I really wanted to post a follow-up to Monday’s blog today.
It seemed logical to follow Monday’s stats blog with yet another stats blog, not to mention, one that’s related to Monday’s topic.
At the conclusion of Monday’s blog, I said the following:
A colleague of mine suggested that the only reason why the GTA average home price wasn’t lower is because the condominium market is so weak, condo sales are scarce, and thus the average home price is being “propped up” by the fact that there are proportionally fewer condo sales than usual.
So is that what we’re going to discuss today?
No.
Back-to-back stats blogs are a no-no here on TRB, as mandated by random, forgettable readers, in an indeterminate year, at some point in the past.
Alas, you will have to wait until Monday, but I promise it’ll be worth the wait!
Today, I want to talk about how deals are routinely being “lost” in 2025.
This is to suggest that the four parties to a transaction – buyer, seller, buyer-agent, and seller-agent, are individually or collectively ill-equipped to adjust to the current market conditions, and thus their actions are serving as roadblocks to successful transactions.
A “lost” deal could have two results:
1) The would-be buyer purchases a different property.
2) The would-be buyer does not purchase any property.
In the first case, there’s no sale “lost” as far as the market goes, and thus it doesn’t explain why sales are at an all-time low.
In the second case, a buyer who would buy but doesn’t buy helps to put a face and a reason to the low sales figures.
I suppose the opposite could be true; there could be a seller who sells to somebody else, but in my experience, that’s not happening. In my experience, when that seller doesn’t sell to one person, for whatever reason, it’s unlikely that a second person comes along and is able to fill in the gaps and get the deal done.
As I said, there are four parties to the transaction that could, individually or collectively, stand in the way of a deal. Today’s story is about how listing agents can get in their own way…
Two weeks ago, I visited an east-side starter home with my buyer clients and the buyers really liked the home!
While there is a lot for sale in this price point on the east side, that’s not to say that all properties are created equal.
Every buyer has a different set of evaluation criteria for a home, different needs, and different wants. This particular home had an owned parking space, which was an absolute must-have for my buyers, it provided the backyard space that they coveted, and it hit the marks for square footage, bedrooms, and bathrooms.
How many other buyers would put this particular home atop their list? Well, that’s what we were about to find out!
As with every other freehold in the city, this house was listed for sale at a price that was below fair market value, and an “offer date” was set.
Once upon a time, this was a can’t-miss strategy in our market, but as we all know, much has changed since then.
The house was listed for sale for $999,000, along with many others like it on the east side, and my clients and I figured the true “value” of the home was around $1,250,000.
On the day of offers, my buyers went to the bank and secured a certified cheque to accompany their offer (which fewer and fewer buyers are doing in this market), and we registered our offer around 10:00am.
Then we waited.
We waited to receive an email that read, “SECOND (2) OFFER REGISTERED,” which could then be followed by a subsequent email that read, “THIRD (3) OFFER REGISTERED,” but those emails never came.
At 6:00pm, we had the only registered offer on the property.
I called the listing agent to confirm that we had the only offer and he sighed and said, “Yep, it looks like it.”
This is where things get really, really difficult in our market and where deals are both made and lost. Buyers, sellers, buyer agents, and listing agents all play a role in whether a deal is made or not, and I’m inclined to say that the personalities and emotions of those four parties have a massive influence on what happens next.
We submitted an offer of $1,100,000 on the property.
Here’s where many people would agree with us but just as many would disagree.
“Why would you bid against yourselves?” some people might ask. “The property is listed for $999,900 and you’ve bid $1,100,000 – there’s no reason for that!” they might argue.
But the point is: we know the seller is not going to accept $999,000 for their house that’s worth somewhere around $1,250,000, give or take. Truth be told, we also know that the seller isn’t going to accept our offer of $1,100,000, so it’s all the more reason not to offer the list price and frustrate the seller, thereby creating an obstacle to getting a deal done.
Right before I emailed my offer, I called the listing agent one more time to ask, rather rhetorically, to confirm that we were the only offer on the table, which he did. I needed him to understand that we were the only buyer in the city for his listing, but without pointing this out to him directly, and risking bringing his emotions into the mix.
Our objective was to see what type of sign-back the seller would provide after receiving our offer of $1,100,000.
We figured the value was around $1,250,000, but would the seller sign back lower? Maybe they didn’t value the house the way we did, or maybe they were anxious and wanted to get the property sold. Would the seller sign back higher? Maybe they valued the house at a much loftier figure, or maybe they were greedy, and/or out of touch.
What do you think they did?
Did they sign back at $1,250,000?
Higher?
Lower?
Pick any one of the three options, and you would be wrong.
Why?
Because the seller refused to sign the offer back at all!
The listing agent called and asked me, “Can your buyers come up in price?”
This is very common, and not in any way out of line.
Of course my buyers could come up in price. We had discussed it in advance and our offer of $1,100,000 was strategic in nature, and didn’t represent a max price or a final offer.
I told the listing agent, “This isn’t their final number for the home,” and he rather excitedly said, “Great, so go get that on paper, and we’ll discuss.”
This is where things went off the rails.
Once upon a time, his response was not only valid but expected. That time, however, was when he had nine offers in hand, not one.
I told the listing agent, “Well, we’re not going to get a higher offer on paper,” and explained that we had submitted an offer, the seller had received it, presumably reviewed it, and that we were now waiting on the seller to counter.
The listing agent said, “No, but, well, um, this is our offer night. So you need to come to us.”
I told him, “We already did.”
The problem here was that this listing agent was acting like his big offer date had paid off and he had multiple offers, so he could tell “all” the bidders that they needed to improve their respective offers – like this was 2022, 2023, or even 2024.
But it’s 2025. And he had one offer.
Amazingly, he proceeded to explain to me how an offer night worked!
“We have set an offer date, and we’re going to review offers,” he told me. “We’re not interested in working with your offer of $1,100,000, so you can resubmit another offer if you’d like.”
I asked him, “Why wouldn’t you sign our offer back?”
He paused and I could feel him thinking through the phone. He tried to speak, but caught himself, then sighed.
After another beat, he offered me the explanation that I knew was coming.
“You don’t sign an offer back on your offer night. We’re in a position of leverage here, not you.”
Huh.
Is that a fact?
Well, unfortunately for this agent and so many like him, the market is the market, and they’re all going to need a crash course in “How To Sell Real Estate In 2025.”
Throughout the city of Toronto, listing agents are showing their inexperience as they attempt to do business as though it were three years ago, and it’s simply not working. These agents lack the ability to work with other agents and not against them. They lack a set of critical skills, notably communication and understanding.
But there’s one more important factor here that’s playing as large a role as any in our market: fear.
The listing agent was afraid to advise his clients to sign our offer back for a multitude of reasons.
For starters, he’d never done it before! Because he’s never worked in this market! It was simply, “Fear of the unknown,” and when some people don’t know what to do, they don’t do anything at all. They just freeze. But this agent was also worried about signing back too high, too low, or really, signing back at all. He didn’t know what move to make so he said, “You make the move, I’m not doing it!”
For years, listing agents were absolutely spoiled. They could simply set an offer date and have buyer agents line up outside their doors, and we’d never know if they did a good job or not, since the property would sell, and we couldn’t determine if another agent would have sold for more or less.
But in today’s market, negotiating, communicating, strategizing, and cooperating are paramount to getting any property sold.
“Never let a deal die.”
There’s a classic real estate saying, and while there are exceptions to the rule, it typically holds true.
“I’m not going to let this deal die on my operating table,” a similar saying among agents goes, as every agent knows that a buyer or seller can’t accept an offer that isn’t in front of them.
“How am I supposed to advise my clients to sign what they don’t have?” you could also ask.
Returning to our story where we left off, I asked the listing agent, “Can you explain this concept of ‘leverage’ as you see it?” I wasn’t being snide, but rather I wanted to get him talking about the position he felt he was in.
“We have under-priced this house,” he explained. “We’re not going to sign the offer back because we don’t need to show our true hand,” he naively continued. “That’s not how offer nights work. The buyers submit offers, the sellers review and consider them.”
I let him say his piece, and then I pointed out, “You said offer(s), plural. But you don’t have offers. You have an offer. You have us. You have paperwork in front of you with a price on it. If you don’t like the price, then change it, initial it, send it back to me, and I will present it to my clients, review, evaluate, and report back.”
Then I added a critical piece: “But you have to act, because that offer is not going to change itself.”
Without so much as consulting with his clients, he aggressively shouted, “Looks like we’re done for the night” and hung up.
And that was it.
That is an example of what’s happening every night in this city, and it’s why so few transactions are being done.
The listing agent called me the next afternoon and asked, “Are your people still interested in the house?” I said, “Yeah, probably,” since nothing had really changed in eighteen hours.
Shockingly, instead of providing us with a counter-offer, a verbal price, or any indication that they wanted to engage, he reminded me, “Well, our house is still for sale, so feel free to resubmit an offer.”
He hadn’t learned anything.
I consulted with my clients and they declined. Not necessarily because they didn’t like the agent, the process, or had lost interest in the house, but because by that evening, they had already seen two new listings on MLS that piqued their interest, which is a risk that every seller runs in this market.
They were still interested in the first house, don’t get me wrong. But they wanted to play the field!
We went out that night and saw the two houses, one of which was fantastic. The listing agent for that property called me the next morning and said, “We do have an offer date, but seriously, that’s just for show. You know this. Bring me an offer, let’s work together, let’s get a deal done, David!”
What a novel idea!
So after mulling their options that evening, my clients called me the following morning and said, “We’re in.”
They went to the bank and secured a certified deposit cheque, sent an offer over to the listing agent – technically a “bully offer,” but call it what it is in this market, and the listing agent graciously thanked me for my offer and our efforts.
She said, “Good luck to us all!”
I received a notification from BrokerBay: “PRE-EMPTIVE OFFER REGISTERED,” and I knew we were in business. A good listing agent doesn’t email buyer agents and say that an offer is registered unless that agent intends to accept the offer.
Two hours later, the listing agent called me and said that the sellers were going to accept the offer.
In my opinion, we got the house for slightly less than we thought it would have, could have, should have sold for, but you never know.
The listing agent was an absolute pleasure to work with; professional, accommodating, and understanding in every way. She made that deal happen for her sellers.
Three days later, the agent from the previous property called me. His listing was still on MLS at the pre-offer-date price of $999,900, even though the offer date was well passed. He said, “We’re thinking of re-listing, but wanted to see first if you’re people were interested in coming back.”
I asked him, “What are you going to re-list at?”
He said, “Well, that’s between me and the sellers. But before we do that, I wanted to see if you guys wanted to make a move.”
It sort of felt like he was selling tickets to last year’s Superbowl.
I followed up, “Can you give me a range in which you’ll be re-listing? Like, some sort of indication?”
Still feeling his “leverage,” he told me, “You should know what the range is. If you know the market, and you know what properties are worth, then I wouldn’t have to tell you.”
I thanked him for the call and told him to have a fantastic night.
If you’re wondering why I didn’t inform him that my buyer-clients purchased a different house three days ago, it’s because I simply don’t care to do so. The minute you feel the need to “show” somebody, you’re no better than they are.
That property remained on MLS at $999,900 for another week before they finally changed the price to $1,299,000.
It’s still for sale, and it will be for some time.
With sales in the GTA at all-time lows, I have to think that lack of consumer confidence is a major factor, and it’s one that’s being talked about in real estate circles and the media. But the elephant in the room, which looms larger than you can imagine, is the inexperience of real estate agents and their seller clients which has put roadblock after roadblock in place.
There would be far more sales if market participants just learned how to put emotion aside, but more importantly, if they learned to adapt to a market climate that has changed…
