The short answer, say industry players, is no.
“It’s not up to an agent to decide if a client is overpaying or not,” says Mark McLean, a broker in Toronto and the incoming president of the Toronto Real Estate Board. “You have to look at where the market is going and what the implications are.”
Housing prices in cities like Toronto and Vancouver – particularly in the detached market – are most likely not about to drop. Realistically, if a client wants to get into that segment of the market, he or she is likely going to have to pay a premium for it.
“I wouldn’t talk a client out of doing something a client wants to do, but I would advise them accordingly,” says David Fleming, an agent in Toronto. “I would say, ‘Guys I think we’ve hit your max here,’ or ‘Anything over this and I think we’re overpaying.’”
The best way you can protect your clients from themselves, says industry veterans, is by educating them. Explain to your clients that they should be within the confines of a debt-to-income ratio, help them tally the total carrying cost of the property, and share with them the comparable sales data for the neighbourhood or building.
Still, in the end, the decision is theirs, argues Fleming.
“It’s their prerogative (to pay whatever they think the property is worth),” Fleming says. “But, theoretically, a property is worth what someone is willing to pay for it.”
In some of Canada’s hottest markets, it’s simply understood that almost any detached house will sell over-asking, but is it ever the job of the buyer agent to step in and prevent clients from over-paying for a property?