Prospective condo buyers left out as developers sell to friends, family first
JOANNE LEE-YOUNG
The Vancouver Sun
Would-be condo buyers and their agents are frustrated that, in a sizzling hot market with scarce supply, some projects are being sold first to a select group of VIP customers.
Dennis Ho had been trying to help his client get into a False Creek development. He emailed and received a quick reply from the developer’s sales staff that he would be contacted later. He never heard from them again, but a few months later, a friend forwarded a copy of an email announcing that units at the very same development were on sale, but only to clients of another agent.
“I emailed them to ask, ‘What is going on?’ I wanted to get my client in,” Ho, an agent with Sutton Group-West Coast Realty, said. “But it’s hard to break into the VIP — or the cream of these VIP — Realtor lists. Everybody is a VIP, they say, but that isn’t true.”
Condo developers are increasingly under fire for the way they and their marketing companies prioritize access to units. Usually, this is done in chunks: First, for socalled friends and family of these companies, then “VIP Realtors who guarantee a large set of buyers,” Ho said, then other Realtors and, finally, the public. The result is that some VIP agents have become known for their relationships with developers and their ability to get a client ahead.
George Wong of marketing agency Magnum Projects Ltd. has been feeling the heat this week. Vancouver agent Steve Saretsky said he noticed a slew of units at the 53-storey Telus Garden at 777 Richards St. pop up for sale on the MLS database.
He reported on his blog that some 16 per cent of units were already being flipped for a profit because the final occupancy of the building recently occurred. In 2012, some 150 Telus employees had first crack at buying over a third of these, followed by buyers with close ties to the developer, Magnum and certain Realtors, Saretsky said.
“We keep hearing that the Vancouver housing crisis is about (a lack of ) supply,” he said, “but even if there was more supply, how possible is it for the average Vancouver buyer to get their hands on these units when they are mostly presold?”
Wong said the formula varies with each developer and project, but in general, there is a “healthy proportion of suites for the public.”
“It’s a very hot market and not everybody is going to get to buy,” he said.
“In today’s marketplace, one has to adjust. Buyers that are more aggressive to get attention will get more attention. Those who are less (so) don’t get to the front of the lineup. It’s just the way it is.”
Asked to elaborate, Wong confirmed that certain agents “who muster up more buyers get more attention.”
“There are a number of Realtors out there with websites to attract pre-sale buyers,” he said. Wong emphasized that he didn’t mean they necessarily are allotted a higher number of units ahead of the public, only that they might get “more attention.”
“People who say they couldn’t get in because of certain tactics or favouritism are making a faulty conclusion,” he said. “It’s misplaced.”
Others aren’t convinced. Ian Watt, an agent who specializes in condos, said if “you’re really a VIP, you get in before the VIPs.”
And to become a VIP? You tell the developer “you have a boatload of people going to buy,” he said.
Recently, Ho went with another client in the market to buy a condo at a pre-sale event that he says felt a bit more fair. Invitees were asked to register online and arrive with a bank draft of $5,000 for the privilege of looking at floor plans and listing their top three choices.
“They never took the money draft, but (probably) wanted it to weed out legitimate buyers,” he said. After a few weeks, he received an email inviting them back to write contracts for a unit.
“I wasn’t sure who gets to go first, and how it all worked, but I was placed early in the lineup and got one,” Ho said. “It was a better experience.”
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