $200/hour.

Just as a sidebar: if you are contemplating selling your $500,000 asset – how the hell can you be so cheap as to not spend $1,000 on a REAL lawyer? I don’t understand…

I finally submitted an offer to Brandon, and he looked it over and emailed me a bunch of questions. He didn’t understand what “irrevocable” meant, and I knew we had a problem.

I explained that our offer was irrevocable until midnight, or rather it would “expire” at midnight. Brandon said, “Well that’s not fair.” Brandon felt that he should have two weeks to decide, as he wanted to show his unit to cold callers from Craigslist.

Further, Brandon wanted to wait and see what a similar unit had sold for in the building. That unit was sold conditionally, and I told Brandon that the sale price wouldn’t be published until the unit was sold firm. Brandon didn’t believe me – and said that I should just “be honest and give him the price.” I further explained, again, that conditional sale prices are not published, and it would likely take 10-15 days until that deal firmed up. Brandon said that he wanted to wait those 10-15 days, and I told him we would likely have bought something else by then.

Brandon said that he “needed two weeks to make a decision,” and I in-turn told him that often I’ll give the seller 3-4 hours to accept, decline, or sign-back. The market is fast-paced, and nobody in the world (and by world I mean Toronto) would give a two week irrevocable period. I rarely, if ever, provide two days.

Brandon sent me a list of things he wanted to change about our offer, and I asked him why he didn’t change these on the actual offer itself? He said that he preferred to just “list them off” over email, and again, I explained to him how the offer process worked.

So I had Brandon make changes to the actual offer itself and initial anywhere he had made a change.

I drove to my office, through the snow and ice at about 11:30PM one night last week to get the sign-back that Brandon had faxed, and what did I find? A sign-back where he had come down $900 in price.

I lost my mind.

But, I was polite and professional. I emailed Brandon back and said, “I was disappointed to see that you have come down from your inflated asking price a whole $900. I don’t believe my clients and I will pursue this property.”

Brandon had also crossed out some of the pre-printed portions of the Agreement, which I have only ever seen once before. These Agreements are on standard OREA and TREB forms, and only once (a budding young lawyer) did one of my clients ever alter these sections. These are what I call the “unimportant” sections – things like adjustments, time limits, tender, closing arrangements, family law act – all the things that are present in order to protect both buyers and sellers. I mean, they are important as anything in the agreement is important, but they’re pre-printed because they’re never altered! They’re in EVERY agreement! I figured that Brandon was trying to show off and he had randomly chosen some sections to cross out and initial.

The whole thing was bizarre. And I was beyond frustrated that I drove all the way to the office to get a sign-back for $900 less than his silly asking price!

The next day, Brandon sent a long email apologizing and saying that his lawyer, who happens to work for $199, instructed him to sign back close to his asking price because, “That’s how you negotiate” and that “offers will be signed back and forth twelve times before they’re done.”

I asked Brandon why he was taking advice from a discount lawyer instead of a discount real estate agent, or even a REAL real estate agent, but he didn’t provide an answer.

The next day, we improved our offer several thousand dollars which was as far as we were willing to go, and I sent the paperwork to Brandon as a “final offer.”

This is where things got very dicey and very dangerous. Brandon said that if he were to accept, he would still want his lawyer to look it over before he gave the final “thumbs up.”

I told him that this isn’t the way an agreement works, and that “thumbs up” isn’t quite a legal term.

I asked Brandon point-blank “Do you realize that if you sign that offer, and you sign the ‘Confirmation of Acceptance,’ that you have sold your condo?” Amazingly, Brandon said, “No, I haven’t. I want my lawyer to look it over.”

This is when I realized that the potential for litigation was increasing. If Brandon accepted our offer, and then decided that he didn’t want to sell, we would end up in court. You can’t accept an offer and then turn around and change your mind.

I said, “Brandon if you sign the offer and accept the offer – it’s accepted. You can’t ask your lawyer to look over an accepted offer and then tell you whether to accept! That’s not how this works.”

Brandon replied, “And I’m telling you that this is how this offer process is going to work! My lawyer will look this over and tell me if it’s okay.”

Realizing now that I had a seller with not even a simple understanding of contract law, I inserted a condition that read, “This offer is conditional upon the approval of the terms hereof by the Seller’s solicitor. Unless the seller gives notice in writing to the Buyer within one (1) business day from the acceptance hereof that this condition is fulfilled, then this offer shall be null and void.”

Now this gave Brandon an opportunity to review the accepted offer with his lawyer.

And you know what? Brandon said, “That clause doesn’t matter because I was going to do that anyways!”

He just didn’t understand.

He then reiterated that he didn’t want to “fully” accept our offer until he found out what the other condo in his building sold for. I wondered what he meant by “fully.” Did he think he could “partially” accept our offer?

Or maybe he could “like, sorta” accept?

Perhaps he figured that there was a legal precedent for accepting “mostly, kinda, but not really until later, ya know?”

I was very worried about how all this would turn out, but eventually, Brandon decided that he would probably accept our offer.

He called me and asked “Where do I sign?” And I gave him specific instructions on how the acceptance worked.

He never sent any paperwork my way, and the next day, I received an email saying:

“I spoke with my lawyer today and I have decided to fully reject your latest offer. Further, I will not entertain any future offers from you or your clients. Please let them know so that they can focus on other properties.”

O…….okay…

Was this his idea? Or his $199-per-pop lawyer’s?

What changed overnight? Was his lawyer playing Realtor again? Or maybe his lawyer was upset at the email I had sent saying, “Perhaps you should review this offer based on its own merits and your needs, rather than consulting a lawyer who does deals for $199 and has no knowledge of real estate values.”

Regardless, we moved on. My clients bought another property, and that was the end of the story.

The moral of the story, however, has yet to be written.

Any day now, I expect Brandon to email me saying, “The property is still available. I would like to re-open discussions.”

I’m not sure if Brandon was the recipient of some poor advice, or if perhaps he was trigger-shy and never really wanted to sell his condo in the first place. Maybe he felt like I was beating him up and he just wanted to cut off communications and look elsewhere.

Personally, I would have worried if we received a signed acceptance from Brandon. I would worry that he’d try to change his mind in a couple weeks, and although he has no legal standpoint to do so, we would end up chasing this in court if he decided he would stay in the condo, rip up the papers, and hold down the fort.

There really are some sellers that can sell on their own and do a good job of it.

But then there are people like Brandon who don’t even know how to read a contract, and who open the door to litigation with every idea that pops into their head.

I’m not writing this post because I want to rag on the public and make a point that “Everybody should use a Realtor!” That’s never been my business model. People can list with me, list with my competitors, list with a discount broker, or list the property for sale on their own. I work with those people that choose to work with me, and you’ll never see me out banging on doors or handing out business cards.

I just wonder if people like Brandon have fully thought through the pitfalls involved with the sale of real property, and if they’re ready for the consequences…