Don’t call it a comeback
I’ve been here for years
I’m rocking my peers
Puttin’ suckers in fear
Makin’ the tears rain down like a monsoon
Listen to the bass go boom
Explosions, overpowerin’
Over the competition I’m towerin’
Wrecking shop when I write these lyrics
That’ll make you call the cops
Don’t you dare stare, you better move
Don’t ever compare
Me to the rest that’ll all get sliced and diced
Competition’s payin’ the price

You know what comes next.

That hook, that lyric – it sends a shiver down your spine, doesn’t it?

When my car was infamously stolen from my driveway at 2am one night in the summer of 2019, taken for a joyride, subsequently crashed into the wall of a fire station, and “totaled,” because I am a complete and utter creature of habit, I replaced this car with the exact same one.

Well, to be fair, it wasn’t exactly the same.

The new one had Sirius XM.

I didn’t use it for the first couple of months.  At the time, I was really into podcasts, but as those made me angrier and angrier (I usually listened to political, economic, and media commentators), I switched to Audible and listening to books, since I have absolutely no time to read.

Then one special, magical day, I ended up on Sirius XM 8.  That, of course, let to Sirius XM 9.

I don’t know that I’ve changed the dial since.

“80’s on 8” and “90’s on 9” have become a part of me, every day, in the car.

I can’t decide which I like more, and I don’t know which I listen to more, but whether it’s the 1970’s or the 2000’s, all other channels and decades can take a hike.

Like many people last week, I was saddened by the death of Eddie Van Halen, and after listening to Van Halen all day in my office for about ten hours straight (and introducing a 23-year-old team member to “Van Halen,” which she had never heard of…), I dove deep into a pattern of glam metal that continued right through the long weekend.

I was a massive Guns N Roses fan as a kid.  Seriously, even though I was born in 1980, I was a fan.  Do the math, I know.  It’s inappropriate.  But I had memorized all of the lyrics to “Appetite for Destruction” by 1991 when I was 11-years-old, and I knew what the lyrics meant, because I asked my dad, and he told me!

In September of 1992, at 12-years-old, I went to the “Guns N Roses/Metallica Stadium Tour” at the C.N.E. with my mother and sister, and saw Faith No More open, followed by Metallica, then we waited two hours for Guns N Roses to get on stage.  It was a scene, man.  And the next day at school, I was a legend.

So last week, I surrounded myself with Motley Crue, Skid Row, Poison, Warrant, RATT, Scorpions, Judas Priest, and even some Whitesnake.  As I write this, I still have the lyrics to “18 And Life” in my head.

Not to turn this into an advertisement for Sirius XM, but the best part about the “90’s on 9” is that you never know what you’re gonna get.  One minute, it’s “Winds of Change” by Scorpions, which you sing along to, even though you don’t really know the words.  And then…

….it’s LL Cool J.

And suddenly, you find that voice you didn’t’ know you had, as you yell, “DON’T CALL IT A COMEBACK” and make odd symbols with your hands as you drive down Bayview Avenue, bopping your head like you’re an extra in a music video that just happens to be filmed in your car.

I just love this lyric.

Dr. Dre released “Forgot About Dre” in 2001 and rapped about how people acted like he had fallen off, but now that he had Eminem, and a booming company, people’s hands were out again.

I love that song too, and every lyric therein.

But LL Cool J’s “Don’t call it a comeback” explains that he never fell off, and he wasn’t going to listen to anybody that suggests as much.

If you’re looking for a parallel here with the real estate market, I don’t have one.

Instead, my parallel is with something that many of you will find boring, but some of you will find tremendously helpful, I assure you!

I mean, who doesn’t like legalese?

Right?

On a Tuesday morning, after a long weekend?  You’re welcome!

As we move through this incredibly up-and-down, unpredictable 2020 in the Toronto real estate market, the winds of change blow stronger than a Scorpions’ hit from the 1990’s! (sorry, I had to!)

No longer are offers “standard,” in certain situations, and I’m finding that both buyers and sellers are getting more creative and, in some cases, more demanding with their terms.

Case in point: the clauses we see in offers.

Every time I have received an offer this fall, I’ve seen something that wasn’t there in the summer or the spring.  Some of these are trivial but others are consequential.

By the same token, I’m including clauses in my offers that I haven’t used in years!  On the sell-side, I’ve altered my standard “Schedule B” in some cases.

Don’t call it a comeback, but the following clauses are now being used more than before…

Buyer agrees to provide a certified cheque as a deposit within one (1) business day of the acceptance of this offer. Upon receipt of the certified cheque, the uncertified cheque provided upon acceptance of this offer will be returned to the Buyer or the Buyer’s Agent.

Here’s what you do, as a buyer, when you aren’t able to provide a bank draft with the offer, or don’t want to.

In some cases, I’ve seen buyers submit this clause in competition, along with a standard personal cheque.

In my opinion, a buyer should still always provide a bank draft or certified cheque with the offer, and the clause above is merely pointing out the obvious.  However, I’m merely pointing out what clauses I’ve seen this fall, so to each, their own.

–

Notwithstanding the completion date set out in this Offer, the Buyer may (advance/postpone) _ the completion date of the transaction by not more than (# of) _ days, by giving written notice of the amended completion date to the Seller or the Seller’s Solicitor at least (# of) _ days in advance of the earlier of the completion date set out herein and the amended completion date.

This is what we call the “advance/postpone” clause, which allows a buyer to move the closing date back by, say, 30 days, provided the buyer gives usually 15-30 days notice.  The buyer can also advance the closing date as well by providing notice.

I’m seeing this a lot lately, both for buyers and sellers.

Let’s say that a would-be buyer of a house happens to own a condo.  That buyer is afraid that he or she can’t sell the condo in time to close on the house, but wants to hold out for the chance that the condo moves quickly.  Using the clause above in tandem with a 90-day closing, let’s say the buyer ends up selling his or her condo in a mere ten days!  Suddenly, the buyer wants to move the closing date up from 90 days, perhaps to 60 days, perhaps because the purchaser of the house-buyer’s condo wants a quick closing too.

Alternatively, let’s say that the buyer wants the option to postpone the closing of the house, just in case the condo takes longer than anticipated to sell.

In other cases, I’ve seen sellers use this clause in situations where the sellers have yet to purchase.  Say the seller wants a 60-day closing with the option to postpone the closing by 30 days, just in case the seller doesn’t find anything to buy, and doesn’t want to be homeless.

These clauses are far from automatically accepted, and I might add that they only work in rare cases.  But they’re out there this fall!

–

This agreement is conditional until _____ p.m. on ____________, ________ on the Seller negotiating a firm and binding agreement for the purchase of a new home, failing which this agreement shall become null and void and Buyer’s deposit returned without interest or deduction. This condition is for the sole benefit of the Seller and may be waived by her by notice in writing to the Buyer or Buyer’s representative within the time period specified above.

Don’t get any ideas, folks.

This clause has about 3% chance of being agreed to by the buyer, and you can see why.

Would you, as a buyer, agree to this?

It would have to be in a very, very rare case!  Certainly not with your standard house or condo here in the central core, but you perhaps can see the rare case where a buyer is looking for a deal, isn’t in a hurry, doesn’t need that particular house, but gets creative and allows the seller some major flexibility, perhaps in order for more favourable terms.

I was talking to a colleague last week who was in a conditional purchase on behalf of a buyer-client, which contained this clause.

“She’s just waiting around, biding her time for the seller to get off his ass and sign an APS on a house up north,” my colleague said.

The condition was for thirty days, and the buyer wasn’t getting regular updates from the seller on the progress in his search, and the buyer was understandably frustrated.

But this was a private sale, and in order for the buyer to secure this rare property without it going to the open market, she had no choice but to agree

–

This Offer is being submitted on the basis that it is one of multiple offers. If the Seller receives no other offer by ___________, the Seller will notify the Buyer or the Buyer salesperson and the Buyer Salesperson and the Buyer will have 1 hour to revoke or revise their Offer. If the Seller accepts the Buyer offer, the Seller will provide, within 24 hours, the name, address and phone number of the Salesperson and Brokerage company that submitted the competing offer or offers.

Oh boy.

You just know this one was created because somebody out there was very, very bad!

The existence of this clause allows for blame on behalf of buyers and sellers alike, but I honestly think that, even though this clause is there to protect buyers, it’s the fault of some buyer out there that this clause was necessitated to begin with.

Let me explain…

When I’m making an offer on behalf of a buyer client, knowing there is competition, I will send my offer in 5-10 minutes before the scheduled review time.  Say that offers are being reviewed at 7:00pm, as they usually are.  I will check on the number of registered offers periodically throughout the day and only when I know exactly how man there are, say, at 6:55pm, will I discuss the offer price with my clients.

If the listing price is $799,900 and we figured that this was a $1,000,000 sale to be, and there are eight offers registered at 6:55pm, then we’re good to proceed with our offer of $1,010,000.

But if at 6:55pm there is only one competing offer, well that certainly changes things!  We’re definitely not offering $1,010,000, are we?

On the flip-side, when I’ve had listings, I’m shocked when an agent sends in that $1,010,000 offer at 2:15pm, without asking about competition, and without waiting until 7pm.  It’s inexperience at its finest.  It’s absolutely dangerous.  And yet, I see it every time I have an “offer night.”

So the clause above was clearly created by an agent, like the one I described above, who submitted an offer mid-day, thinking and assuming that he or she would be in competition, only to find that no other offers materialized.  This agent then cried afoul, licked his or her wounds, and vowed “This will never happen again.”

Hence, the clause above.

Only this clause need not exist if buyer agents simply do their jobs.

In any event, I’ve seen this clause in offers I’ve received twice so far this fall.

–

Buyer hereby acknowledges that he has not inspected the Property. This Agreement is conditional until 8:00 pm on the _____ day of ___ _, 2020 upon the Buyer Inspecting the Property and finding it satisfactory to him in his sole discretion, failing which this Agreement shall become null and void and the Buyer’s deposit returned forthwith without Interest or deduction. This condition Is Included for the sole benefit of the Buyer and may be waived by him by notice in writing to the Seller or Seller’s agent within the time specified above. Seller shall ensure that the Property Is available for the Buyer’s inspection at a mutually convenient time at least 24 hours prior to the time limit specified above. Seller will also ensure that the Property is unoccupied throughout the Buyer’s inspection.

This is what we call our “sight unseen” condition, and it’s an odd way to buy real estate, to say the least!

At the onset of the pandemic back in late-March and into early-April, a lot of sellers out there were trying to sell their properties through photos, videos, and virtual tours, and this was the condition they wanted buyers to use.

I don’t know a single person out there who bought a property that wasn’t seen in-person, nor do I know an agent who sold one this way.

But another colleague of mine sold a property with this clause last week to a buyer who, apparently, was afraid of contracting COVID, and thus wanted to purchase without setting foot in the unit.  I say “apparently” because after the deal was struck, and the property was viewed in person, the buyer came back for a $30,000 abatement, and my colleague said, “I think they planned this all along.”

That’s either ingenious or disingenuous.

–

This Agreement is conditional until ____________am/pm on the __________ day of ___________, 20________ on the Seller being released from a previous Agreement of Purchase & Sale for the Property and providing the Buyer with written evidence in the form of a Mutual Release signed by the Seller and the withdrawing buyer or buyers, failing which this Agreement shall be null and void and Buyer’s deposit returned without interest or deduction.

This is the condition that a buyer uses when he or she is making an offer on a property that is sold conditionally with an escape clause.

An escape clause?  What the heck is that?

It’s basically an option the seller has to opt-out of a conditional deal.  Read a 2017 blog post of mine on this subject, titled “What the heck is an Escape Clause?”

I literally went a decade in this business without seeing a property sold conditionally with an escape clause until I wrote that in 2017, but even now, I can honestly say I’ve never been a party to one.

But that doesn’t mean they don’t happen!

And as a buyer, if you see a property that is marked “SCE” on MLS, for “sold conditionally w/escape,” you can choose to make an offer on the property with the above condition, and if your offer is accepted, the seller will then exercise his or her escape clause, and the buyer may or may not firm up.  If the buyer does not firm up, then the seller is released, and you have bought a house!

–

Last, but certainly not least:

The parties acknowledge and agree that all closing documentation can be signed electronically and forwarded by email or fax in accordance with the Electronic Commerce Act, SO 2000, as amended. In the event that either party is unable to perform their obligations under the terms of this Agreement due to events reasonably viewed as related to the furtherance of public health causes or the containment of exposure to the COVID-19 virus, where one or more of the parties, the community at large or a portion thereof shall be kept from engaging in business activities due to bank closures, Ontario government services closures, business closures, public health emergencies, quarantines or self-isolation of one or more of the parties, their legal representatives, or their Realtors or mortgage brokers, the parties’ responsibilities hereunder shall remain in full force and effect, and the closing date herein shall be extended to the date that is 14 days after resolution of the event triggering this clause, Saturdays, Sundays and statutory holidays excluded, or such earlier date as the parties may agree to.

This is what most brokerages are simply calling their “COVID clause.”

To be honest – I have yet to use this clause.  Even when things were bleak back in April, I didn’t feel, on the sell-side, that this was necessary.  I personally feel that the presence of this clause gives buyers and sellers the feeling that they can opt-out of the transaction, for a variety of reasons.  Think of “that guy” who always knows best, and who, when confronted with a situation he doesn’t like, says, “Yeah, sure, lemme talk to my lawyer.”  He’s the kind of guy who, when you tell him that the sky is blue, he wants to explain why you’re wrong.  That guy will try to use this clause to gain leverage or an undeserving advantage that has nothing to do with COVID.  That guy is an opportunist for whom this clause is a license to do as he pleases, or so he thinks.

The truth is, even without this clause in the APS, transactions that don’t close on time due to COVID will not simply self-destruct like a note passed to Inspector Gadget.  If there’s a breach on the scheduled closing day, then the two lawyers and the buyer and seller simply work ahead the next day.  The presence of this clause is really just for peace of mind.

And what happens after 14 days, anyways?

Regardless, we’re seeing this clause in most listing brokerage’s standard “Schedule B’s,” so buyers should familiarize themselves accordingly.

–

Phew!

I don’t know how lawyers read this stuff all day long…

Hope everybody had a wonderful Thanksgiving, and that the tofurky was satisfying!