Do you know how to access the dark web?
But they talk about it a lot in Mr. Robot, and who can forget the movie War Dogs with Jonah Hill?
A reader emailed me on Tuesday morning and said, “You’re trending on Reddit right now,” and that was, for a guy like myself, my dark web moment.
Okay, I’m 40-years-old, and like most people my age, I believe I was the first person that any of you have ever met to download an MP3 from Napster. I knew Word Perfect 5.1 before they taught it in Grade-9 “Keyboarding,”, and I was the first of my friends to pass the level “Greece” in the original Command & Conquer, 1995.
Other than using it to search for illegal streams of UFC fights, I have never used Reddit. The interface alone intimidates me.
So when Monday’s blog, “Behind The Scenes Of A Toronto Offer Night” was a topic of conversation on Reddit, I had no choice but to read the discussion and subsequent comments.
Do you know what my largest take-away was?
That the TRB readers are far, far brighter than the average Internet dweller.
Oh boy, that’s not going to sit well with Reddit…
Blessed are thee that peruse TRB. That rhymed. Nice.
The discussion about my “offer night” on Monday was exactly what I had expected, however, the discussion was different on Reddit. I expected the TRB readers to take what I was saying as given, ask a few questions about the process, or some “why didn’t you do this, or that,” type comments, and for the most part, the detractors would be in the extreme minority. But the comments on Reddit were far more critical of the offer process, and I feel that’s because those folks are lacking the proper education and understanding that is necessary in this market.
On Monday’s blog, a reader made the following comment:
You know what?
I love this!
As far as blogging goes, this is like getting to drink two beers from the same bottle!
I have penned no shortage of multi-part blogs over the years, and I think the idea of seeing the offer process from the other side would be entertaining and informative.
Then again, I think that combining stories about an unsuccessful offer with a story about a subsequently successful one would make for a more thorough explanation of the process, the lessons learned, and the journey that the buyers go through.
Add in the fact that, in the following story, something happened to me that has never happened to me before, and is something that I deemed to be an urban legend in real estate (start guessing…) and it makes for the perfect blog.
So without further adieu…
Lex and Andrea are long-time clients of mine, with whom I have transacted twice previously.
Like many buyers, they had looked passively, then actively, then passively again, but only became very serious about purchasing this year.
Lex and Andrea reached out to me about a very unique, or, if we’re being specific, a very unique property.
The house was nothing special, and they, the other interested buyers, and even the folks who eventually purchased the home would all freely admit that the house wasn’t in good shape. There were kitchen doors literally falling off the hinges! The tile was cracked and heaved – like an earthquake had run through the house, much of the interior was original, and zero effort was made to clean, paint, or stage the house whatsoever.
So what was special or unique about the house?
It was on a double-lot.
The idea of owning a house on a 40-foot frontage, in the middle of a sea of 20-footers, was appealing to Lex and Andrea. Even though the house needed a ton of work, they were willing to take that on in order to get an incredible lot with tons of potential.
As Lex but it, “There are ten years worth of weekend projects in this house.”
The house was listed for $899,900, but we knew that was exceptionally-low.
The question was: what would somebody pay for a double-lot, upon which a neglected house sat?
I should also add that due to the right of way on the driveway, it would not be possible to build two houses on the property.
Lex and Andrea were willing to submit a bid of $1,200,000 on the house. I was honest and told them that I didn’t think this would be the big-winner, but that, given the uniqueness of the property, you just never know.
Before you accuse me of being a hypocrite here, saying “you just never know,” here me out.
When I write blogs about the agents who submit an offer of $699,900, on a listing that’s $699,900, amid twelve competing offers, saying, “You just never know,” it’s not the same thing.
In today’s market, for a neglected house, on an odd lot, $300,000 over the list price isn’t an offer you simply pass on.
I also felt that, if anything, this initial bid would give us some insight into where the eventual price might land. I knew the listing agent very well and I figured that he would be straight with me. At the very least, it would enable me to go back to Lex and Andrea and tell them what they would need to do in order to be successful.
On the day of offers, I had Lex and Andrea sign “Form 801” to officially register their offer, and I believe we were the second or third to do so.
As the hours ticked by, I continued to get email notifications:
OFFER UPDATE: There are currently 2 offers on this listing.
And so on, and so on, all day long.
OFFER UPDATE: There are currently 9 offers on this listing.
Wow, that escalated quickly!
OFFER UPDATE: There are currently 14 offers on this listing.
Wait, how long was I gone from my desk?
OFFER UPDATE: There are currently 19 offers on this listing.
OFFER UPDATE: There are currently 26 offers on this listing.
Alright, I’m taking a nap on my office couch…
That’s how “offer night” can play out sometimes when you’re on the other side.
In this case, it was “offer day,” since offers were at 3pm – something I may start doing on my listings, but that’s a topic for another day.
I submitted my offer by email at 3:00pm, and when I hadn’t heard from the listing agent by 3:45pm, I gave my old friend a call, just to make sure my offer wasn’t lost somewhere with Netscape Navigator and Alta Vista.
“David, good to hear from you,” my old friend said. “I’m just sorting through this mess of offers right now…”
“You have twenty-six offers?” I asked him.
“Twenty-nine now,” he told me, as I could hear him literally shuffling papers in the background. “And I’ve got……let me see here…..I’d say…..probably a good six or eight higher than yours,” he told me.
What a gem, he was.
Not like most agents, who aren’t experienced enough to get out from behind their own fear, my old friend had no problem basically telling me, “Don’t waste your time here, go home, and don’t let your clients sit anxiously any longer.”
I told my clients that even if we came up $50,000, we wouldn’t be even close.
They sounded defeated, but who wouldn’t?
It’s not just losing that’s hurtful in this market. It’s losing when there are thirty competing offers, and knowing that the competition out there is fierce. Because where do you go from here? Are those thirty buyers going to follow you up the street? Down the block? Over the bridge? Those buyers aren’t leaving the market; in fact, you start to see the same damn people at showings as you saw last week, and the week before! It begins to get personal when “that couple” who drive “that car” are waiting outside the house with their agent, holding “that hand bag,” and maybe the guy is wearing “those shoes,” and your agent hands off the key as you head out and they head in.
Lex and Andrea considered a few more properties, but we switched gears and found a detached bungalow on a wide lot in an area where development is only starting to ramp up, where we felt we could buy a great house for today, with major upside for down the line.
This property too was under-listed: $849,900.
What a joke!
How many offers is this property going to get?
I told them I felt it was worth around $1,150,000, but I wavered on that. I went up, then down, then up again.
A really “done” bungalow on a super-busy street had sold for $1,320,000, and it was on a smaller lot, with a way smaller footprint.
This had a great footprint, and the basement was absolutely massive.
It needed TLC, no doubt. But that’s what my clients wanted. They did not want to pay for somebody else’s work!
Offer day came, and once again, we registered first thing in the morning.
It made for a very long day, but at 7:00pm, we submitted an offer of $1,200,000, no conditions, seller’s desired closing date, and bank draft attached.
How many offers were there this time?
Not twenty-nine, thankfully.
This time around, there were “only” twenty-two…
I had spent the previous five days buttering-up the listing agent. I spoke to him over and over again, often calling him with pretend questions just to strike up a conversation. I stopped short of being annoying but tried to keep it light.
We had built a great rapport and a mutual respect. He mentioned several times, “I love the way you do business, you’re a real professional.” He was from outside the GTA and had dealt with all kinds, I’m sure!
Around 8:00pm, he called me and said, “Sorry man, but you’re in second place.”
I asked what I needed to do in order to be successful, and this is where, quite often, agents don’t help you at all.
In this case, he said, “Look, there’s one offer that’s just way, way up there! You barely beat out, like, three other buyers. So you’re not without company. But this other offer, wow! It’s up there, man!”
I told him I would speak to my clients, and I let them know the good and bad news: we were in second place out of twenty-two offers, and the door was open for us, if wanted to walk through it.
They spoke privately, and eventually came back and, armed with the advice I gave them, decided to increase their bid to $1,230,000.
Before I submitted the revised offer, I called the listing agent to talk shop.
“This other guy, man,” he began to unload on me. “This other agent, wow, this guy is such a prick!” he told me.
He explained that the agent with the highest offer had included a 90-day closing date and his sellers preferred a 60-day closing. When he asked the agent if the agent’s buyers would consider moving up their closing date, the agent barked back, “Not a chance. We’ve bought five houses in this area in the last month, and all of those are 90-day closings.”
The listing agent said that it had rubbed his clients the wrong way, and divulged that these sellers were actually his fiancee’s parents!
He said that they were house proud, and they didn’t like the fact that this guy’s buyers were running around buying up all the real estate.
So an idea dawned on me: I would try to tug on the heart-strings a little. Even though I always say this doesn’t work, I figured this might be that 1% of cases where it does.
I submitted my revised offer of $1,230,000 and wrote a couple of paragraphs about my clients.
Lex and Andrea were engaged to be married and had planned on a 2020 wedding. The pandemic changed all of that, and although they tried again in the fall of 2020, it wasn’t in the cards. So, they decided to cancel the wedding and spend the money on a house instead. I may have invented that last part, I honestly can’t remember. But I wrote about how they loved the home, they felt the warmth of a family that had lived a life there, and that they had planned to pick up where that family had left off.
Then, I emailed my offer.
Ten minutes passed, and my phone rang.
“DAVID….” the listing agent breathed into the phone, “…..this is so, so crazy,” he said.
“My fiance and I were supposed to get married in 2020 too!”
Uh-huh. This was interesting…
“Buddy, we’re in the same boat as your clients,” he said. “We’re gonna try to aim for fall of this year, and fingers crossed, we can make this happen.”
He told me about how close he was with his fiance’s parents, and how much this sale meant to them.
“They don’t need the money, man,” he told me. “They were so pissed at this other agent – the fact that he’s got some buyer, probably offshore, scooping up all these family homes,” he went on. “They don’t want to sell to him.”
I felt a “but” coming on, and I was right.
“But the other offer is $28,000 higher,” he added. “Lemme talk to them a little bit and see what we can do.”
See what you can do? What were you going to do? Sellers leaving money on the table is an urban legend! It’s a headline in the Toronto Star!
I submit over a hundred offers per year, and I’m so desensitized to the winning and losing that I never get anxious. But this time around, I was feeling it.
This was a low-percentage play. Almost zero-percent.
The agent called me ten minutes later and said, “Sorry man, I tried my best.”
My heart sank.
I honestly thought there was a shot, but I should have known better.
“I appreciate the efforts,” I said.
I continued talking, but he interrupted me and said, “Nah man, I’m just fucking with you! They’re gonna accept your offer!”
I was dismayed and in disarray.
I didn’t know whether to thank him or cuss him out.
I was, if for only a moment, speechless.
“Honestly, David, my fiance’s parents, they just didn’t wanna take that guy’s offer! That agent was such a prick and his client is buying up everything, so screw them! My fiance’s parents wanted to know that another young couple would be moving into the area, and they’re fine with the price. It’s a great price! They just turned down an even better price, but whatever.”
This was like music to my ears. I now know what my parents felt like when they heard The Beatles for the very first time…
And to show me he wasn’t just selling me a bale of hay, he followed up an hour later with a picture of the other offer. It was indeed $28,000 higher.
This was the first time in my career that I had “won” in competition without having the highest offer, and I don’t know how long it will be until I experience this again.
Say what you want about the sellers and their decision, but realize that it was their decision, and nobody else’s. You don’t have to sell to anybody you don’t want to, and it just so happened that they were disgusted with the idea of “big money” buying up properties like they were souvenirs.
For my clients, it was a whirlwind couple of weeks, and I couldn’t come up with enough hyperbole to explain the situation that they found themselves in.
Not all experiences are like this one, of course. And when you’re going up against five, ten, fifteen, or forty competing offers, very few of the outcomes are successful.
But as I sat and wrote this blog on Tuesday night, I received three bully offers on one of my listings, all from buyers and buyer agents who are trying to think outside the box out there, and avoid the disappointment that awaits most buyers who make offers in this market.
I wonder what the Reddit users would say about all of this?