Every Realtor runs his or her business differently, and every Realtor brings different pros (and often cons) to the table.

But I’m going to call out some poor business practices that I do NOT believe are part of any Realtor’s “job”…

“I bet 25-plus bids.  I thought if I didn’t break 20, I wasn’t doing my job.”

What a complete ass.

I’m putting myself in a tough spot here, because I’m going to speak out against business practices that frustrate me, as both a Realtor and a consumer, and have frustrated every single buyer in the real estate market over the last decade.

RECO rules prohibit me from doing and saying certain things, but that doesn’t always stop me.  Sometimes I speak in hypotheticals, change names, dates, places.

So how about this – let’s call this entire blog post “hypothetical,” and I’ll tell you that I’m speaking generally and prefacing everything I say with “If this were true.”  That way, I can keep out of trouble for calling out something and somebody who should be in trouble for his or her actions anyways.  Oh, the irony!

So, hypothetically…

The above quote was said by the listing agent of a property that gained headlines for receiving thirty-one offers and selling for $200,000 over asking.

As I said at the onset, every Realtor is different, and every Realtor takes a different approach to the business.

But it should never be a Realtor’s “job” do get twenty-five offers on a property.  That’s just ridiculous, and it’s meaningless.

The job is to sell the property for the maximum amount possible, in the shortest amount of time, with the least inconvenience to the client.  But clearly – getting the most money for the property is the main goal.

This does not, however, mean that a Realtor needs to involve countless parties who needn’t be involved, embarrass the hell out of dozens of people, waste a lot of people’s time, and make the entire process into a circus.

My colleague, Mark McLean, is one of the best-known Toronto Realtors on Twitter, and has his own blog called “Realty Lab” where he weighs the pros and cons of a situation like the one we’re discussing right now.  With respect to the 31-offer, $200,000 over-asking debacle, Mark was the first one to shine a light on the ethics (or lack thereof) involved:

Let’s face it, an agent lists a house grossly undervalued to drum up multiple offers and that process is nothing short of inconsiderate, underhanded and unprofessional. Of course, the neighbours talk, perhaps the media pick up on it, and the agent sends out just sold cards exclaiming “look at me, I’m so great because my  listing sold for 140% of asking price”. We are not doing ourselves any favours people. When you have 15 people at the offer table, 14 of them have given up time with their families because the agent has given them a glimmer of hope that a particular house is within their financial reach. Perhaps the flyer should say “Hire me; I don’t know how to price a house so I guarantee a line-up of buyers”.

I couldn’t have said it better myself, Mark.  Mark’s Twitter handle is @mark_mclean

I once wrote about the idea of “people giving up time with their families,” and I was called out on this blog by 1-2 people that said, “Oh boo-hoo, you wanna go home to your family?  Stop complaining, you make too much money,” etc.  But those people missed my point entirely.

The point is that some Realtors don’t respect anyone, or anything.  Some Realtors don’t respect the very industry they work in!  They don’t respect their colleagues, or the time they put into their business; they don’t respect buyers and sellers – neither those who “win” properties during multiple offers, or those that go home and feel like crap for days on end.

Under-pricing a house to solicit a bidding war, as Mark points out, may be disguising an even bigger problem in real estate: that some Realtor’s can’t effectively do their jobs!  Some Realtors can’t price a property, and take the easy way out by under-pricing.

Maybe the house in this completely hypothetical situation we’re talking about was worth $490,000.  Maybe it was worth $525,000.  Maybe it was worth $440,000.  And maybe, just maybe, the Realtor who sold the property had absolutely no clue what the property was worth, and took the path of least resistance by listing it at $379,000.  In the process, this Realtor brought dozens of people into the fray that otherwise would never have been involved.

I used the word “embarrassing” above, and I can’t think of a better word to describe these antics.

On the one hand, the Realtor who listed the property should be embarrassed for his actions.

On the other hand, the buyers who submitted offers of $420,000 and got absolutely crushed by $150K are also embarrassed and likely still sore about it.

The entire situation stinks, and it’s needless, in my opinion.

Let me draw a comparison to a football game, since we now have to wait seven months to see Eli Manning and Tom Brady again.

The Realtor in this hypothetical situation said: “I bet 25-plus bids.  I thought if I didn’t break 20, I wasn’t doing my job.”

In football, the objective is to win the game.  But if you take the above logic into the equation, it’s like a coach saying:

“I don’t just want to win the game.  I want to: 1) win the game, 2) win because we started out with an artificial 14-0 lead, 3) embarrass the other team, 4) celebrate like we won the Superbowl even though it’s the pre-season, 5) hurt a few opposing players in the process.”

If a coach said that, you would all agree that he’s an ass.  Can you really brag about winning the game when you started with a 14-0 lead?

Isn’t this the same thing that’s going on in the real estate story above?

The house was-under listed by $100,000 – $200,000, and the Realtor set a silly “goal” of bringing 20 useless bids to the table, which were only put forth because of the misleading pricing.  And in the process, everybody was embarrassed (except for the Realtor who for some reason went to the newspapers and asked for a story to be done about his great “work.”)

This is why the general public hates Realtors.

This makes me embarrassed to be part of this profession.

I love my job, and I love the company that I work for.  I truly think that our brokerage and our agents have among the highest ethical standards in the business, and we separate ourselves from the rest of the industry every single day.

There are lots of other brokerages like us, and thousands of agents who do what we do.

But then there are Realtors that give us ALL a bad name, and it’s stories like the one in the Toronto Star about rampant under-pricing and 31-bids that make the public say, “All Realtors are scum, and they’re not better than used-car salesmen.”

Having read the article in the Toronto Star, and seen the quotes – I can’t disagree.

And if I get in trouble for writing this post, then I’ll deal with the repercussions.

It just had to be said…