November 27, 2019 39

Business

Slam The Gavel!

Okay, so we don’t have gavels here in Canadian courts, but the sybmolism is what I was after.

A landmark real estate case has just passed through appeal, and the TRB readers are already discussing…

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November 22, 2019 10

Stories!

Mixed Emotions

Button your lip, baby
Button your coat
Let’s go out dancing
Go for the throat

Let’s bury the hatchet
And wipe out the past
And make love together
Stay on the path

You’re not the only one
With mixed emotions
You’re not the only ship
Adrift on this ocean

From the files of, “You know you feel old, when,” I actually remember listening to the Rolling Stones’ Steel Wheels album, on cassette, with my childhood friend Jeff, in 1989.

I just put the song “Mixed Emotions” on iTunes, and I actually felt like I was there for a moment.

My bedroom at 128 Parkhurst Boulevard, west-side of the house, small window.

Awful 1970’s carpet that was scratchy and rough.

Barely space for both Jeff and myself, laying on the floor, in between the bed and the dresser.

And an unhealthy amount of these:

Whatever those were called, they defined my childhood.  Along with Cheez-Wiz, Ritz, Premium Plus, and Fruit-Roll-Ups that my mother would never buy us, but that I would trade for at recess as often as possible.

Jeff and I use to listen to “Mixed Emotions” over and over, but on cassette, we had to get through “Sad, Sad, Sad” first.

Shortly thereafter, we discovered music videos, and as childish as this is, and please don’t fault me, because I was 9-years-old, we used to watch the video and look for Mick in his blue and yellow leoptard, with his package banging back-and-forth out of his pants.

We were kids!

But I’m not wrong.  I mean, look:

Okay, on that note, let’s move on to a package of stories from this past week…

I brought out a listing last week in that oh-so-sought-after sub-$1M range that garnered a lot of interest.

I knew that we would have bully offers on the property, but we were 99% unlikely to accept one.  Topic for another day, but I find that very few bully offers out there are worth accepting these days, since the astronomical prices people are seeing on offer night necessitate waiting.

Two days into the listing, for a property listed at $729,900, I received a call from an agent who was very unhappy with the price.

“What do you think it’s worth?” he asked me, which in this case wasn’t because he didn’t know, but rather because he was looking for an argument.

I answered, “Well, I think we’re going to see at least six-figures over list, that’s for sure.”

Then he launched into what felt like a pre-rehearsed speech about how “unfair” it was that I listed this property under fair market value.”

“If you think the property is worth one-hundred thousand dollars more, then why don’t you price it there?”

I was so confused.

I’m used to getting this from members of the public who (rightfully) dislike the process, but most of whom understand it, and accept it.  But from another agent?”

I told him, “This is how houses have been listed for sale since I got into the business sixteen years ago,” and he abruptly cut me off and said, “Well I’ve been in the business for twenty-four years, and I can tell you that I don’t like what’s going on….”

He continued his speech, and I let him.  I was curious as to his end game.

“What’s the price at which you think this property should have been listed?” I asked him.

“Whatever price you think it should sell for,” he said.

“Real estate has no fixed value,” I told him.  “We’re good at our jobs, but in a market like this, where it’s worth ‘what somebody is willing to pay,’ and that price is different for everybody, doesn’t it make sense to have an auction format, with one day and time when all interested parties can attend, that way it’s ‘fair’ to not sell a house in one day, or fifteen minutes?”

“This house should have been listed higher,” he said, ignoring my question.  “And I’m not going to show it.”

Confused doesn’t explain this interaction.

Tell me that you don’t like “multiple offers” and I’ll agree.  But it’s a result of the supply and demand in our market, and “offer dates,” believe it or not, are borne of fairness to interested buyers as much as they are of sellers looking for top dollar.

For an agent with twenty-four-years experience to not show this property to his clients because it was under-listed with an offer date is beyond confusing to me.  It’s insane.  I feel terrible for his buyers, since their overly-emotional agent has no idea how to transact in this market.

Two days later, I received a pre-emptive offer on the property, and it wasn’t great: it was for $790,000.

The property ended up selling for $972,000, by the way, but that’s besides the point.

Don’t let the frustration of the bull market sway you from the storyline here; I’m talking to you today about emotion in the offer process, and when agents (and buyers) should know better.

The offer for $790,000 was a poor one, and obviously my clients weren’t inclined to work with it.

By “work with it,” of course, I mean “move up their offer date.”  Because let’s not forget that if a seller decides they want to accept a pre-emptive offer, they must notify all parties who have expressed an interest in the property, and notify those parties of the new time and place that offers will be reviewed.  And once you start that ball rolling down a hill, there’s no turning back.  So when you decide to “work” with a pre-emptive, you’re selling the property that night, or you risk sending the buyer pool, the buyer agents and the listing into absolute chaos.

On all my listings, I include the disclosure: “Seller Reserves The Right To Consider Pre-Emptive Offers With 12 Hours Notice, No Exceptions.”

In the spirit of fairness, I refuse to blind side buyers and buyer agents by either selling the property without notifying them (which is illegal, but agents do it), or emailing them to say that I have an offer in hand, that will be accepted in 35 minutes.  I have a strict 12-hour rule, and I think that’s reasonable.

This agent gave me the offer at 6:00pm, with a midnight irrevocable, and I wasn’t pleased.

The $790,000 offer price wasn’t going anywhere, but it was the irrevocable that bothered me because it came with a note that said, “Unfortunately, we’re not able to abide by your 12 hour irrevocable, however we think you’ll see that this price is worth your attention, and that the time period to review is reasonable.”

How bout that.

I called my clients to let them know about the offer, and they agreed that this wasn’t anywhere near what they would accept as a pre-emptive, in order to move up the offer date.

I called the agent back to let him know, and he was shocked.

“I’m absolutely shocked,” he said, as I became shocked that he was shocked, in a shockingly-ironic twist of fate.

“They’re really going to turn this down?” he said.

I had to string him along, because that’s how it goes.  “Bring this offer back on Monday night,” I told him, keeping my emotions in check.  This is where inexperienced agents spout off and say, “You’re a joke, man.  Your crappy offer has zero chance.  What do you mean you’re shocked?  What market are you working in, bro?”

But that’s getting emotional.  And I have no mixed emotions when it comes to doing my job in the most effective manner.

“I’ll look for you on offer night,” I told him.  “You’ve got a foot in the door.”

“David, these guys aren’t coming back on offer night,” he told me.  “Your clients have until midnight to accept this offer, or they lose it.  My buyers walk.”

I couldn’t understand why he was trying to strong-arm me when he had no leverage.  But again, I kept my emotions in check.

At this point, I sought to clear up any confusion and potential frustration on his buyer’s end, and I told him, “Please do not tell your buyers that you’re waiting until midnight.  This is a hard ‘no’ and I don’t want your buyers thinking that they’ve got a shot, and for them to wait around, so please convey this to them.  But again, I encourage you to come back on offer night if your clients are still interested.”

He reiterated that they wouldn’t be, and that was that.

Offer day came, and throughout the day, offers were registered.

At about 6:00pm, with a 7:00pm offer presentation time, guess who emailed?  Yup, he came back.

His email said, “AMAZINGLY, my clients have decided to put their offer back on paper.  I’m shocked.”

And once again, I couldn’t understand the tone.

When I submit an offer on behalf of a buyer, I kiss the listing agent’s ass!  I spend a week buttering he or she up, looking for an in, or an edge, and I play nicer than your pastor’s son.

But so many agents out there feel that their ego matters most, and here was this agent, coming off a terrible bluff, who just didn’t have the humility to open the door for himself.  Let’s call this what it is: crawling back.  But he didn’t need to open with, “Amazingly, shockingly, my clients are coming back.”

At the same time, I’m not expecting him to say, “Hi David, I’m a bum, and you’re a God, so here’s our original offer after a really bad bluff attempt.”

But is it really beneath him to just avoid the ego-check?  Just say, “Hi David, please find our offer attached.  Keep me posted.  Thanks!”

What the hell is wrong with that?

It’s a really, really tough market out there, and emotions are getting the best of buyers.  But agents can’t let emotions get the best of themselves, or they’ve lost all hope.

I had another bully offer attempt a couple of days after that first one, only this one was really good: it was for $881,000.

We were reviewing offers on Monday night, and the agent called me on Saturday evening to say he wanted to bring a pre-emptive.  Again, I tried to help him: “We will not be looking at a bully, not this close to offer night,” I said.  “We have one more day until offer day, there’s just no upside here,” I said.  “I’ve had 80+ showings and I’m not going to piss off eighty colleagues and their buyers, nor do I think the time is right for a bully.”

He said he understood, and I went on with my night.

Sunday morning, I woke up to find a pre-emptive offer from this agent, for $891,000, irrevocable at 12:00pm.  I was up at 8:30am, so even though he had sent this at midnight the previous evening, I really only had 3 1/2 hours until the deadline.

The offer was really good, but it wasn’t an astronomical figure that was worth changing the offer date for, so we decided to pass.  I told my clients that their floor was probably $860,000 on offer night, and their ceiling, in a crazy world, would be $1,000,000.  The risk/reward proposition was not in their favour.

I told the agent that we were going to wait, and I added that it was my daughter’s birthday and I had 30 people coming over, so there was no way I was going to spend the next three hours calling 80 agents to let them know about the bully.

Now, truth be told, work comes before family in my world.  Judge, blame, feel sorry, but it’s the path I chose.  If this offer was for $1,050,000, I’d be in the basement working the phones, and I’d check the video footage of the birthday cake later.

But I was just using that to see if one personal anecdote solicited a personal response from the other side, and indeed, it did.

The agent called me back and essentially said, “too bad” about my daughter’s birthday, and that if we didn’t accept this offer by 12:00pm, his client wouldn’t be back on offer night.  And if he did come back, he would come back lower.

I’ve heard this before a couple of times this year, but nobody ever does this.  It’s illogical.  Its’ real estate suicide.

We passed on the offer, and I watched Maya run behind the couch, crying, when we presented her with the birthday cake.  Kids are nuts.

As mentioned before, offer day came and we had eleven offers, with the property selling for $972,000, which nobody in the city saw coming.  Nobody.  Not even the folks that bought it!

But that “bully” who submitted the Sunday-morning offer of $891,000?  What did he do?

Well, first, he came back, as they usually do.

But he did something that I’ve never seen a buyer do: he really, truly did come back lower: $860,000.

Now that is getting emotional!

I don’t know if this was the buyer’s idea, or the agent’s idea, or both.  But this goes beyond “cutting off your nose to spite your face,” or “shooting yourself in the foot.”  There’s zero chance you win with an offer that is lower than what you presented as a bully.

If your bully was turned down, it’s 99% likely that the listing agent knows they’re getting more on offer night.

And if you then turn around and offer less, then that 99% chance simply increases.

I would understand if this buyer walked away.  But I don’t understand the logic in submitting a lower offer.

The level of immaturity here was astounding.  And I blame the agent for letting this happen, even though I think it was probably his idea.

The agent that had the winning offer, by the way, was one that spoke to me three times before offer night.  He’s been in the business for over two decades, and he happened to call me right after this second bully offer was submitted and the agent was rude on the phone.  We chatted about “agents today” and commiserated.  He built a personal relationship, and while he did end up with the highest offer, that relationship might have helped if things were tight on offer night.

I can’t tell you how many deals I get because of my personal relationships.

I know I’m not supposed to say this, but last month, I got a deal because I was the second-highest offer, but the guy with the highest offer was an asshole, so the listing agent told me, “I fucking hate this guy, and so does my seller.  Beat him by $10K and you got it.”

That happens.  You don’t want to think it does, but it happens.

I get deals done because of my personal relationships, because of my reputation, and because I know when to kiss the listing agent’s ass, rather than slap him or her in the face.

So many of today’s agents are running around with mixed emotions; they don’t know when to be nice, and they don’t know when to be aggressive.  They don’t understand when the leverage isn’t on their side, and they sure as hell don’t know how to keep their personal biases, personal agendas, and emotions in check.

These agents are “not the only ship adrift on this ocean.”

So they need to stop acting like it, or they’ll never get a deal done…