1 bloor
east smacks of exploitive sales techniques
Charles Hanes
November 1, 2007
Now, just because I endorse them does not mean that you should just run out and visit any
of their sales sites. Their sales centers are manned (and womanned to be politically
correct I guess) with some of the best sales professionals in the business! That’s
where I developed my career, at condo sales sites, usually after the developer got in
trouble with sales they would call me in to “close deals”.
It’s funny that most people today are still totally oblivious to “high pressure
sales tactics”! Walking around from condo sales center to condo sales center is NOT
the way to go about buying a condo. Whether you are buying as an “end user” or
as an “investor”, condos are always first and foremost an investment. A condo is
usually the single biggest investment the majority of my clients ever make!
Knowledgeable investors (and end users) know, or should know to build a team around them
when going into uncharted waters. If you are thinking about buying a condo know that you
need to build a team of qualified experts around you. This team requires three simple
players.
First and foremost you select your own experienced and day-to-day knowledgeable
(“hands on”) Buyer’s Agent who can tell you the name of the developers who
are developing buildings AND what buildings they have successfully delivered in the past!
Today’s “hysteria buying”
tactics being employed by developers simply doesn’t meet the factual “smell
test” that any investment MUST pass to qualify as a sound investment. My recent article analyzing two Toronto condos
launched virtually 2 weeks apart but delivered a year and a half to two years apart shows
the absolute lunacy of buying blind from the glitzy sales material in those glitzy
presentation centers with the high pressure sales tactics, with and/or without your own
real estate agent!
There are over 22,000 Realtor/members of the Toronto Real Estate Board and only a very
small threshold of these Realtors can honestly say that they are condo specialists. This
does not mean that they are specializing in condos but rather that they have a long
history of hands on activity in the Toronto condo industry.
The most important thing is buying a condo is to work with a proven and disassociated
group of professionals consisting of a professional developer with a proven and
professional buyer’s agent and a proven and professional lawyer and a proven and
professional mortgage lender.
This is the magic formula that shifts the optimum positive positioning to your favor.
I’m sure we’ve all heard the old joke about the three most important things in
real estate are “location, location, location” - duh.
This is true (I guess) with detached houses but in the condo world it a formula or
“thinking” of self destruction I feel. I don’t buy or sell detached houses
(but I understand that there is a big calling their for a true buyer’s agent) but I
can tell you that this old folk tale is now “developer, location, developer”.
Unfortunately most uniformed buyers today are caught up with that great concept of
“do it yourself and save the money” and it becomes almost a macho thing to
“go out and negotiate your own purchase”.
Let me tell you that unless you know the market inside out and have worked on a condo
sales floor where you’ll find that place to be the only place that you really learn
the tactics employed to get consumers to buy their product, you are at a decided
disadvantage in the game of chess known as condo sales. From the newspapers to the Free
Condo magazines the sales process has been refined over the years to - GET YOU!
As with most releases of condos in downtown Toronto I was invited to attend a VIP
PRELAUNCH EVENT 1 Bloor St.
East, one of the many new developments in the city. A local broadcaster recognized me
and asked me if they could get my comments. I found their questions interesting as they
apparently found many of my responses.
I’ve written about the three event launches of
developers in the past but would recommend you revisit the article to refresh your
thinking, especially those of you who voluntarily visit condo sales centers without having
first entered into a buyer agency
relationship.
Well, this was represented as being the first of the three where the top Realtors in the
city are allegedly invited in to learn about the development. It was represented to us
that the actual condo units “could not be purchased until November 13th). My response
to the television crew is that this whole event was a sham and that the developer has been
advertising heavily for months and actually has his own authorized (“insider”)
agent selling as many of the units as possible before ever going to the Realtor community.
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The interviewer was intrigued, to say the least, and questioned why the developer would do
that so I explained the simple truth of this industry. It’s all about money. They
will open on the 13th of this month having already “rung the towel” grabbing up
every buyer in site. You can’t really hold this against them and I’m not
complaining. I have to disclose that they did “get me” for one buyer with whom I
had been working who got snapped up by this developer’s “insider” sales
guy.
The big event that I was attending was to scam the Realtor community to squeeze out anyone
that did not see their advertising and/or marketing for the past months and who had not
been followed up on by the developer’s top gun sales people.
I shudder every time I run through any scenario where a buyer is buying from the
Seller’s Agent. Whether that person is a Realtor or a sales professional hired
directly by the developer, the average guy is at a disadvantage entering this high stakes
game on their own. When “buyer agency” is FREE (my services do not cost you
anything) it is absolutely beyond me why anyone would go it alone!
Well, the night was a blistering success. I normally last about 15 minutes as I’m not
group mentality minded, nor am I overly social and events like this bug me to no end. The
hundreds if not thousands of alleged “VIP REALTORS” in attendance gobbling up
the free food and drinks did not realize that they were pawns in the big game of condos.
They don’t know that the developer has been high pressure selling these suites for
ages and that the best that they can expect is what’s left over after the main
flogging of the market has taken place. Condo have become a game of Mahjong!
Yes, prices have risen drastically and my article comparing The Met and London on the Esplanade that sold at
$350 per square foot (approximately) clearly shows that even the guy who has never built a
building and fulfilled the demands of occupancy and registration, can demand and get $800
per square foot, clearly shows how frivolous it is to buy blind! But the beat goes on, as
they say!
Heavily speculated buildings are higher risk investments. I feel that this development is
more risky than many others as it has come on the market late. The Mayor and one of his
councilors was in attendance gleaming that they’ve worked on this project for 15
years.
Well, there has been a lot of competition enter the market in Toronto (never mind 15
years) in the last couple years alone. The Ritz Carlton in the Entertainment District
offers serious competition, The
Shangri La on University Avenue, The Hazelton in Yorkville, The Four Seasons Hotel &
Residences In Yorkville, The
Trump International Hotel & Residences in the Financial District, have all
come on stream and are all already building.
Yonge and Bloor is not Yorkville or the Financial District or the Entertainment District.
Access to the subway does not really a Five Star Hotel make”.
Nine feet and ten feet high ceiling also “do not a five start residence make”. I
see tons of developers come and go and all of them promise the “very best of the very
best”. All of these hoteliers/developers (above) have track records that tell me you
can’t go wrong.
We don’t know these people behind 1 Bloor East. To recruit the
efforts of the realtor community under the guise of a VIP Broker’s Event while having
flogged the building for months to avoid paying these people but depending on them for the
sell of the building (suites remaining that will be offered to the public and realtor
community) seems a little dubious to me.
They did sell Crystal Blue
and high rise development just west of Yonge Street immediately south of Bloor. I
didn’t put any clients in their either. The significant thing that very few people
think of is NOT in the selling of a building. The key is in building the building and then
occupying the building and then Registering the building.
A quick look at the mess that is 1
King West shows you where concept, risk and reality meet! For the record I didn’t
put any of my clients in there either! I simply feel safer putting my buyer/clients into
developments where I’ve seen the developer take a project from concept to
registration. Then I can be assured that my clients are protect from much of the abuse
that I see out there every day.
The other factor that stands in my way of endorsing this project is it’s price per
square foot. Realizing that it will not be a 5 Star Hotel & Residence coupled with
it’s ceiling heights and location and unproven developer I left with a relative
indifference about this project. Realizing the serious competition for both upper end (1
Bloor I would designate more of a 3 ½ star location and project) residences and high end
hotels I would say that they are a little late to the market.
I’m Charles Hanes |
