I’ve been doing this a very long time and the one thing that I’ve learned, actually decades ago, is to keep all emotion out of the deal.
As Realtors it is an absolute must!
It is difficult for buyers and/or sellers to do this as they are emotionally attached to properties and to the money that is involved so the burden on Realtors is to navigate these choppy waters for their clients.
We’ve been looking at buying a home in Oakville for quite some time now and my “better half” (decidedly so) analyzes every, which constantly leads her to become emotionally attached to properties that we look at, even before we move to the offer stage of negotiation.
I, on the other hand, refuse to get emotionally involved with any property even once we hit the offer stage.
But, knowing how emotionally involved people get when considering hundreds of thousands of dollars, it is absolutely paramount that Realtors keep all sideline emotional issues out of the negotiations.
That is easier said than done, as we are in a straight commission business thus our incomes teeter on every negotiation. But that’s what the definition of “Professional” is all about!
I have a up-to-the-moment factual case study that shows this.
I’ve been trying to buy a property recently mostly for investment purposes. I say “mostly” because I already own a magnificent condo townhouse right in the heart of the Financial District.
It’s a one-of-a-kind residence because I was asked by the developer about what he should do with what was originally the “staging area” for the construction of the two high rise components of the development.
So, in essence I designed them, or at least gave the critical factors required to optimize their outcome of the project while delivering “quality” homes for a select few people.
My condition for helping them was that I get the exclusive right to sell them and committing to buy one myself, sight unseen!
They agree although tried back-dooring me by selling a few privately only to have me catch them and give them my usual “I’ll make you famous” line.
Knowing that my site generated over 40,000 “Hits per day“, they understood that “when I whisper I’m heard around the world“!
I usual talk only with owners or C.E.O.s because, fundamentally I don’t trust many developers based on real life experience. There are a couple good ones in town and I continue to put clients into only their buildings. Obviously I don’t publish a list identifying which developers or which buildings because I’m about the only true learning source for knowledge on Toronto area condos and in so doing, I “feed my competition“.
If you, or someone you know is considering buying a Toronto condo, believe me the best thing that you can do is contact me. Do not “register anywhere or with anyone or sign anything”. Simply contact me and rest assured that you will find what you are looking for in one of the City’s few “quality” condo buildings.
They backed down from their frivolous threats of suing me for Slander and said they’d give me seven of them for one week. In this business, where you work with snakes every day, snakes that bite many times without reason, I’m fortunately known as “the king cobra“, and yes I can be quite a nuance especially if someone is trying to pull something over on my buyer/investor clients!
You see, that’s what “Buyer Agency” is all about.
When you get a real estate license you agree to live by the rules and regulations of this highly regulated industry. You enter into what is called a “fiduciary” relationship with each “client” that you contract to work with.
And the single most prominent “fiduciary” obligation is to “protect the best interests of your clients”!
I introduced Buyer Agency to Toronto with the Toronto Real Estate Board introducing the requirement that all Realtors have all parties to a contract sign a written acknowledgement that they understood the concept of “Agency” and that they were either being represented by a Buyer’s Agent or Seller’s Agent (or someone trying to be both at the same time – “Dual Agency” – not advisable).
Real estate is an emotional thing for Realtors and for consumers interested in buying or selling. A professional Realtor removes any/all potential for emotion to creep into a negotiation.
As I was saying, I have been looking for a property to invest in, either a triplex or high end home satisfactory for us to move into and enjoy the outrageous rental income potential of our luxury three bedroom (all with ensuite baths) plus den plus top floor family room overlooking a park.
So, we found an upscale townhouse in Oakville, an upscale residential community about a half hour out of the City along the Lake.
It was priced a little high, based on “comps” (historic sales on mls) so, as expected we submitted an offer based on their “comps” minus the cost required to bring up their townhouse to the standard of their comps. This really is who you identify “true market value” in real estate.
“The price a genuine Seller has accept, recently, and the price a genuine Buyer was willing to pay and they have agreed on, equals a true comparison, from which you deduct any/all shortcomings in the “subject property”.
Price should never be an arbitrary thing! That’s one of the key reasons why you would pay a Realtor 5% or more to sell your property for you. You want to know, and must know the “true market value” to set a fair and reasonable price. Otherwise you are voluntarily living in the “wild west” where it’s “everyone for themselves”!
It is “emotion” that a Seller is dealing with when trying to sell their home, as it is emotion that a buyer is dealing with.
These are two volatile parties dealing honestly with feelings about the property that may not be objectively appreciable.
That’s why Realtors exist or “should” exist!
A professional Realtor removes all of that emotion by communicating with his/her client, the importance of “controlling that emotion”.
When you have two professional Realtors each representing one party to a transaction, there should be no emotion whatsoever.
Unfortunately, in today’s “case study“, I submitted our Offer last evening only to hear back from the seller’s agent that “the Seller was quite disappointed in the Offer and that they were sending us a message by signing it back at Asking although they had considered not signing it back at all“.
Now, this is an “emotional” response and quite frankly, a disappointing one. Emotional because obviously the Seller did not understand the “comps” that their agent had provided us with, which clearly showed their house, the “subject property” in the comparisons to be inferior to the upgraded finishes in both comparable property.
When you are looking at around a million dollars, receiving an offer with only the hard costs to bring the subject property up to par with the comps that they supplied us, seems a little immature to me on a professional level.
I’m not slighting the Seller as it is an emotional thing to them and I fully respect that.
Had I been representing them I would have prepped them by having told them that after over two months of no offers in a hot market that they should have reduced the price already.
I saw a similar townhouse immediately next door recently sell for more in 4 days! I know because I wanted to see it and it sold before I got the chance.
Without emotion involved, the math speaks abundantly clear for itself!
In my professional opinion, the emotion should have been cut off by the Seller’s agent and never having been passed on to the Buyer or their agent (in this case I’m one and the same).
As a buyer, I never get emotionally involved with any property. I know many people seem to think that I have some kind of dysfunction but I simply do not get emotionally involved.
That’s what has made me such a great Realtor! I don’t get emotional even when I’m forced to deal with incompetence, unethical conduct, attacked by people including litigators.
It is obvious what has happened here. Two properties have sold after being impressively upgraded and restored (these luxury townhouses are 30 years old!) and this seller misinterpreted the concept that suggested their townhouse was worth the same amount.
Many times the agent may be overcompensating to get along with their client, but especially in this business, the truth is all that matters. If your client has a misunderstanding about the value of their property then I feel that they should be educated on how pricing is calculated.
This simple math, with emotion removed, would convince the most strident negotiator that the true market price is the number that comes out after doing the simple math (subject property + needed upgrades = true market value).
I’ve chosen to simply walk away as I don’t let stress into my game at any level.
I’ve found an excellent tenanted triplex that I’ll pursue, after all, I’m just trying to make an investment.