(Thinking) Outside The Box

Stories! | September 28, 2020

thinking outside the box

Would you agree that sometimes the difference between a great idea and a terrible idea is execution?

Sometimes, I think it is.

This fall has been anything but ordinary in the Toronto real estate market and that’s not to say it’s necessarily bad.  Certain segments of the market are absolutely on fire, and others are cold.  To say “It’s tough out there” could mean it’s tough for buyers who are losing in bidding wars, or it’s tough for sellers who aren’t getting showings.

Bottom line: it’s tough everywhere.  Nothing is easy.

As a result, market participants are trying new ideas.  Some are great, some, well, not so much.

But often the difference between that great idea and the really, really bad one is a matter of opinion.  Or, it’s a matter of reception.  If a so-called bad idea works, then it’s a great one.

Over the last few weeks, I’ve seen some really interesting attempts by real estate agents to sway the market in their favour.  Today, I want to share a few of those with you, and you can let me know which are good ideas, which are bad ideas, and which ones all depend on execution.

In the end, I see this as an exercise in either, “That’s thinking outside the box,” or, “What were they thinking?”

Here are four recent examples…

A property on the east side has been listed four times now.

First, for $1,100,000 in April.

Second, for $1,100,000 in May.

Third, for $1,100,000 in July.

And now, for $900,000 in September.

You don’t have to be a rocket scientist to see that:

a) The sellers want and/or expect $1,100,000
b) This property is not worth anywhere near $1,100,000

When listing a freehold property for sale, a good listing agent will do everything possible to assist the buyers and the buyer agents in making well-informed decisions, including providing a pre-home inspection, floor plans, a survey if one is available, a list of upgrades and features/finishes, information on school districts, etc.

This listing agent, however, went above and beyond.

Was he thinking outside the box?

Here’s the email he sent on the very morning that offers were set to be received that night:

 

Good day fellow agents,

Since i’ve been asked this question a couple of times, i figured i’d share the findings of my research so if your clients were contemplating an offer on (address redacted) this afternoon, you could share an important detail with them which may affect their evaluation of this home.

As i mentioned in the listing – this is a larger home compared to the recent homes/similar homes you may see in the neighbour and being that square footage is a factor in the value of a home i wanted to share the comparison i made recently to (address redacted) and (address redacted)

As per MPAC/public records

(Subject property – address redacted) – 1654 sq ft + basement

(Address redacted) – 1312 sq ft + basement

(Address redacted) – 1280 sq ft + basement

Yes, all of the homes have different offerings but we do hope that most buyers see that (Address redacted) st is a very well maintained home. My clients wanted to show the kitchen cabinets in their natural finish to show  that they are custom wood cabinets – so of course they could be painted to suit ones taste. All 3 levels floors were just replaced in few months back including having the hardwood stairs resanded and stained from main to 2nd to match new floors. We feel that there are a lot of extra touches in this home, and loads of potential if one wanted to modernize the home to suit their style. What we feel confident is, that a new family would be getting a solid, well cared for up kept home- one that offers more space than many similar homes in this pocket /expected price range.

If you have any other questions i can answer to help you with your offer, dont hesitate to reach out and if you missed my email yesterday with inclusions let me know and i’ll resend those details

cheers

(Agent name)

(Agent brokerage)

 

What in the world was he thinking?

Or do you believe he was thinking outside the box?

Most buyer agents don’t like to be sold.  I don’t like receiving an offer on a listing accompanied by a laundry list of ‘problems’ in the property, which are often just items that the buyer wants to change.

But what you see in the email above is a whole other conversation.

This is an agent trying desperately to sell, explain, or convey the seller’s own definition of “market value,” when the market has clearly said otherwise.

To me, this is over-selling.  Plain and simple.  It raises a red flag, and not only do I fail to believe that agents and buyers can be swayed by outside-the-box thinking like this, but I also thinks it turns them off.

This property received two offers on “offer night,” but failed to sell.

It’s still listed for $900,000 with no update to the “offer night.”

Here’s an email I received from a downtown listing agent after I had sold one of my own listings:

 

Hi David,

Congratulations on your sale…

I am just wondering whether the other agents who showed this unit and missed out would love to hear about our listing at (address redacted)

If you would like to share your list of showing agents, or feel free to send them our link, we would be so grateful.

Thanks, and again, congratulations to you and your Sellers!

(virtual tour link redacted)

(Agent name)

(Agent brokerage)

 

Thinking outside the box?  Or what were they thinking?

This agent is asking me to go out of my way to email buyer agents, who showed my listing, with information on his listing.

It’s odd.  But I like it.

In fact, in the spirit of “nothing to lose,” and “trying to make something happen,” I think it’s brilliant.

With downtown condominium inventory at an all-time high, and listing agents praying to various Gods for a single showing over a weekend, ideas like this one are exactly what sellers should be happy to see.

Am I going to email the four other agents who showed my listing, and inform them of some other random listing in a different area, at a different price, listed by some agent I’ve never spoken to?  No.  And that’s not because I’m unhelpful, but rather because I don’t want my name associated with a listing and a client that I have no affiliation with, and no control over.

But this agent’s tactic is still worth a shot!

If this agent sent out 100 of these emails, and even 10% of the agents respond, then he’s probably getting 60-70 more eyes on the listing.

Sometimes, even long-shots are worth taking!

A TRB reader emailed me last week saying she’s on a mailing list for a downtown Toronto condo agent, and she had received a monthly newsletter with the following:

 

The numbers are in and it’s official — Now is one of the best times to make a move on condominiums in the downtown core. After collecting data from our neighbourhoods, we’re seeing that prices for condominiums aren’t increasing as much as their counterparts. For instance, average selling prices for condominiums are up by only 8% compared to this time last year, while detached homes are up by 16% and semi-detached homes are up by 18%.

The average Days on Market for condominiums is hovering around the 15-day mark, 4 days more than semi-detached listings. While this may sound like bad news for sellers, it’s a prime opportunity for buyers to take the leap towards home ownership. Smart buyers can take advantage of the influx of inventory and have more negotiating power.

Our clients, especially first-time buyers and investors, are getting their dream condos at a better price than they would’ve earlier this year. For those expecting an economic recovery in 2021 — with a return to education, tourism and development — we predict that now through January 2021 will prove to be the sweet spot for condominium buyers in the downtown core.

I think my readers are going to have a field day with this one, especially the bears.

Yes, it’s salesey.

Yes, it sounds like some of the hot-air-balloon agents that are always pumping the market’s tires, although to be fair, I actually don’t know which agent sent this.

But to some extent, it’s not wrong.

Condo prices are down, and for those looking long-term, it’s an opportunity.

House prices have out-appreciated condos 2-to-1 over the past year.

I think you readers are going to hate this, and tell me if you do.

But it’s not dishonest.

Last, but certainly not least, here is a bluff that would make Johnny Chan proud…

The background on this condo?

It was first listed for $899,000 and sat on the market for 31 days.

I showed the unit to a 30-something female divorcee, and the moment we walked in through the front door, she said, “A guy lives here.”

Yup.

It was quite masculine, from the finishes, to the artwork and accessories, but ultimately it was the exceptionally overpowering smell of smoke that turned her off.

Me too.

I don’t know if was cigarettes or cigars, but I don’t care.  Some people say, “Cigar smoke is different,” like it conjures up images of Michael Douglas reclining in a leather chair, sipping a fine scotch, while holding a stogie.  To me, it’s all the same.

This place stunk.

It was also over-priced.

The listing was terminated and the property was re-listed at $799,000.  That’s a whopping $100,000 price drop, for those playing along at home!  You don’t see that every day.

Nonetheless, even at $799,000, my client wasn’t interested, nor was I telling her it was something to consider.  Smoke, or no smoke, it just wasn’t worth jumping on.

Four days later, I was sitting at home on a Friday night, enjoying my version of a fine scotch, aka Crown Royal and diet gingerale, when I received this email:

Hi,

I wanted to give you a further heads up that the seller of (address redacted) would be willing to negotiate as low as $749,000 this weekend as he needs the condo sold by Monday to not miss out on another opportunity. This would bring the condo to only $747 per Sq. Ft. which is an amazing deal as unit 401 just sold for $959 per Sq. Ft. or $873,000. This deal will only last this weekend. If my client has to miss out on his deal on Monday then he will be re-listing at $898,000 and not willing to negotiate.

If any interest with this change please call my cell at (redacted)

Please see below for more details including a series of links on the condo. I would be happy to answer any questions you have.

Best,
(Agent name redacted)

Well?

What was she thinking?

Or thinking outside the box?

Once you email blast a couple dozen real estate agents and say, “If my client has to miss out on his deal on Monday then he will be re-listing at $898,000 and not willing to negotiate,” there’s just no turning back.

Right?

Well, that’s the best part!

A few other agents that I know received this email, and it had been widely shared in the real estate community by the time Monday rolled around, so everybody was watching.

Would the property be re-listed at $898,000 with no negotiating?

Nope.

In fact, it remained on the market at $799,000, and has now been listed at that price for three weeks.

While this was a catastrophic bluff, I give all the respect in the world to the agent for trying this!  Knowing that this bluff had the potential to embarrass her, this agent put all that aside, in the name of the client.  That says something about this agent’s character.

While you might choose to see this as a sleazy move, or a cheap bluff, I see it as an agent who would try anything – even risking her reputation, to get a deal done for the seller.

This market is keeping everybody on their toes, and the four emails above are all examples of how some agents are thinking outside the box in order to try and get deals done.

Some are watching the box cave in on them, however, but trying, nonetheless…

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9 Comments

  1. Appraiser

    at 10:56 am

    Michael Cohen on MSNBC.

    “In the year he (Trump) paid $750 in taxes I paid more than $3 million. If I went to jail for 3 years for tax evasion, he should get 300 years.”

    1. Bal

      at 12:18 pm

      He should get 300 yrs…..rich are getting richer and middle-class families like mine….work all their life just to pay taxes…lol

  2. Joel

    at 5:13 pm

    I think they were all worth a shot. You only need to get one person interested to sell.

  3. Condodweller

    at 11:29 am

    I find it interesting how an agent and a buyer can have such a different view on these. I think some of the strategies are smart even if they didn’t work. I’m assuming there were other negative attributes for not being successful. I also think that a great idea, even if it works, might not be such a great idea if it has undesirable side effects.

    I’m surprised the “smokey” unit didn’t sell with such a significant discount. Is smoke that hard to get rid of, and who cares if a “guy” lived there? You are not being asked to move in with him. If you are saving over $100k, if you spent $10-20k decontaminating i.e. have it totally repainted, get a cleaner to scrub every inch of the place, would that not make it a great opportunity? Especially if you can just qualify for a mortgage at the lower price.

  4. Bal

    at 12:18 pm

    He should get 300 yrs…..rich are getting richer and middle-class families like mine….work all their life just to pay taxes…lol

  5. Karolina

    at 12:36 pm

    This reminds me of the time when it was a truly a seller’s market and buyer’s wrote personal letters to the sellers hoping to perhaps get an edge during the offer night. Roles are reversing…

  6. Appraiser

    at 1:15 pm

    “On Monday, BILD announced that a total of 4,539 new homes sold last month, up 217% from August of last year and 119% above the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence. This also marked the highest number of new home sales for August since Altus Group started tracking in 2000.”

    https://torontostoreys.com/gta-new-home-sales-august/

    1. Appraiser

      at 1:22 pm

      P.S.

      “What’s more, condominium apartments, including units in low, medium and high-rise buildings, stacked townhouses and loft units, accounted for 2,609 new home sales, were up 159% from August 2019 and 106% above the 10-year average.”

  7. Condodweller

    at 7:12 pm

    When David posted the fall numbers in earlier posts I thought to myself wow that’s a lot for sale, especially for condos. I was thinking that it will be interesting to see who wins the tug-of-war i.e. will sellers lower prices to move them or do they have time to keep waiting for buyers to come up and meet/exceed asking prices.

    It certainly seems that it has become less of a seller’s market but at the same time it’s nice to see that prices haven’t tanked due to the high listings.

    The buildings I watch certainly have a higher number of listings compared to the past. One as more than five one beds listed whereas in the past there were years where perhaps only one came up for sale the entire year.

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