So you’re saying it’s a seller’s market, are you?
In this market, the seller can dictate exactly what closing date they want, and they can demand you bring a 5% deposit cheque on offer night, and probably get away with a lot more.
But when are the “demands” just too much?
A house came up for sale this week that’s being sold by the Ontario Public Guardian Trustee, and it came with an insane set of “instructions” that I would never tell a buyer to adhere to…
There’s nothing really wrong with the listing agent for this property asking for the following.
There is, however, something wrong with buyers automatically abiding by these rules.
Every agent runs his or her offer process differently, as we have discussed on here many times before.
But as a buyer, you have to take a step back sometimes and ask yourself, “Is this really reasonable? Do I really want to get involved in this?”
The following appeared as an attachment to an MLS listing for a house currently for sale by the OPGT, and in my opinion, these “rules” constitute and absolute deal-breaker.
Here are their “Frequently Asked Questions,” in bold, along with their answers below.
My snide comments are in italics…
My Brokerage wants me to ask for 2.5% to the co-operating brokerage?
The OPGT will only be paying 2% to the cooperating brokerage. If your confirmation of cooperation & representation has a different percentage, your offer will be automatically rejected for not meeting all the required criteria.
I know, I know – screw the “greedy” real estate agent.
But let’s not forget that all the terms and conditions are negotiable!
This is red tape at its finest.
What if there’s an $800,000 offer, with a 2.5% commission specified, and the next highest offer is $770,000, with a 2% commission?
They’re going to reject ANY offer, with a 2.5% commission. Genius…
What if my client doesn’t have the 10% deposit?
While the OPGT prefers 10% deposit, any offer that does not comply with the standard requirements must be explained in a letter from the buyer and attached to the offer, otherwise it may be returned to the Selling agent.
Since when is 10% reasonable?
What if the buyer is only putting down 5%, like a large majority of first-time buyers in this market?
And what should this “letter” have as an “explanation?” Something like, “I’m only putting down 5%, like a large majority of first-time buyers in this market…”
How will you accept the cheque?
Send a photocopy of the chq with your offer, and then have the actual chq delivered to our office. (5155 Spectrum Way Building 22, Mississauga, Ontario L4W 5A1)
No offer will be presented to OPGT until the actual cheque is received.
So I’m supposed to mail you a certified deposit cheque in order for you to present my offer?
Because I can’t present in person, with MY cheque. No, that would be unreasonable…
If my offer isn’t accepted, how do I get my cheque back?
If the cheque has not been deposited we will send by regular mail back to you, or you can arrange for pick up. If your cheque has been deposited, a Mutual Release will need to be signed and emailed to the listing agent.
This is scary.
WHY IN THE WORLD would a cheque be deposited, if the offer isn’t accepted?
Did anyone die in the home, was it a grow OP?
We are not given background information on the home or on the home owner. Agents must do their due diligence when it comes to their client’s purchase. If however we are made aware of anything that can be detrimental to your Buyer, we would let you know.
Yes, of course they would let you know.
Because this whole document, thus far, shows how they have YOUR best interest in mind.
Those were the “Frequently Asked Questions” although they called them “Commonly Asked Questions,” perhaps just to show how different this entire process is from anything normal.
Then came the document called “Other Instructions/Info” which is even crazier:
Please use the Agreement of Purchase and Sale uploaded with each OPGT listing, it has been vetted to include and exclude clauses as per the OPGT.
So they’re basically drafting the offer that THEY want YOU to submit, just with the price left blank.
Very, very seldom do I see an offer with the pre-printed, standard, “boiler-plate” terms and conditions altered.
But in this case, they drew lines through half the damn document.
During the irrevocable period, the OPGT may receive new offers that are stronger than yours. At this point lower, or less attractive offers will be rejected and the irrevocable period starts again with the new offer(s) under consideration.
This is how some online auctions run.
When somebody bids, it keeps the auction alive for a pre-determined amount of time.
The idea of an auction “expiring” at 12:00pm doesn’t apply, if every subsequent bid keeps it open for another hour. You could basically extend the auction forever.
In this case, they’re saying that if you submit an offer on June 8th, with an irrevocable of June 16th (they demand 6 business days irrevocable), that there’s nothing to stop somebody from submitting an offer on June 15th, which will then expire on the 23rd.
And as they put it, “The irrevocable period starts all over again.”
The OPGT will not negotiate with a buyer. They will accept or reject an offer. A Buyer may of course submit a new offer, with a new APS date and new irrevocable until an Offer is accepted.
No, of course not.
Don’t negotiate with a buyer, or have any discussions, like any other agent would.
Just handle this process like a robot, without the ability to think.
Just sit and wait for offers to come in, don’t talk to anybody, and just wait until, “an offer is accepted.”
In the event of a resubmission of an offer, a single page Agreement of Purchase with new purchase price and amended closing will not be accepted. The entire Agreement of Purchase and Sale must be resubmitted.
Of course, why would we make anything easy?
I’d say about 90% of the offers I work on, in sign-backs, end up with only the first page. Why print out the other eight?
The listing agent will regularly update Cooperating Agents with active offers, when new offers are received. There is no need to call the Agent.
“No need to call the agent.”
They clearly don’t want people communicating with the agent, because that would constitute WORK for that agent, which they have demonstrated with the clauses above, that they are trying to avoid.
And why would we, after reading everything above, TRUST the listing agent to keep people “updated” when they clearly don’t want to work on this?
The listing agent will also contact Cooperating Agents when their client’s offers are rejected, no need to contact the Listing Agent.
Yes, we got that the first time.
Don’t bug the listing agent.
Imagine the audacity!
The irrevocable must always be a full 6 business days beginning the day after a full offer with deposit is submitted. ( NO EXCEPTIONS ) For example, if an offer is submitted Monday the 5th, the irrevocable is Tuesday the 13th.
Beginning the day after.
So you mean……seven business days, then, don’t you?
No exceptions. Got it. That’s the theme thus far.
Will the offer also be………….REJECTED?
If your offer has any errors, or does not meet the above guidelines exactly, your offer will be rejected. You will need to resubmit, with any changes needed. (correction of dates etc).
Whoever wrote this LOVES rejecting things!
They probably have a stamp that says “rejected” and they use it, even though the person who submitted the offer will never see it.
These are a LOT of rules to adhere to, and while I understand that power of sales, estate sales, and trustee sales are complicated, it doesn’t make the rules any more acceptable.
There are no “deals” in the Toronto market, so if you’re thinking, “Maybe so many buyers will turn up their noses at this that I’ll get a deal,” unfortunately, you’re wrong.
The biggest issue I have here is with respect to the deposit cheque, since a buyer might be tying up his or her money for days, weeks, or more!
They’ve asked for the cheque with the offer, otherwise the offer will be……..REJECTED!
And they’ve asked for six business days, which we’ve established is actually seven.
So that buyer is tying up those certified funds for seven business days, whereas they’d only tie up their funds for an evening, during a traditional offer presentation.
What’s more is the idea that every time a subsequent offer is submitted, the “clock starts over,” meaning that the funds can be tied up for weeks.
I would never, under any circumstances, advise my buyer-client to get involved in this, unless they had the only offer.
Folks, it’s a seller’s market, no doubt about it.
But that doesn’t make all this red tape okay.
If you don’t like the rules, don’t play the game. It’s as simple as that…