What time is it?
I dunno. Have a look at your watch.
Oh, I see. It’s time to ruffle some feathers.
We’re one week into the fall market and I’m already frustrated.
I’m not frustrated with my team. I’m not frustrated with my clients. I’m not frustrated with the market; be it sales, inventory, or prices.
I’m frustrated with agents.
More specifically, I’m frustrated with agents who:
1) Have no clue what they’re doing
2) Have amnesia.
3) Have no common sense.
Earlier this week, I submitted an offer on an entry-level home that was extremely under-priced. This was a strategy, of course, and the strategy worked – thanks to the market, as there ended up being eleven offers on the house.
The listing agent called me and told me I was “in the top five offers,” and I said, “Yeah, no kidding I’m in the top five. The other six are probably all dummy offers.”
He “invited” me to improve our offer, as agents always do. And my buyer did, since he anticipated this situation and since the process was playing out exactly as expected.
But the next phone call with the listing agent was unexpected.
Amazingly, the listing agent said, “None of these offers are acceptable to my client.”
Le Sigh.
I already knew where this was going.
“None of them?” I asked. “Not one of the eleven?”
“No, unfortunately not. They are……..not even close to my clients’ expectations.”
During that pause you see there – the one after he said “They are,” I could feel him thinking. He didn’t pause to choose his words, but rather he paused to consider just how ridiculous his clients were being. His voice slowed and got quieter as he finished the sentence; as he heard himself saying the words aloud.
I could feel his defeat on the phone.
He wasn’t steering this ship; his client was.
And with eleven offers on a house in the September market, with all the uncertainty in the housing market, this agent was just as surprised as I was that those eleven offers wouldn’t result in a signature on the Agreement of Purchase & Sale.
The property is still on MLS, still at the same list price, still with the original offer date in the brokerage remarks. I assume that they’ll deliberately wait 7-10 days to update the listing with a new price, strategy, or offer process, in hopes that interested agents will call.
So now you may ask the question: why am I bothered by this?
I’m not bothered because my client didn’t purchase the home.
I’m not bothered because of the “games” agents are playing.
I’m bothered because it’s as though the agent pool didn’t learn anything from the respective markets in the fall of 2023 and the late-spring of 2024.
Do we have amnesia?
Do agents have any ideas other than under-pricing and setting an offer date?
Don’t get me wrong, the market is moving. We saw twenty offers on a home on Sparkhall Avenue this week.
However, not every segment is moving, and agents can’t treat all segments the same.
Why in the world is a 1-bed, 1-bath condo at 219 Fort York Boulevard listed low with an “offer date?” I can’t fathom.
I spoke to a colleague of mine yesterday about all the freehold “offer nights” that have taken place this week, as she’s a crazy person who seemingly tracks every offer that’s registered in the city of Toronto. Early returns show that the market is better than it was in the late-spring, and significantly better than the Fall, 2023 market, which was really rough. However, we are still seeing agents putting the same loser “strategies” into practice, and it makes me think that the agent pool is incapable of learning.
My team and I have sixteen listings coming to market in September.
Ask me how many of these listings have an “offer date;” go on, just ask.
How about…….one?
It’s a bungalow in Leaside. It’s land value. It’s a builder’s lot. While there is still no guarantee that the “list low, hold back offer” strategy is going to work, it’s the only property that I would consider listing with this pricing strategy.
As for my other listings…
$3.2 Million in Yorkville?
$2.4 Million in Birchcliff?
$2.1 Million in King West?
Obviously, those aren’t the “list low, hold back” type.
But what about:
$550,000 in Liberty Village?
$699,900 in the Merchandise Lofts?
$699,900 by the Waterfront?
Once upon a time, sure, maybe we’d be pricing these for “competition.”
But in today’s market, seriously folks – read the room.
I see agents pricing these units as though we’re in a red-hot condo-market, and what’s worse is that they act like it.
Earlier this spring, I started to use two simple words when talking to agents that signified a shift in the market:
Work together.
It sounds cliche, right? Imagine the agent who lowballs the heck out of your listing and says, “I’d like to work together to get this deal done.”
No, not like that.
What I mean is that whether a property is under-priced with an offer date, whether a property is listed with offers any time, or whether a property has been on the market for 90 days, if I’m a buyer agent calling the listing agent, the first thing I say is, “Let’s work together on this.”
No bullshit.
Sure, we’ll negotiate. We’ll lie to each other. We’ll work for our clients.
But what I mean is this:
Let’s acknowledge the market that we’re in and not act like it’s February of 2022.
Consider this scenario…
A property is listed for $799,900. It sits on the market.
Then it’s re-listed for $749,900. And again, it sits.
There’s a third listing, this time, again, at $749,900, and it sits once more.
The property is then listed for $599,900, with an offer date, and I have a buyer who happens to have started his search at that time.
I call the listing agent and say, “My buyer is interested. I know you have an offer date. I know you were listed before. It’s a tough market out there, let’s work together on this. Surely there’s a Venn Diagram intersection, somewhere, with my buyer and your seller overlapping. What do you think? Where do you think we can land this?”
What do I not want to hear?
What’s the worst thing an agent can say?
“We have an offer date and we’ll see what all the offers look like, and we’ll make a decision then.”
Tell me, tell me, “David, you’ve written blogs before where you talk about not playing your hand, or where you complain about agents who don’t know how to price, or agents who don’t do their homework.”
Yes, I have. Many times. But those are completely different situations as those are completely different markets.
In the situation I’ve described above, where the listing agent has rearranged the deck chairs on the Titanic and has put a “plan” in motion that has a 0.00% success rate, I would hope, naively or otherwise, that this agent would extend the olive branch and see that the only way to get a deal done is to collaborate and cooperate; not to stymie and brush off.
Mark my words, folks: the agents who don’t know how to talk to other agents, and the agents who look at their watch, look at a calendar, lick their finger and stick it in the air – and still don’t know what day, week, month, or year it is, are going to have a miserable time in this fall market.
This week, a client of mine emailed me an article that ran on Tuesday in the Toronto Star:
Oh boy.
Here we go…
Why the Toronto Star decided to give free advertising to a property, an agent, and a strategy that is destined for failure, I don’t know.
But my client asked me, “Have you ever written about this on your blog before?”
So I went through the archives.
May 5th, 2010: “Listing Price: $1.00”
May 7th, 2010: “Listing Price: $1.00 (Cont’d)
August 26th, 2011: “One Dollar!”
May 26th, 2016: “One Dollar Bob!”
May 25th, 2021: “Does Listing For $1.00 Actually Work?”
Geez. I’ve been doing this a long, long time…
In any event, the $1.00 listing is nothing new. We have discussed this many times over the years, but I don’t know if I’ve ever seen a “front page” newspaper article glorifying the strategy.
The Toronto Star article, which you can read HERE, is more about the photos and layout of the condo, aka “real estate porn,” than it is a piece about strategic pricing.
But it seems to give a podium to the inmates who are running the asylum.
From the article:
Why is it priced this way?
The property was relisted to one dollar recently, in an attempt to garner interest from buyers.
“It’s an unusual thing,” Raisinghani said. “Obviously, this is not getting sold for one dollar, but it’s a free thing that anybody can walk in and say, ‘Okay, this is the price I want to pay for the property.’ If their number is reasonable and their number is the best, we just give it to them. Simple.”
The condo was previously listed at $499,999, which Raisinghani says is under market value for a condo in the community similar to its nature by around $200,000 to $400,000.
He added that the sellers are motivated to sell the house, which is why it was listed at its original price.
I dunno, George.
I seem to be lost on this.
The $1 listing is going to “garner interest from buyers.”
Really? Why?
What type of buyers?
In my humble opinion, a condo that’s listed for $1 after sitting on the market for a short eternity is immediately stigmatized.
What does it say when you take a condo worth, apparently, $800,000, and list it for $1?
Who feels good about the optics, the process, and the purchase itself?
“Obviously, this is not getting sold for one dollar.” Good. I needed that clarification, as did much of the buyer pool, it would seem.
“If their number is reasonable and their number is the best, we just give it to them. Simple.”
Ah, right!
But it’s not that simple, because there are two flies in the ointment:
1) Who defines “reasonable” in this case?
2) There’s no guarantee that “best” wins out.
After all, the listing history for the property tells a story:
This property has been listed for sale for almost one full year.
This property has been listed with “offer dates” three times before.
Not only that, two of the offer dates were when the property was listed for a paltry $499,000.
So my question is this: when the property was listed at $499,000, did the “best” offer win? Was the property “given to them?” Was it that “simple?”
And what “reasonable offers” were presented at that time?
How reasonable?
And who determined the level of reasonability?
Look, I think we all know what’s happened here.
The seller wants more than the property is worth and will not accept market value.
That’s obvious, right? That’s the only logical conclusion to draw when a property has been listed for sale for a year?
For the record, I’m not working with buyers in that geographic location and/or for that property type, and I have no vested interest in the outcome.
I suppose I’m just disappointed by the lack of imagination on behalf of my fellow listing agents.
“But David, isn’t listing at $1 a different, unique strategy? One that uses imagination?”
No.
It’s not.
It’s a “strategy,” and yes, I put that in quotations to underscore my cynicism, that has always been used out of desperation.
I personally believe that listing a property for $1 cheapens the offering, stigmatizes the property, and only lowers the leverage and eventual sale price that the owner will receive down the line after this strategy fails to work.
As for the rest of the market, time will tell.
We are very early into this fall season and the results are mixed.
How about that $8,000,000 house on Heath Street that sold for full list price after only one day on the market? Shall we label this an outlier, or shall we use it to paint the entire market with the same brush?
I remain convinced that good properties, that are well marketed, and well-represented, will sell.
But the “same old, same old” isn’t going to fly this fall.
Agents misreading the market, overvaluing properties, overplaying hands, not cooperating with other agents, and who take orders from their delusional sellers are going to be responsible for a lot of re-listings and terminations over the next three months.
Will any of them list for $1.00?
