Toronto Real Estate Myth 018: Buyers That Deal Only With Listing Agents Win Big. Sound Strategy Or Wishful Thinking?
March 3rd, 2010 Categories: Home Buyers, Home Sellers, News Wire
Ask any agent that lists in the Toronto real estate market how often they speak with potential buyers that desire to work only with the listing agent, and they just might tell you something along the lines of “far more than I CARE to have that particular conversation”.
What?? How can that be? Well, it’s not that Toronto real estate agents don’t want to double-end their deals. Because if the opportunity presents, agents will go for it. And if it’s done correctly (read: in adherence to the Code of Ethics) both the buyer and seller are properly represented. A successful offer is written, accepted and the deal closes.
What Are These
Toronto Buyers Thinking?
So what’s the issue? It’s simple: When speaking with buyers about your listing, chances are pretty good that it isn’t the one for them (for the usual reasons: too much money, too small/too big, too much work, etc.). However, if you’re speaking with buyers who’ve truly bought into the “I’ll only work with the listing agent” mindset, they’re not interested in seeing if you’re able to work effectively for them in the capacity of a buyer’s agent. Because they believe they will do much, much better dealing directly with the listing agent. Which is their choice to make. Sometimes this is crystal clear from the first conversation; sometimes, it takes a few rounds of calls and emails. My preference: crystal clear from the first moment (it just saves so much time!).
I never take this preference personally, as I strongly believe that buyers and sellers should work with whomever they wish. And although my door is always open to these buyers, I’m not sitting beside it having second thoughts about our conversations and waiting to see if they return to moi.
Wishful Thinking Buyer Strategy
For Toronto Real Estate Market
But what I have been giving second thoughts to is the strategy itself. Because strategy is always so very interesting. Is the “only work with the listing agent” strategy effective for buyers in today’s real estate market? Do these buyers have a better success rate than those who choose to work with buyer agents? They seem so confident, so self-assured. If it’s a winning strategy, shouldn’t all buyers adopt this approach?
Why don’t we take a look at just what’s going on out there?
I’ve been working extensively in Toronto’s District E01 the last few months so I’m very familiar with recent market activity (scorching hot! unbelievable prices! bidding wars galore!). So I number crunched in this area in order to get an idea of how much double-ending is actually going on. Which would give some indication of whether the “only work with the listing agent” strategy is a viable one.
I looked only at freehold sales for the past 90 days (12/01/09 to 03/01/10). During that period, there were 148 sales. Of those sales, 27 were multiple representation deals (definition: the same brokerage represented both buyer and seller). However, of those deals, only 13 were written by the same agent representing both ends (which is what the market typically considers to be the double-ended deal). That’s less than nine percent of total sales.
Numbers Don’t Support
Double-End Strategy Advantage
Numbers-wise, that’s not all that significant/impressive. Buyers who work that strategy aren’t dominating the market. In fact, they’re barely registering. I also took a quick scan of the condo market in E01 during the same period (though no actual calculations were done) and it seems to play out pretty much the same. And if I were to take a look at other Toronto districts, I doubt there would be any that would skew significantly in favour of double-ended deals.
For this strategy to be successful, both parties have to buy into it. And here’s where this one falls down: sellers aren’t buying into it. It’s just not enough for the buyer to believe working with the listing agent is their best shot at writing a beneficial (to them) deal. The sellers also have to believe that the double-ended deal will be the best-ever deal (and that would be because …?), and be willing to turn away all other offers until that deal arrives. Clearly they don’t. Time and again, buyer agents wrote the boffo offers that were accepted.
So “listing agent only” buyers, I ask: When a strategy is just wishful thinking, is it time to adopt a new one?
Toronto buyers and sellers! Are you looking for a Toronto real estate agent who can handle today’s challenging market? Call Lauren at 416–550–6991, or send me an email.
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I agree with you that buyers should work with whomever they choose. It’s not always easy to convince clients about the benefits of sole representation. Most of the time, buyers just don’t understand the process.
Derek H