March 29, 2021
How Being a “Motivated Seller” Can Jeopardize Your Listing
Representing a property on the open market is likely the biggest form of representation which exists. As important as a lawyer in a criminal court case, or even worse.. a divorce if you should go through one…
Speaking from a negotiations standpoint… buyers and sellers both, need to maintain a strong foothold. There are some interesting factors which can come into play which only realtors would ever know about.. so through this blog I hope to provide some further transparency on this matter.The most common word you’ll note in this blog… is the word “MOTIVATED”.Its Monday morning as I write this blog.. so yes, I am feeling very MOTIVATED, although thats not the type of motviation that I amspeaking of.Im talking about a MOTIVATED seller.What does this mean?As a home owner….If you receive a call from your employer indicating that you just got a MASSIVE promotion and need to move to Montreal… you’re likely motivated to sell your home, and move to Montreal!If you are unable to make your mortgage payments due to losing your job and find yourself in financial distress… you’re likely motivated to sell your home!So with that said… what kind of a seller wouldn’t be motivated?The Toronto real estate market in recent years has operated on a frenzy level… So with a frenzy market, you find homeowners just “testing” the market to see if someone will pay a life changing price for their homeAlternatively, if an investor may have an investment property currently occupied and the tenant is taking great care of the place.. paying down their mortgage while the property appreciates. If the market were operating in a “frenzy” state… the investor may elect to “test” the market. This is another example of someone who does not need to sell but would if someone were to pay a life changing price for their investment property.When it comes to real etstae negotiations.. its somewhat like poker. You need to withold your hand (your motivation level) until the river is out… the bets are in and you show your hand.In all likelihood, you’ve probably seen an MLS listing feature sheet before. There are variations to these MLS listings in terms of the one-page report you see as a consumer, and what WE see as Realtors.There is a version which is labelled as BROKER FULL which provides details realtors need such as commission payable to a co-operating agent, the sellers legal name and more specifics the public really should not see.In this BROKER FULL version there is also a portion for BROKER REMARKS. This will provide details on offer process, schedules (terms, conditions) to be attached to your offer, specifics on irrevocable periods, and further details which brokers will need to know if they are to submit an offer on the listing.Often times (mostly in the 905) you may see a Realtor put “MOTIVATED SELLER“ in the brokerage remarks… this is likely because the listing has been on the market for sometime, and is substantially overpriced.The negative impact that this has on your listing is severe and is not an approach I would suggest.Thats basically like saying “we know we are over-priced but we need to sell, so please bring me an offer!”In a market like Toronto… demand is high, inventory is low and properties priced appropriately, well, they simply sell!So why would a broker put MOTIVATED SELLER in the Broker Remarks… my assumption is that the listing agent set the sellers expectations too high just to simply secure the listing… and now can not get a price reduction to actually sell because they’ve promised the world!So what do they do?They simply sneak “MOTIVATED SELLER” in the Brokerage Remarks, which their client will never see as its not public information. Doing this is essentially saying “BRING ANY OFFER BECAUSE WE KNOW WERE OVERPRICED” which interestingly enough… I’ve seen as well! (shakes head)I cringe when I see this as its not only jeopardizing your stance in the market.. but it is normally done behind the sellers back as only REALTORS can see these comments.Pricing is more important than ever in a shifting market.If you price too high your property will go unnoticed and actually contribute to the sale of properties around you.Its best to show the market you are motivated (or not) by taking the time (or not) to prepare your property according to your motivation… rather than list WAY above market value and put MOTIVATED SELLER in the Brokerage Remarks.
Complacent representation at its finest.. in my opinion!