There used to be an old saying that the toughest sellers were real estate agents. I’m not really sure why, maybe it is because they are so close to the daily minutia of the market that they can easily pick apart the competition. But lately I’m not so sure. This week I came across two interesting situations. In the first, A client called the agent crazy for suggesting a list price that was $80,000 lower than what he expected. The agent, a seasoned veteran with lots of experience in the neighbourhood under is belt was nearly shown the door. In the second situation a Seller was distraught that her house only sold for full asking price, with one offer. How did things get out of whack so quickly? When did the public stop trusting an agent’s research? For starters, Toronto has enjoyed one of the longest periods of sustained property appreciation ever. That has led to the belief that prices will never come down. Clearly there is a disconnect in place. On one side, the media is hitting everyone over the head with reports saying the market is cooling rapidly but on the other side, some sellers are refusing to believe that news has anything to do with them or their property. So I question whether we, as agents, are doing our job?
The truth is that when we are called in to evaluate a home, our job is to 1. Provide a range that the property should sell for given current market conditions and based on historical data of past sales. 2. Determine a strategy to employ that would best suit the situation in order to provide the maximum exposure to buyers. As easy as it seems, it’s not. Subtle nuances in the market play a huge role in the evaluation process. Property assessment roles may tell you what the house down the street sold for, but it doesn’t mention the Wolf stove and custom kitchen or that the house’s foundation is collapsing. More importantly, assessment roles don’t tell you that one house sold in a Buyer’s market and another sold in a Seller’s market. All that critically important information comes from the grunt work an agent does as part of their daily routine. It cannot be replaced.
A while back I wrote about market value, you can read it here http://bit.ly/Quk3S0 So the question we should be asking our clients is Do you want me to tell you what you want to hear or do you want the truth? Setting expectations ahead of time should be our primary goal. In the case of the “only one offer” the agent did a great job of telling the client not to expect multiple offers in the first place. If it happens it is a gift. She also came prepared with a full competitive analysis of the neighbourhood and showed the client, after the sale, that they should take comfort in the fact that they set a new “high water mark” on the street. For the client who wanted to list at a higher price, the agent was able to clearly demonstrate how he arrived at his price in a way that left his client’s emotional attachment at the door.
It reminds me of the story one of our agents told about an agent who booked an appointment for 7pm on a house that was vacant and had no power. Our agent told her she couldn’t go in after 5pm because it was too dangerous, to which she said she only worked after 6pm because she had, what she called, “a regular job”. Am I the only person out there that believes you can’t do this job part-time?
Last week, one of my agents called me to say that she was preparing the paperwork to terminate a listing she had because the client was simply unreasonable. The client had given my agent a bottom line on what she was prepared to accept and while the number was a little on the “high” side, it was not unreasonable. After 40 days on the market, multiple open houses, and countless money and time put into the listing, my agent negotiated an offer that was exactly what the client had required. Take a wild guess at what happened next; the client turned it down. By the way, my agent was the third in a series of listing agents the client had hired. The property had been on and off the market for many months. So, I thought it might be time to look at when you should consider severing ties with a client whether they are buying or selling. For straight forward answers to this question, I talked to several of our top agents in the company. In no particular order, here is their list;
- Unrealistic expectations. Client wants a house within a 10 minute drive of downtown Toronto. They want a 2 acre lot, pool and 2 car garage for under $375,000. Or how about the client who will never be satisfied with the offer you bring them.
- Clients who micromanage agents. They think they know more than you and are overly demanding of your time.
- Personality. Instinctively you know they are going to be hard to get along with. It could be language difficulties, philosophical or cultural differences, or maybe, after a few weeks of working together you realize the client is…. a real jerk.
- Buyers who won’t go into bidding wars. Well, let’s face it, in a seller’s market, you are going to get into bidding wars. A seasoned pro knows how to negotiate in a multiple offer situation. A buyer who doesn’t want to compete, simply believes they will be paying too much.
- Seller wants you to commit fraud. Trust me, this happens more than you think. Recently one of our agents went on a listing presentation on a house that had expired. Our agent knew of serious structural issues but the seller had covered them up. When questioned, the seller simply replied that the issues had been corrected but couldn’t recall how they had been remedied. Strange.
- The Grandma Syndrome. The little old widow who is looking for a condo, you drive them around for weeks. You always pick them up on the same day and time, you look at a few places but for the most part you are playing chauffeur while they pick up groceries or stop at the drug store.
- Looky-loos. Also referred to as Real estate junkies. They are just out to satisfy their curiosity. They probably will never buy unless they win the lottery.
- The horizon buy. The client is planning to buy in two years but wants to start looking now.
So how can you weed out the bad clients? Start with a structured and in depth client interview. This is an absolutely critical tool that we all should be adapting. Ask pertinent information. Set expectations early. Lastly, know when to walk away. If you feel that there is a glimmer of hope but something might happen, don’t be afraid to refer the client to someone else in your office. You could potentially pick up a small referral without doing any work.