Given the tagline, you might argue that I’m overstating things, or overreacting.
I mean, there’s people out there “living in perpetual fear” about their health, or their war-torn country, or the person stalking them like in some bad movie with Jennifer Lopez…
But as I explained to my wife on the weekend, and subsequently a couple of clients, the 2016 Toronto real estate market has me living in perpetual fear. Every minute, and every day. The worst part is – it’s rubbing off on my clients.
Let me explain what I mean…
I just had one of the worst three-day stretches of my professional career.
I lost in multiple offers three times, I had one property basically stolen out from under me, and two of my clients watched idly by as the properties on which they planned to offer sold via bully offers ahead of the scheduled “offer date.”
It’s been a grind.
But so too has all of 2016, and it’s not getting any easier.
I’ve been in this business for almost twelve years, and the first seven weeks of 2016 represent the most difficult market I have ever worked in.
The causes are evident – there’s not enough product to satisfy the demand. Not even close.
And while people continue to predict this looming 30-50% drop, the same drop that was predicted before the market gained 80-100%, I can’t see anything changing.
Prices have caught up to Toronto. We were undervalued for so long, and while the 18-year run-up looks maddening, I believe it’s because we had never received our due.
The new reality of the Toronto market: mania.
Or perhaps “organized chaos” is more appropriate.
But after the first seven weeks of the year, and specifically the last few days, I can honestly tell you that we real estate agents live in perpetual fear of properties selling out from under us, and every time the iPhone buzzes, we think, “Oh no, what now?”
Let’s take a step back for a moment, and think about how properties are sold in this market.
The public has long-loathed the “offer date” as it seems to insinuate that the seller is planning for, or expecting, multiple offers.
But the “offer date” is now common place. It’s not new, and it’s certainly not unexpected.
And to be quite honest, who out there is so naive to think that a freehold, single-family residence (especially those under $1 Million), will not garner multiple offers?
In the 2016 market, with the lack of supply, and the excessive demand, a seller would be an absolute fool not to have an “offer date” and expose the property to the market for at least six or eight days before pulling the trigger on the sale.
Buyers, non-owners, and the media love to call sellers “greedy” and suggest these are “tactics,” when in reality, a seller putting his or her house on the market tomorrow, and taking the first offer that comes through the door, is making a tragic mistake.
So let’s not blame the “offer date,” since anybody who hates this “tactic” would absolutely, positively, utilize it when he or she goes to sell.
There is, believe it or not, something far worse than the “offer date,” and while I’ve made this point before many times, and probably written this exact sentence, I’ll say it again: the bully offer.
The bully offer throws our disorganized market into further disorganization, that we call “chaos.”
The bully offer makes us all live and breathe real estate, every minute of every day, and keeps us all in a constant state of awareness.
We Realtors need to be on guard, drinking coffee and red bull, up 24 hours a day, or risk being lapped by a competitor, or losing out.
Last Saturday, I showed a property to a client who said he intended to make an offer on the Tuesday when offers were being reviewed – the day after Family Day. He was heading down to the Air Canada Centre that Saturday night for the NBA All-Star festivities, and he had a wedding to attend on Sunday.
In other words, he had a life. Don’t we all?
I left that Saturday showing, fearful, that a bully offer would come in. I wasn’t only fearful because I knew how busy my client was, but also because I leave every showing these days, fearful that a bully offer will come in.
And of course, in this case, one did.
At 9:15pm on a Saturday night, I was at a friend’s housewarming when my phone rang. I saw the listing agent’s name on the display, and I just “knew.”
They had received a bully offer, it was irrevocable until 11:59pm, and the listing agent wanted to know if we were “prepared to come in.”
No. Not even close. Nothing about being out on a Saturday night, with the intention of making an offer on Tuesday, screams “prepared” about dropping everything to make an offer on Saturday.
I knew that was going to happen, and it did.
I left my viewing that Saturday morning, and I just waited. I just knew.
My client didn’t have the time, wherewithal, or stomach to get involved, so he let it go.
Fast-forward to this past Wednesday, when a property came out, with offers scheduled for Tuesday, February 23rd at 7:00pm, and in the brokers remarks it said: “Absolutely No Pre-Emptive Offers To Be Entertained As Per Seller.”
I sent the listing to my client, and he said, “This is perfect. I’m away for work until Friday night, but at least now I don’t have to worry about another goddam bully offer coming in! Let’s see it on Saturday when I’m back!”
Would you trust those words on the MLS listing about “no pre-emptive offers?”
And in the end, I had good reason not to.
I booked a showing for Saturday, even though it was only Tuesday, to get my foot in the door, and ensure I would be told if there were any developments.
Alas, I got that email, as I knew I would, on Thursday night: “Bully Offer Registered on XXX Street, Presenting Tonight At 8:00pm.”
I got that email at 7:30pm on Thursday night.
My client laughed when I told him. He said, “That’s not exactly what I’d call ‘fair warning,’ is it, David?”
I had to be honest and say, “There’s nothing ‘fair’ about this market.”
I didn’t know the listing agent, and perhaps I was a bit salty on Thursday, so while I aim never to burn my bridges and always take the high road in this business (it’s awful, but it has a huge impact on your career), I couldn’t help but ask the listing agent, “What happened to that whole ‘no bully offer’ stuff you had in the listing?”
His answer, on the phone?
I believe the term is, “Meh.”
He Meh’d me.
He F*cking Meh’d me!
I took that to mean, “I couldn’t possibly care less about what I said I would or wouldn’t do with this listing, nor could I care less about you, your buyer who is out of town, or anybody else in this situation other than me, and maybe my seller-client.”
The house sold, and interestingly enough for less than I told my buyer it would. So perhaps that was the one silver lining in all this – the listing agent got less for the property than he would have, could have, should have. He screwed up, in my opinion.
But I felt bad for my client, who told me that he dreaded getting emails from me, because half the time it’s about a new listing, and half the time it’s about that new listing selling.
A similar situation happened on Friday/Saturday, although this was a listing where the words “Seller Reserves The Right To Review Pre-Emptive Offers” appeared.
I showed the property to my clients at 2:00pm on Friday.
They were, as they said, “in.”
It was an income property, and there was no emotions to play off of; just numbers.
I told them what I thought it would sell for when offers would be reviewed on Monday, and they said, “We’re in.”
One hiccup, however; they were waiting on their bank to give them that last, final, over-the-top, double, go-ahead with regards to their financing.
They know they could afford it, but as prudent investors, they weren’t going to move forward without a guarantee.
And thus, our wait began.
And of course, my fear continued to perpetuate.
It was Friday, and I had to get through to Monday at 6pm in order to make this deal happen.
72 hours is an eternity in this business, and I began my fearful wait through Friday, and into Saturday, hoping to get to Monday without this property selling.
You don’t even need me to finish this story, do you?
On Saturday afternoon, my iPhone buzzed, and I just expected bad news. I’m not a pessimist, but I am a realist, and the reality of this market is that properties are selling left, right and centre, and the “offer dates” specified on the MLS listings are meaningless. Every time my phone buzzes, I fear that it’s a bully offer, or a non-confirmation of a showing due to a sale.
And in this case, there was a bully offer registered on the income property; a property for which my clients had to wait until Monday at 9am to get their financing approved.
We sat back on Saturday night and waved “bye-bye” to this gorgeous income property, feeling completely helpless the whole while.
Yes, it would have been great if our financing was where it needed to be.
But it also would have been great if “Monday” meant “Monday” and not “Any Day, TBD, with an hour’s notice.”
Every time a property sells out from under me, or I lose in multiple offers, or essentially I don’t get my clients sold, I look back and say, “What could I have done differently?”
You try to blame yourself, as a Realtor (the good ones, at least), because it makes you better, and makes you more accountable. You look for reasons why you didn’t get the job done, rather than blaming happenstance, or others.
But with our current market in the state of chaos that it currently is, it’s tough to point the finger at yourself. Unless you’re going to sit in a padded room, covered in bubble-wrap, with a laptop, a cell phone, and enough strength to stay awake 24-hours per day, every day, then you’re going to miss out on properties.
Even in the condo market, where “offer dates” and “bully offers” don’t apply, you still live in perpetual fear.
The condo market is red-hot as well, and when you show your buyer a condo at 5:30pm on a Wednesday night, you know that there could be an offer in play, there might be an offer coming in within the next few hours, or you could call to register your offer tomorrow, only to be told that the property has been sold.
That’s the life.
It’s my job to deal with it, and I do, in my own way.
But many of my buyer clients are living in fear, and walking on eggshells, and that’s not right.
It’s not right, but it’s not going to change.
Especially not in the “busy spring market” that starts in March/April. No, in fact, I think our mania will just rise to a whole new level…