What Makes A Seller Want To Re-List HIGHER?

How do they get to that point?

What must transpire for a seller to do something that crazy?

Folks, this story is hot off the presses.  I can still smell the shwarma on my fingertips as they type away on this keyboard (I’ll explain the shwarma later…)

Let me regale you with my latest experience, literally hours old, and explain how a seller goes from one list price, to a higher one, overnight…

Succeed

My poor clients, honestly

Right when they think they’ve finally caught a break, it all comes crashing down on them.

Don’t worry – I prepared them for the eventual outcome, which you already know, having read the title line.

Yes, we made an offer on a house on Tuesday night, only to see it be rejected, and the seller is going to instead re-list at a higher price this week, or next.

But it’s not the conclusion to the story that’s of interest this time around.

It’s how we got there.

I’ve written quite a lot in the past about how many sellers out there will list their homes for sale at a given price, receive a fewer-than-expected number of offers (or no offers at all…) and decide to raise the price.

We saw this quite a bit in the spring.

When the market changed, and those $799,900 listings, which had been generating 10-12 offers in February and March, and selling for $1,100,000, started to get significantly less interest, we started to see those list prices increased from $799,900, to $1,089,000 the day after a failed “offer night.”

It became an epidemic.

So much so, in fact, that I hypothesized that it skewed the TREB data, and “New Listings” were substantially higher as a result of so many properties being counted twice.

In the spring, we knew that a lot of sellers, not to mention agents and buyers, were having trouble figuring out the changing market.  As a result, it took a lot longer than expected for sellers and their listing agents to change strategies, and list at or near fair market value, with offers any time, rather than hysterically under-list at a price often 70% of fair market value, hold back offers, and set an offer date.

In the fall market, we’re seeing houses listed a lot closer to fair market value (those with “offer nights”), but also seeing houses listed with “offers any time.”

We’re also seeing far fewer homes being re-listed at a higher price, as we did in the spring.

But if you’re wondering in those cases where the seller does re-list higher, how do they get there?  Well, I have a story for you…

I have made two offers with Andrew & Marion this fall.

We lost the first bid by a little, and the second bid by a lot!

I’m not going to tell you in what area they’re looking, since I want to keep the listing in this story positively unidentifiable, but let’s just say that it’s a high-demand area (what area isn’t?), and listings have really slowed down over the last two weeks.

Last week, a new listing hit the market, and I figured it would sell for well over our budget, which was very close to the list price.

The house was detached, in an area where the semi-detached vs. detached ratio is about 50/50, but it had a rare private driveway, and it was steps from the subway.

We had bid on houses that were much further from the subway, houses with no parking, and houses that were semi-detached.  But they were all really polished, and we were willing to compromise on location/parking/semi in exchange for a beautiful, turnkey house.

The house on which we bid on Tuesday night was not in good shape.  Structurally, it was sound.  But aesthetically, in today’s market of pristine, staged, magazine-worthy houses and condos, it just didn’t compete.

We didn’t really know if we were going to submit a bid, since we had expected competition, but it became clear by 5pm that offers weren’t pouring in.  There were zero offers registered at that point, and the listing agent, probably trying to encourage any offer, told me that he honestly didn’t expect anybody to come in.

Andrea & Marion went to the bank and got a certified cheque for $70,000, and we met for the handoff, and signed the offer.

We were submitting an offer of the listing price – $1,298,000, with the $70,000 deposit cheque ‘herewith,’ and no conditions.

Offers were being presented at the listing brokerage at 7:00pm, but by 6:00pm, the listing agent called to say he didn’t know when offers would be, or where.

Something was off, but I had yet to really realize it.

I was in the area early, so I had to kill time waiting for him to call me.

Have you ever gone into Subway Sandwiches, and seen one “Sandwich Artist” slowly working on a 6-incher as though it were a 12-foot novelty sub, while four other people waited in line?

I have no patience for that.

I just can’t do it.  I physically can’t watch the world go by at 20 KM/H when my mind is constantly running at 120.

I found a shwarma place down the street, and my God did these guys have a spread!

As much as I wanted to gain seven pounds last night, I managed to exhibit some self-control, and just go for the standard chicken shwarma.

Then I went out to my car, like every lonely real estate agent does, and ate a shwarma in the front seat, while trying desperately to avoid dripping garlic sauce on my winter coat, and receiving curious looks from passer-byers.

I pulled up in front of the house at 8:00pm, since rather than meet at the office at 7:00pm, we would meet at the house an hour later.

I went inside, and met the two agents – Peter and Cathy, and the seller, who sat with arms-folded, in a cheap, ugly, kitchen chair.

It bears mentioning at this point – there were two sellers of this property, and yet only one was present.

And thus, sadly, this offer presentation was over before it even began.

I exchanged pleasantries with the listing agents, and then extended my hand to the seller and said, “Hello, I’m David Fleming from Bosley Real Estate, great to meet you,” to which all I received in return was “hi.”

Maybe it was a language barrier, or maybe it was a sign of things to come.

But I carried on, laying out three copies of the Agreement of Purchase & Sale, with the “lead” copy featuring our $70,000 bank draft and one of my business cards paper-clipped to the offer.

I told the three of them a little bit about my clients, as is usually the custom, even though the vibe at the table didn’t warrant it.

Something was “off” in the room, and I figured there had been a discussion before I’d arrived.  You know when you walk into a room, and the people in the room are quiet, and you ask, “Were you guys just talking about me?”  You just have that feeling.  And the feeling I had, was like that.

I always let the listing agents do the presentation; there’s nothing worse than a buyer agent who decides he or she is going to take control of the table.

When I had finished my spiel about my clients, not a word of which was listened to by the seller, I handed the three copies of the offer over, and said, “Peter, Cathy, please proceed.”

The seller took one look at the first page of the offer, and we lost her.  It was done, even though it was already finished before it had begun.

There was no sigh, no grunt, and it’s not like she ripped the offer up.  But part of my job is to read body language and non-verbal cues, and it’s something I’m very good at.

You know when somebody is less than happy, but they don’t want to show it, so rather than open their mouth and let out a sigh, they catch themselves and sort of roll their tongue through their cheek?  Add in a blank stare, a shift of the bodyweight from one side of the chair to the other, and I think the point is made.

The listing agent, for some odd reason, read the offer out of order.  He skipped through to the Schedule A, perhaps to highlight there were no conditions, but took his time reading every word, of every clause, even though it was all pointless.

The seller had stopped listening.

The four of us sat there, each of us knowing this was merely an exercise, each of us acting like we didn’t want the others to know.

When I present an offer, I place my hands together on the table, and I don’t move.  I literally turn into a statue.

The seller sat with her arms crossed, not looking at her copy of the offer and not following along, shifting her gaze from one end of the table to the other.

The other listing agent was looking at my eyes, then the sellers eyes, then the offer, then back, and forth, all over again.

And the listing agent with the offer in his hands continued to read through the offer, maybe hoping for divine intervention.

I had all I needed by this point, and stopped reading body language.

I began to think about that shwarma….

“….Fridge, Stove, Microwave, Dishwasher,” the listing agent read.

What is that green stuff they put in the pita?” I wondered.  “What’s that called?  I know there’s a name for it.”

“No fixtures excluded, no rental items included in Section 6 of the offer…”

“I’m pretty sure the pinkish stuff is radish, but what’s in the chopped veggies other than cucumber?”

“Title search date is the requisition date for lawyers; you don’t need to concern yourself with that…”

“No, wait, it’s not a radish – it’s turnip!  What the hell was I thinking?  Who puts radish in a shwarma?”

“The Schedule B is our own brokerage’s clauses, about interest on deposit, it’s Prime minus 2.75%……”

“Pickles!  They were missing pickles!  Isn’t a shwarma supposed to have pickles?”

“The rest of the agreement is boiler-plate, just standard clauses that appear in every offer…”

I would go back there for sure.  I don’t know how many calories were in that thing, but it was worth it.  I shouldn’t have chased it with the gum, however.  My mouth feels horrible.”

This is basically how we spent five minutes together, and the other agents felt the same way.

The agent reading the offer was jumping around from section to section, I’m not sure why.

The agent sitting next to him didn’t know whether to hold a smile, or look reserved, but the back-and-forth made her look crazy.

When the agent said, “The closing date is January 31st, is this what you wanted?” and the seller replied, “I don’t know.  I haven’t thought about it.  I’d really have to think about it,” I was a little perturbed.  It was clear she didn’t care about any of this, she was unprepared, and the listing agent had to bear some of the blame for that.

For the rental items section, I wrote “None” and the agent asked the seller, “Is the hot water tank a rental, or is it owned?”  The seller said, “I have no idea.”  The agent told me, “You should have put ‘Hot Water Tank – If Rental,’ because we don’t know if it’s owned or not,” like somehow, that was my fault.

When the charade was finished, I graciously shook all their hands, smiled, thanked them for their time, and walked toward the front door.

One of the agents followed me, and walked me out.

Knowing full-well that this house was going to be re-listed $150,000 higher the next day, I simply asked the listing agent, “What are we doing here?”

He asked me what I meant.

“This.  This entire process,” I said.  “That seller isn’t going to sell, you know that.”

He nodded.

“I’m here with an unconditional, full-price offer in hand, my clients went to get a deposit cheque.  I know it’s not the price she’s expecting, but all I ask for is a little respect.”

He nodded again.

“She didn’t listen to the terms of the offer, she didn’t look me in the eye once, the husband didn’t even bother showing up.”

He agreed.

“The husband stayed late at the office,” the agent explained.  “When he found out there was only one offer, he basically decided they weren’t going to sell the house tonight.”

“And yet, here I am,” I mused.

The agent was a nice guy, and I think the sellers really threw him for a loop.

“What can you do when your client wants more money?” he rhetorically asked.

“They don’t deserve it,” I told him.  “The house doesn’t show well, they put zero effort into the listing.  The paint colours are brutal, their furniture is the cheapest, ugliest crap I’ve ever seen, they didn’t stage it, didn’t fix anything in the house, they didn’t lift a finger, or spend a penny, and there are shit stains in the downstairs toilet.  What did they expect?”

What did they expect?  Seriously?

Had they put $10,000 into this listing, maybe they’d have gotten the $1.45 Million they clearly wanted.

But they didn’t.

They felt entitled, they misread the market, they misunderstood the market, and the market responded in kind.

So next week, we’ll probably see this little $1,298,000 house come back out at $1,449,000, and there, it will sit.

Just like many before it.  And just like many sellers before them, they’ll lament the market, and in keeping in line with Monday’s theme – not take any responsibility.

For Andrew and Marion, it was certainly worth a shot.

And for me, I enjoyed the experience (despite the cynicsm above), got an idea for a blog post, and had one hell of a chicken shwarma…

11 Comments

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  1. Sardonic Lizard says:

    Nothing but realtors and sellers out there with ‘Delusions of Grandeur.’

  2. Paully says:

    I would never eat something made with that much garlic before a meeting. Maybe the vendor was a vampire?

  3. steve says:

    Excellent post … and I’m afraid you’re right … the listing will sit and whither. There are a more than a couple of similar listings in my neighbourhood.

  4. Paul says:

    Clearly if the seller is having an offer presentation deadline they are looking for something over asking price, and I’m sure you knew this.

    What was the value of comparable sales, was your offer of list price competitive?

  5. Ralph Cramdown says:

    It bodes ill for the theory that people with 20%+ down are rushing to beat the new income test if a decent, median priced detached at or below FMV only attracts one offer.

    I know you won’t identify the property after slagging it, but maybe a shoutout to that shawarma shop sometime later…

  6. Patty says:

    Yes, would love a follow up on this listing.

  7. Condodweller says:

    “rather than hysterically under-list at a price often 70% of fair market value, hold back offers, and set an offer date.”

    Some may argue the 70% was the fair value in the spring. Shields up!

  8. Marina says:

    I truly don’t get people who don’t stage. Even if your house is dated as hell – slap a coat of paint, fix obvious issues, get in some nicer furniture, or at least clean out your clutter.

    It’s like showing up to a job interview in torn jeans and a dirty t-shirt. That’s not how you are going to get that upper management job you want. And it should be obvious.

  9. paul says:

    please keep track of that listing and let us know in the near future what the sold price is.
    i am curious to know if they can get near their list price or if it sits months in the market

  10. Andrew says:

    That “green stuff” you speak of is called Tabbouleh. It’s primarily parsley, with mint, finely chopped tomatoes, Olive oil, and some spices.

  11. Kramer says:

    Really? Because I heard through the grapevine that the customer service at this company was worst in field.

    Also… There has also been a lot vandalism of cars in my neighbourhood lately.

    Maybe these two things are connected. I’m not saying they are. But maybe. It’s not impossible.

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