I wore a suit every day for a decade. Maybe more.
When I got into the business in 2004, I didn’t have many “nice clothes.” As I have told the TRB readers before, I went to my dad’s “Men’s Shop” and told the gentlemen there that I needed to be outfitted for a successful career in real estate.
From then on, it was a series of “slacks” and something called a “sport-shirt,” which was a dress shirt made in really awful, unbelievable patterns and colours. I kid you not – there’s just no way you’d ever believe what I wore. Some of these shirts were basically technicolour, and some had a sheen that could blind an arctic wolf!
In the spirit of transparency, let me dig up an out-take from a 2005 photo shoot….
Nobody told me that a yellow shirt with olive-green pants wasn’t a good look!
The short-sleeve dress-shirts? Egad!
Sometime thereafter, I wised up. I went out and blew a whack of cash on six suits.
I then wore a suit every single day for over a decade. No matter the day of the week, the season, or the cycle of the market, I wore a suit.
Because that’s what real estate agents do, right?
Because successful people wear suits, right?
Because when buyers and sellers see a “Real-a-tor,” they see them in a suit, probably flashing a nice watch, likely driving a fancy car, and they’d have the newest Blackberry 8600 that had a built-in camera!
I wore a suit every day of the week, without fail. Forty degrees in the summer? Didn’t matter. I would drip sweat down on the steering wheel as I drove clients around, still wearing my suit-coat behind the wheel. Minus-forty degrees in the winter? I remember a client of mine wearing ski-pants and thick mittens to a showing, and grabbing my millimeter-thin suit-pant, asking, “Are you crazy? It’s fucking freezing! What are you doing?”
Realtors wore suits! Right?
This past Thursday morning, I met a client downtown for a staging consultation, wearing shorts and a polo-shirt. Then I did a showing for a condo townhouse in shorts and a polo-shirt. Then I showed $2M houses in the west end in shorts and a polo-shirt. Then I showed a $2.2M house in Leaside in shorts and a polo-shirt. Then I showed a $1.4M bungalow in shorts and a polo-shirt, but that was to my mother, so it’s all good…
I’m blessed to have more business than I can handle, literally. I’m blessed to have a clientele that I truly enjoy working with, otherwise, I’d choose to work with somebody else. I’m blessed to work with like-minded people who couldn’t possibly care less if I was wearing a suit, because they know me, they read my blog, they value my experience and wisdom, and they’re probably in shorts and t-shirts themselves.
Maybe I had to wear suits when I was younger so people would take me seriously. Maybe some agents out there actually like playing dress-up, and feel empowered when they step out of $1,200/month car wearing fancy clothes. Maybe it’s their own real-live television show! And more to the point, maybe some clients value that.
Who knows. What works for one person might not work for another.
Sometimes, we over-think things. Some things in this business don’t matter.
But some things do.
Some things aren’t subject to change, or opinion, or outlook, or evolution.
Some things are just, in a word, basic.
Case in point: the lockbox.
Also not rocket-science: supply and demand.
The following story is about the intersection of those two phenomenons, and how one real estate agent that I ran into this week had no idea how simple these concepts were, and managed to make a mess out of it.
If you’ve ever sold real estate before or been a buyer, you’re familiar with the process of obtaining access to the property, right?
In many condos, keys are left at the concierge. But for all other condos, and for all freehold homes, keys are left inside a lockbox on the property.
In condos, these lockboxes can be in the stairwell next to the unit, or in a designated area outside the building, or sometimes down in the P1 parking level, amid 200 other unlabelled and aging lockboxes. Ever been to 75 East Liberty Street?
For houses, the lockbox is almost always on the front door or the front railing, but sometimes it’s on a gas meter or fence-post.
Occasionally, there will be keypad entry, but about 99% of houses listed for sale in Toronto are accessed via a key in a lockbox.
So the obvious question: why would anybody try and think outside the (lock) box and have another method for viewings?
For many luxury homes, the listing agent will meet the buyers and the buyer agent at the property, and this is partly because the listing agent may want to offer a brief modest explanation of the features of the home (nobody likes a sales pitch!), and partly because there are so few buyers for a property in this price range, that going to the property maybe 2-3 times per week isn’t an issue.
Now see that last part – about the 2-3 buyers per week? That’s what you might refer to as “demand.”
Demand, of course, being an essential part of “supply and demand,” which brings me to my next point.
The other “basic” idea in our real estate market that I’d like to discuss today is how supply and demand work in the context of a listing strategy.
If you have a $1,000,000 house and you decide to implement the old “under-list, hold-back offers” strategy, then you’ll list at $799,900, and get as many buyers through the house as you can, in attempts to obtain as many offers as possible, so you can exceed that $1,000,000 fair market value threshold.
But how would this pricing strategy work if there was no demand? It wouldn’t. It simply couldn’t.
And why would there be no demand? I mean, what if you only allowed viewings one day per week? Would that make sense, in the context of an under-list strategy? Or what if, say, you had to be present for all showings, but there were 50-60 requests per week, and thus you couldn’t accommodate them all?
This is basic, basic, basic, and yet every so often, I meet an agent who doesn’t understand.
Do you remember watching The Price Is Right on weekday mornings in the 80’s and 90’s when you had a P.A. Day on a Friday? Or when you were home sick, and for some reason, watching TV? Remember “Contestant’s Row,” how they bid on prizes? And remember when that one moron got it all wrong?
The first person bids $1,800, the next bids $2,100, the next bids $1,700, and you bid last, and think that all of these people have over-shot. So you bid $1.
Or, you think they’re all low, so you bid $2,101 so that you cut off the legs of the person at $2,100, and win if the price is higher.
But what about that good ‘ole boy from Oklahoma who dun got it all figured out, and bids $1,699?
I would be eight-years-old, screaming at the TV. I just couldn’t believe it.
I get the same feeling when I see a property listed for sale, with an offer date, and restrictions on showings. You dun messed up, ‘ole boy!
You got the supply part right; you under-listed the house, but you need the demand! And by only allowing showings on certain days, at certain times, you’re eliminating potential buyers and thus potential offers, all of which your strategy relies on!
So where does my story about lockboxes and supply and demand intersect?
I was going to show a west-end property on Thursday, which was in a higher price point, but under-listed with a hold-back on offers. Right off the bat, I disagree with this pricing strategy. It makes sense to under-price a $1M property to drive interest through the roof, but there are far more buyers at that price level than, say, up at $2.5M.
I went to make an appointment through our internal MLS system, but there were no online appointments. I would estimate that 95% of listings on MLS have online appointment capability, but this is merely one small facet of this story.
I called the brokerage, which was an extremely small shop I had never heard of, but the phone just rang and rang. After about eight rings, a voice picked up; a voice that was unmistakeably in a call centre somewhere, maybe in Sudbury, maybe in India, who knows.
I tried to make an appointment, but the person at the call centre said that they were merely able to page the listing agent, so I told them to forget it.
I’m very bothered by experiences like this, since I’m a top agent working seventy hours per week, out of a full-service brokerage, and the idea of a “brokerage” in this red-hot market, with no actual employees, who out-sources to a call centre, in the middle of a Wednesday afternoon, drives me nuts. Somebody hired these people to represent them in the sale of their largest asset, and this is how it’s done?
I called the agent directly, and he picked up, “Hallao.”
Again, not every agent picks up, “Hello, David speaking?” But I just had a feeling, based on how this had gone so far.
I asked if he was the agent for the property and he said that he was. I asked how I would go about booking an appointment to view the property and he said, “You ask me.”
He then added, “There’s somebody there right now, you can go.”
I was a bit confused. First of all, we’re all abiding by COVID-19 showing procedures, which means no double-bookings. So when “there’s somebody there right now,” it means you do not go. It’s literally the complete opposite of what he was suggesting!
“We’d like to go on Thursday at 1:30pm,” I told him, to which he, again, responded, “You can’t go now?” This was Wednesday at noon, by the way.
I said, “Thursday at 1:30pm, please and thanks. Can you book that for us?”
He said, “Well, I have to be there.”
While this property was listed over $2M, it was as run-of-the-mill at that price point as you can possibly get. This was not one of those rare luxury properties where the “estate agent” shows up to greet the buyers and their agent with champagne, and whirls them through the home with a grand, narrated tour.
“I don’t understand, is there not a lockbox?” I asked.
“There is,” he said. “But we’re not using it.”
I was so confused. This made no sense.
“How are appointments being conducted?” I asked.
“We’re doing viewings for the buyers,” he said, which made no sense. “We can meet you there and take you through,” he said as though he was an employee at the CNE, taking children through the fun-house while the parents held their kids’ candy-floss and waited outside.
“So there is a lockbox, but you’re not using it?” I asked.
“Yeah, there’s a lockbox there, I told you that,” he said, sounding agitated. “But we’re not giving out the code. You make appointments through me.”
I told him that we wanted to go on Thursday at 1:30pm, and he put his phone down and flipped through some pages, spoke to somebody in another language, and then said, “3:30pm.”
What in the world?
This is a property which is under-listed as a part of a strategy to try to attract multiple offers, but they were making showings extremely difficult.
“We’re asking for 1:30pm,” I said, not needing to explain any further.
“2:30pm,” he said.
I was flabbergasted. “Are we negotiating on the time here? What am I missing?”
He said, “Okay, flip me your contact to this phone, and I’ll see what I can do.”
I did in fact flip him my contact, by sending a text message asking if we could see the property at 1:30pm on Thursday and I didn’t hear back for about eight hours. That’s when he sent me a text and said, “Who is this?”
I told him who it was, and he said, “Can you send me your business card?”
How? By carrier pigeon?
I sent him my name, brokerage, cell, and email, and guess what?
I never heard back.
Like, not at all.
And I remain bewildered at how this agent can not only fail to grasp the simplicity of something called a “lockbox,” but also fail to understand his own pricing strategy. If he wasn’t getting everybody through this property that expressed interest, then he would end up with fewer offers, and there would be nothing to drive up his artificially-low list price.
Now, before you suggest that he was likely needing to be present for showings because of a concern for security or safety, or that the Van Gogh in the foyer of the home remained intact, I don’t buy it. If 99.9% of freehold properties listed for sale in Toronto have access through a lockbox, then that doesn’t make this agent a genius or a hero for showing up for viewings.
There’s one more thing, and I’m not sure what to read into this…
The standard buyer-broker commission offered on MLS is 2.5%. This agent was offering 3.5%, which I have never seen before in my entire career. Not once.
What does that mean?
Sorry, but that raises a red flag to me. If you feel the need to incentivize agents somehow, as though they would go out of their way to sell this house to buyers for an extra 1% (the cynics will suggest this is the case, but I assure you that it just doesn’t work that way), then you’re hiding something. Or running some sort of a game.
Here we have a property that’s under-listed in price, with a holdback on offers, for which showings are difficult and the listing agent insists on being present, negotiates the appointment times, but doesn’t call people back at all. Oh – and they’re offering a much higher commission than anything I’ve ever seen.
Am I crazy, or is this a case of thinking outside the box when you really, really don’t need to?
I’m a big proponent of staying ahead of the curve. I pride myself on seeing real estate trends coming, being quick to adapt, and going the extra mile.
But I also know when not to reinvent the wheel.
I understand when simplicity is golden. I know the path of least resistance because I’ve taken it so many times, successfully.
While innovation, ingenuity, and originality are huge parts of real estate, there’s also something to be said for knowing when to use established and time-tested techniques. I mean, why wear a yellow shirt and green pants when a black suit has never gone out of style?
Sometimes, thinking inside the box is the difference between selling a property for top dollar, or seeing your “strategy” blow up spectacularly.
I have a feeling I know how this one is going to end…