Let’s Put an End to "Phantom Buyers"
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This post is meant to be a sort of open letter to the entire pre-construction condo industry in Toronto regarding what I believe has become a significant problem. It’s time to put an end to the practice of “Phantom Buyers”.
Phantom Buyers is a term that I have coined for buyers of pre-construction condos who are not really buyers. Usually what happens is this: when a new condo launches of any significance in the city, a large number of Realtors will camp out for several days to be first in line when the VIP broker event takes place. Many of the Realtors who are in the first several spots in the lineup do not have any actual clients who want to buy! These agents will buy units in their own name (usually the cheapest units available), and then they will use the 10-day rescission period to try to find an actual buyer to take the unit(s) they have ‘reserved’ in their name.
This is why you often will see ads on Craigslist and Kijiji posted by these agents, advertising “I HAVE UNITS AT XYZ DEVELOPMENT!!! CALL NOW”. They are desperate to find someone before the 10-days expire. I regularly get calls from these agents asking me if I have any buyers for their units and asking me if I want to split the commission! As someone who takes my role as a buyer’s agent very seriously, I find this practice absolutely ridiculous.
This needs to stop for the following reasons:
- It is unprofessional and contributes to a ‘hype-driven’ pre-construction condo market.
- It may be artificially inflating the condo market because creates a type of artificial demand
- It shuts out real buyers who want to buy (especially end-user buyers)
- It is clearly an abuse of the 10-day rescission period.
This is bad for our industry, this is bad for the condo market, this is a farce. I’m asking all Realtors, brokers, developers, condo marketers, and consumers to call for an end to this silly game. What do you think? Leave a comment or send me an email.