Whether you are a first-time home seller or have been around the block, did you know there are things you do not need to tell your realtor?
As you may have noticed, the real estate market in Canada has exploded, with home sellers cashing in and moving on.
On our street of about 40 homes, we’ve seen five houses go up for sale from May to August.
What was interesting is how they sold for over $100,000 asking price.
Currently, there is a house around the corner for sale at 1.2 million dollars that’s no bigger than ours but has a pool.
Both Mrs. CBB and I chuckle about that because we can’t get over what is happening in real estate.
In a previous blog post, I shared with you what home buyers should avoid telling their realtor.
It’s important to know what you should or should not say to protect your privacy and buying power.
Let’s take a leap and discuss what home sellers should steer clear of telling their realtor.
Home Sellers Must Trust Their Realtor
There’s no shortage of shady realtors out there which is why buyers and sellers need to abstain from saying too much.
I don’t care what type of transaction you are making with real estate. It’s always, “Buyer Beware.”
Why? Because you don’t always know what your realtor is telling potential buyers.
After two days of house hunting with a friend, I noticed a few things home sellers should dodge telling a realtor.
A good realtor will offer you full disclosure and tell you to walk away from a house that they should avoid.
Although the realtor is not by law held accountable for things they do not know or were not disclosed to them by the home sellers.
That, to me, is a trustworthy realtor looking out for a client who is buying a house, perhaps first-time buyers with no experience.
When home sellers hire a realtor, a good realtor will ask all the right questions avoiding what they do not need to know.
Although I was there to help look for obvious problems and share my opinion with my friend, I felt more like an investigator.
As simple of a process, you might think buying a house depends on the realtor you hire.
Often I always suggest interviewing a few realtors before finding one you’re comfortable working alongside.
Quick Tips From RECO
The Real Estate Council Of Ontario (RECO) is an excellent source of tips for buyers and home sellers.
Be sure to confirm the registration of your real estate professional by using the real estate professional
search feature on RECO’s website.
In Ontario, to trade in real estate, brokers and salespersons must be registered under REBBA 2002.
Remember to read everything before you sign and ask questions if the information is not clear. Agreements are legally binding contracts, so you must understand the terms and conditions.
It may be helpful to include someone you trust during the negotiation process to translate unfamiliar documents for you.
Ask your family or friends about their real estate experiences and if they would recommend a particular
real estate professional to you.
You can read more here.
Important Changes To RECO
What are the most significant changes?
Many essential reforms in the legislation will improve protection for Ontario’s buyers and sellers.
Here are a few highlights, but you can read more here.
- Adding clarity for buyers and sellers so that they know whether they are represented by a brokerage, or if they are self represented;
- Requiring new disclosures to buyers and sellers to support informed decisions;
- Additional regulatory powers that will give RECO more tools to get the worst offenders in the industry out of the business; and
- Making it easier for RECO to levy fines against real estate salespeople for certain violations of the legislation.
The above quote is from the RECO website.
Home Sellers Should Keep Clear Of Financial Disclosure
Your realtor does not need to know how much money you have in the bank or your net worth.
The only person who needs to know about your financial situation is your mortgage lender.
Another big NO is never telling a realtor the least amount of money you are willing to accept to sell your house.
The quicker they can sell your house, the faster they can move on to sell more homes.
Home sellers do not need to disclose if they are in debt and forced to sell their home to pay for it.
Often home sellers can get too close to their realtor, and it’s easy to tell them too much.
I think of a real estate agent as a car salesperson who knows how to negotiate and the tricks to buying and selling.
Although unethical realtors will do just about anything to sell a house, including double-dipping, be wary of what you tell them.
Double-dipping is when a realtor becomes the selling agent and buying agent at the same time.
My friend’s realtor was using was a real piece of work and did nothing for him.
He brushed off the fact that a bathroom with a hot tub was full of mould by saying to remove it.
No big deal, right? Wrong, that was a huge problem and a significant renovation for potential home buyers.
Every issue found was fixable, and when he called the selling agent, she told him everything she knew about her home sellers.
What? Yes, and I couldn’t believe it until he realized I was there and he stepped into another room.
My buddy walked away from that house and tossed the agent with whom he did not partner by signing any documents.
Realtors Do Not Need To Know Your Professional and Personal Associations
While chatting to a listing agent of a home we were viewing, he asked questions I felt were nosey.
He had asked me where I lived, worked and did I grow up in this city? Woah! I’m not even buying a house.
Of course, my buddy, who didn’t know any better, jumped in and offered where he worked and why he was looking for a home.
The realtor asked my friend if he knew someone that worked where he worked. Ugh!!
You see, this realtor didn’t care about what I had to say but thought he’d see if my friend would join in the conversation.
Sure enough, he did until I almost stepped on his foot to get him to shut up.
Instead, I said, it’s time to see the next home as if I was his partner pulling him away.
Knowing where you work and any personal associations gives any realtor a way to figure you out.
The realtor could find out how much money you earn and dig a bit deeper into learning more about you.
We’re about here, and the big guns come out to play if a potential buyer is on scene.
Home Sellers Need To Evade Chit Chat About Private Life
As mentioned above, the real estate agent who worked for my buddy was on the phone with the home seller’s agent.
I heard her say that the home sellers were getting a divorce, and they did a quick cleanup.
They were hoarders, and she suggested that they do some quick fixes to make their home stand out.
Oh, it stood out alright. The dark painted walls, black kitchen cabinets, black wainscotting attempted to hide the smoke stains.
Let’s not forget how disgusting the house was. Maybe they just forgot to clean it.
The electrical outlets were even painted over black, haha! They were that lazy they couldn’t even remove them first.
I have a problem with home sellers who try to screw buyers with unmistakable lousy quality workmanship.
No chance I’d EVER buy a house slopped together or a flipped house—nay.
My point is home sellers need to get straight to using a realtor and avoid their private life.
A realtor does not need to know if you are getting married, divorced, moving close to a dying parent or having a baby.
The realtor works for the home sellers to sell the home and does not need to know your private life.
By doing so, the home sellers give unethical realtors the go-ahead to use tactics to negotiate lower prices or psychological tricks.
If both realtors get in on it and want to sell the house, grab the commission and run watch out.
Doesn’t that make you mad? I know it does for me, which is why many homeowners opt for Property Guys or other For Sale By Owner companies to sell their houses.
Neighbours Have All The Juicy Information
I want to make a final point on this particular house: the neighbour was outside with her dogs.
I started chatting to her, and before you know it, we had loads of inside information about the home sellers.
They split up and headed to divorce court and needed to sell the house fast.
This neighbour also considered buying the house as a rental with a friend of hers.
When they walked through the house, she told us there was no chance they were buying it.
See, neighbours are a great source of info for buyers but not for home sellers if the situation is terrible.
If the home sellers neighbours are great and you all get along, they will praise you, so there are pros and cons.
Every street has nosey neighbours, so look out for them and strike up a conversation.
Ghostbusters Won’t Save Your Haunted House
There is no known law in Ontario that says home sellers must disclose death, unnatural deaths, homicide or a haunted house.
These are called stigmatized property situations where no physical defects or problems with the home would lessen the value.
Keep in mind the home sellers may have bought the home where someone committed suicide and didn’t know.
If the sellers didn’t know, then the realtor won’t say, and neither will you.
So if you think your realtor will tell you, think again because they probably don’t know.
House Shopping Without A Realtor
I discussed double-dipping, where the home seller’s agent becomes the home buyer’s agent.
Keep in mind that brokerage fees need to be paid by the seller’s agent, so they don’t get the total amount.
For example, it would look like this if the total commission is 50/50 between the buyer’s agent and the sellers’ agent.
Commission total is $50,000 Agent A get $25,000 and Agent B gets $25,000.
However, this would happen if the buyer goes right to the home seller’s agent before it hits the Multiple Listings Service (MLS) without an agent.
If the buyer makes an offer on the home and the sellers accept it, the agent gets the full $50,0000 commission.
The agent would tell the home sellers that they have a potential buyer who would like to put in an offer for consideration.
If that agent motivates the home seller and the buyer puts in his//her best offer, the agent can work their magic to close the deal.
However, there are many risks involved when you buy with the listing agent.
What’s not so great is if the sellers realtor lets out too much information about current offers or what the home seller is willing to take as the best offer.
You may also find that the agent will tell the home sellers how much work the buyers would need to repair the home.
Realtors Who Pull Out All The Magic Tricks
When we met with the listing agent of a home that we called to schedule a walk-through, he asked if my friend had an agent.
He said no because he truthfully fired his agent the previous day and thought we would go to the source.
In a way, we wanted to see what we, the buyers, could get from the home sellers agent.
Realtors all have a bag of tricks they use when it comes to earning a commission.
They don’t have to be tricks that are unethical either, but money sure does talk when working on commission.
We found out from the agent that the homeowners have two other homes in the USA and were motivated to sell for this particular home.
The home sellers were open to a fast closing date as well. Plus, he helped my buddy find a way to lower the $479,000 asking price to $400,000 given the renovations that needed completion.
Again, this is why you never tell a realtor your financial situation or even how much of a mortgage the bank or broker is willing to give you.
Trust me, if an agent knows they will push to the max to show you why you need to bid high and use the maximum loan amount.
So, these home sellers were converting a double garage into an apartment to rent but didn’t quite finish.
Although my friend backed away from the offer, the house sold the next day.
Working With The Home Sellers Agent To Buy
I’ve seen how the magic of this tactic happens first-hand with another friend of ours who bypassed everything.
The listing agent knew she was desperate to find a home (too much info given) and that his buyers wanted to sell fast.
Bingo! The buyer paid $100,000 over asking and has now sunk $150,000 into renovations.
Of course, he would motivate the seller to buy the home because it’s so hard to get into the market right now.
Houses sell for ridiculous prices, and realtors have the upper hand, as do the home sellers.
The realtor in this situation has a mother who is also an agent who then signed off as the buyer’s agent.
These home sellers didn’t look back and whisked away with the cash from their overpriced home that just sold.
She also forfeited a home inspection in the process by including nothing but the house offer.
Don’t do this. Just don’t.
Home Sellers and Buyers Beware
I’ve already mentioned that buying and selling a home always comes with the sign of the times, “beware.”
No matter how much work you do with a realtor, if you hire the wrong one, you could ultimately get screwed—no other way of putting it.
What’s good for the home seller is even better for the buyer when the listing realtor has a big mouth or knows too much.
Zip it, hire the right realtor and do all the valuable things you need to do so your house sells fast and for all the right reasons.
Like my friend above, who thought he was getting a great deal during his desperate situation, cost him a fortune.
Discussion: What other topics should home sellers avoid telling their listing agent to protect their selling power?
I’d love it if you could please comment below, sharing your tips and perhaps a first-hand story that you’ve experienced.
Thanks for reading,