Dirty Truths about the Real Estate Market

1. Roxanne and Matt Don’t Exist (aka, the Truth About Door Knocking & Cold Calling)

A few months ago, we had a property listed for sale. It had been on the market for about a month, when one day, our Sellers received a note in their door from a REALTOR:

“My clients Roxanne and Matt are looking for a home in your neighbourhood. They are a young couple, looking to start a family, yadda, yadda, yadda….and are excited to get into your neighbourhood. I’d love to talk to you about selling your home.”

Okay, so there are a few problems with this and they should set off your bullsh*t meter.

First: There was a For Sale sign on the lawn and the house was already on MLS. That note contravened the real estate industry’s rules that prevent an agent from contacting another agent’s clients.

Second: The house had been for sale for 30 days and that REALTOR had not made an appointment to see it.

TRUTH: Roxanne and Matt don’t really exist or they would have already put an offer on the home.

Real estate agents are taught to door-knock and cold-call people as a way to find Sellers. They’re taught that homeowners will be most likely to respond if they think the agent has a real Buyer, so stories are created and scripts are crafted to make it seem legit.

However, it usually goes down like this: The unwitting homeowner (that’s what they think you are) gets excited that someone wants to buy their house…the agent convinces them to put in on MLS to attract more Buyers...and everyone conveniently forgets about Roxanne and Matt. Boom – agent makes a commission.

NOTE: I have to say that sometimes, Roxanne and Matt really do exist, and agents are truly trying to find real people a real house. But trust me, this is the exception, not the norm. In all our years we’ve only had that twice across our whole office. You will be able to tell the difference.

In this case, we called the agent and asked her why she hadn’t brought her clients to see the house yet. What we haven’t mentioned yet, is that this house was part of a subdivision of identical houses – so if Roxanne and Matt really were looking in the area, they would have seen it was for sale. Her response? ‘I have a marketing company that sends out those letters everywhere to help me find Sellers’. Just as we thought.

The Moral of the story: If an agent is willing to start a relationship with you, about your largest asset, based on a lie, is that they type of person you want to be in a relationship with? Next time an agent calls you or knocks on your door and tells you about their Buyer who wants to buy your house….be VERY suspicious.

2. Most REALTOR awards are BS

You’re really smart so you’ve probably already suspected this, and I’m here to tell you: it’s true – a lot of REALTOR awards are bullsh*t. Most brokerages ‘award’ their agents every year for sales – you’ll see President’s Awards, Chairman’s Awards, Platinum Awards, Diamond Awards, 100% Club, #1 Awards, Top Producer and a whole bunch of other meaningless stuff.

Truth: These are all INTERNAL awards, meaning that they merely represent an agent’s performance vis a vis other people in their own brokerage…so the size of the brokerage is critical in determining what that performance award really means. Sometimes, that agent is #1 in a 5 person office. Sometimes they are a ‘Top Producer’ yet 75% of realtors sell more homes than them. Sometimes, everybody gets an award, even if they’ve only sold 3 properties.

In every organization, internal awards serve an important purpose – to reward and motivate the people who are part of that organization. But why have real estate agents and brokerages chosen to turn those internal awards into marketing messages? I can’t think of any other industry that advertises their internal awards this way…. you don’t see Apple marketing themselves as the best at Apple. Better than Samsung or Microsft? Maybe. But not the best at Apple.

Buyers and Sellers don’t know the difference between Platinum and Diamond and Chairman when it comes to real estate awards – hell, I’ve worked in the industry a long time and I don’t know what most of them mean. Just recently, I’ve found out that most of the awards at one of the BIG brokerages (think balloons) relate to how much commission the agents make. Really, I’m not kidding. So an agent claiming to be part of the Executive Club has made between $50-99K in commission (or has sold 3-6 properties in our area). So basically, they are advertising how much money they make, which seems worse than advertising an internal award.

To stay within the advertising rules a bunch of agents have asterisks that explain the award... and if your eyesight is better than mine, you might be able to understand what they won the award for. Don’t get me started on the agents who are the ‘2010 Top Achiever Award’ on business cards…in 2018.

Hey, I’m all for recognition of accomplishments but when everyone wins an award for something, and it’s all internal awards, I start to get suspicious. This isn’t Timbits Real Estate, where everyone is a winner. The only one who should be a winner when choosing a Real Estate agent is you, the Buyers and Sellers. Lets face it, you are a lot smarter than most agents think…and I believe most of you care more about experience and expertise than they do about internal awards they don’t understand.

3. Some Agents Pay to Play

Get this: the agent on the cover of that magazine might have paid to be there. For example, Top Agent Magazine, which touts itself as featuring ‘the top-producing and most accomplished agents in the real estate industry’. Truth: They reach out to (almost any and every) agent and tell them they are being considered to be featured as an expert…then they interview them…and make them pay to be able to share the magazine (with their photo on the cover) with their friends and clients. It’s the same with most Radio shows. That 30 or 60 minute show on talk radio is not the radio station hiring the agent to come on because they’re they expert in Real Estate and the listener’s are dying to hear about the market. No, that agent is paying to be on the radio and they are portraying THEMSELVES as the expert, even though they are most likely not.

Also: not all reality TV is created equal. While there are some great shows featuring top real estate experts on HGTV, there are also a lot of reality TV shows (on different networks) where the agents pay to be on the show. For example: Top Million Dollar Agent, in the US. Don’t be fooled….the people you’re watching may not be top agents, and they may not be selling luxury properties. The one thing you can be sure of? They paid to be there. Its not different here.

Now don’t get me wrong: I have no problem with paid advertising… what I have a problem with is paid advertising making you think its genuine when it isn’t. Lying, Deception: not cool…never.

4. It’s not karma that the agent called you.

Picture it: You’ve got your property listed for sale for 4 months. Much to your dismay, it doesn’t sell and the contract with your REALTOR expires. Suddenly, your phone is ringing off the hook with agents who have a Buyer for your place – are you still interested in selling? Notes, postcards and flyers start arriving at your door telling you how hot your street is. Wow, what a coincidence right? Not a chance. You have an ‘expired property’ and every agent wants to sell it.

We’re serious – we’ve had clients of ours get upwards of 15 calls a day after their listing expired.

There are entire seminars and training sessions devoted to teaching agents how to “convert” expired listings into new listings…and how to get around the rules put in place to prevent would-be Sellers from being harassed by eager agents.

Truth: If that agent had a real Buyer, they would have brought you an offer while your property was listed with your agent.

Heads Up: When you signed the listing agreement, you agree (or not) to be contacted by other agents when your listing expires. If you didn’t agree to it (and you shouldn’t), and are getting calls or people knocking on your door, record the names of the agents and report them to RECO – they could be fined (or at least dissuaded from harassing you). If you don’t it will continue to happen.

I’ve blogged about: Supervillains of Real Estate, Masterful Deception, They say its All Your Fault, The Market is Smarter than You, Gimmicks Real Estate Agents play on you, etc. Today, I want to share with you 4 Dirty Truths About the Real Estate Industry that no one wants to talk about. Agents really do get pissed at me for talking about this kind of stuff. Oh well. 😊