There it was, in all it’s glory:
“Seller Requests 72 Hours Irrevocable On All Offers.”
Who would have known what an utter mess those eight little words would create?
There ought to be a law against it…
When an offer is “irrevocable” it means that you can’t take it back.
You can’t drop out, you can’t change your mind, and you can’t change any terms of your offer.
When you put pen-to-paper and give somebody an “irrevocable” of 11:59PM on Tuesday night, you have nothing to do but sit and wait.
The irrevocable period varies according to the property, the circumstances, and of course the wants, needs, and strategies of the buyers and sellers.
If a property has been on the market for ten days, and you’re making an offer at or around the asking price, there’s no reason you can’t submit an offer at 3PM and give an irrevocable of 11:59PM that night. The time frame is completely reasonable, and the seller should be able to review the offer and make a decision within those nine hours.
Quite often, however, the seller and/or the listing agent will include on the MLS listing: “Seller requires 24 hours notice on all offers.”
As a buyer’s agent, it’s your choice how to proceed. You can ask, “Why does your seller need 24 hours notice?” Maybe the seller is based in Europe and there are significant time restraints. But maybe, just maybe, there is no good reason whatsoever, and the seller and the listing agent are just playing games…
One agent based in the King West area, who I absolutely despise, is notorious for noting “48 Hours Irrevocable On All Offers” on every single property he lists. I know for a fact that all he does is take the offer and spend two days shopping it to every single agent who has shown the property, trying to get a single dollar more.
The most frustrating part is: you’re at the mercy of the listing agent. If they request 48 hours, you don’t have to give it to them, but they can always say, “Sorry, I don’t have enough time to present this to my seller. You’ll need to re-submit with a longer irrevocable.”
In essence, that agent is saying, “Screw you, give me what I want.”
In a seller’s market, you may have no choice but to play ball.
As a buyer and a buyer’s agent, you can do whatever you bloody-well please. You can give them a two-hour irrevocable no matter what they ask for! But there are no guarantees that they’re going to present your offer, and you have to know that going in, and then adjust your plan accordingly.
Aaaaaah, the games that agents play! Frustrating as hell; especially when you and your client feel completely and utterly helpless…
A property came out last week on Ontario Street that was perfect for my young buyer, Antonio.
Antonio was looking to purchase a house that had income potential, either from a basement apartment, or perhaps a duplex. The Ontario Street house was a duplex with a 1000 square foot 1-bedroom apartment on the main floor, and a 1000 square foot 2-bedroom apartment on the second floor.
Antonio could live in the 1-bedroom apartment and rent out the upstairs for $1200/month, or he could live with a roommate (paying him $600/month) in the upstairs unit and rent out the main floor unit for $1000/month.
Either way, Antonio’s cost of living would be much lower than purchasing a 1-bedroom condo. He’s a very knowledgeable, capable kid who has the support of his family behind him, and it helps that his father is planning on fixing up old houses when he retires in a few years!
The house came out at $415,000, and we knew right away that it was severely under-priced. I told Antonio to think “upwards of $450,000,” and both he and his father viewed the house as if it were listed as such.
Due to the tenants occupying the property, however, it became very difficult to view the property.
In actual fact, the listing sat on MLS for a week before we were even allowed inside!
The listing agent emailed me and all the other agents one night saying, “Showings permitted this Thursday from 6 – 7:30PM.”
Wow! Imagine that – out of the 168 hours in a week, we were down to 1.5 hours when we could actually see the property! Talk about a tough sell!
Antonio and I went through the property one evening with about ten other buyers all at once, and the property was exactly as we had expected: it needed work, but it was fully liveable as is, and with a few coats of paint, some better lighting, and perhaps some new carpeting, it would be a turn-key operation.
The basement was unfinished and there was very little potential present. With no separate access, it would be impossible to create a third income-producing unit in the house, not to mention the fact that the back of the basement had a dirt floor!
The plumbing had been updated with the installation of copper piping throughout the house, and it looked like majority of the electrical had been updated as well.
The property itself was a semi-detached, century-old Victorian on a very deep 148-foot lot.
The location was less than stellar. The area is “transitional” in that there is still some subsidized housing in the area and you’re always going to have your fair share of crack-heads wandering around. As a matter of fact, I think the only area in Toronto without crack-heads is probably Post Road…
The street itself is absolutely gorgeous, and when you look north from the bottom of the road all you see is tree-tops and rows of beautiful Victorian and Edwardian houses!
The area may be surrounded by the less-than-desireables, but judging by the number of Audi’s, Mercedes, and SUV’s parked on the street, I’d say that the affluent have been inhabiting this street for more than some time now.
So now being completely sold on the area and the property, the only task at hand now was to actually go out and buy the house!
Easier said than done…
Houses in the downtown core under $600,000 are flying off the shelves, and the $415,000 asking price for this property was sure to attract more than a few suitors!
Antonio and his father were fully comfortable going in at the $450,000 price I had quoted, but that still left the issue with the 72-hour irrevocable period.
I didn’t like it from the start, and I wasn’t going to play within the confines of this dream world that the listing agent was trying to create for himself.
Oh – I should also mention that the seller was the listing agent’s brother, just to complicate matters even further.
Offers were to be presented on Monday, no time specified, so with seven different offers drafted at $450,000 representing plan-a, plan-b, and so on, I went to meet Antonio at the Tim Horton’s at Bloor & Bedford to talk strategy.
I had few tricks up my sleeve.
Was it going to work?
(TO BE CONTINUED….)