A realtor’s confession


Received this anonymously overnight. Thought you might like to read it. — Garth

I witnessed owners who got sucked into bidding wars having to take a loss when they sold. This wasn’t recently – it was 3 years ago. They weren’t my clients by the way! I have a real problem advising people to bid anything over what I think a house is worth, let alone those “professionals” advocating going in $50 to 100,000 (or more) over list. I’ve advised many of my clients to look elsewhere when faced with bidding wars.

I think things are already slowing down. Other Realtors think it’s because of the weather this year. I do not.

I see and hear bizarre things in my line of work, and the level of (lack of) financial savvy amongst the average person is shocking. You plan on spending half a million on a house and you don’t get an Inspection BEFORE buying? Rolling $60,000 in renovations into your mortgage? Crazy. Mind you it doesn’t help that the City of Toronto seems to think the workaround their new land transfer tax is to simply roll it into your mortgage as well.

There is trouble headed this way and I for one welcome it. For too long there have been unscrupulous people working in the industry, taking advantage of what they see as easy money, and purchasers good intentions. Builders that put up crap and cut corners, large numbers of people I wouldn’t let sell used cars running to get their Real Estate license because they think it’s easy money, unprofessional Real Estate Agents (this includes some “high profile” people with reality programs) , so-called “Stagers” that think Staging is simply hiding flaws (true Staging is not). I’m hoping the coming trials will weed them out.

5 years as a Realtor and Accredited Staging Professional has left me thinking I’m the only honest person out there, but I want to be able to sleep at night.

I used to work in a high profile office with over 100 Agents. There are 2 in that office that I’d even consider working to sell my house.

A really good shake down might give some people some perspective – or at least get them to start returning phone calls. This isn’t just limited to Real Estate either.

From “A Toronto Realtor”


#1 Yossi Kaplan, MBA on 03.18.08 at 9:57 am

Dear Garth,

I am a Realtor, not a “realtor”, and I put my name behind
whatever  that I say or write.

I work downtown with focus on condos and personally participated on behalf of
clients in “bidding wars” with up to 17 offers on one single condo (we lost btw).

Multiple bids do do not automatically equate to over-priced properties, as
there are many reasons why this would occur, for example, Seller strategically
setting low asking price in hopes of attracting prospects, or, the market as a whole gains a few points and a new unit in a requested area
or building may reflect that increase in overall prices.

I repeatedly advise my clients and readers to do the required research, consult with professionals
– interview several and then pick the one that you think is the best for you – and clearly understand the risk that goes with each type of investment, in our case, real-estate.

Above all, ask questions.
All the best,

Yossi Kaplan

#2 Toronto neighbourhoods on 03.18.08 at 12:05 pm

In my opinion, it can be hard job to find a true profesional realtor in Toronto. Avarage real estate agents try to sell as many houses as possible. Sometimes they do not look on buyer’s wealth. The vision of easy money earnings can affect on realtor’s decision making. So, it is necassery to carefully choose right real estate agents.

#3 Dane Caldwell on 03.18.08 at 12:51 pm

Interesting Garth,

The anonymous emailer who wants to sleep at night and says they are sick of consumers being mislead is doing the same thing.

This person claims to be an ‘Accredited’ stager when there no such thing as an Accredited or Certified stager. These are marketing ploys and the ‘letters’ placed after their names are really Trademarks they pay annual fees to use.

I’ve blogged the 10 questions to ask a stager before hiring one:


Another of my blogs is about the perils of hiring a stager who is not qualified to make suggestions:


Time for your anonymous emailer to stop trying to pull the wool over the consumers eyes about their ‘accreditation’ and come clean…they took a 3 day course on staging…that does not make them a subject matter expert let alone a professional stager.

Wonderful book you’ve written. It is refreshing to see someone with consumers’ welfare in mind!

Dane Caldwell

2 Hounds Design – the IDEA resource

#4 John Ostris on 03.18.08 at 1:04 pm

I guess I will continue to rent….I live in Ottawa and although at a slower pace, prices have inflated so much so over the past decade, I will continue to rent while all this plays out over the next few yrs…

JOhn, Ottawa

#5 David Smith on 03.18.08 at 3:10 pm

Hello Garth. I live in Winnipeg and have noticed a substantial price increase in housing over the last five years. Prior to that, a house rarely sold over the asking price. Today, homes are listed by an agent with an open house during the weekend and closing bids the next day! They are driving up the price of homes by creating these bidding wars. It’s great for the seller but lousy for the buyer. Four years ago, I bid on four homes with offers ranging from 5-10 thousand over the asking price and lost them all. When I did get my home with a successful bid of 6 thousand over the asking price, we did so with no home inspection. It needs all new windows and a new roof that will cost me upwords of 20 thousand dollars.

Today, homes are selling in Winnipeg for more than 50 thousand there asking price! And in one recent case a house was listed at 350,000 but sold for 500,000! How crazy is that! I blame the agents for creating the bidding wars…they are laughing all the way to the bank.

#6 mwhite on 03.18.08 at 3:20 pm

Just read your chat on the Globe and Mail and wanted to point out for anyone that thinks you’re seriously off base on a real estate collapse that it actually is (almost) completely predicted by demographics. As baby boomers age, die, etc there will be a LOT of real estate chasing fewer buyers i.e. a reverse of the trend that got us to the high point of some markets today. Really… it’s very simple stuff. One thing that wasn’t predicted by demographics was the number of aging boomers choosing to downsize from larger homes to condos (which is happening in some markets already I believe).

#7 R.EVANS on 03.18.08 at 7:37 pm

Read your G&m chat. Is your new book anything like your 1996 2015 Revised-After The Boom? Is this a new attempt to get it right this time because it sure wasn’t right last time. So, o.k. I’ll ignore you.

Actually, I predicted a demographically-inspired real estate dump by 2015 in my book of 13 years ago (hence the title). We’re still on schedule. And of course you are welcome to ignore me. Good luck. — Garth

#8 Dominic on 03.18.08 at 7:40 pm

I just recently moved from Montreal to Toronto and to say the least am completely stunned by the housing market in TO. When I know that I am in the top 5% of the income bracket and can’t afford to buy a resonable house there has to be something wrong.

Yet, all I hear from all the Real Estate agents is that prices are continuing to increase and that I need to buy now.

In a way I hope you are right Garth as we definately need some relief in pricing. While I don’t want to make money off someone else’s misfortune, I would like to own a home and need them to be at reasonable prices.

I have also noticed that trying to sell my Triplex in Montreal seems to be much more difficult, when the weather turns nice we will know if it is weather related or cyclical.

Good luck to all.

#9 Vancouverite on 03.19.08 at 7:25 pm

Hi Garth,

Great info on the impending real estate crash. I have been renting for several years now. In 2001, I almost bought, but the bears told me that even though rent was the same as mortgage, I had a risk if my home went down. So I rented. I have seen prices soar to insane levels. I can not believe my eyes! Who is buying this? I am still renting but happy to konw that someday, the market will come back down to normal levels to a point where I can buy at the bottom. I am getting restless and sick of renting but I am hanging in there. If I could do it for almost 7 years, then a year or two is not a big deal. Real Estate going down to the level that I am hoping for (back to 2001 less 50%) is all I am asking for. Thanks for your wise wisdom.

#10 danny on 03.24.08 at 12:32 pm

The sky is falling the sky is falling. I am not a realtor but i am smart enough to know that if your waiting for the prices in Toronto to fall by 50% you can put down your crackpipe and join the real world. This is not going to happen. You will see small gains or a plateau. Even in the US not all states are getting hit. If you look at large city centres like T.O they are still moving up not down.

Who said a price reduction of 50%? More reasonable is a flatlining, and a 10-15% decline, perhaps more if the economy tanks. I think you should set aside twenty bucks from your own crack and buy my book instead. Much more stimulating. — Garth

#11 Justin on 03.24.08 at 9:48 pm

Enjoyed reading the comments. My wife and I have been wrestling (not literally :) about what direction to take in this current market.

We own a home in the suburbs outside Toronto. We bought about 4 years ago, and therefore got in the market at a relatively good time. In light of everything I have heard and read, we are wondering whether we should sell and take the equity, pay off debt, and sit tight for a bit to see how the market rises, falls, or flatlines (as you say). We are thinking about purchasing a cheaper place with a good downpayment, while still putting aside some cash (just in case). This would ideally be used as rental property in a few years from now. The only alternative if we sell our home would be to rent (which my wife despises) or live with family for a little while.

So with that said, does it make sense to sell now considering we have decent equity in our home now? Do we sell and wipe out debt? Do we sit tight in the house and ride out the storm knowing that our house will only decline 10-15%? I’ll be honest, the thought of being debt free excites me, and if only for that, we are seriously thinking about it. However, will getting back in the market ever be more reasonable? Will leaving the market now only set us back in the long run? I’m confused and would appreciate some advice.

Thanks for reading this desperate plea for help :)


#12 danny on 03.25.08 at 8:21 am

Garth, The 50% comment and the crackpipe was directed at a previous comment from another blogger. I think alot of your comments are accurate and well thought out except I think you tend to take the gloom side of the approach on too many occasions.