I understand that we’re in a hot real estate market right now, and have been for some time.
I understand that sellers set lofty goals, and more often than not, they achieve them.
But what happened this past Tuesday night was one for the ages…and almost cost my client his house….
There are about ten different stories, lessons, antic-dotes, and experiences to tie into this story, so I’ll start at the beginning…
Working with your friends as clients isn’t as easy as it sounds. On the one hand, you don’t have to pretend to be something you’re not (ie. professional…), and you can relax all the time and assume you have the trust of your friend. On the other hand, you may have some uneasiness about making decisions or recommendations because your friendship might be at stake.
My good buddy, Sport, started his housing search in the Fall of 2007. While I have no qualms about the time it took for Sport to finally tie up a property, I was beginning to get the sense that he was.
He would jokingly say, “I’m not so sure about this building, but it’s all part of my plan to see every single condo in the city.”
While trying on tuxedo’s for my brother’s wedding, he remarked, “Are you getting tired of me yet?”
It seems that he was self-conscious about the amount of time it was taking him to make a purchase decision. For what it’s worth, I had no problems whatsoever. I believe in the “client for life” philosophy, and the last thing I want is for him to regret his decision down the road.
Sport started by looking at condos, and eventually started looking at houses. Sport started by looking in one price range, and eventually moved into several other (higher) price ranges. His search seemed to be strewn with mass confusion from start to finish, but in the end, the process enabled him to get EXACTLY what he was looking for. I only realized this while looking backwards upon our working relationship.
The decision to change direction from condos to houses came about rather abruptly, and the other day, Sport explained why, but not before I became rather confused myself.
“I’ve been doing some modelling lately,” said Sport. Suddenly, I slammed on my brakes to defend myself from an oncoming cab-driver (I swear it was all HIS fault!), and our conversation was interrupted. A few seconds passed, and I began to process what Sport had just said. I thought to myself, “He’s been doing some modelling??” Hmmm. Well, Sport is an attractive man. He’s tall and handsome, with a chizelled jaw-line and a smashing eye for fashion, but how does he have time to model on the side?
“Soooo…..you say you’ve been doing some modelling,” I carefully began.
“Yeah I have, and it’s rather interesting,” he said.
“Yeah, I’ll bet,” I smirked under my breath.
“I’ve inputted all the possible costs associated with home ownership and compared them to condominium living over various timelines in excel and the results are quite interesting.”
Aaaaaaaah! “MODELLING.” Right! Like a mathematical model! Phew!
Sport went on to explain why the model has pointed him towards home ownership, and the rest is history.
On Monday night, I took Sport to see a house in Leslieville, which I find to be undervalued compared to Queen or King West. A house on Salem Road sold for $485,000 last week, asking $399,000. I didn’t see the value in this, given that it backed onto an apartment building, and Sport agreed. Leslieville was an area we had always considered in theory only, but as soon as we set foot on the tree-lined street, and saw the house only steps from trendy Queen Street, we were reeled right in.
I wonder if the fact that Sport’s girlfriend/fiancee/lifemate (don’t tell him that!) tagged along that evening had anything to do with his purchase decision. She is an interior designer, and this house was owned by another designer, who turned this once-dilapidated house into the most beautiful home I’d seen anywhere east of the DVP in years.
The house was gorgeous from top to bottom, but the best feature—and the one that I knew would sell Sport, was the backyard/patio. They had a two-tiered deck made from cedar that featured a BBQ area on top with a seating arrangement below whereby a half-octagonal cedar bench was built and they completed the arrangement with a patio set. The patio was complete with a tree-canopy, and was totally private due to the surrounding seven-foot fence.
The second level of the house combined a condo-loft-style and old-world-charm rather effectively, since the back room had dark laminate flooring and sliding doors similar to a condo, and the front bedroom used the original hardwood (80+ years) and maintained the ceiling detail, bay window, and other features showing it’s age.
What I liked most about this house was that they used reclaimed wood, which must have cost a small fortune, to give the house that classic-feel.
Sport was sold, and when my phone rang on Monday night at 10PM, I already knew what he was going to say.
The house was listed at $389,000, and all signs pointed to this being a $425,000 house or more. Sport and I had seen many crazy sales in the past eight months, and we wouldn’t be surprised if this went for $450,000 or more. Sport was maxed out at around $400K, and he said he “just wanted to throw an offer in there, and see if he could get in the game.”
I knew this was a $425,000 house all day, but I was content to let Sport go through the motions and “hope for the best.” “HOPE” is a four-letter word in real estate, but for some reason, I was also hopeful…
We were the first to register our offer on Tuesday afternoon at about 1:30PM. Offers were being presented at 6:30PM, and thus we had five hours to constantly call the listing agent’s office and ask “Are there any offers? Are there any offers??”
By 5:00PM, I was informed that there was a second offer. I expected upwards of six or seven offers, and I was cautiously optimistic when I realized that we had only ONE buyer in our way.
I had discussed price with many agents at my office, and they all felt that the comparable sales on Rushbrooke of $422,600 and Caroline of $437,500 pointed towards this being a $425,000 house. One agent in our office, who is a certified appraiser, told me he would be fully comfortable appraising this house upwards of $450,000 since there had been a few $500,000+ sales on the street.
At 6:15PM, I got in my car and drove to the house. With only two offers on the table, I knew this had ceased to be an exercise in “hope” and that this was now very real, and Sport had an excellent shot of buying this house. I got on the phone with Sport, and told him, “Hate me if you want to, but I’m only doing my job….I’m going to ask you to increase your offer by $5,000.”
I told him that with only ONE other offer, this was his chance to buy this house, not just throw his name in the hat and hope it gets pulled out. Priced at $389,000, I knew the other offer would be above $400,000, and I asked Sport to move to $410,525. He agreed.
I arrived at the house at 6:30PM, and ironically enough, the sellers wanted to deal with the offer presentation on their gorgeous back deck. As the listing agent read through my offer, my eyes wandered and I envisioned myself drinking Heineken and eating prime rib on this very back deck this summer.
I thanked the listing agent and the sellers for their time, and I left the house, and went back to my car. Twenty minutes later, after the second offer had been presented, my phone rang. It was the listing agent.
I thought I had seen just about everything there is to see in this business, but I was wrong.
The listing agent said, “David, we’ve reviewed both offers. My clients are very disappointed; they’re absolutely sick! They hate both offers, and they want far, far more money. We’re not accepting either offer.”
(TO BE CONTINUED)Back To Top Back To Comments