Look out for your interests, how to protect your profit.

Tim Banfield
10 min readMay 1, 2017

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Let’s take a look at a tactic in the industry known as “buying a listing”. If you’re like me and you are passionate about real estate then you probably spend some time watching Home and Garden TV (HGTV). The popularity of the channel is growing and there is a lot of quality content to consume on their channel. Typically, I watch the shows that have to do with buying or selling a house. Ask anyone, DIY is not my strong suit at all, that’s Andrea’s responsibility in our home. I spend my time watching the shows that are realtor related, ones where someone is trying to list their home and decide if they want to buy another one. You know the shows, Property Brothers, Love It or List It, Million Dollar Listing (although that’s on Bravo), etc.

There’s often one common theme on these shows when someone is listing their home, sellers think that their home is worth more then it is. I can’t remember a show where that wasn’t the case, not saying that it didn’t happen but it is definitely a rarity. It certainly hasn’t happened on Million Dollar Listing where most home owners think their home is worth millions more then what the market does but that’s fine, that’s what they are supposed to think, it’s their home and the sentimental value is real. We all have pride in the things we own and home owners have pride in their homes.

It happened to me a couple years ago when we listed our home and it happened to my parents recently when we discussed selling their home. They thought it was worth more then it is. Knowing this happens I called one of my best friends back in Nova Scotia who is a Realtor to find out what she thought. Of course it was worth less, it usually always is and it’s not a surprise, people value their homes more than others and that is ok.

How do realtors take advantage of this situation

What’s not ok is when Realtors take advantage of this situation and attempt to “buy the listing”. Realtors know that everyone thinks their home is worth more and in most cases when someone is considering selling their home they interview several Realtors. Guaranteed, one of those realtors will tell the homeowners that their property is worth more than it is in an attempt to beat the other Agents who are competing to list the property.

It is a predatory tactic used by Realtors to get listings. The Realtor tells a home owner that their property is worth $20,000 or $30,000 more than it actually is and then they get the listing. It’s music to the homeowners ears, hearing that their home is worth more then it actually is and how would they know any different? Well, I’m hear to tell you the difference, 90% of the time it is simply not true, it is an ‘alternate fact’.

What is often happening is the Realtor is telling the seller what they want to hear; everyone wants to hear that their home is worth more, the Realtor knows this and knows they can ‘win’ the listing over the other Agents by lying to the homeowner. Then, one month, two months after being on the market the Realtor is hounding the sellers for a price drop, they are finally being honest with the sellers and telling them the value that the home is actually worth, then harassing them as time passes for price drop after price drop.

The problem with the strategy of listing too high and making price drops is by the time the price reflects the market value the potential buyers have already discounted it and moved on. Homes get the most interest in the first 12 days on the market, after that it is race to the bottom of inactivity. While the home was ‘fresh’ and had buyer’s interest it was listed too high and they moved on. So, 2 months down the road the home still has not sold and is now stigmatized as stale, “something must be wrong with it” or buyers just sit and wait, watching for price drops, anticipating that the price will continue to go down.

If, during the first 12–30 days while the home is overpriced you are lucky enough to attract a buyer who wants to put in an offer there is a strong likely hood that it will be a low-ball offer and the deal won’t come together because the seller was tricked by the selling Realtor into believing that their home is worth more then it really is. You might wonder why a Realtor would do this?

Why would a realtor do this?

The real reason Realtors “buy listings” is this…Think about what takes place when a home is listed for sale? There is a for sale sign on the lawn, flyers in the neighbourhood, a listing on Realtor.ca, open houses and social media posts. During all this who benefits? The Realtor, this is simple exposure for them, their phone number, face and website are marketed not your property. Having a home listed is like a giant billboard for Realtors, helping to generate more business through sign calls and inquiries whether your home sells or not.

This is why Realtors focus on listing more properties, think about the post cards, mail-outs and FaceBook ads that you are exposed to daily. Most realtors are marketing their most recent listing, the homes they have sold or their open houses. A listing is truly like a billboard, it is advertising for Realtors.

So here’s the warning. If you decide to list your property and a Realtor seems overly gung ho about your home being worth more then the other Agents you interviewed — LOOKOUT. Sure, it could be true, it has happened to me once in four years, where I thought that a property was actually worth more then the seller. It happened once but maybe this is that once in 4 years situation or, likely you are being fast-talked by a sales person who practices these techniques daily.

To be honest, I’ve lost clients for being too honest about home values or seller’s expectations and that’s fine. I feel people deserve the truth, not what they want to hear, I’m simply the messenger, it doesn’t matter to me if the news is good or bad, I can’t control what’s happening with the market but what I can control is telling the sellers the truth. I can think of several situations where I told a seller that their home was worth less than a Realtor I was competing against. The sellers then decided to go with that Realtor because that person lied to them and “bought the listing”. It happened recently in Strathcona Park in the Westhills.

Here’s a real life example of a Realtor “buying a listing”.

Late in the summer of 2015 I had a string of home sales in the community of Strathcona Park. I sold more properties in that neighbourhood in a few months then most of the “Neighbourhood Specialists” and received several calls from prospective sellers because I sold their neighbours home quickly and for a great price when the market was beginning to slow just as oil prices were beginning to drop.

On one street in particular, Stradwick Rise, I sold two homes nearly side-by-side within a couple months. A third neighbour from up the street reached out to me to give her an idea of the value of her property too.

During the meeting with the seller, (I don’t typically do a traditional listing presentation like so many other realtors because I wonder how we are supposed to know the value of a home before we go see it.) it was clear to me that she had also interviewed other Realtors and that’s fine, having competition is good and I would likely do the same thing if I wanted to sell my home (let’s assume I wasn’t a Realtor ;). While I was at the seller’s home we discussed recent sales in the neighbourhood and a ballpark of what I thought the home might list for. I said I’d need to go confirm that price but that I was probably pretty close, she questioned me about some sales in her area that were from a long time ago and that were of larger homes. I said that I would take a look but that I did not feel her home was comparable to these sales.

I went home, checked the trusty computer and sure enough, as I had anticipated those sales were not representative of her home at all, I gave her a call, confirmed the number I had mentioned during our meeting of a list price of $560,000ish. How did she know the sale prices of these larger homes though? Whether or not you think it is ok, Realtors control the sales data, the only way she could have known what those sales values were was if another Realtor told them to her. She questioned me about 3 sales that all would have valued her home closer to $590,000 then $560,000. My immediate thought was that someone was trying to “buy the listing”. Literally I had just sold the last two homes on her street for $585,000 and $625,000, her home was not worth the same, I feel like at the time I was a good person to ask having just sold the two homes down the street.

What did she list at?

Sure enough, a month later when I was putting together a search for a buyer I came across her property listed at $590,000. I wasn’t surprised at all, and guess what happened? She went through 5 price drops! That’s right, 5 price drops over the next 4 months, constantly being harassed by the selling realtor to drop her price. Did she change Realtors? Nope…Statistically that doesn’t happen and I wrote about this previously when I wrote about bait and switch technqiues to watch out for. Realtors know that usually people won’t switch the Realtor they are using and use this to their advantage.

Instead of telling this seller the truth, the listing Agent found comparables that mis-lead the seller into believing her home was worth $590,000, why else would the seller have asked me about those recent sales? Either the selling Realtor did this on purpose knowing they would benefit from another ‘billboard’ with their name on it or they are incompetent, either way, not the Realtor I would want representing me. In my experience though I will bet that listing Realtor knowingly lied to that seller and “bought the listing”.

Not only did it cost the seller the stress of being on the market for 4 months and suffering through several price drops, it also cost them big bucks. I know that home would have sold for a minimum of $540,000 and likely somewhere closer to $555,000 but because the listing Realtor “bought the listing” the seller ended up selling their home for $520,000, well below what it was worth. The home came on the market in September, one of the best times of the year to sell but did not end up selling until just before Christmas.

Realtors lie, here’s video proof

Don’t think that Realtors would intentionally lie to a seller? Then you should watch this video by CBC Marketplace. It’s an undercover special where the Investigative Reporter uses a hidden camera to catch countless Realtors lying in an attempt to double-end home transactions.

This special was recently featured on CBC again and it just shocks me what Realtors will say and do to make another sale. It smells of sales tactics and desperation just like “buying a listing” does. There’s a common theme, these things are good for the Realtors and bad for the sellers. I have written about this on countless occasions as soon as money is involved, honestly and transparency are out the window and some Realtors will do anything. The average Realtor in Calgary sold 3 homes last year, that’s one home every 111 days! Do you think they would “buy the listing” to try and get the extra exposure? You betcha!

The original Marketplace episode aired in November 2016 but likely got bumped up and shown again because the Ontario Provincial Government just announced changes they are making and a plan to investigate and focus on Real Estate Agents themselves.

Where does this leave us

BEWARE of the Realtor trying to “buy your listing”, is the Agent who tells you that your home is worth $30,000 more than the other Agents telling the truth? Realtors all have access to the same data, why are they suggesting such a high price? These are just a few things to ask yourself when you interview a Realtor who suggests a price much higher then the others. Ask them to justify that price, are they simply making it up or can they explain their price in an educated and logical manner?

We’ve seen above what the tactic is that Realtors use to “buy a listing”, we’ve also seen on video that Realtors are willing to lie and be unscrupulous to get a sale; no doubt they will inflate the price of your home to get a listing too, I’ve seen it firsthand in several times.

I’m ok with losing business for being too honest, I would rather lose a listing then mis-lead sellers by telling them their home is worth more. My reputation is valuable and I don’t want sellers repeating the story of how we had to do 5 price drops and how the selling price was $70,000 less then the asking price. I would prefer to under-promise and over-delivery not knowingly inflate the value of a home simply to have another ‘billboard’ in a neighbourhood.

The way I tend to work is like this, I present the good news and the bad news, your options and then ask what you would like to do. I’ll never pressure someone or use sales tactics to get a listing. For me it’s about full disclosure and objective advice, homeowners deserve it and as it turns they out appreciate an honest and open approach. You need to demand this of your Realtor too. I hope that giving you a glimpse into a tactic used to ‘win’ listings by Realtors will give you the upper-hand if an Agent attempts to mis-lead you and “buy your listing”

Thank you for taking the time to read my story. If you found it useful please click on recommend so that we can inform others of this trick. It would really be appreciated!!

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Tim Banfield

I’m a Realtor and Climbing Photographer living in Calgary who loves climbing and real estate. DM me if you have any questions or feedback on what I write.