Ep. 14 - What Is a Buyer Agent Worth? The Truth About Real Estate Representation

In this episode of The Last Honest Realtor podcast, host David Fleming dives deep into one of the most hotly debated topics in real estate today: the value of a buyer agent in 2024. With 75,000 real estate agents in the GTA, opinions are divided, but David cuts through the noise with his candid take on what truly separates the best agents from the rest.

David examines the common misconceptions about buyer agents, exploring why some see them as indispensable while others question their worth. He discusses the history of buyer agency, the impact of industry lawsuits, and the real-life scenarios where having an experienced agent can make or break a deal. Whether you're skeptical of agents or considering going it alone, this episode provides the honest insights you need.

Throughout the episode, David shares personal stories from his 20-year career, offers strategic advice on navigating the Toronto real estate market, and reveals the negotiation tactics that seasoned agents use to secure the best outcomes for their clients. If you’re involved in real estate—or just curious about the inner workings of the industry—this is a must-listen episode.

In This Episode:

• The true role and value of a buyer agent in 2024
• The history and misconceptions surrounding buyer agency
• Why U.S. and Canadian real estate lawsuits are changing the landscape
• David's personal stories of negotiation and the importance of industry relationships
• Key factors that differentiate top-performing agents from the rest

Timestamps:

00:00 - Introduction
01:00 - The Misconceptions About Buyer Agents
07:00 - The History of Buyer Agency: Why Do We Have Buyer Agents?
15:00 - Real Estate Lawsuits: U.S. vs. Canada
24:00 - The Value of Knowledge, Experience, and Relationships
35:00 - Negotiation Secrets: How Top Agents Close Deals

Don't Miss:

• David’s take on the current lawsuits affecting the real estate industry
• A breakdown of the history and evolution of buyer agency
• Insider tips on what makes a top agent stand out in a crowded market

Subscribe to The Last Honest Realtor on YouTube or your preferred podcast platform. Be sure to like, comment, and share your thoughts on this episode!

Transcript

SPEAKER_00 0:00

Hello, everybody, and welcome back to The Last Honest Realtor. I am your host, David Fleming. Thank you so much for joining me today. And if you read the title, you're gonna fall into one of two camps. You are either here to get your snarky comments ready in the YouTube comment section, Or you're actually intrigued by the idea. The cynical side of me is going to joke that on the weekend, I asked the question, what could possibly anger more random YouTube viewers than talking about how the Toronto real estate market is going to go up? Then maybe, oh, I don't know. talking about the value of a real estate agent in 2024. If this was 200 years ago, I'm picturing Marie Antoinette's being led to an execution and people are throwing tomatoes and heads of lettuce. Where did that come from? And who decided to start throwing entire heads of lettuce? But that is me, proverbial or otherwise, as I try today, not necessarily to convey or in any way to convince you of the value of a buyer agent, but rather to sit back and to honestly ask, What is the value of a buyer agent in Toronto in 2024? So there are a lot of people coming into this that are just going to say, real estate agents suck. They're terrible. They lie. They cheat. They steal. Whatever you can say, right? And there are some people that, I mean, there's a reason I'm in business. I have very loyal clientele. I have people that call me and ask me to work with them. And then there's people in between that may say, yeah, you know what? I'm all ears. I want to listen to what you have to say. So I'll say this at the onset. There's 75,000 real estate agents in the GTA. I have gone on record many times that saying most are not very good. So today we're not trying to talk about the average or the overall, because in any industry, there's going to be good and bad. And if you want to look at mortgage brokers or home inspectors or any other industry, of course, there are better and worse. There are good or bad. Real estate, for whatever reason, gets slagged on a lot. I have said over the years I believe a lot of people aren't in the market. Thus, they hate real estate. They hate real estate agents. I've written blogs about this. In fact, our upcoming Insights article, which is a magazine that we send to all our clients, I wrote an article called, Why Do People Love Being Bearish on the Toronto Real Estate Market? And that, of course, was one of our podcasts that we did. So 75,000 real estate agents, most of them aren't very good. But hey, listen, there's probably 7,000 to 10,000 that do most of the transactions. And what is the value of that? of that agent in that$7,000 to$10,000, whether they are working with you as a buyer or a seller. Today, of course, we're talking about buyers. So by way of introduction, three things I want to talk about. Number one, to remind you that buyer agents are compensated by the seller. So there's this misconception out there that as a buyer, you have to pay. As a buyer, you get to use my services for free. Now, hang on a sec, because some of you are cracking your knuckles getting ready to type in the comments section. It's not actually free. It's coming off the top. It's coming off the seller's bottom line. Maybe it is, maybe it isn't. But that's going to lead into a conversation about the history of buyer agents. Now, the second thing I want to talk about is that in the United States, we have massive lawsuits that are being settled for billions and billions of dollars. And people are going to say, hey, there's a lawsuit here. So sooner or later, it's going to be free to use a real estate agent. It's not going to be free to use a real estate agent. And I could do an entire podcast on compensation. That's There's no real reason that people should expect to not pay. Now, how much you want to pay, of course, is negotiable. The lawsuit in the United States is about commissions. It is suggesting that sellers are somehow forced to pay buyer agents. That is what the lawsuit in Canada is about that followed. But I'm going to read something to you from Kristen Bosley's Insights. This is the article that she wrote, and it goes like this. Did you know that as of June of 2024, there were 535 registered multiple listing services in the 50 different states across America? How does a qualified buyer navigate a world in which two houses side by side can be listed for sale onto completely different MLS systems? Suddenly, the Toronto Regional Real Estate Board, TREB, looks like a gift from the real estate gods. So if you want to compare the lawsuit in the United States to the lawsuit in Canada without doing any research or having any knowledge and say, hey, guess what? Real estate in Canada is going to fall apart. Well, Sorry, you should probably look into it because as I noted there, there are 535 MLS systems. And yes, in the United States, you could literally have your neighbor list with a different agent who's part of a different board. It is an absolute mess down there. That is the basis of their website. The Canadian lawsuit is very different and I'm not going to get into that today. But I want to now tell a story and this is going to be a fun one. So listen up. It's a story that got me in a lot of trouble. So right off the bat, maybe if some of you guys are interested and it's a story that right now could get me into further trouble. So why not? I want to show you that I am not biased. I want to show you that I'm not necessarily a cheerleader for the entire real estate body. And I'm going to refer you to a blog post that I wrote six years ago. It was in January of 2018. It's an article called realtor stats. How many transactions were agents doing in 2017? So here's what I did. I'm going to name names today. There are third-party companies that either scrape data from Treb or Treb sells the data to them and they sell it back to us. But there are third-party companies out there that will give you a subscription and you can look at every single agent and how many transactions they do. Now, I have this program because I like to know who I'm dealing with. If a buyer agent offers on one of my listings and I look him up and he's done zero transactions in the last 12 months, I have a pretty good idea of where his weak spots are. On the contrary, if I happen to look an agent up, I've never heard of them and they've done 40 deals, I'm going to treat them differently. And we'll get into that later when you talk about the actual value of a buyer agent. But in 2018, I downloaded the stats for all 50,000 agents and I put it into Excel and I wrote this blog and I asked the question, how many licensed realtors complete zero transactions per year? And so it was very simple. If we looked at this data and we said there's 50,000 agents, but only let's say, I don't know, 28,000 had done a deal. Well, there's your answer. Now, when I wrote this, there was a lot of upheaval in the industry because I basically took the lid off and a lot of people complained, well, what if you're on a team and your deal goes under someone else's name? I mean, I have a team and I don't do that to my agents. I hope no other agent is on a team where your deal goes under someone's name. Some people said, well, what about pre-construction experts? Okay, oxymoron, sure, magic beans and all. So there's always gonna be critiques, but essentially I did this in 2018. I made these disclaimers. The data's not coming from Treb. It's from a third-party company. Third-party company only tracks agents that have performed sales, not leases. There were 50,010 realtors licensed in Treb at the end of 2017. Amazing, now that number's gone up by 50%. And the sales data is for the entirety of 2017. So I wrote this. And I put graphs in here and I said, how many agents did zero transactions in 2017? It was 34.6% according to this data. 17,313 agents out of 50,000, 34.6%. So then I looked and I said, okay, how many agents did one transaction? Add that to the people that did zero, 51.3% of all agents in 2017, statistically, did zero to one transaction. And so that's where I want to introduce the idea of value in a buyer agent. Because if you were asking me, what is the value in those 51.3% of agents? There isn't any. I don't believe in the value of a part-time real estate agent. I don't believe in the value of a discount real estate agent. I've been in the business 20 years, 43. Oh my God, I'm turning 44 tomorrow. I've been the top agent of Bosley for 10 years. I don't know whether that has any importance here, but I'm just saying I'm in it to win it. Okay. I believe in this industry. I believe in my value. There are a lot of agents that don't have value. I'm admitting that. And I'm telling you that, but I'm not talking about those. And if you want to hire your cousin from Nepean to sell your condo in Toronto, you want to tell them what to do and have him not charge you for it. I understand that when my car breaks down on the side of the road, I don't decide now's the time to get out the jack. Figure out how to change a tire, right? I don't throw darts at a board on Wealthsimple. I have a professional that does that for me. That's me. And that's who I am. But to each their own. So back to the blog post. And I broke this down. And for some of you, you can go and Google it. Realtor stats. How many transactions are agents doing in 2017? So how many agents are doing more than four transactions per year in 2017? The number is 24.8%. How many agents are doing 10 or more transactions? 10%. Then I put a graph down. Agents doing 20 sales or more, 2.5%. Agents doing 50 sales or more, 0.3%. Now for me, I don't know if this is tantamount to the proverbial notches on the headboard, so to speak. I mean, how many deals do I do in a year? Does it really matter? I think, I don't know, the most I ever did was like 104. That was a grind, let me tell you. But usually I do 80 deals, and that's me personally. My team does a ton of deals. I'm involved with deals with Matt and Tara and Chris on a regular basis. I do a lot of leases. Believe it or not, yeah, I do leases. And I know a lot of agents that reach a certain level they don't want to, but I figure that client bought through me That client expects me to lease it for them. I will happily do that. So I'm in that 0.3%, or if we were to go higher, it would probably be the 0.1% if I'm being perfectly honest. But I'm not here to tout that, but rather to say two things. Number one, not all agents are equal. And number two, I am with the public when it comes to identifying that there are good and bad and better and worse agents as evidenced in this blog post from 2018. So let me explain to you what happened when this blog post came out. All hell broke loose in the People at the Toronto Real Estate Board read the blog post. They did not like it. They wanted to know how I got this data. The company called IMS at the time had given me an account through my then broker manager at Bosley. The account was disabled. It was fairly obvious that the folks at IMS knew that I had used this data to go and write a blog post. Now, it's kind of funny because it's our data us being real estate agents. And then we went and got it by paying a subscription to a third-party company. And now we're being told what we can and cannot do with it. I mean, listen, we signed up and they have rules and regulations. So if I broke the rules, then they took my account away and that's fine. But I heard through the grapevine that what ended up happening, our broker owner, sorry, broker manager then in 2018 was a director at Treb. Yeah. And during a subsequent meeting of the board of directors, he was asked to leave the room so that the rest of the directors could discuss what David did. Next day he came down and he said, I spoke to the person at the third party company who has the data. They will give you your account back. Just stop doing what you're doing. I said, okay. They gave me a new username and password. You ready for this? The username was my email. And the password they gave me was, I won't do it again. All lowercase. I'm not kidding. That happened. And then two days later, my account access was removed. And I asked my then manager to look into it. He called the owner of the third-party company who said, yeah, I thought about it. And after giving him his access back, I thought, you know what? F this guy. And I decided to take it away. So a lot of people emailed me about it. There was media attention about it. And a lot of people at the Toronto Real Estate Board were not happy about it. I don't understand why the public, it doesn't get more information on realtors. Now, there is no inherent right to know how many deals a realtor does. You just can't. You can't mandate that. You can't legislate that. But there are a lot of people out there that say, how am I supposed to know if my realtor is good or bad? How am I supposed to know how many transactions they do? Just ask them. Ask them. How many deals a year do you do? People ask me that all the time. And I'm honest about it because some people think I'm too busy for them. And I do too many. And some people think that I'm not busy enough and I don't have enough experience. So that is the story that I wanted to tell. And it leads me into this question. What is the value of a buyer agent in 2024? The reason I gave you these statistics was because I wanted to introduce you to the concept of not all agents being alike. I'm not talking about your friend who has his real estate license, who told you that if he buys for a million dollars and he gets a$25,000 commission, he'll glad you give you$20,000 of it back and he'll just keep five. right? Because he's a partner at a law firm and he has a real estate license. Guys, look, I'm not going to convince you if you think that there's value in that, but I can tell you that Matthew on my team just sold a property where the seller was self-represented. Can you imagine what that was like for him? What's the expression? Shooting fish in a barrel? Yeah. The self-represented seller who thinks that real estate agents are paid too much, doesn't want to hire a real estate agent. Imagine Matthew going to war and his opponent has absolutely no armor and no weapon. With all due respect to that person, Matthew raked him or her over the coals because he is a seasoned negotiator and he knew which buttons to press. And frankly speaking, because most other real estate agents didn't want to work with that seller. Now that's the basis of some of these lawsuits. Real estate agents won't go and work with sellers who don't want to pay X percent of commission. No, I think that those people don't know how to do it. And in this case, that seller was crazy. You know, wanted to hold the deposit in his or her individual name, wanted an escape clause in case they didn't want to go through with a transaction, wanted to walk around the house in every single room, like basically taking for your fingerprint and DNA. But there's an example where somebody that didn't want to hire a real estate agent probably left, well,$900,000 house, Comps were over a million bucks. And you're going to say, oh, I don't believe you. I don't believe you. I'm telling you. I was there. I watched it. I saw it. I supervised it. So let's do this. I want to go briefly to the history of buyer agency. Why do we have buyer agents? That's what a lot of people ask. Why do we have buyer agents? I wouldn't get along with those people because they're the people who use words like should and they. They being who. Always comes down to the government. You know what they should do? Who's they? Right? That's what I always joke around about. So Why do buyer agents exist? Why do they have buyer agents? Well, if you go back far enough, there was a time when every listing belonged to a brokerage. And if you were a buyer, you would have to go, that was me knocking, you'd have to go knock on the door of the brokerage and say, hi, what listings do you have? So I'm going back to a time before MLS and before buyer agents and before the internet. And you would go and you'd knock on the door of XYZ brokerage, what listings do you have? And then you would look at their listings. And if you wanted to see one, you would go and take a look. And if you didn't like them, you'd go to the next brokerage. Now, eventually we began to cooperate. We, I wasn't born yet, but we began as an industry to cooperate. But it was still incumbent upon that buyer to go and work with the listing agent. Now, if you were to walk into a brokerage and they said, here's this house, would you like to take a look? You go in and you are working with the seller's agent. And then you make an offer through the seller's agent. You have absolutely no representation. Ironically, If we were to eliminate buyer agents, that is what we would go back to. And this is the public's issue is that it's a double-edged sword or having your cake and eating it too. We for so long said multiple representation is the worst thing in the world. There was all these articles and all these politicians talking about multiple rep. It's so bad. You can't have the same party represent buyer and seller. But we also hate real estate agents. We want to get rid of them. So let's get rid of buyer agents because buyer agents don't do anything. Well, then as a buyer, you now have to go through the seller's agent And now we're back to multiple representation. Now, some of you are gonna go, ah, guess what? I'm smart. So I'm gonna represent myself and I'll just have my lawyer look at it. Yeah, cool. You're still negotiating directly with the seller and the seller's agent. I don't care who you are. And I come across these people all the time. And I'll get to that as a point I wanna make in the very end when I say that, No self-represented party has ever bought one of our listings or come even close. But if you are the super smart guy, you don't need a real estate agent. You're just going to have your lawyer look at it. You're still going up against the seller and the seller's agent. You have no representation. So I'm not suggesting that multiple rep where the buyer actually uses the listing agent and expects them to look out for their interests. I'm not talking about that. I'm talking about a situation where you just simply go up against nobody. Fine, you have no line of defense, no problem. Ask Matthew how that worked out for that other seller. So that's the history of buyer agency. That's how it came to be. Let's now talk about buyer agents and exactly what they do. Buyer agents get a key from a lockbox, they open a door, and then they get 25 grand. That's what people like to say that they do. What does a buyer agent do? You sell a million dollar house in Toronto, you get 25 grand, you're overpaid. Okay, well... I mean, buyer agents have expenses, first of all, and buyer agents have splits with their brokerages, but you don't care about any of that. Forget it. Say they're only getting 18 grand, whatever. It's too much money. They don't do anything. What do buyer agents actually do? I told you that in 2017, 51.3% of agents, according to the stats in this blog post, did zero to one transaction. Those buyer agents don't do anything. So you win. You can have it. The other agents who do 20 plus transactions a year, That's two and a half percent of all the agents. Those agents are worth their weight in gold. And you don't have to believe me because you want to submit your own offer on a listing. I've met you, I've seen you. Start to sound like a real jerk. But to the others who trust me and think it's funny, Yeah, you can't imagine the experiences I've had. Oh my God. I'll get into one. I'm going to make a note right here to talk about Jenna's grandparents' house. I'm going to come back to that. That guy was a gem. So buyer agents, they say things like, I'm hardworking. Okay. Anyone's hardworking. The waiter at the restaurant, he's hardworking, is more hardworking than any of us. They say things like experienced and professional and knowledge. Sure. We all say that. Any agent is And I love going to an agent's website. And again, we all started from somewhere. Going to an agent's website where they're like brand new and they talk about how hardworking and knowledgeable and experienced. They're just buzzwords. What does that actually look like? What is experience and knowledge? I'll tell you a story. Years ago, I was on the bus going up to the Ballsy golf tournament. You know how long ago this is because number one, I don't have time to do that and I don't go anymore. And number two, I would never go on the bus. But I said I wanted to play a game and here it is. You have to say an address and someone else has to say the name of the building. Or you have to say a name of a building. Someone else has to say the address. So we're sitting on the bus. Someone goes, Electrolux. Someone else goes, 1029 King. Someone else says, DNA. Okay. Well, there's an asterisk there. Okay. One Shaw or 1005 King Street West. So we played this game. And it was actually kind of cool because you saw what level of knowledge some agents had and others didn't. And again, the layman might say, good for you, David. You want 2.5% to memorize a list. That's not what I'm talking about. I'm talking about the experience of a buyer agent who can say, and I'm going to use Matt and Tara as an example, I have been in every single condo in the downtown core. There's a value to that. Absolutely there is. I don't care what industry you are in. If you go and buy a pair of skis, You're like, which skis are better? And they go, oh, I've only ever heard of this one. I've never heard of the other 15. I can't tell you about them. Right. But we're talking about the person that knows every single make of ski and he knows every single binding and he know which boots are the best. And anyways, I don't know. I'm looking out the window and there's a ski place. Right. But that's my point. So that game was a lot of fun. And I remember playing that. And I remember when Matt got into the industry, I said to him, I want you to memorize every single condo in the city. And he was like, you're joking. And I said, no, that's what you have to do. And I want you to go and see a unit in every single building. I did the same thing with Tara. I told both of them, go and book appointments. Every single day, I want you to see 30 condos. And they did. And they spent months. And it's not just seeing a unit in the building, but you have to understand what's the address, what's around there. That's part of the other value of real estate agent. We'll get to in a minute. Where's the concierge? What are the amenities like? Is there a rooftop terrace? What are the units like? What are the ceiling heights? What's the decor in there? How old is the building? Are most of these refurbished? What are the maintenance fees like in these buildings? What do they pay for? Is heat and hydro included? Is there a parking lot across the street? Is this view going to be blocked? There are a million things that I can tell you from a knowledge standpoint that I told Matt and Tara to do, just as I told Chris and some of the other agents I don't work with anymore over the years. Hell, I remember getting in my car once with a previous iteration of my team. We drove around the city for six hours as I just gave a tour and educated them about everything. Today's buyer agent needs to know the product, just like in any other industry. And so I'm talking about condos here. because, you know, I'm using the example of a Matt or a Tara. And of course they sell houses. The irony is we sell just as many houses, if not more than condos. But the idea of this young buyer agent that's getting into the business and they're being crapped on by society who says that they have no value. Hey, someone who's been in the business for a week, maybe they don't. But I don't know whether it's two weeks or whether it's 20 years. If you have somebody that knows every single condo in the city and every associated aspect, and then they know every single house, they know every area, they know every school and every park. and how far it is to walk to, and which is the French immersion catchment. Knowledge is a factor. So, you know, I've got a note here. Pros, cons, ins, outs. Values, relative values. And as an example, the value of a real estate agent somewhere between knowledge and honesty and experience is, and I'm going to draw off of a pick five that John and I did this week. Let's say that somebody emailed me and said, hey, I'm really interested in buying a unit at The Well. My first instinct is, wow, that's a really expensive building. And it's new and prices are high. And I would ask them why. Now, part of the value of a real estate agent is to be able to put yourself in that buyer's shoes. Let's say differentiate between one buyer and the next. If you have a buyer that has scraped and clawed their down payment together, and they are running on fumes, living on margins, and they saw this really cool unit at the well. It's very different from the kid whose parents give him a million dollars and said, Billy, go buy whatever you want. Would I sell a one bedroom, one bath to a young person in the well? Extremely unlikely. Now, if you live in the well, I'm sorry. If you love the well, it's just an example. But the unit we looked at the other day, John and I, when we were comparing two bedrooms, sorry, what was the pick five? It was$2 million units. And we're looking around and at the well, it's 1500 a foot. And you could go two blocks over for$1,100 a foot. What's the value in that? Now, what's the value in the real estate agent telling you that? I think sometimes people don't want to admit that there's value in knowledge. There's value in words. And I'll give you another example. Let's say that a client of mine is going to be listing their condo for sale. And they've got a very dark unit. And I say, don't worry. Tomorrow morning, I can have someone here to install pot lights in all the bulkheads. And they'll charge you$1,500 to do that. Now, if the seller wanted to do that on their own, they would Google potlights Toronto. They would spend some time in Sanford's energy. They make some calls, they get some frustration. They'd have some guys show up and rip them off for nine grand. So part of the public doesn't want to believe that there is value in my recommendation, but that is my experience. And that is my contact. I have an electrician. I can have show up tomorrow to put potlights in for 1500 bucks. This person is vetted. They're professional. They've worked in my own home. I trust them emphatically. They will not rip you off. They will not screw you. They will not rob you. They will not start the job and not finish. They'll not overcharge you. They'll do the job. And you don't have to wait two months to do it. Alternatively, you can go on Craigslist, right? There's value in that. Now, some sellers don't see value in that. What do you pay for? That's the value for them. I'm paying you X. How much are you paying Y? Subtract Y from X, and that's the net. That's what I'm getting. They don't see value in anything else. Now, when it comes to buyers, when it comes to the value of a buyer agent, as I said, a lot of it is intangible. So if there's a young buyer agent that is able to talk you out of making a bad purchase, there's value in that. If there's a buyer agent who is able to direct you to a different neighborhood or a different school district for your kids or tell you why you shouldn't buy property X, Y, or Z, there is a value in that. And that, of course, comes from experience and knowledge. Do you remember when you would get in a taxi and they would know where to go? Now, contradict and contrast this with today when you get in an Uber, they type the address in and they drive there. So call me a relic, but I thought that there was a value in a taxi driver that knew the city. They knew where to go. They knew what the routes were. They knew what the shortcuts were. Now it's automated. And we just have someone that puts it into an app. So some of you have always thought of the Uberization of real estate as the next step in the forefront of the real estate industry. Maybe my example is not great there, or maybe, just maybe, you might choose to look at that and know exactly what I'm talking about. Let me get my thoughts together as I go to the next section. I'm

SPEAKER_01 26:20

going to take a quick break and come right back. Welcome back.

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And before we took the break, I was trying to convey the value in knowledge in Toronto real estate. Again, I think there are some people out there that are going to say, I can create that knowledge for myself. I'm resourceful. I have YouTube. I have Google. I can figure it out. Then there are folks that are going to understand. And I'm one of those folks. I believe in experts in their field and in their industry. And I believe in the value of a buyer agent who knows absolutely positively every single thing there is to know about houses or condos in Toronto. So if you look at when you start a process of buying or selling, if you're a first-time buyer, I've always maintained that there's far more value in that buyer agent because you've never done this before. Maybe it's an introduction to our mortgage broker. Again, right? Hey, you don't want to give us credit for passing on a name. This is somebody that we have used for 15 years. Somebody that I use every time I complete a deal on my own. Matt, Tara, Chris, everybody on our team. I think there's a value to that. But there's a process that you can outline as an agent working with a first-time buyer from having them get pre-approved for a mortgage to explaining the ins and outs of the transaction from start to finish. Now, again, I don't want to compare to the lowest common denominator, but Jonathan was telling me off camera, oh, you should mention about how many times a rookie agent calls you and doesn't know how to fill out forms. And I said, look, I don't want to make our agents sound great and valuable because we're comparing them to people that shouldn't be in the industry or don't know what they're doing. But yeah. There are those people, believe it or not. So when I say that when we work with a first-time buyer, we roll out the red carpet, we educate them, and we explain the process from start to finish. I don't want to take credit for doing our job, as we should see it done. But take something as small as the conversation you have with a first-time buyer. And they say, I want to go out and I want to start looking at places. And agent A says, absolutely. They go out, they start showing them places. And then unfortunately, it turns out that buyer can't get the 900,000 they thought they were going to get. They can only get approved for 700. That buyer is never going to be happy. And that search is going downhill fast. Had the agent done their job in the first place and said, you need to get a mortgage pre-approval. Once we find out what you can afford, we'll go out and start looking. Had that happened, it would have been a completely different process with a different result. And you might say, hey, that's basic knowledge. Or you might say, ah, it doesn't really matter. You're not going to convince me that that buyer was going to be super upset. There is a way to do things and there is a process. And in any other industry, in any other occupation, you would probably agree. So I can talk to you forever about the value of knowledge, product knowledge. I may or may not convince you, but we wear a lot of other hats as well. Let's say from a home inspection standpoint, I'm not a home inspector. I know enough about houses to be able to say, hey guys, check this out. A lot of agents don't have that knowledge. They don't have that experience. They don't have that know-how. Now, likewise, if a client asks about a particular building and one of us said, actually, that building has a$4 million lawsuit right now. Again, I'm demonstrating knowledge. The public doesn't understand that. But I'd say probably one out of every four buildings in the downtown core is a building that I would not sell in. Maybe it's the price. Maybe it's property management. Maybe it's that it's being used as an Airbnb. Maybe it's that 98% of the units in that building are rentals. There are all kinds of reasons why I wouldn't sell in a particular building. And on the flip side, when it comes to houses, I can't tell you how often I talk buyers out of buying a property. Now that's me. You can say that I'm in sales and my job is to sell. I don't really see it that way. I think I'm an advocate. And when I think someone should buy something, I will absolutely tell them. But if I'm sitting on a property and my buyer and seller, sorry, I was going to say my husband and wife, my couple are looking back and forth at each other, I might just interrupt and say, guys, this is not it. This is not the house. I don't think a lot of agents are like that, but that's just me. So again, I go back to knowledge. I go back to experience. And then there's that element of trust and Honesty, integrity. Oh God, I'm saying the words every agent on every masthead of every website. Trust, honesty, integrity. That's the John Smith way. Everyone says this. But here's the thing. And I tell people this all the time. I don't need the business. I want the business. So I can afford to not push somebody into a property, to not try to sell somebody into a property. The agent that needs the business, that's the person you don't want to work with. The person that does zero to one transactions a year and you say there's absolutely no value, which there isn't, and you say they're going to give me half the commission back, fine. They are going to push you into anything and everything because they have to. But if I'm doing 50, 100 transactions a year, I don't need it. I'm going to do what's right because that's how I've built my business. We'll talk more about reputation later. So negotiating, is that important? No, no. All real estate agents do in multiple offers is tell the client to pay the most money. Sure, in a hot market. Now, in that hot market, there's something to be said for strategy. There's something to be said, and I'll go on at great length for this, for being able to interact with other agents and who you are and what your reputation is. But I understand that people believe there's no negotiating in real estate because the property is listed at$9.99. You're just trying to bid the highest. The flip side is that probably one out of every two deals that we do is not in competition. right now. Or sorry, not right now, but typically. Right now, almost nothing's in competition because that's not the market. But if you're a buyer agent, or if you're a buyer saying, what's the value in my buyer agent? You can't simply expect that the role of that agent is to tell you to pay the most. Now with that comes market knowledge. What's it worth? Comes the experience, comes the strategy. And yes, there is a strategy when making offers because it depends on how many rounds of bidding. It depends on the strength of Other parts of your offer. Is it unconditional? Do you have a deposit check? Is it the closing date that they want? Again, this is basic stuff. But a lot of people don't do it and don't know how. And then the point that I'm going to touch on, one of the intangibles, is how you work with the other agents. But negotiating is a real thing. And I do believe that there are agents who are absolutely heads and tails above the rest. So right off the bat, yes, there are agents that have a value in 2024. Let's end the podcast now. Negotiating, of course. Again, the public might not want to believe it. but there are incredible negotiators in this business. I like negotiating. I'm a competitive guy. I will tell you that sometimes I push too hard. You don't wanna risk losing the deal, but I am really competitive. Now, a lot of agents will put next to their name, and I'm gonna eat a lot of crap for this one. A lot of agents will put next to their name CNE, Certified Negotiation Expert. I once made a comment at a Bosley meeting during the pandemic When everyone was on edge and somebody was saying, here's how to keep yourself busy, take courses. And I cynically said, if you need to put CNE next to your name, we've got a problem, which is my way of saying you're a real estate agent and you negotiate as part of your business. Do you need to put that you have taken a course on how to negotiate? In fact, I might be afraid if someone did that. My real estate agent, John Smith, CNE, what does that mean? Well, it either means he went down to the Canadian National Exhibition and overpaid for food and entrance, or it means he's a certified negotiation expert. And the other thing is, and I got in so much trouble for saying this, a friend of mine, I'm going to blame her. She said she went to the CNE course and she said half the time was spent trying to explain to people who are English as a second language what certain words mean rather than actually talking about how to negotiate. Now, I don't want to sound like a jerk. I'm going to. But I did go to a place called Harvard for a course for negotiating. Look, I did it. I don't put it on my resume. I don't put it on my business card. It's not on my website. It's not anywhere. I did it because I thought it would be fun. And you know what? I did learn a few things. It was great. I definitely learned. That's the whole point. But negotiating is important. It's a huge part of the value of a buyer agent. And I don't want to let you in on what some of my trade secrets are, but because I don't think there's a lot of real estate agents listening to this podcast, I'll tell you one of my best negotiating techniques is to blame my client and think about it for a minute. Let's say that I'm working with a buyer and I am max at 975 and the seller won't take less than a million. Now I know my buyer will go to a million, but here's what I do. I say to that listing agent, Jimmy, I don't care what my buyer pays. I'm in sales, man. I'm here to make a deal. If I could get you a million, I would. Don't you understand that? I just blame the client. I threw myself under the bus. I compromised my integrity in that agent's eyes to get the best possible deal for my client. That is one of my favorite negotiation techniques. Blame the client. I can't get the client up. He won't do it. You know I want to make a deal here. If I could get you a million, I would. Now there's a second part of that, which is that agents have egos and that that agent on the other side is going to see me as weak, that I can't get my client up. And subconsciously, he's going to think that he's better and he can do what? Get his client down. So because he's got an ego to feed, huh? David Fleming couldn't get his client up. Are you kidding me? Watch this. I can get my client down. We'll make a deal here and it's going to happen because of me. Well, guess what? I just out negotiated that agent. That's what negotiation is. That is a very simple example of one of the techniques that I have always used because most agents have an ego. They'll never see it happening. And also because what can you do when you say, hey, listen, I don't give an SHIT what my client pays. If I could do it, I would. I mean, would anyone lie about that sort of thing? So yeah, negotiation is incredibly important. It's a huge part of the value of a buyer agent. I could give you an entire podcast on this, but I would like to move on because another one of these intangibles, and here's where I'm going to rub other people the wrong way, is I want to talk about relationships in this business. And so again, a double-edged sword. You would love if you were a buyer to benefit from some sort of inside information, but you would hate if you were a buyer to hear that some other buyer benefited from some sort of inside information. So it goes like this. My name is David. I'm a real estate agent. I've been in the business for 20 years. I call a real estate agent named Bob. And he says, David, oh my God, how are you? Good, Bob, how are you? And we talk because we've done deals together. We know each other. We're with different firms. We respect each other. We see each other out and about. Chat with Bob every once and so often. I have a buyer for Bob's property. Bob is going to treat me infinitely better than Chester from the 905. Okay, I don't want to crap on the 905. Say Chester, I don't know. Say he works for Bosley. I don't care. Chester, Chester's a jerk. Chester's a rookie. Chester's this, Chester's that. Who you are in this business is so incredibly important. And again, a lot of the public would say it shouldn't matter. This should all be, excuse me, this should all be Uberized. This should all be automated. Just work with me here, guys. Let's say there's a house for sale. There's 12 offers. And I have one of these offers. I know the listing agent. I talked to the listing agent when I first showed it. I called the listing agent to get the home inspection listing agent. I've been chatting up a storm and I've been joking with the agent. Hey, I'm buying your place. I'm buying your place on offer night. I have the second highest offer, but that agent and I have done five deals together and that agent and I have never had an issue. My five buyers have closed on that listing agents, five properties, five times in a row with absolutely no issue. I have a deposit check in hand. I have an unconditional offer. I have the closing date they want. I have everything. But the highest offer is from this agent that the listing agent's never heard of, has absolutely no rapport with, doesn't really know them. Can their buyer close? Are they going to have problems? Don't you think that that listing agent is going to call me? Hey, David, you're not the highest, but do your clients have more? So again, Part of you listening to this are going to say, oh my God, it shouldn't work like that. No. Fair and square. Someone else outbid you. It doesn't work like that, guys. Okay. What's the expression? You know, hate the game, not the player. I don't have any problem with that, by the way. I don't think anyone should be forced to sell. We're going to go back to the word they and should. They should make sure that this sort of thing doesn't happen. Why don't we just turn over all control and listing and selling of real estate to the government? Let's do that. Let's create another 20,000 public sector jobs and they can oversee the entire thing. They and should, don't they and should me. We don't have online auctions with$1 bid increments. We don't have the system in Australia. All of the things that people, and trust me, I'm interrupting myself, my own flow of a podcast because I know what people are thinking. People are thinking that I was quote unquote outbid. My point is that let's say with those 12 offers, My bid is 1,280,000. There's a bid of 1,300,000 above me. And the listing agent is looking out for the best interests of his or her seller client. And they think, I would rather have David Fleming to work with on this and his buyer client than Chester from the 905. Because believe me, every transaction is a partnership between buyer and seller. And there are bumps along the road. I'm a realist. I'm good at what I do. And at the end of the day, if I put a buyer into a property, I will get that through to closing and I will work with the other side for any issues along the way. On the flip side, Chester has absolutely no idea what he's doing. He's an order taker. He's not realistic. He's inexperienced. And when his buyer believes that they can do an entire PDI and send a list of quote unquote deficiencies to the seller before closing, yeah, well, that's going to be a problem. That is why the relationships are important in every transaction. That is why some agents prefer to work with other agents rather on the other side of the table time and time again. Now I'm gonna take a very quick break here because I'm not finished with this thought and you can give some thought to why I came up with the

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name Chester.

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Welcome back to The Last Honest Realtor. At the break, I asked you to decide why I chose the name Chester. Well, it's because Lindsay was eating Cheetos before we started filming this. No, seriously though, in my example, I talked about one agent versus the next at the proverbial table on an offer night. And this is what I mean when I say that the public probably doesn't want to hear this. You want to believe in some sort of fairness, right? Like there is a God, a real estate God, a judge, a jury that is overseeing every transaction. What there are people, And people are a variable. And when you have a property with 12 offers, when you've got a listing agent representing a seller, looking out for that seller's best interest, you're going to look at all the variables. Now, I am on the listing side very often. My breakdown is probably 70% listings. Actually, it's probably 75% listings, 25% buyer ends. Now, when I am on the list side and I have 12 offers, I put a column in Excel for the name of the agent. Not just the amount of money and not just the deposit. I wanna know who that agent is. The agents that I know, I have worked with before, I trust they are reputable, they are honorable, they are honest. They have no mistakes in their offer. They have no issues in the past with me with not getting checks on time or not closing on time or not, what? What else? There's a million different things. But I wanna work with agents that I know can close a deal. I wanna work with agents that I know are professional. And here's where I'm going to suggest The value of a buyer agent, in addition to the knowledge and the experience and their hard work and their work ethic, in addition to their ability to negotiate, in addition to all of the contacts that they have and their processes and how they can lead you by the hand or otherwise through from start to finish, the value exists in their name and their reputation and their brand. Right? Let me give you an example. I might've told this story before, but it's going to provide context. And I apologize if I'm trying to pump my tires. Years ago, there was somebody who worked on my team. This person and I had a listing. This person came to me and said, oh my God, you're never going to believe this. This real estate agent's brother is going to make an offer. And this real estate agent said he wants us to represent the brother. Why? Because that real estate agent assumed that we would lie, cheat, and steal to get his brother the property and double end it and make twice the commission. I told this other agent, absolutely not. I have no interest in doing this. And this agent could not believe what I was saying. My reputation and good standing is worth far more than one end of a transaction. And on that listing, which by the way, happened to be an extremely good client of mine, not that that really matters, but I just couldn't picture myself sitting there with 10 offers. And then I say, oh, by the way, we're representing this buyer over here. And this buyer magically paid the most money for it. This buyer's sibling happens to be a real estate agent. The top agents, they get it. Their name, their brand, their reputation is so incredibly important. And this is the value of a buyer agent. So no disrespect to agents that are starting out. Okay, I started out somewhere once. No disrespect to agents that aren't well known, that don't do a ton of business. But what I'm trying to convey to you, and I don't wanna sound like a jerk, can't wait to read the YouTube comments, is that when I have a listing, there are buyer agents that call me and they go, hey, oh my God, it'd be so great to work with you. There are agents that call me who have never met me and they say things like, listen, I've been reading your blog for so long. It'd be so cool if we could work together. Right off the bat, you don't see a value in that. You don't see a value in reaching your arm across the table and taking the hand of the person that is not your adversary. Of course, it's a distributive negotiation, right? I get more means you get less. But it is a partnership between you, the buyer agent, and between the other person, the listing agent, between the buyer and the seller. It's a partnership. And you've got to get from start to finish. And you need to work together. The idea of a buyer and seller agent hating each other and not working with each other, it's nonsense. The best agents know how to get deals done. And here's something I wrote at the break. Good buyer agents get deals done. What's the value in your buyer agent in 2024? They get the deal done. And a cynic is going to say, oh, they push you the hardest. They try to close you. They tell you to pay the most money. No, they know how to get deals done. They know how to work with the right mortgage broker. They've got the home inspector to come in and on eight hours notice because you've got a quick condition, needs to be satisfied. They know how to talk to the agents that they know in advance of the offer date. They know how to strengthen the offer by not just offering the most money, but having the deposit check in hand, having no conditions, having the right closing date. They know how to grease the wheels, so to speak. Good agents get deals done. And of all the things that I can talk about, yes, knowledge and experience is crucial. And yes, absolutely, the systems and the process and being able to negotiate. But having that name and having that reputation, having that brand value, I cannot tell you how many deals I have done over the years, sorry to say, because there was someone on the other side that I could work with. And I go back to the example of me being the second highest offer and you saying you shouldn't get the chance to improve. Well, who are you to say that, right? Or you saying the seller should be forced to sell to the highest offer. Well, who are you to say that? We could do an entire podcast on this. So I want to tell you a story that I mentioned I would tell earlier. I said my wife's grandparents. Okay, I have never seen a good self-represented buyer. When we have self-represented buyers, you know the type. I can already hear the voice, right? And listen, I'll work with anybody, but I don't think I've ever had a self-represented buyer come to me and say, Hey, listen, hat in hand, dude, I don't really know what I'm doing. And I'm just like, I'm doing this. So let's just try. They always come at you hard. They don't like you. They don't respect you. They know more than you. I've never had a self-represented buyer successfully purchase one of my listings in competition and Any self-represented buyer or any buyer working with a discount brokerage, and I can't name them because I'm not allowed, but the discount brokerages, the cashback brokerages, the real estate graveyards, none of these brokerages has ever brought an offer that would be successful. So again, the cynic's gonna say, Oh, what? They couldn't push their client the highest? No. It goes back to knowledge and experience. When I have a$9.99 listing and there's 12 offers and it's going to sell for$1.3 and the highest offer happens to be$1.312 and that agent brings an offer for$9.99, the person that hates real estate and real estate agents is going to say, yeah, well, that's what it was worth to them. I'm going to say that was a waste of everyone's time and effort and energy. That agent isn't worth anything. And if the buyer said to the agent, here's what I want to do, that agent has absolutely no value if they don't say, don't do that. It's pointless. So when I was selling my wife's grandparent's house at a self-represented buyer, and he wasn't truly self-represented because he had his cousin, who was a real estate agent in Niagara Falls, bring the offer. So picture this. This house is listed for, I don't came in and said he wanted to present the offer himself. And I said to his cousin agent, I have absolutely no interest in that. And he said, well, he really wants to come in. He really wants to come in. He wants to present it himself. And I said, no, the seller doesn't want him to. So instead he wrote a letter and I had to read this letter to the sellers who are my wife's grandparents. And I wish I could have a copy of this. I could probably dig it up. I'm not going to, because for all I know, the guy's listening and I don't know, friend of his recognizes him. But here's the thing. Self-represented buyers, you don't know what you're doing. You're not in real estate. You have no experience. And it's not just the experience and the knowledge, it's the tact. His letter said something to the effect of, rather than begin a protracted series of back and forth negotiations for which both of us will come out potentially feeling emotional, tired, and worn down, we are going to now offer you your full list price. Talk about the cluelessness. I just told you it was listed for two, two. It's sold for two, six, five. This guy who knows absolutely nothing offers list when there's eight offers. And then writes us a letter telling us how he's going to do us a massive favor. And rather than go through a protracted series of negotiations, I'll never forget those words, he's going to give us the full list price. But more to the point, actually, that was the point. Additionally to that, I would say that his letter was all about him. His letter told everything about him. And his relationship with his grandfather and his roots in the area and this and that. And listen, it's great to ingratiate yourself with the seller. Try to create a connection. But that guy wasn't reading the room. This was years ago. I think this was my wife's grandparents were late 80s, early 90s. And the way to get through to them was to talk about them and their house and their memories. They've been there 50 years. They were home for every showing, which I know is something I... say in a podcast. You can't have your sellers home, but they're 90 years old. And grandma, God bless her, she would ask people if they wanted snacks. It was the cutest thing. It was one of the best experiences of my entire career. And I had agents calling me and saying, oh my gosh, I met your wife's grandparents. God, were they sweet. And on the offer night, we had people come in and they would gush about the house and And agents would come in and I'm not going to name names, but I had a couple of really big name Midtown agents who came in. They knew what to do. They know who to talk to. And this guy wrote a letter that was all about him. And he went on to talk about the issues with the house. Imagine reading that despite the significant work that needs to be done in the home, we're still willing to consider it as an option. I know that you listening to this are going to say, well, I'm not stupid, but I'll also tell you this. Every time I have sold a property. or made an offer on a property for myself, irrespective of investment properties, I have had an agent at Bosley do it. I sold my first condo, Jan Lasher, was a listing agent. I sold my second condo, Chris Kancik, was a listing agent. I made offers on houses in 2017, 2018, Richard McNutt. He was the buyer agent for me. No, I didn't do it on my first and second, but that's because I lacked the experience to know I cannot represent myself. You need a buffer. And this is me Telling you that I am not equipped to be my own listing agent or buyer agent because you need a buffer and you need to be unbiased. And that's why you have someone, your first line of defense as it is. And the self-represented buyer to me is an absolute unmitigated disaster. And this example from my wife's grandparents, I'll never forget that. That agent left and he had issues in his offer and there was all kinds of nonsense and didn't have a check and just so many things wrong with that. But yeah, what's the value in that buyer agent, that self-represented party? He had absolutely no value. And you know what? Even if he had the money, my wife's grandparents never would have sold to somebody that insulted their house. And that's their right to do so. So I use the word tact. You could say tact or you could say common sense. You could say an agent knows how to schmooze. They know how to grease. They know how to network. But there is a huge intangible there for who you are and who you know, how you know how to talk, how you know how to get around. And listen, I've had situations where I've gone in a listing appointment and I lost the listing. Another agent that I know got it. Then I had the buyer and I provided the buyer the And we can chat, we can talk. It's not adversarial. It's not confrontational. You're working together. So probably to me, the biggest intangible outside of all of the things we've talked about, whether it's knowledge or whether it's negotiating, the biggest intangible in a buyer agent where they can show so much value is in their relationships and in the way they conduct themselves in the industry. And time and time again, when I'm on the list side, I come across buyer agents who have absolutely positively no clue how to communicate and we don't get deals done. So listen, guys, I think it's clear that I could go on forever. I don't know how long this podcast is, but I'm very passionate about this topic. And I opened this by joking and saying, you know, let's do a podcast. It's going to get 50 angry YouTube comments. It is what it is, you know? And if you hate real estate and you hate real estate agents, go ahead. Tell me why. But for some of you out there, hopefully you've listened to this and hopefully I've made an impact or not. If you've listened to all of this and you're like, yeah, great. I'm still going to use my cousin. Okay. Well, I helped you out and you're welcome. But for any of you guys that have follow-up questions, you know where I am. I'm on this blog. I'm on this podcast, 103 Vanderhoof right now. And I can't wait to go home. I think I'm going to go for a run. It's been a tiring one. And as the email goes off, so guys, thank you again for listening to the last honest realtor podcast. I'm your host, David Fleming. Please remember to give us a like on YouTube. Please remember to subscribe wherever you get your podcasts. And if you want to leave a nasty comment on YouTube, you know what? Go for it. Just please put a happy face because it makes everything so much better. Guys, thank you so much. And we'll see you next time here on The Last Honest Realtor.