Home sales keep smashing previous records – Greater Vancouver MLS sales for May were up 32 percent year over year, and Fraser Valley sales were up 48 percent. Properties sell in hours, with multiple offers, often ‘Subject-Free‘.
One might think that it must be amazing to be a Realtor right now. Surely everybody in the industry is having record years?
Nothing could be further from the truth. In fact, for Realtors this is probably the most painful market to be working in.
Here is just one example. Four weeks ago a client of mine wrote what was one of 28 subject-free offers to be submitted a 35-year-old condo downtown. That condo sold for $165,000.00 over the asking price. My client was unsuccessful in her attempt, as were 26 others.
28 sets of clients, with 28 Realtors.
All of whom read through stacks of minutes, reviewed Form B’s, depreciation reports and budgets, performed inspections, contacted their mortgage Brokers for finance review discussions. Hours and hours of work invested by dozens and dozens of people who are not paid by the hour.
For 27 of these crews of people involved per client putting in dozens of hours of effort each, it was all to no avail.
Realtors earn a living only one way – with a successful transaction. There is no base rate of pay for making an effort to win. It is all about the win.
Realtors are having to have difficult conversations with clients about the need to write subject free. The need to offer above asking prices, asking prices which sellers want set artificially low to drive multiple offers.
Realtors have to complete their due diligence on each property and write up all the related contracts, all on a maybe.
In the instance above 27 Realtors did several hours work and none walked away with any compensation from the event.
The majority of the clients of those 27 Realtors are looking at more properties and making additional offers. The cycle repeating over and over. And with this ferocious competition, the buyers are getting skunked again and again.
My personal record was one set of clients for whom I had to underwrite 13 properties before they were successful on a bid. Twelve unsuccessful offers, all researched, prepared and presented by their Realtor. Thirteen times more work than in a typical (balanced) market.
The stress levels in this market frenzy are reaching astronomical heights with not just Realtors, but also bankers, Brokers, underwriters, appraisers, home inspectors, conveyance staff, notaries, lawyers, and any other party to any number of utterly ridiculous timelines being presented.
Often ‘winning’ the property requires agreeing to a timeline which would be a miracle to achieve in more relaxed market conditions. However in an already overloaded system where every single thing is labelled either as RUSH or EMERGENCY it is tougher than ever to make the miracles happen.
And all the while to the public the face of the entire experience is most often the Realtor.
Realtors have been run off of their feet for the better part of two years straight, all the while facing almost continual failure. One Realtor I spoke with recently has been in 16 bidding wars over the past 6 weeks and has lost every single one of them. That is a lot of work for zero reward.
Sure, when Realtors have a listing and are representing sellers their job is perhaps simpler than in years gone by. But with nineteen Realtors per week knocking on your own door asking to list your property this fierce competition creates incredibly high levels of rejection on the listing front as well. So while it might be ‘easy’ if you have listing, the getting of those listings has never been more difficult.
For most Realtors there is no time to invest on obtaining listings, as all of their waking hours are spent repeatedly tracking down properties before they are snapped up and preparing offer after offer. The work required on either side of the transaction has expanded exponentially.
Is the life of a Realtor wonderful? For many it is, but in a market like this the optics are certainly skewed.
More sales than ever, but radically steeper competition that even.
And yes, the buyers have it even worse. Falling in love with a home used to be a more relaxed process, it has turned into a process akin to a speed-dating round with a Justice of the Peace at the door wanting to know who you are marrying – right now. But for the buyer the process ends with a purchase, for a Realtor there is no end. No end to the line up of buyers wanting to win that multiple offer contest. The fatigue and strain of this prolonged market frenzy is starting to show up in various areas of the system.
It is the best of times and it is the worst of times.
Next time you see a Realtor give them a hug.