This post by Richard Silver, Sales Representative, Senior Vice President – Sales at Sotheby’s International Realty in Toronto, was originally published on www.torontoism.com.
You read about them on internet review sites, hear about them from friends, and watch them in movies and on Reality TV. If you’re particularly unlucky, you get to meet them in person. They are the Agents of Discord; real estate agents who are pushy, rude, sneaky, unreliable, dishonest, or otherwise just plain unpleasant.
Not surprisingly, no one fitting any of these descriptions has come forward to defend such behavior, and I’ve never met anyone in the real estate business who describes themselves with these terms. They can, however, go some way in explaining the phenomenon.
“Any business that involves high commission dollars is a competitive business that will come with a few unprofessional salespeople,” explained Toronto’s Sutton Group Associates Realty agent Josie Stern.
“It is much more competitive than it was decades ago simply because the number of agents has gone up dramatically. There are about 40,000 Toronto Real Estate Board members so the increase in the number of agents alone dictates that it’s going to become highly charged with competition.”
Wanting to understand how real estate agents compete, and how most of them manage to comfortably coexist, I spoke not only to Josie Stern, but also to Julie Kinnear (of Keller Williams Neighbourhood Realty), and our own Richard Silver.
Kinnear helped set the scene a little more:
“There are more agents than ever before, and increased pressure to reduce commissions (there have always been discount brokers but it seems that some agents are willing to do anything for any commission now), as well as the pressure to pay for more perks for the client, i.e. staging, as well as a perception from some clients that it is “easy” to sell their home because the good ones in good neighbourhoods sell fast.”
A booming real estate market (along with technological advances that allow people from all over the world to view and buy Toronto properties) means that there is more likely to be multiple offers for one property, while the increase in the number of agents has led to a breakdown of the old territories.
“You move around a lot more,” Silver told me. “It used to be that you had to stick to one area, and now you find that agents are working all over the city. Now, everybody’s trying to get into everybody else’s territory.”
Although Silver seemed fairly comfortable with the changes in territories and movement, the increase in multiple-offer situations is worth noting because, as he himself explained,
“The most competitive part [of the job] happens when there is one property and a number of offers. Whenever there’s multiple offers there’s a winner and a loser. Usually a number of losers. And some of the people who lose don’t take it well. And there’s often complaints that come up that go to the Real Estate Council of Ontario.”
Dirty tricks revealed
Even outside of such an obviously high-pressure situation, dirty tricks abound, and not all of them are intended to benefit the client. Stern had a few things to say about agents who are out for themselves first, and their clients second.
As an example, she told me about agents who set an unrealistic price for their sellers to make sure they get the listing and then ask for a price reduction two weeks later.
“No agent can claim they have never had to reduce the price of a property, but, when it’s done intentionally just to get the listing, it’s deceptive, especially because the client is counting on a higher sold price and may make buying decisions based on that number.”
Some agents go the other way around and list properties intentionally at extremely low prices, just so the final price looks like a big win.
“Of course they look like heroes when they send out “sold for 20% above the list price” flyers, but they don’t send out flyers when the offers do not materialize and this strategy backfires. I have written a number of blogs warning the public about these scenarios.”
There are situations when the listing agent is also the buying agent and does everything to help his buyer win.
“Some listing agents who have their own offer tell their own buyer what to pay for the property after viewing all submitted offers. To be fair and lawful, the listing agent should give all buyers a chance to increase their offer, not just their own buyer, in order to get the seller the highest price,” says Stern.
“But instead, motivated by greed, the unethical listing agent curtails competition and breaches their fiduciary obligation to their seller client and practices unfair competition. This happens more often than we want to admit.”
Awkwardly timed or short irrevocable periods are another unpleasant tactic, according to Kinnear, who explained how such a move on the part of a potential buyer would send rival agents (and perhaps the property seller) scrambling to update their offers and keep everyone informed. Kinnear even ran into a 20-minute irrevocable once, “But that was actually in the middle of an offer situation—so all parties were there and we were more prepared to make a decision at that point.”
It’s often just a case of bad manners
Of course, not all off-putting behavior is intended for personal gain. Silver emphasized the fact that often, it’s just a case of bad manners.
“They may—in trying to get the best price for their people—insult the sellers, let’s say, or they may insult another party in their presentation. They may not be thinking so much of a soft way of delivering a message, like the property is over-priced. So they’ll focus on the negatives of the property.”
Given that Toronto is a multicultural city, with potential property buyers all over the globe, some friction is caused not by bad manners, but by different ones.
“What we’re seeing a lot more of now is the clash of cultures in negotiating,” Silver pointed out.
You have to remember that Canada and the United States are probably the only countries in the world where you don’t negotiate over everything. Often times, people want the property, and they’re willing to pay for the property, but they just feel that it’s part of the culture that they should offer a lower amount, he says.
“Sometimes that’s offensive to the seller, or the sign-back is offensive to the buyer. And I just encourage people to be as patient as possible and to ride it through, because sometimes it’s just a cultural thing.”
Clearly, a really good real estate agent is also a bit of a diplomat, and genuinely values the goodwill of others—even rivals.
“I try to be very, very civil,” Silver told me. “I try to be very cooperative. Some people might think that my presentation is very low-key and very nonthreatening. However, I find I’m hardest on myself—harder on myself than I am on others. So I will try to be cooperative with others.”
“The real estate industry is not just full of poorly behaved, rude unethical sales people!”
All three of the agents I spoke to made it clear that, while there are always a few bad apples bobbing to the surface, most of their profession is made up of decent people trying to get a good deal for their clients. And all three talk of being on friendly terms with agents who have been, or may yet be, competitors.
“Our industry is not just full of poorly behaved, rude, unethical sales people,” Kinnear assured me.
“The vast majority are amazing. Inexperienced agents need a bit of hand holding and explaining how to improve their offer, which we help with, as it is to our clients’ advantage that an offer is constructed properly as well,” Stern agreed.
“There are many competitors we get along with, but those are the ones who are happy to see others succeed and who show respect to people they interact with. I have written blogs promoting our competitors and promoting their blog posts because I like to see people succeed.”
Being on good terms with your competitors is beneficial
After all that, I had to ask if being ruthlessly competitive actually did pay off in the long run. Kinnear was unequivocal.
“No it doesn’t pay off with me. Yes, sellers will choose to work with a different buyer even if it is for a lesser price, as they don’t have the confidence that the deal will come together, or they have strong value systems and believe in fair play, or if they are close with their neighbours and want to have a buyer that they feel will fit better into the neighbourhood.”
Stern was a little less optimistic and wishes that industry leaders and our governing body dealt more firmly with the problems in the industry.
“Some people believe that everyone gets their comeuppance, and although this is true in the end, I don’t think it happens fast enough,” she says.
“I have seen way too many agents get away with unprofessional behaviour for years and the consumer gets hurt in the process. These are the agents who really don’t care about their clients or their reputation because they value the mighty dollar above all else.”
Having said that, she did say that a friendly, accommodating attitude has considerable advantages for everyone.
“Inventory is what we are all chasing and sometimes a competitor you get along with tells you about a property that is off market that is perfect for a client. This outside of MLS deal making would not happen if your competitors don’t like you.”
There are other benefits to being on good terms with your competitors—like constantly learning and improving your work.
“I benefit tremendously from our competitors in the education front. The industry is constantly changing and growing and we need our competitors to bounce ideas off of and to learn from each other in order to provide the best service to our clients,” said Stern.
l’m giving the last word here to the diplomacy advocate himself, Richard Silver.
“I think I’ve been around long enough to know that when you are confrontational you end up losing,”he said.
“Because you end up offending people and they don’t want to cooperate. And it’s the same thing when you work with your clients, as well as when you work with your competitors.”
As a footnote: Having good relations with other REALTORS can also work well for you in terms of referrals from colleagues outside of your trading area.