What Realtors Should Not Do While Representing A Client


This could be the shortest blog of my career!

This sounds like such an easy question but there are a few answers so I’m going to cover a couple aspects on the issue here today.

As usual, I am going to use a real life experience as theoretical interpretation frequently misses the mark all together or at least miss the essence of it.

What Realtors should never do is  .  .  .  .  “GET EMOTIONAL” or “ALLOW EMOTION TO GET INVOLVED WITH A NEGOTIATION“!

As most of you know already, I am first and foremost a real estate investor.

As a Buyer’s Agent I’ve put literally hundreds of international and local condo buyers into Toronto condos, lofts and/or townhouses over the past fifteen years (25 before that as a “Seller’s Agent”).

I am known as a tenancies fighter for my buyer agency clients and if you’ve read some of the more scathing blogs of mine over the years while publishing under simplycondos.com (I’ve switched to simplycharles.com as I deal with so many other topics these days) detailing unacceptable or unfair practices by certain developers while dealing with clients that I’ve represented.

I do this not for sport, but rather to try to level a very tilted playing field here in “Condo Land“.

I never get personal or emotional about any of these fights, even when they send their pit bull litigators with frivolous threats of litigation alleging “Slander“.  The best defence, by the way, to claims of slander is “the truth” (“Defamation” involves making untruthful statements either in writing which is called “Libel” or verbally “Slander”).

Lawyer costs to protect ones self are excessive but I’ve managed to fend off numerous frivolous law suits by defending myself while burdening the offending party with masses of paperwork in response to their Notice of Intent to Sue, which immediately runs their bill up beyond the minimal retainer that they are required to pay their pit bull.

Under law, you are allowed to represent yourself and in so doing I tilt the balance of power back into my favour as they have to pay to play and I don’t.  This is the exact game they are playing, thinking that if I have to hire a lawyer I will shut up.   Wrong!

That’s all good when dealing with pre-construction buying/investing, but when it comes to buying/investing into a resale (existing condo, loft or townhouse) it’s Realtor on Realtor interaction.

I was recently considering buying an older freehold townhouse in Oakville as an investment income unit, when this article presented itself.

The property was listing at a little below $900,000, but it needed a considerable amount of work to bring it up to the standard of the two units reflected in the comps.

The Seller’s Realtor had used comps (historic sales data) to come up with the price but had based their analysis on fully renovated and fixed up units whereas this unit was in much lesser condition.

My intentions were to offer $800,000 as I saw the home requiring a considerable amount of work (carpet removed from two levels of stairs and hardwood installed on the stairs and upper two floors, complete new kitchen, windows and roof, etc.).

Not wanting to inflame a seller (I’ve seen lots of emotional responses to my buyer’s perspective on “value” and the seller’s) we decided that we should up our offer a little with the expectation of coming in somewhere around $850,000 so we drew up the offer at $835,000 ($40,000 light anticipating “meeting in the middle”).

The agent immediately came back with a rather bazaar message from what she described as an “offended” seller, telling us that “they were not going to even sign back our offer but then had decided to ‘send us a message’ by signing it back an full asking“.

Now, I don’t know what outcome any agent could expect, especially this agent as one of the comps was her own unit and she fully understood how superior that unit was over the subject property.

I never hold Seller’s accountable for emotional outbreaks, as they are personally connected to the property and their perception of it isn’t always factual or objective.

The simple solution and the point I would like to make here is that, regardless of a Seller’s emotional response to an offer, the reason we realtors get paid the outrageous amount of commission that we receive, is supposed to be because we supply “professional services” meaning that we make sure that “emotion” plays no roll whatsoever in the sale of a property.

With Listing agents charging 5% – 6% this roughly $900,000 transaction was paying between $45,000 – $54,000 in commission.  Could anyone really think that the commission was just for listing on mls?

My point here is that those hefty commissions carry with them a responsibility to keep all matters on a professional level (something that could hardly be expected between a buyer and seller left on their own).

The seller’s response to my “light offer” was normal and expected by me.  Consumers don’t get that buying and selling real estate is a game where the best outcome is one in which “both parties come away feeling that they got a good deal“.

In my professional opinion, this agent would have been better advised to simply withhold describing how the seller reacted to our offer.

In introducing that the seller was “offended” by what a professional buyer’s agent (me in this instance) had calculated from using comps that the seller’s agent had used to support their axing price, the agent had introduced the number one thing that all agents should work to avoid  .  .  .  emotion!

It is always expected that the seller will not like the initial offer and the decided majority of successful listing agents will affirm that “you always include a little wiggle room for offers” (it’s really a part of the game).

This instance was a true case of an “over-priced listing“, and that’s alright because the seller’s agent is supposed to and obligated to under law, protect only the best interests of their client  . . . . “the seller“.

Now, with hundreds if not thousands of transactions that I’ve personally handled over the years, I’ve seen some pretty outrageous emotional attacks for some of my “low ball offers” but I never get offended or upset because it’s all part of the game (be sure to check out “The Condo Game” (a recent CBC Documentary) here on simplycharles.com to get a good understand of “the game“.

You can’t expect consumers to get that this is a “game” and that’s about the only justification for 5% – 6% commissions!

In my opinion, the passing on to the buyer through their agent (in this scenario I was both) such “emotional distress messages“, the only possible outcome of the negotiation is to end up at a dead end.

To further inflame a prospective buyer by telling them that the seller was “sending a message to them“, brought nothing constructive to the process and introduced about the only logical outcome that one could expect (the buyer becomes offended and walks away).

It is never good to offend someone who is trying to give you almost a million dollars!

So, as expected (even though they suggested that we submit a fresh offer) we decided to walk away from the deal without commenting as any retort would surely just inflame the situation further.

There never is a good outcome to fighting, especially in real estate sales.

The only people that logically can be expected to “keep the piece” in such matters are the realtors who are getting paid, what some say to be outrageously.

The solution to this scenario is quite simple.  Insure that both realtors involved in any transaction don’t get emotional or allow the emotions of their clients to spill over into the negotiations.

There is some stretched concept of failure to fulfill fiduciary (legal obligations to protect the best interests of their client) in passing on emotional comment, as that is what dissolved this deal!

Had the seller’s emotional outbursts not been passed on, we may have come back with a sweeter offer (not me as I don’t get emotional connected to any property, let alone one that I don’t own).

This is the stuff that real estate commission are supposed to come from.  Not simply putting a listing on mls!

If we as Realtors choose to get involved emotionally then my original question resurfaces:  “what are we getting paid for“?  Buyers and Sellers could throw around emotional insults all day long and never make a deal!

So, the punchline to this story is that we walked away after the initial offer and reply only to see the unit have a “price reduction” within a week (it is still unsold as I write this) and the agent didn’t even call the prospective buyer that had submitted an Offer just days before!

We had told them that the right price was $20,000 below asking (we showed them the quote from the flooring contractor which was actually $23,000 without counting in the replacement cost for the kitchen) which means that the buyer and seller were only $20,000 apart.

Dropping the price by $10,000 days later meant that, had they simply signed back out offer or accepted the verbal recommendation of $850,000, the unit would have been sold that day!

The agent had asked us to sign back the sign back but, trying to avoid further emotional outbreaks, I suggested having the seller simply sign back our offer at a “take it or leave it price“.

The seller, still obviously emotionally out of control, refused, and then the price reduction without even calling us (I still would not have gone back to the negotiating table as I just don’t get emotional connected to properties that I don’t own).

Today, unless someone comes along (“falls off a hay wagon”  I always say) and offers full asking price, the seller of this condo townhouse unit will end up with less than what we offered a couple weeks back!

With winter here and the seller having been looking for a “30 day closing” and having two and a half months go by since listing the unit, I have got to conclude that “emotion killed the best deal that they could anticipate receiving“.

Go figure!

I’m Charles


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