Wanna Play A Game?

Opinion

8 minute read

September 28, 2022

Mouse Trap.

“It’s the craziest trap you’ll ever see!”

That was the tagline from one of the most seemingly exciting, yet classically disappointing board games of the 1980’s or 1990’s.

The television commercial not only featured an incredibly catchy jingle that described exactly what happens when you play the game (“Flip the man, into the pan, the trap is set, here comes the net!”), but also showed the entire apparatus in action, while children cheer with glee!

In reality, the apparatus rarely worked the way it’s supposed to, and the game was utterly boring until the point where you set the mouse trap concoction into action.

I’ve been writing blogs for fifteen years now, and I just know I wrote about board games once or twice before.  But for those of a younger generation, you’ll never understand what it was like to slide out that box of Pizza Party, Clue, Sorry, Battleship, Operation, or Guess Who.  And for those of a much older generation, well, enjoy your cup-and-ball…

Monopoly was my favourite game as a child, and it wasn’t even close.  I liked Snakes & Ladders when I was about five or six, and Battleship was exciting for a time.  But nothing ever topped Monopoly, and nothing ever will.

When I was in London in April, we did start a game of Monopoly once my daughter went to bed.  Myself, my brother, and his daughters – aged 9 and 12, were about ninety minutes into a game when it was time for bed, and although we all promised that we would continue the game the next night, it didn’t happen.  Once the board gets a bit messy, then it’s moved for dinner, then it’s boxed up, you just know you’re never starting that game up again.

Perhaps one of the least-realized facets of games, as a child, is that not every game that starts ends up finished.

Starting a game of Life during indoor recess at school?  Pffft.  There’s no point.  You’ve got fifteen minutes, tops.  You’ll never finish!

Play-date with a buddy on a Saturday?  By time his mother calls, “Come down for lunch,” you should know you’re not completing that game of Candyland.

As I write this, there are a slew of games being played in our real estate market, many of which are unfinished.

Some of these games never should have been started.

Some of the games feature players using sleight-of-hand, or “deflated footballs,” for those familiar with Tom Brady’s body of work.

Some players change the objective, mid-game, and others change the game itself.

And all the while, the buyers and buyer agents are supposed to make sense of this.

There was a comment on Monday’s blog that piqued my interest:

“David why is a seller able to leave a listing up for sale long after their offer date without changing the price?”

What this reader meant was: in the case of a property that’s “under-listed” in attempts to solicit multiple offers, why can this agent and seller leave the listing up at that bait-price, with an offer date that was nine days ago, without updating the listing to reflect the price they actually want?

It’s a great question.

I’ve long lamented that there’s no “time limit” per se on how long agents have to update a listing.

On the one hand, we have awful, part-time, uninterested agents who have photos of their properties with snow in the front yard, or a note saying “Open House: Saturday, August 13th.”  These aren’t updating their listings, and some listings will still say, “Offers Reviewed On Monday, July 25th.”

But we accept those for what they are: bad listings by bad agents.

But what about the good listings by good agents?  When are they supposed to be updated?

Let’s say that a listing comes onto MLS on Tuesday, September 6th.  The list price is $999,000 and there’s an offer date set for Monday, September 12th.

This is clearly not a $1M house.  It’s worth $1.2M or more.  In February, maybe it was worth $1.3M.  But anybody with a basic knowledge of real estate understands, whether by looking at the list price, the presence of an offer date, or both, that this property is under-listed.

Now, Monday, September 12th comes and goes.  The listing isn’t updated on Tuesday the 13th nor is it updated on Wednesday the 14th.  Thursday and Friday come and go, but the listing isn’t updated.

TRREB has rules about reporting sales, just so you you’re aware.

Any firm or conditional sale must be updated within 24 hours.

In reality, agents couldn’t possibly care less about this.

There are agents that will sell a property conditionally and wait two, three, or four days to update the listing to “SC” because they know showings will stop once the listing is updated.

But what is the rule regarding updating a listing that says “Offers, Reviewed On September 19th?”

You got me there.  I don’t know that there’s a specific rule, but rather we simply infer that agents will do their job.

In our example, the “offer date” was September 12th, and let’s say a full week goes by and the property has not sold, but the listing hasn’t been updated.

How much of a faux pas is this?

It’s a big one, if you’re asking me!  Not only because of the ridiculous amount of time that has lapsed but also because it’s deliberate.

If you’re an agent whose offer date failed and has passed by, and you do not update the listing in the next day or two, there’s no reason to explain your actions other than the fact that you simply don’t want to update the listing.  You want it to remain in limbo.  You want agents to call you and ask, “What’s going on with the listing?”  That way, you know who’s interested.

It’s savvy but it’s unethical and against the rules.

But that doesn’t stop agents from doing this every single day.

In the above example, the listing agent and the seller don’t want to re-list at $1,249,000 or $1,199,000, or whatever price they desire, because they’re so afraid of showing their hand.  They priced artificially low at $999,000, with an offer date, to avoid letting the buyer pool know what they really expected for the house.  But once that offer date has passed, they simply can not just leave the listing up at $999,000, since that’s a price they wouldn’t accept.  This is why agents will avoid removing “Offers Reviewed On Monday, September 12th” on the listing.

It’s a classic case of two wrongs making a right.

At the time of this writing (Tuesday, 3:35pm), there’s a listing that I’m tracking which personifies the behaviour described above.

This listing was set to review offers on Monday, September 19th.

It was under-priced, er, priced lower than what the seller wanted, but probably just below fair market value.

I had shown this property in the summer when it was listed much higher, and I told my clients at the time, “They might do something silly like under-list and set an offer date in the fall.”

That’s exactly what they did.

Listed orginally for $2,999,000, they were at $2,899,000, then $2,799,000, then they listed “low” at $2,399,000, with an offer date.

I checked BrokerBay last Monday and noted that they received two offers.

But the listing didn’t show “SOLD” on Tuesday or Wednesday, so I called the agent on Thursday.

He told me, “We’re still working on an offer,” which could have been true, or not.

In that case, what should the listing agent do?

He or she can’t mark the listing sold on MLS, since it’s not, but also can’t remove the note about the “offer date” and keep the $2,399,000 list price, because it sends mixed signals to the market.

But that was last Thursday.

Today is Tuesday.

It’s been eight days since their offer night and the listing has yet to be updated.  No update on the listing with respect to the “offer date” and no sale price.

Make no mistake, this is deliberate.

If they terminate this listing and re-list higher, then they’re admitting failure and demonstrating this to the market.  They’d also be on their fourth listing and the so-called “great houses” don’t often need four listings to sell.

So the answer is simply to freeze and hide in plain sight.  Leave the listing as is, don’t update it, and if people call and inquire, just say, “We have something in the works.”

In Monday’s blog, I told the story about two townhouses listed with two different pricing strategies.

One was listed at $1,100,000 with offers any time, the other was listed at $799,000 with an offer date.

One sold, one didn’t.

The one that did not sell had been listed low, with an offer date, and had received eight or nine offers.

Again, at the time of this writing, the listing has still not been updated.

With a $799,000 list price, the listing agent can tell agents on the phone, “We expect $1.1 Million,” but as soon as that property is re-listed at $1,029,000, the advantage and leverage of the buyer pool not knowing the agent’s true expectations are gone.

So as was the case with the $2.4 Million listing above, this property seemed to just sit and stew.

Both of these examples, however, pale in comparison to the next story.

A property is on the market for $699,000.

The listing says, “Motivated Seller!  Bring All Offers!”

The price looks too good to be true, but there is no “holdback on offers here,” so it doesn’t seem to be deliberately under-priced for competition.

What’s more is that the property has been on the market for 42 days.

I called the listing agent and said, “Is this property really listed at $699,000?”

She said, “Absolutely.”

I said, “So your seller would entertain offers at that price?”

She said, “No, of course not.”

I asked her if she had received any offers on the property and she said, “Several, and most were over asking,” and that told me all I needed to know.

This is, or should be, illegal.

I told her, “You’ve turned down offers of above $699,000, but you remain offering the property for sale at that price.  Isn’t this false advertising?”

She told, “Grow up,” and then explained how this is her strategy to “Cast the net wide and bring in the buyers!”

To me, it’s just another pointless game that agents are playing.

A similar version of the same game was played earlier this year, right after the market slowed down.

A house was listed for $1,880,000 and wasn’t moving.

The house came back out at $1,199,000 and the listing remarks said, “Offers Any Time.”

We knew that the house wasn’t really available for that price, but there was no offer date, and no indication to the market that this wasn’t “real price.”  The seller knew, the listing agent knew, any decent buyer agent would know, but what would the public think?

Therein lays the problem.

Even if the games are unfair, most agents know how they’re being played.

But the public is like that kid that shows up in grade nine from another country and has no clue how to play baseball.  Then you give that kid a baseball glove and tell him how to catch, but when you throw him the ball, it goes right through his glove and his nose sprays blood everywhere.

True story.

That kid, for what it’s worth, wasn’t deterred by the experience.  He continued playing baseball until he was good enough to hold his own in house league.

But most of the general public aren’t going to like being smacked in the face, and every time we see some nonsense pricing game playing out with a house or condo in this city, we lose credibility as an industry.

I hate it when agents pull this sh!t.

The fact that this has become so commonplace that other agents merely shrug and consider this “part of the game” is another problem altogether.

If it’s illegal for a baseball player to take steroids, then it’s wrong.  It’s illegal.

But if a second player starts taking steroids, then a third, then before you know it, more than half the league is taking steroids, then you’re actually a sucker if you don’t follow suit.

All the while, the actions are illegal.  They’re against the rules of the game.  They undermine the game.  They make the game lose credibility.

I feel as though many real estate agents think of this “changing market” as an opportunity to deliberately work outside the rules that are in place.  Perhaps they think confusion and uncertainty in the market will somehow provide cover for these antics, but I think it’s the opposite.

I think that when the market is red-hot, you can get away with a lot more.

When the market is tepid and temperamental as it is now, the public simply won’t accept these games being played.

I caution all listing agents and sellers out there to consider the effect that their games will have on the target buyer pool for their property, and encourage them to plan two steps ahead.  If you’re listing low with an offer date as a strategy, then you have to know exactly what you’re going to do if and when that strategy fails.  Freezing, stalling, and inaction are not strategies that will pay off in this market.

And if that doesn’t get through to these agents and sellers, then just think of the horror movie, Saw.

When Jigsaw asks, “Wanna play a game?” he scares the crap out of everybody; both those in the movie and those watching.

The result is going to be the same in the real estate market this fall.  Hopefully it doesn’t take listing agents and sellers seven sequels to figure it out…

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

Post a Comment

Your email address will not be published.

28 Comments

  1. Appraiser

    at 8:56 am

    This may come across as blasphemy from me, but I believe it’s high time for Realtors to be required to obtain a Bachelors Degree (or equivalent) to become fully licensed to sell real estate in Ontario.

    Such a program was implemented by the Appraisal Institute of Canada in 2006.

    Not a cure-all, of course. But is does tends to winnow the herd.

    1. JC

      at 12:00 pm

      Requiring a generic Bachelors Degree is just credential-ism and is IMHO not great or a variety of reasons. I agree that requiring some kind of job specific training or certification relevant to the job would be helpful.

      1. M

        at 3:16 pm

        Agreed. Bachelor degree in just any subject may reduce the number of agents, but doubt it will increase the quality. I really think there should be a mandatory apprenticeship after the education part to become licensed.

        1. Appraiser

          at 11:33 am

          They have had an “apprenticeship” program for many year now, as well as mandatory continuing education.

          Yet here we are.

  2. Derek

    at 10:01 am

    To what extent, if at all, would an inability to get clear instructions from your seller play a role in the delay in updating a current listing? Here are your options….. I don’t know, I’ll get back to you…

    1. Appraiser

      at 11:53 am

      Informing ones client that failure to update the listing puts their own real agent in jeopardy of violating TRREB MLS rules and regulations and / or code of ethics might help.

      However, if the client is being deliberately evasive, there’s not much anyone can do. Is there?

      1. Appraiser

        at 11:59 am

        P. S. Having a strong and ethical Broker of Record who doesn’t permit this shit in the first place – also good.

      2. cyber

        at 12:18 pm

        And broker being caught and reported to TREB results in … what consequences exactly?

        Try doing an internet search for “suspended”, “sanctions” etc. +TREB and pretty much nothing comes up, other than TREB trying to restrict access to up-and-coming competitors. For the entire Province of Ontario, RECO publishes like 1-2 public advisories per year.

        Maybe those in the industry can enlighten us with examples of on the level of ‘ethics violation’ that has had any meaningful consequence (e.g. withheld MLS access, license suspended, license revoked, at least some extra ethics course required to be taken) but is not in criminal category related to deposit/ brokerage account improprieties and such.

          1. cyber

            at 11:10 am

            If you actually read these decisions, it’s for criminal matters (uttering death threats, issues with brokerage account and buyer deposits), educational & background check matters related to licensing requirements, etc.

            Couldn’t really find recent examples of purely ethics violations like listing condo den as a bedroom, listing basement bedrooms as ‘regular’ bedrooms, not updating the listing price after unsuccessful “offer night” etc.

            1. Appraiser

              at 11:42 am

              If you see it, put the complaint (false advertising, poor ethics, etc.) in writing and send it to RECO with the particulars. Complaints from the public carry more weight.

  3. JC

    at 11:57 am

    “But most of the general public aren’t going to like being smacked in the face, and every time we see some nonsense pricing game playing out with a house or condo in this city, we lose credibility as an industry.”

    It’s arguably too late. The level of vitriol I have seen directed at realtors online is significant, and shenanigans like this are a large part of that. As you noted in the post, to those ‘in the know’ it’s just part of how things works. To the general public, “real estate agent” is increasing becoming a punchline – the equivalent of how “used car salesman” was used in 80s.

    Practices that are “just how things work” for experienced professional agents quickly become damning commentary on the entire industry when you introduce agents that are incompetent and/or unscrupulous.

  4. Derek

    at 12:30 pm

    Off topic, but I saw something on the tweet machine and was wondering if, in the blind bidding situation, there are any safeguards to prevent fake bids from adding to the perceived number of bidders (I suspect I know the answer). In the vein of the classic friend of a friend anecdote situation, I know of two sellers who had their friends submit bids on their sales to add to the numbers. One such seller is now a realtor!

    1. Appraiser

      at 11:46 am

      Fraud evades all safeguards.

  5. Bryan

    at 1:00 pm

    I know that many on here (David included) do not necessarily beleive that the government should (or has the capability to) come in and save the day, but I do not see any other alternative here. What David described with an agent listing at $699,000 and then rejecting anything less than some unadvertised price should be considered false advertising, and should not be legal. It’s one thing to sell for a higher price when there are multiple offers on an offer night, but if you offer something for sale and are accepting offers any time, you should be held accountable to the price you list the item at. With where we are at right now, there is just no way that agents are going to effectively police themselves on this. Good agents don’t do it, but bad agents do not face any repercussions if they do.

    IMO, the industry should be restructured such that the seller, not the buyer submits the first offer. Have offer nights 7 days after the listing goes up, and have the seller put together a full signed agreement of purchase and sale with no buyer name filled in, but with a waiver that says that in the event of multiple offers on offer night, the seller can terminate the agreement at their sole discretion. On offer night, prospective buyers could submit a counter-offer changing things as they saw fit, or they could sign the agreement the sellers summited. If multiple offers come in, everything would work exactly as it does now. If only a single buyer shows up though, and fills in their name and signs the offer, property sold! No more of this “but that price isn’t the real price” nonsense.

    1. Condodweller

      at 12:38 pm

      This may seem like a good idea but it’s a bit too contrived. Something as simple as forcing the seller to set the highest received offer price that was not accepted on offer night to be the new list price would be easy enough to follow. But I don’t see that happening either as people will complain that they should be able to advertise as they see fit. I do agree that something needs to be done to eliminate the crazy games.

      1. Bryan

        at 12:56 pm

        How is it contrived?… perhaps a better question is: how is it any more contrived than the current way real estate is sold? To me, it seems far more contrived to get the buyer to “offer” as, implicitly, the seller making the first offer is how every single other item is sold in our society. Nowhere else can a seller legally refuse a buyer offering to pay an advertised price (outside of multiple offers).

        It is the same set of forms, just with the seller name signed first instead of the buyer’s, and a couple extra basic clauses that say “this deal isn’t binding unless there is only one offer on offer night”. If there is no offer night, you don’t even need those clauses… The first person to sign the deal gets the home…. just like we sell everything else.

  6. Ace Goodheart

    at 1:26 pm

    The way houses are currently sold in Ontario is similar to a used car dealer posting a price on the windshield, and then when she gets a buyer interested, telling them that this is not the actual price she is willing to sell the car for.

    When asked, what price would she be willing to sell the car for, the response would be “I can’t tell you that, try your highest offer and see”.

    When you do that, and she still won’t sell you the car, she can then tell you that she is “waiting for more offers to see what the market will give her”.

    In the end, a car is listed for sale, which is not really for sale. At some point, the owner might decide to sell it, but she does not have to, can list it for a price she has no intention of accepting, and can decline a willing buyer for no reason at all, even if they offer a higher price and theirs is the highest price being offered.

    You could not get away with selling anything else this way. The government would shut down your business.

    It is amazing that it is still allowed in real estate.

  7. R

    at 10:59 am

    “When the market is tepid and temperamental as it is now, the public simply won’t accept these games being played.”

    I think you confuse “public” with *realtors* maybe.

    The public never accepts these games.

    Organized RE just is happy to pass it off as “don’t hate the player, hate the game” when it works to their advantage in a hot market.

  8. JL

    at 11:37 am

    I think this post has revealed an underlying theme that permeates a lot of discussions on this board. David rightly and routinely points out problems he encounters within the RE industry (but with criticism usually constrained by and accepting of the existing framework – e.g. “under pricing is ‘how things work’ in RE, but bad agents mess it up”), whereas those less involved in the industry typically go much further in pointing out that the failings within the system are often caused by the system itself (e.g. “making under pricing work more smoothly by having all agents on the same page does not make under pricing a good or desirable practice”).

    No right or wrong here, it’s a case of practical reality and easy wins versus ideal solution and long term reform, but I found it interesting how this recent posting brought it all out so clearly.

    1. Condodweller

      at 12:46 pm

      Yes, this whole framework is so difficult to nail down with rules. Agents are given some rules, some guidelines, sprinkled with ethics yet they keep pushing past the boundaries. What we need as a first step is strict enforcement of the rules, regardless of how inadequate they are, with meaningful punishment. A $1000 fine even if enforced doesn’t mean anything if a bad agent gains $10,000. The fine then just becomes the cost of doing business.

  9. Appraiser

    at 4:00 pm

    According to Statistics Canada latest report, the number of people on Employment Insurance Benefits rose by 20,00 across Canada last month. 3,000 of those claims were from Windsor Ontario due to semiconductor chip shortages. https://www150.statcan.gc.ca/n1/daily-quotidien/220922/dq220922a-eng.htm

    Tell me again how raising interest rates solves this issue?

    1. Derek

      at 4:36 pm

      Who is claiming raising interest rates solves that issue?

      1. Appraiser

        at 6:54 pm

        The issue is inflation. Inflation due to lack of supply.

        1. Derek

          at 8:32 pm

          C’mon man. That’s not the main factor.

    2. Average Joe

      at 6:32 am

      They are not losing their jobs because of interest rates, they are losing them because there’s no parts and no production and no sales. If there’s no parts and no products then there’s no need for people to borrow money to buy things that aren’t available, which drives inflation. Supply and demand.

Pick5 is a weekly series comparing and analyzing five residential properties based on price, style, location, and neighbourhood.

Search Posts