Blog

A long, long time ago I was at the Markham fair with my then-girlfriend. The Markham fair is exactly what it sounds like, a fair in the middle of a farm field, with tractor pulls and crash-up derbies.

The only food you’ll find is corn dogs, hot dogs, and overcooked burgers on stale buns.

The best part is walking through the midway and seeing real carnies at work running the games.

It’s amazing what games people will play to win a giant stuffed pink gorilla.

It’s equally amazing the lengths carnies will go to to get two bucks out of your pocket and into theirs.

I’ve always heard there is a sucker born every day and on this particular evening, I was the sucker.

While walking through the midway games area, there was a game where you through a ball at stacked cans. The rules were simple, knock all the cans off the table and win a prize.

My first mistake was making eye contact with the carny. My second was saying hello back. With his tractor beams hooked on, I was powerless against his game.

The first thing he did was ask me if I was man enough to get my girl a prize. I asked him how much the game cost. $10 for 5 balls.

Too expensive, I said.

I’ll give you 3 balls for $5.

Now I’m completely hooked and he knew it.

I asked him exactly how the game worked, and he said knock all the cans off the table and you get a prize.

My girlfriend could care less about a stupid stuffed animal, but this guy had challenged my manhood, and damn him if I would let that happen.

But because he challenged me, I wanted more. More balls for the price or more chances to win.

I told him I wanted 5 balls for $5.

Nope.

4 balls?

The best I can do is 2 balls for $2 and I’ll give you a prize no matter what.

Deal! I won – loser and a sucker I am.

On the first throw, I knocked all the cans off the table and I asked for my prize.

It was a tiny knock-off wish troll.

This guy was a pro, the old bait and switch was coming up. He pointed at another table and told me off I do it again, the troll and the massive pink gorilla were hers.

I’ll show this carny up!

I lined to the table with an iron grip on the ball ready to slay this beast and bring the princess her prized gorilla. She could’ve cared less for the stupid thing but I was going to win dammit!

I whip the ball at the cans. Several go flying off the table, one can spins, topples over, and dramatically rolls off the table. But one can stood firm, not even budging a millimetre.

The carny looked me dead in the eye and grinned like the pirate he was. It took a bit for me to realize I had just been scammed.

Humiliated in front of my girlfriend, I asked for the troll. Sorry pal, you lost.

But you said I would get a prize.

If you knocked all the cans off the table.

My death stare did nothing to change his decision. He had my $2. He was done with me and there was nothing I could do about it and he knew it.

I have never played another midway game ever again. Lesson learned.

Now let’s meet the realtor version of a carney.

This is an actual scenario that I recently went through with my client.

The majority of my time is spent looking through places and what they sell for. When a unit came up for sale in my client’s price range I knew it was underpriced and I figured it was to drum up multiple offers.

It was listed for $499,900 and had been on the market for almost 2 months, so I dug into the listing and selling history of the place.

The condo had been purchased a year and a half earlier for $657,000 more than what it is listed for and looking through the sold history of comparable sold units in the building, I was confused about what was going on with this listing.

The only thing I could guess was the seller wanted more than the asking price, but how much more?

There’s no way someone was desperate enough that they had to take an almost $200,000 loss, right?

The brokerage remarks had the classic greasy “Motivated seller!” in the description.

I texted the agent and posed my question as bluntly as possible: if my client brought a full-price offer, would your client accept it?

Instead of texting back, I guess he didn’t want to have a message trail, he called me.

The conversation went like this:

“Hey, Mike! Thank you so much for your interest in this lovely condo!” A canned script he no doubt learned from his douchey coach or brokerage training.

“Ya,” I responded dryly, “I just want to know if I’m wasting my client’s and my time showing this condo because I see your client (who is his son) bought it for $657,000 not too long ago.”

“That’s a great question, Mike, and I appreciate your concern.”

That answered my question before even answering my question. I was going to get another reframing question designed to deflect.

“Let me instead ask what purchase power your client is qualified for?”

Purchase power? That’s a new one, and here we go with the run-around…

“Why are you avoiding my question?” My blood was beginning to boil. I hate being dicked around with these sleazy sales dialogues. “Will full price buy this condo yes or no?”

“A man that’s direct, I like that. Let’s just say my client (son) has had several offers, the highest being $525,000, and chose not to accept it.

“What’s your end play here? Bring in buyers that can only afford $500,000 and you think you’ll somehow negotiate your way up from there? You’re just wasting everyone’s time.”

“You run your business your way and I’ll run mine my way.” Click.

Does he really think the end game is attracting people who can afford to pay over $660,000 by pricing it at $499,000?

If it is, the fact that it hasn’t sold in 2 months should be a clear indication that his tactic isn’t working.

By the way, similar units have been selling for around $570,000 over the past 6 months, so is that a price his son would accept?

I highly doubt it.

Instead of wasting everyone’s time, why not waste only his son’s, er, client’s time and list for an unreasonably high price rather than an unreasonably low price?

At least that way, people could decide beforehand if they would be willing to pay that price rather than going through the motions of booking the time to see it, and preparing an offer, only to get a call from the agent saying they actually want whatever ridiculous price they’re expecting.

But hey, I guess he’ll run his business his way.

Like a fucking carny.

Click the button below to download all the Toronto Regional Real Estate District Maps in PDF format.

Download Maps

Toronto Real Estate Neighbourhood Maps – Central

Toronto Real Estate Neighbourhood Maps – West

Toronto Real Estate Neighbourhood Maps – East

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.

Don’t.

Well, most times. There are agents that can still provide good service even if they are not based in the immediate area, but I find most houses listed with an out-of-area agent are poorly represented.

Here are some of the issues I find, starting with this house in my neck of the woods. Listed just under 2 million, this is what a buyer is greeted with:

Yes. At least 6 inches of snow to trek through before getting to the door.

You know what they say about first impressions…

Am I the only one that thinks this way; I have 2 million dollars to spend, that’s a lot of money, and I expect to find a 2 million dollar house that looks and is presented as such.

Having snow drip into my $600 loafers is not going to leave a good impression and I’d be inclined to not even go into the house seeing that wall of snow.

Maybe this house is part of the night’s watch and defending the Seven Kingdoms from the wildlings and white walkers?

Those books were amazing. Too bad I’ll never be able to read how it ends, and the series was ruined by the last 3 seasons…

Oh, by the way, I don’t wear $600 loafers, I wear decent, budget-friendly shoes because I destroy them no matter the price point.

But I digress and am getting off-topic.

So, my nice and practical Cole Haan boats and I were prepared to brave the elements and successfully navigated the grueling climb to get into the house.

The appointment instructions were to remove shoes. There was no area rug at the front door and there was so much dried-up ice-melter salt, I could have scraped it up and had a perfectly preserved crime scene investigation-esque mould of the front vestibule.

Shoes stay on.

In case you forgot, this is a 2 million dollar home.

It was vacant, unstaged, and I could tell by the shoddy staining of the staircase it was a flip.

The engineered hardwood floor was covered in perfectly outlined footprints from salt and sand stuck to the bottom of visitors’ shoes.

This would not happen under my watch. No, I’m not part of the night’s watch. I happen to take a lot of pride when present houses for sale and there is no way I would allow a house to become this filthy and uncared for.

I have standards and one is a clean presentable house. If it’s a vacant house, I’ll check in on it and make sure it’s still clean.

I may have to do it daily depending on the number of appointments.

Yes, even if it’s not in my immediate area. I was hired to sell a home. I promised a certain level of representation and I would feel like a complete fraud if I didn’t hold up my end of the agreement.

Back to the house, when I went upstairs, random lights were on and one of the washroom exhaust fans was running.

I found MLS listing sheets from one of the previous showing agents rolled into a scroll and left on the ensuite washroom counter, along with the added bonus of someone’s unflushed pee in the toilet.

I’ll spare you a disgusting, moldy photo.

These are some of the poor service aspects and can be easily applied to a local agent as well. Just examples of poor preparation, marketing, and professionalism.

But what if I were a buyer just driving around and saw the for sale sign and wanted to see the house?

I call the number on the sign, right?

So (hypothetically) I dial the 705 number on the sign expecting to be able to make an appointment within an hour or so.

Is an agent from Orillia really going to be able to get down to the house in a reasonable amount of time to show it?

Is an agent from Orillia really going to travel almost three hours there and back to check up on the house to make sure it’s still presentable, or that no one has taken a massive dump in one of the toilets and clogged it?

How about snow removal?

How well-versed is this Orilla-based agent with the schools, parks, heck, real estate activities, and prices of the area?

If a home seller in Orillia asked me to list their home, I would decline and refer them to a good local agent.

How well could I service a house in Orillia from my location in West Rouge, Toronto?

But a lot of agents don’t think this way. They just hope like hell one of the 70,000+ other realtors on the Toronto Real Estate Board has a buyer for the house.

That’s a marketing plan?

They say good things come to those who wait. This weekend a client of mine that has been waiting for a unit to come up in a certain building finally had his wish come true.

It’s a new building in Cliffside with not a lot of turnover. Ciffside is an up-and-coming neighbourhood and I can actually call it an up-and-coming neighbourhood because it is.

They are still mom and pop shops, some seedy drinking establishments and vacant store fronts. Starbucks found its way into the neighbourhood and that’s how you know it’s on the radar of big business.

He’s been waiting for a unit to come up in there since November after he missed out on one in multiple offers.

It was his first time going through a multiple-offer situation, and he was a little hesitant to take my advice.

There were three offers and instead of going in at least full price, he decided to offer less than what I suggested, which was $10,000 over the asking price because he thought he would have a chance to negotiate with the seller.

I told him that in a multiple-offer situation, the seller holds the advantage because there were three offers to choose from. I asked him to go in $10,000 more than the asking price to at least have a good shot of buying the condo.

It was well within his budget even if he went $10,000 over the asking price and to make things better, it was listed with a sell-it-yourself brokerage.

But he stood fast in his position and to make a long story short. He ended up losing the condo and was mad that he didn’t listen to me when he found out it sold for $8,000 more than the asking price.

Fast forward to this weekend, and the unit that we went to look at was a little smaller but had a huge terrace that overlooked a quiet neighbourhood and the lake.

He said he wanted to put in an offer and I told him that because it’s the first day on the market he should expect to pay at least full price for this condo.

He had no problem paying full price for it but he wanted to try for $5,000 less than the asking price. The suggested closing date was in May.

Since he was not in competition, the offer could be conditional on financing and status certificate review.

He was happy with those.

We went separate ways and I headed back to my office to prepare the offer. On my drive back to the office, he called me saying that he only has $10,000 liquid and he will get the other $15,000 within a day from his TFSA account.

I said that was no problem and will make the deposit of $10,000 on acceptance of the offer, and then add an additional $15,000 deposit once the conditions were met.

I typed up the offer like he wanted, put in the early May closing date, and made the deposit structure exactly as outlined above.

I’ve done this many many times over the course of my career without any issues. Ever.

Until this offer.

Once my client signed the offer, I called the listing brokerage to register the offer and called the agent to talk with her about the offer.

I explained the deposit structure and right away she said “My clients will be concerned with a $10,000 deposit.”

“It’s a $25,000 deposit, only split into two cheques,” I explained.

“Well, I doubt my clients would accept that.”

Now I’m angry.

I hate when agents hide behind their clients like this.

“I didn’t know homeowners, especially first-time home sellers were so well-versed in real estate matters.”

“Well generally, here in Toronto, deposits are 5%.”

I couldn’t believe she just said that to me; here in Toronto…

I took a deep breath and tried not to get as condescending as her, and said;

“Since when? Just because that became the norm when the market was white hot in order to gain an edge in multiple offers, doesn’t mean it’s a hard rule. Are we in multiple offers?”

I don’t blame her for wanting a 5% deposit, I’d ask for the same thing, but I’m not saying my clients will be concerned with this deposit.

To me, that kills any sort of authority she may have had.

If I was the listing agent in this scenario, it would just be a direct statement of wanting to see more money on the deposit or I will advise my clients to respectfully decline the offer. Another option would be to counter-offer with our expectations of a deposit if the other terms in the offer were good to work with.

But the real issue was she did not understand the deposit structure because she has probably never seen it before.

A lot of agents have only ever known a seller market.

She didn’t understand that 5% split into two payments is still 5%.

You may be wondering why 5% is what a deposit “generally” is with an offer.

If you look at the percentage they’re asking for and think about what the “typical” commission is to sell a property, you may see a correlation.

Sometimes, between the offer being accepted and the closing date, something could happen where the buyer suddenly can’t close, or gets cold feet and wants to get out of the deal.

You know, breach of contract.

There is a certain term in contract law called specific performance. It is the legal enforcement of a contract that has been breached, and in a scenario where a buyer decides they want out of the deal, the seller is still on the hook to pay commissions because an agreement has been reached between the seller and both real estate agents.

The agents have fulfilled their part of the agreement. They brought a deal together. The buyer decided to pull their end of the deal and now the seller will have to sue the buyer for damages and breach of contract.

Having that five percent deposit is a good way to ensure that the seller is able to pay the commissions without dipping into their personal funds.

The seller doesn’t automatically get the buyer’s deposit money to use. The deposit will stay in trust until a court order either releases the funds to the sellers, or to the buyers after they get the pants sued off them and have to pay damages.

Anyway, the entire point I’m trying to make here about the agent telling me the owners are concerned with the deposit is bullshit. Just tell me straight up if you’d like to see a bigger deposit. Plus, they didn’t even look at the offer.

After much back and forth, I told her the offer is a valid offer and there was no reason to be negotiating before the sellers have even looked at it.

I once again explained that the deposit was still $25,000, it just wasn’t all in one cheque at the same time.

Sighing, she said she’ll present it and try to explain the deposit but she doubted they’d accept it.

Whatever, do your best, I felt like saying.

A couple of hours later, the agent called me and said that her clients would only accept the offer as-is if my client would pay full price.

“So, if he can give you a deposit of $25,000 in one cheque they’ll accept the offer price I have now?”

Yes.

Wow, she must have her Certified Negotiations Expert certificate…

I called my client and explained the deposit issue the agent was having.

He told me he’ll just take the money from his line of credit to make up the difference and put the money back in once he gets it out of his TFSA.

Done.

I called the agent and told her to counter the offer with the change of deposit and keep everything else the same.

My client was only too happy to save the money on the purchase and I guess the listing agent was happy to get the deposit done her way, but accept $5,000 less than the asking price on the first day her client’s condo was on the market.

Shrewd negotiating…