Well, how was your weekend?
I’m sorry if I soured your Monday morning with a headline like what you see above, and a photo like the one you see below.
But I don’t want to sugarcoat anything, and given what a client told me last week, I figured I’d use his quote directly as the impetus for this post.
“David, I’m not buying real estate with a gun to my head.” I don’t blame you, but in this market, you often have no other choice…
I don’t think I’m a negative person.
Cynical? It’s unavoidable in 2016.
Condescending? Yes, but when you’re sarcastic and cynical, you’d be lost without condescension.
But am I negative?
I don’t like to think so.
Somebody told me last week, “Your blog posts seem so negative.”
To be quite honest, I was a bit hurt.
I put a lot of effort into these blogs, but I clearly don’t have to tell you guys that. Monday, Wednesday, and Friday; 1,800 words, interesting, informative, entertaining, relative, and real.
And maybe that’s where the negativity comes into play – on account of the “realness” of what I write.
I write about the 2016 Toronto real estate market, which isn’t fun for a lot of people. It can be difficult, frustrating, and often depressing.
So after a weekend of pondering this “your blog posts seem so negative” comment, I concluded that I’m not negative, and perhaps my blog posts aren’t negative either, but rather the 2016 Toronto real estate market, in many cases, leaves people in a negative frame of mind.
And so what do I start off with today?
A gun to somebody’s head!
Is that negative, or real?
At the risk of sounding like a broken record, because I’ve said this every six months for twelve years, this is the toughest market I have ever worked in.
The condo market in 2009 was insane, when every damn unit in the downtown area had multiple offers on it.
But overall, given the housing and condo markets – the spring of 2016 has been the most difficult.
We’ve established the cause – far more demand than supply.
And we’ve pointed out one trend that certainly doesn’t help – bully offers.
The result, is the toughest market in which I have ever worked, where houses sell “out from under” people every day, and as I wrote last Monday: you live in perpetual fear.
Last week, I showed a house to my buyers one day at 11:00am, and we were out of the house by 11:45am.
They mulled the house over, and even though they were only inside this million-dollar-plus home for three-quarters of an hour, it took them less than three hours to call me back and tell me they wanted to make an offer.
I talked to them shortly before 3pm, and I called the listing agent and left him a message saying that I had clients interested in making an offer, and would he be so kind as to call me back.
At 4:45pm, I got a call back from the agent, who said he had a registered offer, and he would be presenting it at 6:00pm.
I asked him, “When does the offer expire?”
He told me it was good until 11:59pm.
“Oh great,” I said. “So we have time on our side.”
To my surprise, he simply reiterated, “I’m going to present it at 6:00pm.”
I was a bit confused as to why he wouldn’t do everything in his power to stall to get a second offer on his listing (the first offer wasn’t his, fyi), but that’s a topic for another day.
I called my buyer – one of my buyers, and told her the situation: we had less than an hour to put an offer together, and move forward on the property.
Originally, our plan was for me to speak to the both of them at 8:00pm when her husband was finished work, as he had a slew of questions about the property, the process, and the offer itself. But here I had the unfortunate task of telling her that by 8:00pm, this property would likely be sold.
She told me she would call me back when she talked to her husband, and I waited.
It was about 5:00pm, and I was driving downtown for an appointment, but time seemed to be moving at an accelerated rate.
I had sixty minutes to get this thing together, or risk losing out.
I had a client who I was going to meet at 5:30pm, who was depending on me, and the logistics of meeting my buyer clients and getting them to sign an offer, so I could rush back uptown and present for 6pm, were seemingly impossible.
I called a colleague of mine, looking for a favour, and he said, “Lemme call you back in ten.”
I found myself shouting into the phone, “THERE’S NO TIME!”
I felt like Jack Bauer from “24.” Or Johnny Depp in that awful movie “Out of Time.”
My colleague said, “Relax, let me call you back in five.”
Five minutes at this point was a short eternity.
The listing agent was texting me, asking, “Are you coming in with an offer?”
I found this to be unbelievable, given that he took over an hour to call me back, and now it had been less than twenty minutes since he told me about the existing offer and his 6pm presentation.
My client called me back, and said she hadn’t reached her client as he was in a closed-door, arbitration meeting, and could not sneak out for even one minute.
I asked her, “Do you want to offer on this house?”
She said, “Oh gosh, absolutely! Please don’t think we’ve changed our minds or anything.”
I said, “Then you have to get creative here and find a way to reach your husband.”
Time was ticking by, and now I was at my 5:30pm appointment. I felt incredibly rude as I continued to check my phone, but it’s tough to be in three places at once.
My client texted me back and said, “I can’t reach my husband, we need more time.”
Again, I had the unfortunate task of telling her that there wasn’t any time, and we had a half-hour to decide what to do. If they decided they wanted to move forward, I could call the listing brokerage and register an offer, thereby putting my foot in the door. Feel free to chime in here and tell me that an offer isn’t an offer until you have a signed “Form 801” from your buyer, but what can I say – my job is to get deals done for my clients.
At 5:50pm, my iPhone dinged, and it was the husband. The message:
SORRY DAVE, NOT BUYING REAL ESTATE WITH A GUN 2 MY HEAD
And that was that.
I called the wife back to chat things over, as I was now in the car, free to speak once again, and she apologized profusely, saying, “It’s just too fast for us! Imagine us scrambling to make a decision in thirty minutes?”
I told her not to apologize. In fact, I apologized – for our market conditions, for the system we have in place, and for the situation at hand.
I finally connected with the husband around 10pm that night, and I told him the property did indeed sell. He too wondered why the listing agent wouldn’t wait for us, and I agreed that it was odd, but there’s often a lot of “chatter” about offers, and ultimately the listing agent has to decide if a bird in the hand is worth two in the bush.
He told me that he had never felt such immense pressure in all his life, and yet he dealt with a high-pressure job every day. He couldn’t believe that he only had thirty minutes to decide whether to pull the trigger on a $1.6 Million house.
I sympathized, but I had to tell him that this wasn’t unusual in our market, and while I wasn’t happy about the situation, it was something he had to be prepared for as our search continued.
And that’s the truth, folks.
You have to be prepared to make a quick decision in this market, and while the market bears will say that a “quick” decision means “bad” decision or “uninformed” decision or that somehow buying in today’s market, with today’s systems in place, is a self-defeating prophecy, I’ll be the first to tell you that it’s not.
It’s reality. It’s what we have in place, and you either accept it, or you sit on the sidelines and wait for change, like all the people who said the market would drop in 2006, and have been renting for a decade, watching a metropolis built around them.
Sometimes this “gun to your head” mentality gets under my skin.
Last month, I was in an 12-offer competition for a home, and we were told that the top three were all “really close” and we’d have the opportunity to improve.
But we were also told by this snide, piece of crap listing agent, that we “only had ten minutes.”
Man, did that piss me off.
I pictured this agent, sitting at the dining room table with his sellers, with three incredible offers in front of them, and nine other offers in a pile to the right, looking at their watches and thinking, “What’s taking these three buyers so long?”
My clients wanted to talk things over, as they should have.
They were first-time buyers, looking at a $750,000 property, and the idea of adding $15-$20K, when they were already at their max, was a big decision.
The listing agent called me about eight minutes after he told me we had ten minutes, and said, “How are we doing?”
How the hell do you think we’re doing, pal?
He said things like, “We’ve all got things to, bills to pay, people to see, d’ya’know?”
He actually said, “I want to wrap this up, slap a little bow on it, and put this baby to bed.”
Sure, that’s all well and good, but he did call me to say that his clients wanted more money for their home. I know, he actually said, “We’re giving you the opportunity to improve your offer,” but we know what that actually means.
Fifteen minutes after he called to tell me I had ten minutes, which was about twelve minutes after I told my clients where we stood, and about eleven minutes after he called me for the second time, he sent me a text message saying, “We’re going to move forward with one of the other offers if you don’t re-submit asap.”
It didn’t make any sense to me.
Time was not of the essence here for his sellers, and they stood to get more money for their home if they waited an hour.
I called the listing agent back, because I find text messages impersonal, and I tried to rationalize and calmly explain to him that the decision isn’t so cut-and-dry for every buyer, and they still had to sign and initial the changes.
But he didn’t care.
He said, “If your clients haven’t decided by now, they aren’t moving forward. We got one of the three offers back, it’s good, it’s clean, it’s a big ball of cash, and we’re gonna write a deal here.”
So now he was a psychic as well.
My clients did come up by $10,000, and I resubmitted the offer about twenty minutes after he told me we had ten minutes, but the other offer beat us by another $10,000.
Still, the listing agent couldn’t resist replying to my email, and saying, “Too little, too late. Wouldn’t have mattered what you offered.”
What was that about? He’s saying if I had the top offer, he would have told his clients to accept the second-highest, because it came in nine minutes earlier?
It was bizarre.
And my clients were okay the next morning, as they believed in karma, and didn’t like the “vibe” that the offer process gave them.
Talk about buying real estate with a gun to your head…
Not all offers in Toronto end up like this, but if I can tell you two stories like the ones above, that happened within the same 4-5 week period, then that should tell you that ultimately you will feel the gun to your head in this market, like it or not…