I was going to write “Deal Of The Century,” but that sounds cliché, and it’s a bit of an exaggeration.
But “Deal Of The Year” is actually quite the understatement.
Over the long weekend, I got one of the best real estate deals I’ve seen in recent memory; at least 2-3 years, and it totally warranted both my client and I working through a long weekend when all the other buyers and agents were on the docks of their cottages.
This story is one for the ages…
I don’t list properties in Niagara Falls.
I don’t list properties in Burlington.
I don’t really list properties outside the central core, since I don’t live, or work, in those areas.
The market bears and those frustrated with rising real estate prices, and rising transaction costs, love to say things like, “Houses will sell themselves in this market,” and insinuate that anybody can be substituted for Listing Agent A, B, or C.
But the following story will show you just how untrue that is.
You see, I don’t know Niagara Falls or Burlington.
I know where they are, and I could probably run a search on MLS and get a general idea of what a given property is worth.
But is that what a seller wants their agent to do in this red hot market?
Price aside, I don’t know the pockets. I don’t know the schools. I don’t know the people, the demographic, the job market, the infrastructure, or the industries that keep the areas alive.
I don’t know the market – in terms of how properties are bought and sold.
And thus, if somebody said, “Hey David, I have a house in Burlington I want to sell,” I would be honest, and tell them, “That’s great, but I work in Toronto.”
I’d be doing them a disservice if I listed their home, knowing absolutely nothing about the area, the market in which those properties are sold.
I have a client who has been in the market since this past February. Her experiences have been noted in at least one or two blog posts in 2016, and we’ve been heart-broken a couple of times this year.
It’s only only fitting, of course, that she’s the subject of a post called “Deal of the Year,” since she really, truly got a steal in a market where there are no deals, let alone steals.
A property came up for sale two weeks ago in the west end, listed for $719,990, that was sort-of what my client was looking for, but not entirely.
She and I had focused on 2-bed, 2-bath semi-detached houses, under $750,000, or up to $800,000 if the lot was big, it had parking, finished basement, and the works. But this house offered a 3rd bedroom, which meant it had better long-term appreciation potential (not to mention more space!), was in a better neighbourhood, on a better street, and closer to TTC.
A 3-bed, 1-bath, semi-detached, with no parking, and an unfinished basement.
And it happened to be an estate sale, which I think often scares buyers away. People assume “estate sale” means “ugly old house formerly owned by ugly old person,” but not always, as this case would prove.
The comparable sales showed this was “worth” around $800,000, but as with every house in this crazy market, I figured it would sell for $820-$830K.
The listing came out on a Monday, but wasn’t taking offers until the following weekend, ie. not the Saturday five days from then, but rather twelve days from then.
That was really odd, as were many other things about the listing.
The agent, as you might have guessed from the lead-in, was from Niagara Falls, and I told my client, “You never know, he might mismanage this listing.”
Taking offers twelve days after the listing came out, in a market where offers are almost always 6-7 days after, was the first oddity. But when they began to pile up with increasing frequency, we started to think about getting a deal.
Offers were also being reviewed on a Saturday afternoon, which was really, really strange.
It was because the house was an estate sale, and the family needed to be together, which I understand and respect. But virtually every home listed in this pocket in the spring and summer markets had offers on a Mon/Tues/Wed/Thurs, so why buck the trend?
I went to view the house with my client, and it was in a lot better shape than we thought.
In fact, it was a lot less of that “old person who lives in a crappy old house,” and a lot more of that “old person who has nothing to do but maintain their house.”
I could tell from the tuck-pointing of the brick alone that this house was well-maintained. You could literally eat off that mortar.
The little things – like the downspout being extended fifteen feet from the foundation of the home, affixed to the deck, painted all the same colour to disguise it – showed that the owner took pride in keeping everything up to date, and undergoing preventative maintenance.
The footprint of the house was large, the bedrooms were all big, and the basement has about 6’2″ ceiling height, which meant it could be finished without having to pay for under-pinning.
Overall, we really liked it!
This was an opportunity to get into a better area, in a larger house, and not pay for somebody else’s finishes.
But would it stay under $800,000? That remained to be seen.
I emailed the listing agent that night to get a copy of the pre home inspection, and to my surprise, he emailed back and said, “Pre-home inspection? We don’t have anything like that.”
That alone was going to deter at least 2-3 would-be buyers.
We’ve talked about this in the past – would you buy a house with no inspection? Would you pay for your own inspection in advance, knowing you might be throwing your money away if your bid isn’t successful?
My client and I really liked the house, and we debated whether it was worth spending the money for a pre home inspection.
Offers were going in on Saturday.
As in, Saturday, September 3rd.
As in, on the Saturday of a long weekend in Toronto!
So let’s regroup:
-Offers were held back for 12 days, through two weekends
-Offers were being reviewed on a Saturday
-Offers were being reviewed on a long weekend
-There was no pre-home inspection
I told my client that this combination of events would undoubtedly take a lot of buyers for this home out of the running, and that we should proceed aggressively.
I got my home inspector in on Friday (he loved me for that – right before a long weekend…), and he gave the house rave reviews.
“David told me on the phone last night that this house was a fixer-upper,” he told my client and her mother. “This is not a fixer-upper. This is an incredibly well-cared-for home, in above-average condition, with almost nothing that needs to be replaced or repaired immediately.”
Way to make me look bad, and good, at the same time.
I meant that it was a “fixer upper” because it needed a new bathroom, and eventually you’d want to re-do the kitchen, probably tearing out the wall in between the kitchen and dining. You’d also want to paint every inch of the house and replace all the light fixtures right away.
But the structure was sound, the systems were all in great shape, and the windows, roof, electrical, and plumbing were all updated, with the exception of the lead pipe in the basement – that was the only thing we wanted to repair (about $2,500) at some point, but for now, she could use a filter for drinking water.
All in all, we were very happy to move ahead, and set a price target of $795,000.
On Saturday when offers were going to be reviewed, my client told me, “I crunched my numbers and I can probably go higher, if needed.” I never asked her for that number, since I had a very good feeling that we wouldn’t need it, but I assume it was $810,000 or thereabouts.
Offers were to be reviewed at 2:00pm, and we submitted ours via email, along with a scan of a certified deposit cheque.
I registered my offer the night before, just to put my foot in the door, but I didn’t want to keep asking, “Are there any other offers registered?” as I thought it might make the agent clue in and say, “Geez, should there be? Why does this guy keep asking?”
At 2:00pm, we submitted an offer for the $729,000 list price, and I told my client, “Do not get excited – offers always come in late, and they can keep coming.”
Having said that, I was being a bit hypocritical, since I was really excited myself.
I just had a feeling things would turn out this way, from the moment we started looking deeper at how this property was listed.
My buyer was ready to click “send” on a revised offer – $760,000 if another offer came in and competed, which still would have been well below anything we had hoped for. If a third offer came in, we’d be approaching $800,000.
And yet we waited, and waited.
I hate calling with “No news, is good news,” but I didn’t want to leave her hanging through an entire day on a long weekend when she was probably trying to relax.
5pm came and went, with no word from the listing agent.
I worried he would call me and say, “We accepted another offer,” completely ignoring the fact that he was obligated to inform me of any other registered offers, and allow my client the opportunity to revise her offer.
At 5:45pm, as I nervously sat at the table for a family dinner, with my knee tapping out of anxiety and shaking the whole table, my phone rang.
The listing agent said, “We’ve accepted your offer, I just have to scan it and send it over to you.”
It sounded too good to be true.
I didn’t want to tell my client until I actually had the signed, accepted offer, in hand.
But I couldn’t leave her hanging either. So I told her that we had a deal…….’ish.
It took an hour to get the paperwork, and some initials were missing, just to complicate things. But by the time the sun had set, we had a firm deal.
And my client and I were shocked.
So there you have it.
Doubt the accuracy of this story if you want to.
Tell me the market is too efficient to let a house sell for a song.
But I stake my reputation on the fact that this house, that my client purchased for $719,990, is worth $800,000, possibly more.
Mistakes were made on this listing, no doubt question about it.
Ask the family who sold the property, and they’ll probably say that they’re happy getting “full list price in such a short period of time.”
But that’s not the market we’re in.
This property was under-priced for multiple offers, and didn’t get them, because it wasn’t under-priced enough, offers were held back for too long, offers were being reviewed on a long weekend, and there was no pre-home inspection.
That’s the best deal I’ve got in years.
And I can’t wait for next Labour Day weekend…