Realtors. We do it to ourselves, don’t we? We feed the fire that is the reputation of being just slightly above that of used car salespeople.
I say this because I’ve witnessed it for the past 19 years of being in this industry.
True, it is a sales and commission-driven industry. You don’t sell, you don’t eat.
Where I’ve separated myself from the douchebag agents that will do anything for a sale, like knowing not telling their buyers about an issue with the home, or cutting out other buyers from buying a house they have listed to double-end it before offer night, I’ve taken a pure service approach to my business.
If I provide good honest service, I will get sales, I will get paid, but more importantly, I’ll be able to sleep at night knowing I didn’t fuck anyone over.
This morning, I got an email from an agent that I actually like and respect, saying that there was a condo for sale in Scarborough where he was told “under good authority” that the sellers are in some financial trouble and need to sell.
Let me explain under good authority; the agent was either told by the listing agent that their sellers are desperate to sell, or another agent was told by the listing agent about the seller’s situation and is now letting other agents know.
In either situation, the listing agent has broken rules under the real estate code of ethics.
I can’t tell you the exact location of the condo, because there are rules and regulations in place that keep me from just telling you.
I can be fined for bringing undue harm, disparaging a competitor’s listing, and unauthorized advertising, among others.
It’s a 2 bedroom, 2 washroom unit in Scarborough. It has stainless steel fridge and stove, a white dishwasher, and an underground parking spot, listed at $639,000.
The kitchen cabinets and granite counters are dated, and so are the washrooms. It shows decent enough, nothing jaw-dropping. No wow factor.
In the past 6 months, there has been one comparable sale in the building. The comparable was on the same level, it had 2 bedrooms, 2 washrooms, and a parking spot. Listed at $680,000, it sold for $620,000 in October. I’d argue the sold unit showed better even though it didn’t have granite counters in the kitchen.
Doing the same search of other buildings in the area, I found 2 other comparable sold units that sold in January this year. One sold for $580,000 and the other for $572,000.
So why is our subject condo listed for $20,000 more than the last sold condo in the building? Prices for condos in Toronto are going up, but this is Scarborough, and not in a demand area or a demand building in Scarborough either.
Once I looked into the sales history of the unit, I found out why the sellers have chosen that price; it was bought for $590,000 in June of 2021. Prices and demand were high everywhere at that time.
Not so much anymore.
Factor in commissions and land transfer tax, and the sellers are headed for a loss. No one likes to lose money, especially tens of thousands.
To make things harder for the sellers, there are 2 townhouses, that are bigger, for sale in the immediate neighbourhood, and priced lower. In fact, this condo is the highest priced 2 bedroom, 2 washrooms in the area.
Looking at the asking prices of available listings and the prices of the comparably sold condos, this condo should be listed at $599,900 tops.
Listing high in hopes of attracting higher bids was a tactic done in the late nineties. It doesn’t work anymore. Buyers have access to more data now and some buyers even know prices better than a lot of agents.
Thinking you’ll pull the wool over the eyes of buyers is douche-thinking and poor advice.
Even if they are lucky enough to find a buyer willing to pay close to what they are asking, lenders will have it appraised by an appraiser. Appraisers have access to the same data as me and it won’t take them long to surmise it’s not worth that price and the buyers will not get their mortgage funded.
To top all of this off, the sellers have an agent who has let it be known that the sellers are in financial trouble and need to sell.
What buyer and their agent in their right mind are not going to take advantage of this scenario and negotiate in a take-it-or-lose-it situation?
Because that’s what’s going to happen here, the bank will eventually foreclose and the sellers will lose more than if they listed at what their condo is actually worth.