There are over 70,000 real estate agents licensed with the Toronto Regional Real Estate Board.  If that number doesn’t strike you as particularly large, consider that it is also the combined populations of Collingwood, Wasaga Beach and Owen Sound put together!

With that many people helping clients buy and sell real estate, there are naturally going to be a few bad apples in the barrel.  While we’ve had the pleasure of working with a lot of professional, knowledgeable agents on deals for our clients, we’ve also encountered a number of those bad apples.

As a result of those interactions, we’ve learned what to look out for with bad agents so that we can best protect our clients.  Here are the three ways in which an agent on the other side can ruin a deal.

#1 – Poor Communication

All real estate deals require two parties who agree upon terms.  Negotiations often start off with a price, closing date or conditions that aren’t appealing to the other side.  With some hard work, agents representing the buyer and seller can come to terms that both parties are willing to accept.

In order for that to happen, conversations need to happen.  In the past that used to mean in person presenting of offers and negotiating face to face.  Now, it is much more common for the negotiations to take place via emails and phone calls.  Regardless of the medium used, a good real estate agent needs to be able to communicate well.

We have seen many, many deals fall apart because of poor communication from the other side.  That can mean not responding in a timely fashion, but the biggest way communication derails deals is when an agent never really makes the effort to understand the other side.

On multiple occasions, we’ve had buyer agents send emails to us for offers on a property we’re listing with no prior communication.  Just an email that arrives out of the blue, often with no explanation as to who the buyer is or what’s contained in the offer.  In some cases it feels like they accidently sent an offer to the wrong agent, but when the offer is reviewed, it is for our listing.

In all of our history working with seller clients, an offer that arrives in that fashion has never resulted in a deal.  Put bluntly, an agent who is unprofessional enough to not bother with a introductory phone call or email has no interest in what the other side needs for a deal to get done.  Offers that arrive this way are often riddled with errors such as misspelled names, missing legal descriptions and none of the required schedules.  In addition, they are almost always very one-sided, in favour of the buyer.  This means low-ball offers with multiple conditions that allow the buyer to walk away from the deal.  The closing date is typically not what was requested on the MLS listing and the deposit offered is too small for the price of the property.  In short, it is not a serious offer from a genuine buyer that has any chance of moving forward.

Contrast that against a professional real estate agent who takes the time to call and introduce themselves and their client via an email.  Such agents recognize that understanding expectations on the seller’s side is important to crafting an offer that can be negotiated successfully.

#2 – Incomplete Information

Most people react to missing information in the same way – they assume the worst case scenario.  This is actually a pretty practical approach, as if you don’t have all of the info and make assumptions about the worst case scenario, anything better than that would be an improvement.

In real estate deals, incomplete information most often results in no deal taking place.  Let’s go through a few examples.

A buyer is considering making an offer on a home, but there is no pre-list home inspection available.  While walking through the basement, the buyer and their agent notice some water near the washing machine.

  • Did the seller pre-wash a stain on a blanket in the sink and drip water on the floor as they put the load into the machine?
  • Or is the washing machine broken?
  • Or even worse, is the foundation cracked and allowing water to leak through?

A pre-list home inspection could have told us the washing machine is in good working order and there is no evidence of any foundation issues, but in the absence of that information, the buyer and their agent continue their visit looking for other “problems” and they’ll likely find some.  No offer is made and the listing agent and seller don’t get a chance to explain the situation as the buyer has mentally moved on.

Here’s another example, this time on the selling side.

A seller receives an offer for their home and is generally pleased with the price and closing date.  The offer is conditional though, and it’s for three months, upon the sale of the buyer’s property, which makes the seller nervous.  The purchasing agent doesn’t provide any information about the property the buyer needs to sell.  As a result, the seller and their agent discuss the possible scenarios.

  • It could be a lovely home in a great neighbourhood and a fair price has been decided upon and the marketing prepared and the home will go on the market tomorrow.
  • Or is it a home that needs work that hasn’t been done, in a market saturated with listings, where it will take the full three months or even longer?
  • Worst case scenario, what if this buyer can only close if they get an above-market sale price for their own home?

While buyers and sellers have the right to a certain level of privacy, not sharing information that can alleviate concerns in the mind of the person on the other side is a terrible idea.  In the absence of all necessary information, the likelihood of a deal going forward is low.

#3 – Ignorance of the Market

The final common way that a bad agent can derail a potential deal is by not having a proper understanding of the market within which they are trying to buy or sell.  This doesn’t mean that you need to be a local agent who has lived and worked in the neighbourhood for years, but it does mean you need to understand the current market conditions.

Here’s a couple of stories about what that looks like during negotiations.

We listed a home for sale in Toronto that had three income units within the home.  One was owner occupied and the other two were currently rented out for good rental rates.  While the neighbourhood was desirable, it wasn’t a typical family home in this regard and we offered the home for sale at a fair price, with offers accepted at any time.  A buyer agent called us after showing the home and he said that his clients very much liked the home, but he wasn’t sure they would submit an offer as they couldn’t go much above the list price.  He was clearly used to working in a market where homes are always listed below market value to generate multiple offers and assumed this was the case here, despite evidence to the contrary.  When we let him know that we considered the list price to be a fair price and the seller would be willing to sell for that price, he submitted an offer at close to the list price and we came to a deal.

Another story involves a client of ours who we helped sell in Toronto and buy in Vaughan.  On the sale side of things, we received a number of low-ball offers from agents who were choosing inappropriate comparable properties and advising their client on the value of our listing accordingly.  The home was on a wide, deep lot but was a relatively small home with just three bedrooms.  Agents who did not understand the market submitted low priced offers based on properties that had sold on lots that were literally half the size.  When we sold to a buyer who had plans to build a new home on the property, the price was commensurate with the actual value of the current building as well as the lot.  On the purchase side for our client, we submitted an offer on a property our clients liked, but at a lower price which was reflective of recent sales in the market.  The listing agent, who was clearly not keeping up with activity in the market, initially signed the home back at higher than the current list price.  Our clients moved on and purchased another home nearby at an even better price and when this uninformed agent contacted us a week later to say his clients were ready to sell at the price we’d offered, it was too late.

An agent not living in the market they’re working in is fine, but an agent who doesn’t understand the market they’re buying or selling within is a recipe for disaster.

There are some good real estate agents out there, but there are also a number of bad agents who don’t do well by their clients.  When they are poor communicators, don’t provide all the useful information to get a deal done or don’t understand the market in which they’re working, deals don’t happen.

If you’re thinking about buying or selling, don’t try to do it with a bad agent.  Instead, get in touch with us and we’ll show you why our business is based on repeat clients and referrals from happy buyers and sellers.