As much as I enjoy living and breathing real estate, there are a few things that I actually dislike about it as well. However, I am a glass half full kind of guy.
When I started out my real estate career (a story for another day), truth be told, I disliked realtors and disliked being one because of the stigma that came with it – i.e., realtors are oftentimes seen like sleazy used car salesmen. Don’t get me wrong though, there are a ton of amazing realtors out there that I know of and have had the pleasure of working with. On the other hand, a lot of the bad apples in our industry conduct business in ways that’s, let’s just say, are “interesting”.
Got “Platinum Access”? Think Again – This is especially true in the pre-construction segment of the market as it is highly competitive to get allocations to condo projects. Having worked with many clients who have been burned recently by bad realtors, I thought that this would be an opportune time to shed some light on how “platinum access” with agents really work.
The term platinum gets thrown around so often that I personally don’t think it has any merit anymore, not to mention, there is no way to prove that an agent is actually a platinum agent. So in essence, anyone can claim to be one.
Buyer Beware – The other interesting component is that even though an agent may have platinum access to one project, it doesn’t automatically mean that they have this same type of access to all of the projects. So what does that mean? Agents have the full discretion to designate themselves as a “platinum agent”.
So if someone tells you that they are a platinum agent for ALL projects, I would run the other way. Even the most successful agents that I know don’t have platinum access to everything.
This is not to bash on platinum agents because legitimate ones can actually get you access before everyone else, thereby saving you lots of money if there are any incentives. However, there does need to be more clarity on what and who is actually a platinum agent.
Pulling Back the Curtains – Since there are no clear definitions of what a platinum agent is, I’m going to pull back the curtain on how the allocation process (the dispersion of units) typically works. I used the word typically here because every developer operates differently.
I’ve personally coined the terms for each of the categories below as there are no correct terms that are consistent across the board for the level of advance access myself or other agents may have.
1) The Partner Hook-Up – In most cases, if the development is a joint venture deal, the partners of the developer will have their pick of units to buy personally before everybody else.
Access: Partners only, no realtors
Total Percentage Sold: 1 – 2%
2) The Family and Friends Connection – This is loosely used by different developers but it is basically a private sales event for family and friends only. This is becoming more rare as demand for pre-construction condos is rapidly increasing.
Access: Only relatives and close friends, no realtors
Total Percentage Sold: 3-4%
3) The Secret Agent Sales (aka. Pre-Platinum or VVIP) – This is when the developer secretly starts selling way in advance of the project being officially launched, for reasons that I will not get into in this post. If you have ever bought a pre-construction condo with us and have had to see the floor plans in person without any of the finalized marketing material available, then you’ve been part of this category. This doesn’t happen all the time. If you come across these opportunities, take it!
Access: A couple of agents
Total Percentage Sold: 5-10%
4) Platinum Access – This is when a select few agents who have a proven track record with the developer are given access to sell to their clients. It will either be by worksheet (reservation forms) or allocations (pre-determined units). For high demand buildings, the project is often sold out at this stage.
Access: Real Platinum Agents identified by the developer
Total Percentage Sold: 11 – 100%
5) VIP Access – Truth be told, VIP access is even more loosely thrown around than “Platinum Access” because anyone can be a “VIP Agent”. It’s sometimes as simple as clicking a button to register with the developer.
Access: Almost all realtors
Total Percentage Sold: Units left over from the previous phase
6) Public Access – This is when the general public will get access to the project, where anyone can walk into the sales centre and buy a unit. There are a few low-rise developments outside of the GTA where the developer will launch their project directly with this category of access.
Access: All Realtors & General Public
Total Percentage sold: Units left over from the previous phase
7) Developer Hold Back – After the project has been “sold out”, the developer may release additional units to agents or the public. These are units that the developer has opted to hold back initially and not sell in the earlier phases. More often than not, these hold back units are more expensive than when they were first launched. However, there have been a few times when my clients scored a deal during this phase (i.e., Daniel’s Waterfront & Minto West Side last year).
Pricing and Demand – It is important to note that at each stage, the prices may or may not change; it will ultimately depend on the project and the demand. Yes, sometimes prices increase, but sometimes they don’t and certain incentives are either removed or added based on the demand.
The ultimate goal for the developer is to sell out the project in order to achieve maximum profits. If the demand is huge, they will increase the price. If the demand isn’t quite there, they will add incentives.
The Wrap – As you could imagine, everything from prices to availability and incentives can change at each phase. However, what remains certain is that the good units are always picked up first and as time passes, your selection diminishes. So if there’s a great opportunity that you see, don’t wait. Act fast before you regret it!
Until Next Time, Happy Real Estate-ing,