\n<\/p>\n
I really wanted to post a follow-up to Monday\u2019s blog today.<\/p>\n
It seemed logical to follow Monday\u2019s stats blog with yet another stats blog, not to mention, one that\u2019s\u00a0related<\/em> to Monday\u2019s topic.<\/p>\n At the conclusion of Monday\u2019s blog, I said the following:<\/p>\n A colleague of mine suggested that the only reason why the GTA average home price wasn\u2019t lower is because the condominium market is so weak, condo sales are scarce, and thus the average home price is being \u201cpropped up\u201d by the fact that there are proportionally fewer condo sales than usual.<\/p>\n<\/blockquote>\n So is\u00a0that<\/em> what we\u2019re going to discuss today?<\/p>\n No.<\/p>\n Back-to-back stats blogs are a no-no here on TRB, as mandated by random, forgettable readers, in an indeterminate year, at some point in the past.<\/p>\n Alas, you will have to wait until Monday, but I promise it\u2019ll be worth the wait!<\/p>\n Today, I want to talk about how deals are routinely being \u201clost\u201d in 2025.<\/p>\n This is to suggest that the four parties to a transaction \u2013 buyer, seller, buyer-agent, and seller-agent, are individually or collectively ill-equipped to adjust to the current market conditions, and thus their actions are serving as roadblocks to successful transactions.<\/p>\n A \u201clost\u201d deal could have two results:<\/p>\n 1) The would-be buyer purchases a\u00a0different\u00a0<\/em>property. In the first case, there\u2019s no sale \u201clost\u201d as far as the market goes, and thus it doesn\u2019t explain why sales are at an all-time low.<\/p>\n In the second case, a buyer who\u00a0would<\/em> buy but\u00a0doesn\u2019t\u00a0<\/em>buy helps to put a face and a reason to the low sales figures.<\/p>\n I suppose the opposite could be true; there could be a seller who sells to somebody\u00a0else<\/em>, but in my experience, that\u2019s not happening.\u00a0 In my experience, when that seller doesn\u2019t sell to\u00a0one<\/em> person, for whatever reason, it\u2019s unlikely that a\u00a0second<\/em> person comes along and is able to fill in the gaps and get the deal done.<\/p>\n As I said, there are\u00a0four<\/em> parties to the transaction that could, individually or collectively, stand in the way of a deal.\u00a0 Today\u2019s story is about how\u00a0listing agents<\/em> can get in their own way\u2026<\/p>\n Two weeks ago, I visited an east-side starter home with my buyer clients and the buyers really liked the home!<\/p>\n While there is a lot for sale in this price point on the east side, that\u2019s not to say that all properties are created equal.<\/p>\n Every buyer has a different set of evaluation criteria for a home, different needs, and different wants.\u00a0 This particular home had an owned parking space, which was an absolute must-have for my buyers, it provided the backyard space that they coveted, and it hit the marks for square footage, bedrooms, and bathrooms.<\/p>\n How many other<\/em> buyers would put this particular home atop their list?\u00a0 Well, that\u2019s what we were about to find out!<\/p>\n As with every other freehold in the city, this house was listed for sale at a price that was below fair market value, and an \u201coffer date\u201d was set.<\/p>\n Once upon a time, this was a can\u2019t-miss strategy in our market, but as we all know, much has changed since then.<\/p>\n The house was listed for sale for $999,000, along with many others like it on the east side, and my clients and I figured the true \u201cvalue\u201d of the home was around $1,250,000.<\/p>\n On the day of offers, my buyers went to the bank and secured a certified cheque to accompany their offer (which fewer and fewer buyers are doing in this market), and we registered our offer around 10:00am.<\/p>\n Then we waited.<\/p>\n We waited to receive an email that read, \u201cSECOND (2) OFFER REGISTERED,\u201d which could then be followed by a subsequent email that read, \u201cTHIRD (3) OFFER REGISTERED,\u201d but those emails never came.<\/p>\n At 6:00pm, we had the only registered offer on the property.<\/p>\n I called the listing agent to confirm that we had the only offer and he sighed and said, \u201cYep, it looks like it.\u201d<\/p>\n This is where things get really, really difficult in our market and where deals are both made and lost.\u00a0 Buyers, sellers, buyer agents, and listing agents all play a role in whether a deal is made or not, and I\u2019m inclined to say that the personalities<\/em> and emotions<\/em> of those four parties have a massive influence on what happens next.<\/p>\n We submitted an offer of $1,100,000 on the property.<\/p>\n<\/blockquote>\n Here\u2019s where many people would agree with us but just as many would disagree.<\/p>\n \u201cWhy would you bid against yourselves<\/em>?\u201d some people might ask.\u00a0 \u201cThe property is listed for $999,900 and you\u2019ve bid $1,100,000 \u2013 there\u2019s no reason for that!\u201d they might argue.<\/p>\n But the point is: we know the seller is not going to accept $999,000 for their house that\u2019s worth somewhere around $1,250,000, give or take.\u00a0 Truth be told, we also<\/em> know that the seller isn\u2019t going to accept our offer of $1,100,000, so it\u2019s all the more reason not<\/em> to offer the list price and frustrate the seller, thereby creating an obstacle to getting a deal done.<\/p>\n Right before I emailed my offer, I called the listing agent one more time to ask, rather rhetorically, to confirm that we were the only<\/em> offer on the table, which he did.\u00a0 I needed him to understand that we were the only buyer in the city for his listing, but without pointing this out to him directly, and risking bringing his<\/em> emotions into the mix.<\/p>\n Our objective was to see what type of sign-back the seller would provide after receiving our offer of $1,100,000.<\/p>\n We figured the value was around $1,250,000, but would the seller sign back lower<\/em>?\u00a0 Maybe they didn\u2019t value the house the way we did, or maybe they were anxious and wanted to get the property sold.\u00a0 Would the seller sign back higher<\/em>?\u00a0 Maybe they valued the house at a much loftier figure, or maybe they were greedy, and\/or out of touch.<\/p>\n What do\u00a0you\u00a0<\/em>think they did?<\/p>\n Did they sign back at $1,250,000?<\/p>\n Higher?<\/p>\n Lower?<\/p>\n Pick any one of the three options, and you would be wrong.<\/p>\n Why?<\/p>\n Because the seller refused to sign the offer back at all!<\/p>\n<\/blockquote>\n The listing agent called and asked me, \u201cCan your buyers come up in price?\u201d<\/p>\n This is very common, and not in any way out of line.<\/p>\n Of course my buyers could come up in price.\u00a0 We had discussed it in advance and our offer of $1,100,000 was\u00a0strategic<\/em> in nature, and didn\u2019t represent a max price or a final offer.<\/p>\n I told the listing agent, \u201cThis isn\u2019t their final number for the home,\u201d and he rather excitedly said, \u201cGreat, so go get that on paper, and we\u2019ll discuss.\u201d<\/p>\n This is where things went off the rails.<\/p>\n Once upon a time, his response was not only valid but expected.\u00a0 That time, however, was when he had\u00a0nine<\/em> offers in hand, not\u00a0one.<\/em><\/p>\n I told the listing agent, \u201cWell, we\u2019re not going to get a higher offer on paper,\u201d and explained that we had submitted an offer, the seller had received it, presumably reviewed it, and that we were now waiting on the seller to counter.<\/p>\n The listing agent said, \u201cNo, but, well, um, this is our offer night.\u00a0 So you<\/em> need to come to us<\/em>.\u201d<\/p>\n I told him, \u201cWe already did.\u201d<\/p>\n The problem here was that this listing agent was acting like his big offer date had paid off and he had multiple offers, so he\u00a0could tell \u201call\u201d the bidders that they needed to improve their respective offers \u2013 like this was 2022, 2023, or even 2024.<\/p>\n But it\u2019s 2025.\u00a0 And he had one<\/em> offer.<\/p>\n Amazingly, he proceeded to explain to me how an offer night worked!<\/p>\n \u201cWe have set an offer date, and we\u2019re going to review offers,\u201d he told me.\u00a0 \u201cWe\u2019re not interested in working with your offer of $1,100,000, so you can resubmit another offer if you\u2019d like.\u201d<\/p>\n I asked him, \u201cWhy wouldn\u2019t you sign our offer back<\/em>?\u201d<\/p>\n He paused and I could feel him thinking through the phone.\u00a0 He tried to speak, but caught himself, then sighed.<\/p>\n After another beat, he offered me the explanation that I knew was coming.<\/p>\n \u201cYou don\u2019t sign an offer back<\/em> on your offer night.\u00a0 We\u2019re in a position of leverage here, not you.\u201d<\/p>\n Huh.<\/p>\n Is that a fact?<\/p>\n Well, unfortunately for this agent and so many like him, the market is the market, and they\u2019re all going to need a crash course in \u201cHow To Sell Real Estate In 2025.\u201d<\/p>\n Throughout the city of Toronto, listing agents are showing their inexperience as they attempt to do business as though it were three years ago, and it\u2019s simply not working.\u00a0 These agents lack the ability to work with<\/em> other agents and not against <\/em>them.\u00a0 They lack a set of critical skills, notably communication and understanding.<\/p>\n But there\u2019s one more important factor here that\u2019s playing as large a role as any in our market: fear<\/em>.<\/p>\n The listing agent was afraid to advise his clients to sign our offer back for a multitude of reasons.<\/p>\n For starters, he\u2019d never done it before!\u00a0 Because he\u2019s never worked in this market!\u00a0 It was simply, \u201cFear of the unknown,\u201d and when some people don\u2019t know what to do, they don\u2019t do anything at all.\u00a0 They just freeze.\u00a0 But this agent was also worried about signing back too high, too low, or really, signing back at all<\/em>.\u00a0 He didn\u2019t know what move to make so he said, \u201cYou<\/em> make the move, I\u2019m not doing it!\u201d<\/p>\n For years, listing agents were absolutely spoiled.\u00a0 They could simply set an offer date and have buyer agents line up outside their doors, and we\u2019d never know if they did a good job or not, since the property would sell, and we couldn\u2019t determine if another agent would have sold for more or less.<\/p>\n But in today\u2019s market, negotiating, communicating, strategizing, and cooperating are paramount to getting any property sold.<\/p>\n \u201cNever let a deal die.\u201d<\/p>\n There\u2019s a classic real estate saying, and while there are exceptions to the rule, it typically holds true.<\/p>\n \u201cI\u2019m not going to let this deal die on my <\/em>operating table,\u201d a similar saying among agents goes, as every agent knows that a buyer or seller can\u2019t accept an offer that isn\u2019t<\/em> in front of them.<\/p>\n \u201cHow am I supposed to advise my clients to sign what they don\u2019t have?\u201d you could also ask.<\/p>\n Returning to our story where we left off, I asked the listing agent, \u201cCan you explain this concept of \u2018leverage\u2019 as you see it?\u201d\u00a0 I wasn\u2019t being snide, but rather I wanted to get him talking about the position he felt he was in.<\/p>\n \u201cWe have under-priced this house,\u201d he explained.\u00a0 \u201cWe\u2019re not going to sign the offer back because we don\u2019t need to show our true hand,\u201d he naively continued.\u00a0 \u201cThat\u2019s not how offer nights work.\u00a0 The buyers submit offers, the sellers review and consider them.\u201d<\/p>\n I let him say his piece, and then I pointed out, \u201cYou said offer(s), plural.\u00a0 But you don\u2019t have offers.\u00a0 You have an<\/em> offer.\u00a0 You have us.\u00a0 You have paperwork in front of you with a price on it.\u00a0 If you don\u2019t like the price, then change it, initial it, send it back to me, and I will present it to my clients, review, evaluate, and report back.\u201d<\/p>\n Then I added a critical piece: \u201cBut you<\/em> have to act, because that offer is not going to change itself.\u201d<\/p>\n Without so much as consulting with his clients, he aggressively shouted, \u201cLooks like we\u2019re done for the night\u201d and hung up.<\/p>\n And that was it.<\/p>\n That<\/em> is an example of what\u2019s happening every night in this city, and it\u2019s why so few transactions are being done.<\/p>\n The listing agent called me the next afternoon and asked, \u201cAre your people still interested in the house?\u201d\u00a0 I said, \u201cYeah, probably,\u201d since nothing had really changed in eighteen hours.<\/p>\n Shockingly, instead of providing us with a counter-offer, a verbal price, or any<\/em> indication that they wanted to engage, he reminded me, \u201cWell, our house is still for sale, so feel free to resubmit an offer.\u201d<\/p>\n He hadn\u2019t learned anything.<\/p>\n I consulted with my clients and they declined.\u00a0 Not necessarily because they didn\u2019t like the agent, the process, or had lost interest in the house, but because\u00a0by that evening, they had already seen two new listings on MLS that piqued their interest, which is a risk that every seller runs in this market.<\/p>\n They were<\/em> still interested in the first house, don\u2019t get me wrong.\u00a0 But they wanted to play the field!<\/p>\n We went out that night and saw the two houses, one of which was fantastic.\u00a0 The listing agent for that<\/em> property called me the next morning and said, \u201cWe do<\/em> have an offer date, but seriously, that\u2019s just for show.\u00a0 You know this.\u00a0 Bring me an offer, let\u2019s work together, let\u2019s get a deal done, David!\u201d<\/p>\n What a novel idea!<\/p>\n So after mulling their options that evening, my clients called me the following morning and said, \u201cWe\u2019re in.\u201d<\/p>\n They went to the bank and secured a certified deposit cheque, sent an offer over to the listing agent \u2013 technically a \u201cbully offer,\u201d but call it what it is in this market, and the listing agent graciously thanked me for my offer and our efforts.<\/p>\n She said, \u201cGood luck to us all!\u201d<\/p>\n I received a notification from BrokerBay: \u201cPRE-EMPTIVE OFFER REGISTERED,\u201d and I knew we were in business.\u00a0 A good listing agent doesn\u2019t email buyer agents and say that an offer is registered unless that agent intends\u00a0to\u00a0accept<\/em> the offer.<\/p>\n Two hours later, the listing agent called me and said that the sellers were going to accept the offer.<\/p>\n In my opinion, we got the house for slightly less than we thought it would have, could have, should have sold for, but you never know.<\/p>\n The listing agent was an absolute pleasure to work with; professional, accommodating, and understanding in every way.\u00a0 She\u00a0made<\/em> that deal happen for her sellers.<\/p>\n Three days later, the agent from the previous property called me.\u00a0 His listing was still<\/em> on MLS at the pre-offer-date price of $999,900, even though the offer date was well passed.\u00a0 He said, \u201cWe\u2019re thinking of re-listing, but wanted to see first if you\u2019re people were interested in coming back.\u201d<\/p>\n I asked him, \u201cWhat are you going to re-list at?\u201d<\/p>\n He said, \u201cWell, that\u2019s between me and the sellers.\u00a0 But before we do that, I wanted to see if you guys wanted to make a move.\u201d<\/p>\n It sort of felt like he was selling tickets to last year\u2019s Superbowl.<\/p>\n I followed up, \u201cCan you give me a range<\/em> in which you\u2019ll be re-listing?\u00a0 Like, some sort of indication?\u201d<\/p>\n Still feeling his \u201cleverage,\u201d he told me, \u201cYou should know what the range is.\u00a0 If you know the market, and you know what properties are worth, then I wouldn\u2019t have to tell you.\u201d<\/p>\n I thanked him for the call and told him to have a fantastic night.<\/p>\n If you\u2019re wondering why I didn\u2019t inform him that my buyer-clients purchased a different house three days ago, it\u2019s because I simply don\u2019t care to do so.\u00a0 The minute you feel the need to \u201cshow\u201d somebody, you\u2019re no better than they are.<\/p>\n That property remained on MLS at $999,900 for another week before they finally changed the price to $1,299,000.<\/p>\n It\u2019s still for sale, and it will be for some time.<\/p>\n With sales in the GTA at all-time lows, I have to think that lack of consumer confidence is a major factor, and it\u2019s one that\u2019s being talked about in real estate circles and the media.\u00a0 But the elephant in the room, which looms larger than you can imagine, is the inexperience of real estate agents and their seller clients which has put roadblock after roadblock in place.<\/p>\n There would be far more sales if market participants just learned how to put emotion aside, but more importantly, if they learned to adapt<\/em> to a market climate that has changed\u2026<\/p>\n\n
2) The would-be buyer does not purchase any property.<\/p>\n\n
\n