Greed? Or Just Stupidity?


6 minute read

March 22, 2011

I told my client on the phone, “This kind of thing happens about once per year, and unfortunately, it’s happened to you.”

I also told him, “This is the kind of story that I’ve been writing about on my blog for the past few years; the kind of story that you read and think ‘Good Lord, I’m glad that didn’t happen to me!'”

Sorry buddy – we’ll get the next one!

I guess when you picture the moon, you picture that tiny dot in the sky!  So maybe we should fault this elephant for choosing “elephant”?

It’s like that old adage about asking little kids what they’d rather have – a nickel today or a dime tomorrow.  Kids choose the nickel today, but not because they want the money up front, but because the nickel is larger and they think it’s worth more!

You can’t fault the kids.  After all, they’re kids!

They’re not stupid, they’re just children…

However, when it comes to fully-grown adults, “stupid” a  much easier label to apply.

In my business, we often confuse greed with stupidity.  They’re two distinctly separate traits, but often they’re used interchangeably, or perhaps they combine for a new trait altogether.

When you’re on the receiving end of a buyer or seller being both greedy and stupid, it’s a helpless feeling.

You just want to grab the person and shake them!  You want to explain all the reasons why their actions make no sense!

But alas, I’ve learned that arguing with a post gets you nowhere because the post is just a piece of wood and can’t argue back.

Stupid, greedy sellers are no different…

On Friday, my clients put together an offer for a house in the Bloor West Village area that they decided was going to be their first home.  It was an exciting time, and they brought their parents along to take a look.

We viewed a few houses that day, and the parents agreed with my young clients that this detached bungalow offered a great combination of “present and future value,” since it met all their current needs, and down the road would be attractive to builders as the area continues to develop and somebody will want to build a family home on the lot one day.

We signed an offer on Friday afternoon and gave the sellers until Friday evening at 11:59PM to make a decision.

The property was listed at $539,900, and we offered $528,000.

It was a very reasonable offer, and we were working with the idea that “just because something is listed at a given price doesn’t mean it’s worth it.”  So many people assume that if you list a property at “X” then it must be worth it in this seller’s market!

But we identified a fair value of $528,000 and we forged ahead.

On Friday afternoon, the listing agent identified the first of what would be many hurdles.  It seems that the sellers were looking to close in late August!

Remember the post I wrote a while back about the 150 day closing in Pickering?

I surmised that this could only ever happen in Pickering, and that in Toronto’s busy market, no seller could be so clueless as to ask for a five month closing when most buyers are looking for 30 days!

Well, I was wrong.  These sellers had listed their property in March and wanted to close in August – a gap of over 160 days.

Telling your first-time-buyers that they would buy their property in Winter and close the deal at the end of the Summer is not an easy proposition!  Buying your first home is an exciting experience, and most buyers can’t wait to get the keys!

I explained this to the listing agent, and he said that his clients had purchased a property out of town that “wouldn’t be ready until August,” thus the need for the late closing.  I told the listing agent that he’d be hard pressed to find another buyer in this insanely busy Toronto market who would work with a closing of just under a half-year, but that my clients would accept the closing if his clients would accept the price.

He said he’d work on it, and we left it at that.

On Friday night, he called me to say that his clients were going away for the weekend and they didn’t want to review our offer until Sunday night.



You’re selling your house – your largest asset in the world, and your trip to wine country is going to trump the potential transaction of your $500,000 asset?

Try as I might, I was unable to convince the listing agent to convey this to his clients.

I told his the usual, “Well, we might not be back on Sunday night!  We’re looking to buy something this weekend!”

But the sellers went away for the weekend, and we sat on our hands for 48 hours.

On Sunday afternoon the listing agent called me and asked if we would bring our offer back to the table.  His clients were back from their completely unnecessary road trip, and they were now “willing” to review our offer.

So we put together our offer at the same price  – $528,000, and gave them the August closing date that they were looking for.  This was a HUGE concession on our part, and I told the listing agent that we wouldn’t add a single penny more to our offer.

What percentage of active buyers would be willing to buy a property in March and close in August?  10%?  5%?  Their buyer pool was incredibly limited!

I conveyed this to the listing agent, expecting that he would convey this to his sellers.

So before I drop the bomb, let’s review – the property is listed at $539,900 and we offered $528,000.

So what did the sellers come back with?


Yes, really.

I spoke to the listing agent on the phone and he said “Five seventy.”  I thought he was saying “Five seventeen,” which didn’t make a lot of sense because what kind of seller would come back $11,000 lower than the offer price?

But he clarified that his clients wanted to come back at $42,000 higher than our offer, and $30,000 above their asking price!

I was so confused.  I mean don’t get me wrong – I already knew the whole story – that the buyers were greedy and stupid, but I just didn’t know what to say.

What can you say?

Let’s not even get into a discussion about value here because there’s no way this house was worth $570,000.  But what about logic?  How could these sellers list their property at $539,900 and then decide that they wanted $570,000?  Why didn’t they list it at $570,000 in the first place?

I should point out here that this isn’t the type of property that was going to force a bidding war or anything of the sort.  It was a great property and a very pretty house, but it was priced appropriately at $539,900, and our offer was more than reasonable.

I just don’t understand the thought process involved on the sellers’ behalf.  It’s completely without logic or reason.

But I can’t figure out if they’re greedy or just plain stupid?

My clients are moving on.  There’s no doubt about it.

So these sellers will have to find another buyer who will agree to an August closing in March, AND, apparently, come up with about $30,000 above fair market value.

It makes no sense.


If only everything in life could be explained by a demotivational poster!

So why in the world would a couple of sellers, who have the intelligence to own a half-million-dollar asset, act so illogical?

It’s part greed, and part stupidity, but it’s also something that every buyer and seller goes through – other people’s opinions.

Everybody wants to talk about real estate, and everybody wants to share their feelings.

I’m sure these sellers heard from their friends, family, co-workers, the guy at Starbucks, and throw in 4-5 newspaper articles and news reports as well.

People love to give advice, even if they have no qualifications whatsoever.

All it takes is one person to say, “What?  $539,900?  You’re house is worth WAY more than that!”  And the sellers decide that they should abandon the steady course of action that got them an offer for slightly under their asking price, and go back with a ridiculous number that is utterly impossible to attain.

Call me naive, but the sellers should listen to their real estate agent who is an expert and has four decades in the business!  Although in the end, they decided to throw away a perfectly good offer and ask for a price that they will never, ever receive.

Greed and stupidity make for an awful combination, but we see it every day.  It often goes unnoticed, since you don’t really look at the $725,000 house that’s worth $600,000 and has been on the market for 145 days – it’s almost invisible.

But when you have interact with sellers who are as insane as the ones we dealt with on the weekend, you can’t miss it.

I hope these sellers come to their senses and work with the next offer that is put in front of them.  But the clock is ticking, and every day that a house sits unsold in this seller’s market, it’s another indication that a property isn’t “worth” what the sellers are asking…

….let alone $30K over…

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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  1. Sam

    at 8:01 am

    …I’ll bet the owners were CERTAIN there’d be a bidding war. I can’t imagine a professional agent signing back for above asking unless he reluctantly agreed because he was the one who convinced the sellers to list for $539k in the first place, despite the sellers insistence that they “needed at least” $550k or something…It’s my understanding that in the Bloor West Village/High Park area, bidding wars are the new Starbucks.

    I know you don’t like this strategy but how would you advise these sellers? Lets forget about the 160 day closing and assume some of the comps suggested the place could sell for $550-560k…So the bidding war strategy failed, the clients are unhappy and nervous and the only offer is $528k…do you implore your clients to ‘suck it up’ & accept or would you ever suggest relisting at $569k (although that may be the kiss of death), or something else? Just curious what a good agent would do in this circumstance to turn the situation around…

  2. Joe Q.

    at 9:34 am

    You’ll have to update us on what this house ends up selling for.

  3. Clifford

    at 12:08 pm

    None of this is a problem if the list price is what people will accept.

    If you want $570K, then ask for that. Bidding wars should be bannned IMO. Or you shouldn’t be able to ask for more than the listed price.

    The sellers are completely out to lunch. How many buyers would be willing to accept a 1/2 year closing?

  4. Sam

    at 2:59 pm

    I feel your pain but it’s a free market -if someone is willing to offer you more than the list price, you can and should be able to accept…What if you get 10 offers at list, should the government appoint a Minister of Eeni-Meeni-Mini-Mo to decide? Also, if a law is enacted that no property can be sold above list, everyone will list for multiples of what the property is worth, just to be sure…”1 bed, 575 sf, Cityplace Condo, $1 million or best offer”

  5. Marina

    at 11:12 pm

    While I think bidding should be allowed (and it’s not going anywhere), I agree that sellers should not be allowed to reject offers at asking, assuming offer is unconditional. Unless, of course, there is a higher offer 🙂

    In a store, if you are willing to pay the posted price, the store cannot refuse to sell you the item. Houses should be the same.

    I think such a rule would force sellers to put some thought into pricing their house fairly (rather than just gunning for multiples, which are not always realistic).

    There has to be a middle ground where free market rules can still play out, but where buyers would be protected from moronic sellers’ attempts at bait’n’switch.

  6. jeff316

    at 6:43 am

    Other than the emotional aspects, I’m not sure why the underpricing is such an issue for buyers. If your real estate agent is doing their job, then they should be able to assess when and where a house has been purposefully under-priced, and then you can adjust your bidding strategy accordingly.

    Ours did and weeded out houses listed in our price range but that would likely go well-above list, making them unaffordable or poor value – it made the process much less taxing on us and we didn’t waste our time with properties that weren’t for us (financially).

    If you bid at list and they come back with an offer 55 000$ over asking, then you can keep negotiating or just reject it and move on. It’s a pain and makes it an emotional rollercoaster but I don’t understand why buyers are so fixated on the ‘unfairness’ of underpricing. Never go to an antique auction then (beware of the ‘reserve’!!)

  7. jeff316

    at 6:51 am

    To add, there will always be the odd one that falls through the cracks like this one, where the ‘under-priced’ list was accidentally listed at market value, but otherwise I don’t understand what people want to protect buyers from, other than the emotional let down of getting attached to a house that ends up being not in your price bracket.

  8. Suzanne

    at 9:43 pm

    It’s been a while since I have been on your blog, so just reading along and thought to ask you and your readers to please comment on a situation

    The buyer toured the sales centre of a condo project 3 years ago, with me.
    The builder and sales team were there.
    All details were clearly explained and written materials were given to my buyer.
    The most important point is that parking and locker were not included in the sale price and were in fact extra – as is common.
    On the day of signing the offer, the builder had an assistant to the sales team, handle the signing of the offer on builders forms.
    The assistant inadvertently ticked the box for parking included.
    I noticed this when we left the sales centre and pointed it out to my client.
    My client realized the error, and said there would be contact made to the lawyer and would let the lawyer handle it – as far as my client was concerned – the parking box was ticked, so now parking was included.
    The purchase price did not include parking.
    At several junctures, I expressed my concern at taking this stance.
    Well, now three years later, my client is maintaining the position that there is entitlement to parking due to the error on the forms, even though parking was not paid for. And the builder having not heard from my client or my client’s lawyer, has in fact sold the parking, and takes the position, that if my client does not sign off on an acknowledgment that parking is not included in the sale price, then he will refund her money, and let the lawyers handle the whole thing.

    What are your initial thoughts on this matter?

  9. dave

    at 9:40 am


    I’m a reinsurance executive and have been involved in a number of disputes and arbitrations. Often the disputes arose because the literal meaning of the final drafted contract was in contradiction with the “meeting of the minds” as documented in various emails/etc.

    In my experiences, typically, common sense prevails and a simply ticking of a box in error doesn’t override everything else.

    That presumes that there is some written record of what should have happened (ie.parking not included).

    Notwithstanding the above, I think the builders threat to terminate the deal/refund the money unless your buyer concedes, must surely be a clumsy threat and not something they are serious about. Two wrongs don’t make a right, and the harm to your buyer of losing their purchases property is proportionately much greater than that of a parking spot.

    Please note that I am NOT a lawyer, and if your buyer wants to go down this path then they should get to a lawyer post haste.

  10. Joren Carlson

    at 10:43 am

    Too bad you can’t go back with an offer for 518,000.

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