RE/MAX Hallmark Blog

Check and re-check before offering on a Mere Posting

With the evolution of 'mere postings" on our Toronto Real Estate Board site over the past year or so - there was much outrage as can be expected from the "general"realtor population. 

Many were concerned that the value of a realtor would be put to the stress test by allowing these type of listings to appear. For clarification, a "mere posting' is a listing displayed on our realtor TREB site - "listed" by a member of our board. These listings typcially offer very little in the way of a fee for the co-op broker, and direct any realtor to contact the seller directly for showings, and offers. The "mere posting" brokerage is fulfilling their duties by displaying the information on our system with the invitation to connect directly with the consumer.

This is all good under our competitive nature - after all - each and every member firm in our Board cannot be told how to conduct their business - as long as the firm is adhering to RECO and TREB rules and regulations.

Here is the disconnect for me. When a co-op realtor contacts a seller direct to arrange for showings or perhaps an offer - the obligation of the seller to provide industry standard disclosure isn't always forthwright. A realtor must disclose when asked how many offers are registered on a property, if it is his or her own offer - and any collatoral agreements which may be in place. Sellers of "mere posting" listings are not always forthwright in the information they provide. By way of example, a realtor in our firm had an offer on a "mere posting" listing. The realtor asked specifically if there were any other offers on the property - 3 was the answer. Our realtor adjusted their clients offering accordingly.

Turns out their offer was the one and only offer on the property. What is the recourse of the buyer and realtor in this circumstance? If the property was being represented at the table by the listing agent - the answer is easy and most likely not an issue. Realtors understand (for the most part) that transparency is critical for all parties involved and would be held accountable by RECO. 

Who is holding the seller accountable?  Sellers likely are not experienced when it comes to selling their own properties - they don't understand the "rules" of our trade or perhaps they even choose to ignore standard industry practises. 

As for me, I would be very concerned with the information supplied by an owner of a property listing under a "mere posting." The information provided must be considered self serving. A buyer rep needs to go to great lengths to verify all info provided by a seller, and even in the case of multiple offers registered - getting the names of the other agents to verify the existence of any competing offers - prior to submitting their buyers offer.

Another reason for the buying public to work with qualified realtors on their behalf.

 

 

Bully Offers - the process is wrong

"Offer date set for tuesday at noon." We have all seen many MLS listings with different variations of this note. Clearly it is meant as a direction, a fact - no offer will be viewed or entertained until the set date.

In a market we have been experiencing when there are two few listings on the market for the number of buyers, holding off on offers until a certain date makes sense. The hold off allows all interested parties to view the property, establish the value (to themselves) and contemplate making an offer on the set date. Makes perfect sense - a win win for all involved. The seller gets great exposure and perhaps people competing to buy his or her property, and the buyer gets to get all his or her ducks in order. 

Except for the pre-emptive offer or the "bully offer." The bully offer enters the picture and creates an unlevel playing field. Everything changes with the registration of the bully offer. Usually the buyer rep wants to jump the queue when his client is willing to put forward an amazing offer, and certainly doesn't want to risk the chance of losing the house by competing with others.  The price is extraordinary with a very short irrevocalbe date to the seller. All very tempting to the seller and selling agent. What to do?

Often the process goes like this:

Buyer agent (BA): I want to register an offer on the property.

Selling agent (SA): Offer date is set for tomorrow evening.

BA: My offer is good for today only and will expire in a few hours

SA: How good is your offer?

BA: Extremely good, unconditional and $50,000 over list price.

SA: Send it over, I will connect with my seller and get back to you.

RECO has rules for what the selling agent must now do. He or she must inform his seller of the registration of the offer, and notwithstanding the direction concerning the offer date in the MLS listing the offer can be viewed and dealt with. All offers registered on the property must be notified and dealt with of course.

But what about all the buyers, and buyer reps who have been waiting patiently for offer day? Technically they are out of luck unless they have registered an offer.

So, does this process work well for all concerned? Absolutely not. The seller is put under pressure with an extremely good offer - the selling agent doesn't want to advise the seller to hold off for offer date just in case no other offer materializes.

More often than not, the selling agent and client make the decision to deal with the offer. Better realtors will now take the time to inform all that have shown an interest in the property and notify them of the change of offer date time. The listing will be rerun with the reference to offer date set time removed. (company policy at RE/MAX Hallmark) If the selling agent is fortunate, other offers will materialize and now the original bully offer is in competition.

But what about selling reps who simply follow RECO rules and only deal with registered offers? According to RECO, nothing is wrong and life goes on for all. But is it good for all, is it good for our industry?

The simple solution would be have selling realtors get an acknowledgement from their sellers at the listing table concerning offer dates. An acknowledgement from the seller concerning the date set (if any) for offer presentations, which cannot be moved forward. This text could be embedded in the listing agreement and initialed by the seller. 

Or else we could continue on wasting the time and angering many prespective buyers, while draining our industry of credibility in the eyes of the public.

Or, just wait for the problem to disappear when the selling market softens. 

I prefer we do something now.

 

 

 

From a buyers point of view

Can you imagine if we all went about our business as realtors without the slightest hint of a client  qualifying process? Suprisingly it may happen more often than you think.

I received an email from a buyer client of one of my realtors the other evening which went into great detail concerning his experience of trying to buy a home in today's market. He explained in two incidences he lost out on multiple offer situations with no regrets concerning the process. But his third experience was one which really set him off - understandably.

I wanted to share his frustration through his words:

"After two unsuccessful attempts of getting a house (first one sold for 101,000 over asking in bidding war of 9 people), and the other (sold for 105,000 over asking with 11 people in bidding war) - we found the 'dream home'.  ugly as sin with lots of reno needed, but steps to a desirable area. 

It was listed in November for 699,000 and sat there for 60 days (over priced).  Apparently they received three offers under asking and turned down all three. 

It was unlisted beginning of February and then put right back on again a few days later and now listed for $599,000.  That's when it got on my radar.

 

After checking it out and walking through it with my husband and 2 contractors we decided to put an offer on it.  Of course like the other properties we bid on, they were holding back offers.  So on Tuesday, we offered 625,000 (26k over new asking price), and there was only one other offer so we felt our chances were good.  The listing agent said the other offer was higher and we had a chance to lift our offer.  So we did.  We jumped it to our maximum budget amount of 650,000. 

Now it should be noted that beautiful houses in that area that are detached (this is semi) with 4 parking spaces (this has zero) and with larger lots have sold for 700k, so this was clearly not at that level at all. 

Instead of countering either of us - they flat out said no to our best offer and the other one.  After sitting on it over night, we contacted family and were able to get a personal loan from them to beef up our price!  

We now offered 680,000 PLUS as before, ZERO conditions AND CLOSING in 2 weeks which is what they wanted!!!!  This was offered to them yesterday and we gave them until 3pm today to decide.

 

The listing agent said there was another 2 offers today (I frankly think she was lying as she CLEARLY wanted more money as she told our agent to ask us to bump it up!  We were completely maxed out so that was not happening).  At 3pm today we had to call them and guess what?????  The daughter (co-signer with dad) said she doesn't want to sell it anymore and wants to keep it!!  We're then told they will go home for a 'pow-wow' and decide what to do. 

As if that's not enough, NOW the news changes.  We find out that they have taken the house OFF the market, and are RE-LISTING it TOMORROW for $704,000!!!!!!!!!!!!

I am so outraged, I can't even believe it.  These people are crazy and in my opinion their listing agent is too for not guiding them better or informing them on what their house is really worth.  How can she let them do this?  It is clearly way over-priced and the owners clearly have no clue what their house is actually worth."

I feel sorry for clients in the marketplace when they are faced with dealing with buyers or sellers who haven't been qualified by their realtors. It is a big waste of time for so many people and as unprofessional as it gets. 

Realtors need to step up their professionalism.

Who Cares what CREA did ?

So CREA has inked the deal to allow competition into our marketplace, or so all the headlines read. This weekend, at the National Assembly, CREA voted 97% to approve the deal worked out with the Federal Competition Bureau. No surprises there, except the "agreement" is for 10 years. I wonder why the need to have a time period on the agreement ? 

In any case, I am sure all the headlines will run concerning the new opportunities for sellers to get lower and lower fees. What the headlines won't say and what the article won't write about is the "price" paid with lower fees. Less Service and Less Skilled realtors will be jumping all up to put listings on MLS with no representation or very little representation. Pity the seller coming up against a professional realtor, negotiating on behalf of their buyer - directly to a non represented seller. Buyer representatives are under a signed obligation to do their very best for their clients, the buyers. Sellers of less service and less skilled realtors will have to fend for themselves. You do get what you pay for.

I like how our industry is evolving, and I am sure realtors offering value and service for their clients will continue to shine. As for the news today, who cares ? Except to say many many opportunities are out there for top professionals.

Reco and Me

As Broker of Record of RE/MAX Hallmark Realty., I have a responsibility to account for the actions of my realtors. Everything they do with and for the public rests on my shoulders. I take the work seriously. Because we are a large company which is constantly interacting with the public, we are often called to task and must explain ourselves. It is all part of dealing with the public. It's serious work.

RECO takes the work they do very seriously as well. The Counsel looks out for the interests of the consumer and governs the actions of realtors. When realtors are asked to "explain" their actions, the process isn't taken lightly. My "job" is to help my realtors through this process - usually all things work out, but it is a trying situation for most realtors. They hate their reputations being challenged and have never done "wrong" for the consumer or other realtors intentionally. 

In my 31 years of being a realtor, I have never been personally challenged for my actions by RECO - until last week. I received a strong "charge" from RECO, outlining in great detail all the actions RECO believes I committed which are contrary to the code. When I read the charges, my blood boiled. Not only am I innocent of the charges, but I felt insulted by the letter. Now I know how my realtors feel when they are charged by RECO.

My first reaction was to brush it off. believing at the RECO hearing, the panel will hear my explanation of the events and dismiss the charges. But on second thought, I don't trust what will happen at the hearing, so I am hiring a lawyer to represent me. 

The charges? RECO is accusing me of advising one of my realtors to take a course of action during an offer presentation which was contrary to the code. The fact - the realtor called me after the offer presentation to ask my advise on what was already done. Apparently RECO thinks I should of been able to know what happened before it happened. The realtor in this incident acted completely appropriately, protecting the interests of all parties involved.

I don't think RECO is interested in the facts in this matter, but has already formed their own conclusion and is intent on making a statement. Stayed tuned as this could get interesting.

Is it time to drop Realtor.ca?

Is Realtor.ca important for Realtors? Does the site enhance the work we do as Realtors? 

I think we need to begin the discussion about the value of Realtor.ca for our profession. Is the site valuable to Realtors? Does the site help Realtors provide service for their clients? Do we really need to continue to support  Realtor.ca with the advent of IDX at the Board level and the evolution of dynamic personal Realtor sites?

Is it time for our Boards and CREA to discontinue Realtor.ca?

What do you think?

 

CREA and the Competition Tribunal by Michael Polzler

Confusion reigned across the country this week as the Canadian Real Estate Association (CREA) announced anticipated amendments to the Multiple Listing Service (MLS) in response to issues raised by the Competition Bureau.

My subsequent comments in the Globe and Mail didn't help. They were, unfortunately, taken out of context and may have added fuel to the fire. Let me assure you that I did not say that we should throw in the towel. However I've also been in the business too long not to recognize the fact that our industry is changing.

CREA was a little less than crystal clear in their communications, but in a nutshell, under the new rules, clients can now choose a realtor for the sole purpose of listing their property on MLS for a flat fee, but few will.

There is no doubt in my mind that the playing field is going to change in the coming years. I do believe, however, that the impact on our industry will be minimal and I speak from experience based on our US operations. These rules have been in place south of the border for several years and little has changed. In fact, the value of a great realtor has never been more important.

Consumers are entitled to options and yes, there will be those that choose to go it alone. But most people don't want to sell their own cars, let alone their own homes. The fundamentals of this business are etched in stone and will remain the same, no matter what happens between CREA and the Competition Bureau. Those buyers and sellers who are making the largest financial investment of a lifetime will still require the knowledge, expertise and negotiation skills that a full-time, experienced real estate professional brings to the table - and most, if not all, are willing to pay for it.

There is more to what we do as realtors than place properties for sale on the MLS. We should not define ourselves by MLS alone. MLS is just one of the many tools that we use during the course of a transaction. The vast majority of homes in this country are currently sold through a full-service realtor and that trend will continue in the future. Let's not lose focus. We're helping thousands of Canadians to buy and sell real estate annually. Our role has not and will not be diminished.

I have no doubt that we will continue to thrive, as we always have. But more important than ever before will be the value proposition you, as a realtor, brings to a transaction. Knowledge, experience and professionalism are the foundation on which our industry has been built. At the end of the day, it's what the public expects of a professional realtor.

Don't underestimate your importance in the home-buying and selling experience. The fact is, consumers need us. I welcome your thoughts at [email protected]

Sincerely,

Michael Polzler

Executive Vice President and Regional Director

RE/MAX Ontario-Atlantic Canada Inc.

We are a professional association not a Flea Market

On Monday, I did three different press events in relation to the Competition Tribunal and the vote by members of our Canadian Real Estate Association at the Annual General Meeting held in Ottawa. In spite of the strong interest by the media and the general public, there was so much misinformation out there. Throughout the day, many were not clear, and still aren't on the decision made by CREA members. Did the assembly vote yes or no to reform our bylaws in an effort to cozy up to the Competition people?

In my view, CREA did a poor job of putting forth our industry's position and the results of the vote taken. What kind of strong leadership was shown by the actions of the industry leaders? If you by chance viewed the press conference held by our association after the vote, you would have been appalled as I was. Our industry, represented by the incoming President looked weak and inadequate to say the least. It was a joke. Our President presented the results of the vote, but when asked to clarify the position of CREA - refused by saying it was too complicated for the public. I think he was in over his head and lacked clear leadership just when our industry needed it the most.

This is what happened on Monday at the CREA Annual General Meeting and what it all means.

CREA voted to change their bylaws to permit flat fee type realtor's access to MLS with their business model of not providing agency to sellers. Realtors will be permitted to list a property on MLS and have their "clients" sign off on any agency representation from their realtors. WIth the new rules, clients can now choose a realtor for the sole purpose of listing their property on MLS - period. What wasn't voted in was that clients can list their properties privately on our MLS without the services of a realtor. The discussion wasn't about lowering or raising realtor fees as discussed at length throughout the media, it was only about allowing a level playing field for all players in our industry.

Our industry has had brokerage models which essentially offer lower fees to the public fo rthe sole purpose of putting a property on MLS, but now these brokerage models can have their "clients" and I use that word lightly - sign off on having their realtor stand for them during negotiations for their marketing, for showing appointments, and for guidance if they choose. Why did CREA decide to allow this to unfold the way it did?

What wasn't CREA more progressive in their thinking - how could our CREA leadership believe that by not allowing all models into our industry they were being of service to the public and it's members? The vote on Monday should have been a non issue, and acted upon when our American realtor friends dealt with it years ago.Interestingly, the Competition Tribunal responded to the vote taken by CREA by quickly stating CREA hadn't gone far enough and will be pressing on with their challenge to our industry. Maybe the Feds want individual sellers to have the right to list their properties privately on our MLS service without the use of any realtor? If that happens, watch for a big shake up of our industry and the way we put forth information for the public.

We are a professional association, not a flea market.

Personally, I believe this "discussion" between the Competition Tribunal and CREA will sort itself out without any further adjustments from our industry.

When are CREA and our Toronto Real Estate Board going to become industry leaders on this subject? When will we have someone or some body stand up for our industry?

RE/MAX Hallmark will continue to position itself in the marketplace as a full service brokerage, (without exception) standing with our clients throughout the entire process of buying or selling real estate. We strongly believe clients are best served when they are guided by a professional realtor through what for many will be the biggest financial decision of their lives.

 

Competition Bureau and Organized Real Estate in Canada

For some realtors, the latest article in our local and national  papers concerning the challenge of the Federal Competition Bureau to the way our industry - read Canadian Real Estate Association - conducts itself is disconcerting. The Feds are intent, if we are to believe what is reported, in changing the way we as realtors and boards conduct themselves. Essentially, the Feds want consumers to have more options when it comes to selling their homes. Apparently, right now our local boards do not allow listings without representation. The Feds want consumers to have the choice of negotiating their own deals, while using the services of the MLS, for a reduced fee of course.

As reported, the higher ups at CREA and the Competition Bureau have been meeting to try to come to some amiable conclusion for all, but none was to be found. In the last week or so, the Competition Bureau has gone pubic on their intentions of making, in their view - organized real estate more competitive.

So what could all of this mean for consumers and for realtors?

If the Competition Bureau gets their way, consumers will be able to use a realtor for the sole purpose of posting their listings on various boards throughout Canada, for a fee. Consumers willl be able to choose not to use the representation of a realtor for the process of selling their property. As I understand it, home owners will confirm all showings and negotiate directly with buyer representatives on any offers on their property. The listing agent could simply upload all the info onto board websites, and let the consumer take it from there. Basically, consumers would pay a fee to a realtor for allowing access to boards. For some consumers, this willl be a blessing, for others a terrible and costly curse.

Realtors will be challenged by the apparent change to our industry. We could now be faced with dealing with models which provide the basic services for what might be a relatively small fee. Some realtors will not be able to cope.

Realtors who believe the work we do is largely based on the source or protection of information and historical data could be in for a shock in the years to come. If your real estate model depends upon safeguarding consumers from information we know, look out for a big change. That horse left the barn many many years ago. Our realtor friends south of the border have been living with a reality similar to what has been put forth by the Competition Bureau for several years now, and life has gone on. Sure there are models out there offering lower cost service, or fees based on minimum work, BUT organized real estate is flourishing in the states.

This is how it works. If a realtor doesn't provide value added service, the consumer will ultimately make a decision not to use their services and shop for a model which is better suited to their needs. It is a fact of life that some home sellers will be able to negotiate the sale of their own home, but most need experts to help them through the complicated and financially important process.

Being a realtor is not just about listing a property on MLS. Detailed work is necessary to ensure consumers are looked after. The process can be difficult, taxing, complicated and emotionally draining for many.

Realtors who  add value added services for their clients will continue to grow their businesses. Realtor who look at our industry as information based will have a problem.

Confusion Still

This year we have had several "changes" made in our industry concerning forms and procedures. Every year our Board or associations refine what we have to do and how it's done. On rare occasion, different levels of government step into our industry as well. There seems to still be some confusion over a couple of practices now in place.

Several months ago, our Toronto Real Estate Board came out with a new policy procedure concerning listings. In plain language the new bylaw enacted says, if a property is listed on MLS, it must immediately be available for showings. If in your marketing plan, you (listing agent) wish to set a date in the future for offer presentations, that's fine, you just can't delay any showings once the property is listed.

There is still a lot of confusion over Fintrac. Fintrac legislation forces us to collect and store information on our clients. We don't need to give that info to other brokers. Some realty firms are still asking for information on our clients in their offers. We only need to look after who we are under contract with. What we do not have to do is provide Fintrac Information on clients for leases, just the buying and selling of properties.