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Ever wonder if a REALTOR’s sales stats are legit?
Or if the claims they make are true?
Or if their boastful feats are even something you should care about?
Today we’re exposing the truth behind common REALTOR claims. While there are real estate codes and advertising laws to prevent misleading claims, unfortunately, stats can be manipulated and small print exceptions can render too-good-to-be-true offers meaningless. Here’s what those marketing stats and claims might really mean.
Claim #1: “Top Salesperson in the Neighbourhood in 2017!”
True? Maybe, maybe not. A lot of agents have teams and report all of the team’s sales through the team leader’s name. So while the official reporting shows that Agent John has sold 30 homes in your neighbourhood, it’s very possible that those sales were actually the result of the work of 5 agents.
Pro Tip: If a salesperson makes this claim, always ask if they completed those sales personally or with the help of another agent or team.
Claim #2: “My listings sell XX% higher than the rest”
Here’s how this marketing gimmick works: The agent calculates the average selling price of the homes they’ve listed for sale and compares it to the average price of homes sold in Toronto. The problem? The average sale price in Toronto includes all types of homes, parking spots and commercial properties and covers a HUGE geography with a number of sub-markets.
For example: Agent Mary works downtown Toronto. She lists 5 homes for sale, at an average sale price of $1.1 million. She compares it to the average price of all the homes that sold in Toronto ($765,000 in August 2018) and claims that her listings sell for 43% more. While technically true, this is pretty deceptive.
This marketing game also doesn’t take into account the price point the agent works in. If an agent is selling homes listed at $2 million dollars for $1.8 million, they might be selling at $130% more than everyone else in the GTA – but those are terrible stats within the luxury market.
True Fact: We include a similar stat in our listing presentation materials because Sellers expect it – but we compare ourselves to the average home in the areas we work vs. the whole GTA.
Claim #3: “I’ll buy your home if I can’t sell it in 60 days!”
This was a marketing tactic taught to REALTORS years ago and we still regularly see it in Toronto. It helps real estate agents find Sellers because it plays on the very real fear that many people have: “What if nobody wants to buy my home?”
Usually, there are a ton of terms and conditions that effectively invalidate the offer for most Sellers. The most common condition is that the Seller needs to agree to sell their house for a certain price, usually below market value.
If you’re thinking of hiring a REALTOR with a guaranteed sales program, make sure to ask:
- Does my house qualify? Often, more expensive properties and luxury homes are excluded.
- Do I need to buy a home from you too? It’s common for guaranteed sales offers to only be valid if you also buy a home with the agent.
- What would my asking price have to be to take advantage of the guarantee? How many price reductions would I be required to make?
- What kinds of improvements would I need to make to my home? If I don’t do as you recommend, is the guaranteed sale offer still valid?
- How much would you buy my home for? How much below market value is that? Make sure to ask other agents without a guaranteed sales program for their opinions of the true value of your house.
- Is there a difference in commission if I don’t want the option of the guarantee?
Claim #4: “0.5% or 1% commission!”
This one is both true and false. It’s very possible that the agent is offering a low commission for the selling portion of the commission – BUT – that percentage usually doesn’t include the amount paid to the agent who brings the Buyer. In Toronto, Buyer agents are usually offered around 2.5% commission. So that 0.5% commission? Might very well really be 3%. It also might be dependant on you buying a property with the same agent or restrict you to only selling it only to the agent’s own buyers.
Pro Tip: Ask lots of questions and check online reviews before committing. And remember that like most things in life, you get what you pay for…and if it seems too good to be true, it probably is.
Claim #5: “I’ve been in the real estate market for 15 years. ”
Sounds like they’ve been a REALTOR for 15 years, right? Possibly. But more likely: they are a newer agent who has owned real estate for 15 years. I’ve personally seen brokers recommend new agents do this to disguise their lack of experience.
I’ve also seen people make a # of years experience claim because they got their license 15 years ago…but didn’t actually start selling real estate until 2 years ago.
Pro Tip: If someone makes a claim about their experience…ask questions. When were you licensed? How long have you been a practicing agent full time? On average over the last 5 years, how many homes have you sold?
Claim #6: “Sold $300,000 over asking!”
Truth: It is EXTREMELY unlikely that the agent’s actions were responsible for that kind of % over-listing sold price. What likely happened: they got the price wrong or they significantly underpriced it to generate multiple offers.
I’ve seen examples where agents boast a huge over-asking sales price, when in reality, they sold the home below market value.
Also regularly seen: the agent sells the listing to their own Buyer before it gets exposed to the public, then inputs the sale into the MLS system at some arbitrarily low price and instantly marks it as sold at a high price so that their stats look better. Seriously. These are the games that some agents play.
Claim #7: “My listings sell in 7 days”
This could be true. But it’s also possible that they play games with listings that are struggling to sell. It’s common practice in Toronto to re-list properties after they’ve been on the market for a few weeks so that they appear ‘new’ to buyers. They are essentially cancelling the old listing that showed 21 days on the market and re-listing the home as a new listing with 0 days on the market. We’ve seen plenty of REALTORS sell a property Thursday night, cancel the listing and relist it Friday morning and then instantly mark it as sold. That helps their official sales statistics…but isn’t really a reflection of their actual performance.
Pro Tip: Ask about the listings that don’t sell. The Days on Market stat only takes into account properties that actually sell, and not those that are taken off the market. Always ask how many properties the agent listed and didn’t sell.
Claim #8: “I find the Buyers for my Sellers listings 30% of the time.”
This one makes me cringe – because it’s true. A lot of agents pride themselves on representing a Buyer and a Seller in the same transaction. It’s called dual agency or double-ending and usually, the real winner is the listing agent. You can read more about it here: Should I Buy with The Listing Agent? and here: Should I List My Home for Sale Exclusively?
Claim #9: “I market my listings on the internet and on social media”
This claim might be true. But it also might just mean that their listings appear on realtor.ca (like everybody else) and are shared with the agent’s 200 friends on Facebook. If an agent is touting themselves as a digital expert, ask questions and do your homework.
Pro Tip: Ask: How many daily visitors does your website receive? How many followers do you have on Facebook and Instagram? How do you use Facebook ads to market listings? Make a point of doing some online sleuthing to verify any claims made about digital marketing and social media.
Looking to hire a REALTOR who won’t BS? You know who to call.
Henry Vincent says:
I Love the Brel Team. They are trusted RBC realtors with integrity. Melanie and Brendan, you have an awesome Team. We at RBC are so happy to have you as part of our Team.