Time has never been more of the essence in our crazy 2016 Toronto real estate market.
Buyers used to complain about greedy sellers, and evil real estate agents, and the invention of the “offer night” which is used to gouge buyers and spark bidding wars.
Only now, buyers are complaining about the lack of an iron-clad offer night that sellers commit to, as properties throughout Toronto are selling in days, hours, or in some cases, less.
Tick Tock. Tick Tock. Tick……and its gone…
“Don’t stop, make it pop
DJ, blow my speakers up
Tonight, I’m-a fight
Till we see the sunlight
Tick-tock on the clock
But the party don’t stop, no”
Music at its finest.
That’s the chorus from Ke$ha’s hit song, “Tik Tok.”
Yes, her name is spelled with a dollar-sign, and both the “tick” and “tock” are spelled incorrectly, on purpose.
That is what music in this era is all about!
It kind of reminds me of something I saw on Twitter a while back, and I saved, for a day just like today. Lemme see if I can find it……
I think I’ve been hanging on to that for two years, thinking one day, I’d use it.
What does this have to do with real estate?
But at least you can feel worse about society today…
As I said at the onset, for the last few years, the biggest complaint among the buyer pool is “how” houses in Toronto are sold.
The “how,” of course, is this unofficial-auction that takes place at sellers’ homes, or listing brokerages, each and every night of the week.
There are no set rules or procedures, and chaos can ensue.
Case in point, I’m sitting here right now with an offer on a gut-job in Rocesvalles. There are sixteen offers.
The listing agent called me to say, “We’re entering round two right now. Let me know if you want to make any changes to your offer.”
I asked him, “Well are you working with the top……..two? Four? How many? What’s the situation? Can you elaborate a bit?”
He simply replied, “We’re entering round two.”
To make a long story short (and I assure you, I went through the “playing dumb” stage, into the “please help me” stage, and then into the “defiantly angry” stage), he refused to give me any indication of where our offer stood, how many people he was sending back, or how he planned to proceed from here.
As I said, there’s no “one way” of reviewing multiple offers, and that agent simply sat back, and played God.
Buyers have often asked, “Can it get any worse than this?”
For the longest time, that question was rhetorical.
And then about 4-5 years ago, we started to experience this new phenomenon known as “the bully offer.”
Old news now, I know. I’m sure I could search “bully offer” in my archives and find something from 2011.
About two years ago, bully offers started to become more common place, almost to the point of them being an accepted part of our real estate market.
No longer was a bully offer something that raised eyebrows, or started conversations.
We used to remark, “Did you see that 123 Smith Street sold last night…..with a bully offer?”
All that changed a couple of years back.
I wrote a blog post called, “Bully Offers: The New Normal” back in September of 2014, when bully offers ceased to become something unique and interesting, and just became another way of selling real estate.
Today, bully offers have gone from accepted, all the way to expected.
Sometimes we see houses that we think will sell with a bully, but don’t, and we wonder why.
It’s frustrating as hell to be a buyer in this market, and see a house come out on Monday, May 30th, with an “offer night” set for Tuesday, June 7th, only to find out one day after the listing hit the market, that the property sold……the very day it came out.
You’ve heard these stories from me many times over the last few months, so much so, in fact, that it might seem redundant.
But those stories are usually for single-family, residential, freehold.
What about for condos?
On Monday afternoon, a property came out in my neighbourhood for $850,000, that was a solid “B+” property, and by that I mean that it was a great property, and worthy of praise, but certainly not the best listing of the year.
As is always the case in this market, I told my client we needed to see it right away, and we booked a viewing for 7:00pm on Monday night.
As luck would have it, the seller, who has already moved up to his new property north of the city, didn’t leave a key at the concierge for viewings, and so we weren’t able to get in.
The key was dropped off on Tuesday morning, and I showed the property to my client at 11:00am.
We were the very first people to view the unit. In a big city, full of would-be buyers, we opened the seal on this fresh new listing.
We were pretty satisfied with the place; it hit all the marks, and we saw no issue with the price.
We tossed around the idea of coming in $25,000 under the listing price, “just because we can,” in the even that there are no competing offers, but we figured we would cross that bridge when we put pen to paper.
We were set to go back a few hours later with my client’s husband so they could see the property together, and make a final decision.
I booked a viewing for 7:00pm, and told the listing agent I was fairly certain I was bringing him an offer. I told him to “keep me posted.”
Famous last words in this market, if I ever heard ’em…
At 6:00pm, a mere seven hours after we were the first people in to see the unit, the listing agent emailed me to say “Good Luck” with the viewing, and added “FYI there are three registered offers.”
Three offers. In seven hours. On the first day the property was available to view.
Suffice it to say, we were no longer interested.
If we became the fourth offer, this thing was going to the moon.
I told the listing agent, and he said that was too bad, but that it might be for the best as one of the offers was “really, really good.”
My guess is, this thing went for $925,000 or more.
And all this, in seven hours, for a property that was priced at fair market value at $850,000.
The minute that listing hit MLS, the clock started ticking.
And in this crazy market, you’re always up against the clock.
The “what if” scenarios started playing in my head. What if we were able to get in to see the property on Monday night? Would we have been able to get an offer together? Would the seller have looked at an offer with an 11:59pm irrevocable? Would we have got it for $850,000?
Realtors love to quickly cast aside their victories, but lament their losses.
In reality, if we were able to get in on Monday night, it’s likely that somebody else would have as well.
And in reality, we might not have been able to make a decision on the spot, and the seller might not have been able to view and accept an offer in a couple of hours.
But those “realities” are hurdles we need to clear to be successful in this market.
We do need to see properties mere hours after they hit the market.
We do need to make decisions in the unit, on the spot, and move forward.
We do need to work with midnight deadlines, or risk going into the next day, whereby any buyer who wanted to “sleep on it” might decide to take a stab at it.
That real estate clock keeps ticking, and each tick costs money.
You can’t hit the snooze on it. You have to rip the damn cord right out of the wall.
With houses, you might see an “offer night” detailed on the MLS listing, but if you don’t get in there right away and take a look, you might lose out to a bully offer.
With condos, you might see a property that would, or could, or should sit on the market for (egad!) a couple of days before an offer comes in, but if you don’t see it the very night it comes out, you could risk losing out to one, two, or three bidders!
Part of me is shocked that this $850,000 condo down the street from me received three offers on the first day of viewings, and yet part of me isn’t.
Active listings were down a whopping 27% this past April, and I’m gritting my teeth just thinking about how the May numbers will look when TREB releases them next week.
Whether it’s an $850,000 condo, or a $1,500,000 house, or even a seemingly-innocuous $299,000 condo, there isn’t a single piece of real estate in Toronto right now that is in high supply.
And the buyer pool out there is savvier, more informed, and more aggressive than ever before.
For a new buyer, it’s like the first day of grade-nine all over again.
The “big kids” are strutting down the hallways, heads held high, clearly in control, and the new students are small, timid, and can’t possibly compete with kids who have already roamed the school grounds for three or four years.
A new buyer in the Toronto market simply can’t comprehend how quickly properties sell; they can’t understand how time, in the real estate market, moves far faster than in real life.
You can say, “I’ll fold my laundry tomorrow,” and it won’t make a difference in your life.
But hold off on seeing that house or condo for a day, or sometimes, even a few hours, and suddenly your life takes a different path.
Tick tock, folks
And Toronto’s clock is Big Ben…