I’m not really one for anniversaries.
And when it comes to a relationship, aren’t there already enough days that require celebration?
My wife’s birthday. Check. That’s one I try not to forget.
Valentine’s Day. Ugh. I guess, check. My wife knows it’s a date invented by the flower/chocolate/diamond consortium, but she sets her baseline expectation at a simple card. If I can’t do that, then I don’t deserve her.
Wedding anniversary. I guess it’s an occasion worth nothing, but does it too require a card or flowers? How often? Like, every year?
First meeting anniversary. Okay, now this is getting to be too much. Yes, we met on Halloween of 2010. But can’t Halloween simply be about miniature chocolate bars that get smaller and smaller every year and the dwindling number of costumes that are not found offensive in today’s society? Does Halloween really have to be a reminder of when we first met?
Anniversaries come in all different forms and have different meanings to different people.
Some anniversaries are good and some are bad. I shudder every September when I hear the words “9/11” and “anniversary” used together, as I’m one of those people who sort of feels there’s a positivity associated with an anniversary, but the word “anniversary” isn’t inherently positive
How about losing a loved one, and celebrating that person’s life every year on the anniversary of their passing? That’s making a negative into a positive via an anniversary.
So how did you feel last week when we had the first real COVID “anniversary?”
The anniversary of the first known case of COVID in Canada was back in January, and we could go back to early-January or even into December if we want to talk about anniversaries of breaking news, or declarations of a “pandemic” worldwide.
But for me, the date that’s etched in my brain is March 17th. That’s the day the world started to turn in the other direction.
On Monday, March 16th, 2020, the world was turning just fine, and our real estate universe had remained relatively unscathed from a pandemic perspective. That night, I was reviewing offers on a Regent Park condo listing I had. I distinctly remember sitting at my desk in my home office – the very same desk I’m sitting at right now, as I type this, without a clue what was about to transpire the next day.
I just looked in my file for that property and the Excel spreadsheet with the summary of offers was last saved at 11:24pm on March 16th, 2020. How ironic! At that time, I was putting the finishing touches on a $624,000 sale, after eight offers, on a $499,000 list price, representing a new record in the building for either a 1-bedroom or on a per-square-foot basis.
And the next day, the world changed.
The next day, on Tuesday, a state of emergency was declared! We were all in the office, not really sure what to make of this. But suddenly the idea that we’d avoid disruption to our market and our day-today-dealings in it was quickly put to rest.
By Wednesday, my team was boxing up their computers and taking them home. I remember my marketing manager, Sneha, coming by my house to pick up a folding table (one that I used for chicken wings, dip, and chips when the boys came over – something we haven’t done since…) so she could set up her computer and monitors at home. I stood on the lawn, waving as she drove away. “It’ll only be for a week or two, don’t worry!”
I didn’t see her in the office again until August.
The real estate world stopped turning on March 18th, and I had to tell all of my clients that we weren’t proceeding with listings. I didn’t list another property, or sell to another buyer, for the rest of March. And in April, I had one listing, which was a “need to sell,” not “want to sell.”
From March through June, something interesting happened: we all learned how to navigate the Toronto real estate market. People simply couldn’t stop buying and selling. It wasn’t practical. The show had to go on. So buyers, sellers, agents, home inspectors, stagers, photographers, and the like all had to learn how to change their ways in order to stay safe and be responsible.
Here we are, almost one year later, and the way that we list, buy, and sell real estate has changed.
Some of these changes are temporary, and others are here for good.
Let me run through the biggest changes as I see them, and the ramifications and unintended consequences of each…
It goes without saying that the way we have changed as a society, in our day-to-day lives, is going to change how we look at real estate.
I haven’t gone inside somebody else’s house or condo without wearing a mask since March of last year, but then again, I haven’t gone inside anywhere without a mask since then!
Just as we’ve adopted mask-wearing as a part of our new normal, we all do this in showings. As we should.
But we’ve also come to terms with any and all instructions from the sellers, whereas we used to roll our eyes and sigh.
I showed a property two weeks ago where the listing agent insisted that we put out both hands so he could personally squeeze hand sanitizer into each of our hands, and he said, “Rub it,” and watched, as though we were in Silence of The Lambs. Or jail. Not sure which…
I recently received a small opus in place of “showing instructions,” which detailed, among other things, that we were to wear masks, gloves, and shoe covers, but most importantly: dispose of them OFF-SITE!
Simply put: whatever the seller says, goes.
Pre-pandemic, dare I say that some buyers and buyer agents would take on the “This is stupid,” attitude, as though the sellers’ wishes didn’t matter. But today, nobody would dare.
So what are the ramifications, if any?
Two weeks ago, I showed a property to buyers that had massive showing restrictions – only three days out of seven, as well as a laundry list of protocols. Showings were also only 15-minutes long (more on this later). I think that the combination of the quick showings, inflexible schedule and protocols meant far fewer buyers got through the property, and as a result, only two offers came through on the scheduled offer date. My buyers got a sweet deal there.
No Double Bookings
This is, hands-down, the biggest change since the pandemic began, and it’s had the biggest impact as well.
Pre-pandemic, it wasn’t unusual to have six different buyer agents book a viewing at the exact same time, and we saw no problem with this!
Four agents booked for 5:30pm, two more at 5:45pm, and three at 6:00pm? No matter! Just give them all the lockbox code, and hope they know how to share!
I swear, half the time, you’d just show up and the door would be open, but nobody knew who had the key. It was an open house without being an open house, and while this sounds scary to some of you home-owners, the alternative was to drastically reduce showings, therefore reducing the number of offers you’d receive, and thus the price while you’re at it.
Once in a while, I’d go to book a showing and I’d get a non-confirmation: “NON-CONF APPT SCHEDULED SAME TIME NO DOUBLE-BOOKINGS PLS REBOOK.”
Really? No way! Must be a mistake!
Agents, myself included, would go nuts over this! How dare that listing agent play God with the front door! Imagine he or she not wanting agents to go at the same time? Do they know how busy the market is?
Today, no reputable brokerage allows double-bookings. And to be honest, when I receive an email from the listing brokerage saying that my appointment is confirmed but there’s another showing at the same time, it’s always one of the also-ran brokerages.
So what are the ramifications, if any?
Oh, it’s madness.
I just spoke to a listing agent for a property that’s not even on the market yet, but for which his “FOR SALE” sign is up, and he’s already getting calls. He said that I can call his brokerage to pre-book a viewing, since the listing isn’t on MLS until Wednesday, but showing times will book up fast!
If a new listing hits the market on a Monday morning at 9am, by 1pm, all of the showing-times from 4pm to 9pm that night will be booked. Guaranteed.
No longer can a client email us and say, “It’s short notice, but can we go in an hour?” We can, I suppose if nobody has booked that time-slot already.
Time-slot. That’s probably the 2021 real estate term of the year.
Time-slot. Book ’em now, or you’ll regret it!
I can’t tell you how often an agent in my office will lament, “My buyers wanna get into Riverdale but there are no showing times until Friday!”
As a result, some buyers are making offers on properties sight-unseen, but that’s a sexier story than it is a reality. I know of two agents who have actually done this, and yet I’ve heard the proverbial tale a dozen times.
So when the pandemic is over, will we go back to double-bookings? Or did we figure this thing out?
I had over 60 showings on my Bloor West Village listing in the space of one week. Could I have had 80 if there were double-bookings? Would it have mattered? Would a buyer who is serious about this property not go out of their way to see it on Sunday at 10am, or Friday night at 7pm?
The jury is still out on this one…
Half-Hour Showings Only (Sometimes Less…)
In January of this year, I met at a semi-detached house on Balliol Avenue with new clients. This was the first house they had seen.
It was a 4:00pm showing on a Saturday. That much, I remember.
Upon entering the home, they both slowly took off their coats, hats, and scarves, and neatly folded them and placed them on the couch.
They slowly took in the sights, and then looked at each other and said, “Where should we start?”
My mind runs at a different speed altogether, and I realize that many people think I’m insane. But this was a speed with which I was unfamiliar, and it was at the complete opposite end of the spectrum.
They were both new to real estate; one of them from New York, born and raised, the other coming home after years away. They made themselves so comfortable in that house, I swear I thought they were going to crawl into bed.
What was so ironic about this was that every showing we go out on, in 2021, happens in fast-forward. Every showing is a half-hour in length, just as there are no double-bookings, and if you’re inside the house at 4:00pm on the nose, you can guarantee that a buyer or his/her agent is on the front lawn by 4:20pm, lurking, and then is up on the front porch by 4:25pm.
In the case of my clients at Balliol, the irony of all ironies, there didn’t seem to be a showing after us!
So by 5:00pm, when the next showing was taking place, and that agent was gently waving at the front door, my clients looked at each other and said, “What do you think? Should we go through again, or do you want to head out? Have we seen it?”
They had absolutely no idea how lucky they were to get an hour in a Toronto property in January of 2021. But trust me: I explained it to them once we got outside.
That was the last time they ever had that experience.
The next property we saw, there were three groups of people waiting out front, one agent who said she had a showing confirmation, but wouldn’t show me her iPhone, and agents were barking at one-another minutes before showing times expired.
These clients and I saw another dozen houses, all with 30-minutes or less.
And the last house we saw was the best: fifteen-minute showings only.
I told them in advance that these were the instructions, that the tenants were a nightmare, and that the listing agent’s assistant had to meet us there. But after sixteen minutes, the assistant didn’t tell us to leave. Not after seventeen, not after eighteen. It wasn’t until we’d had a full half-hour that she said, “Ya know………I………..ugh…………sorta gotta………..ummm,” and by that time, we’d seen the house.
Many of you must marvel at the insanity of dropping $1,600,000 on a house that you saw for fifteen minutes, but that’s the market in 2021.
Will this stick around?
I’m not sure. If we implement a “no double-bookings” policy long-term, then it’s possible…
No More In-Person Offer Nights
The year is 2018.
You’re out for a jog on a crisp night in October.
Upon passing down the street, you can’t help but notice that there’s one block, on one side of the street, where a procession of Mercedes, BMW’s, Audi’s, and Lexus’ are all parked, with drivers sitting in the front seats, and the interior lights on.
“Ahhhhh,” you think as you try not to slip on those wet leaves, “There must be an offer night for that house that’s for sale.”
This was very, very common in Toronto for a long, long time.
And as of 2021, I’m here to say that this process is gone and I don’t ever think it’s coming back.
For years, we would present our offers in person, either at the house or at the listing brokerage. On the buy-side, I loved this. I relished the opportunity to watch the sellers and/or the listing agent and try to pick up cues and clues. I once presented an offer for a house in the Junction and the listing agent had the one competing offer sitting on the chair next to me. I saw the price, and when she suggested that I improve my offer, I refused. I wouldn’t have got that if I weren’t in person.
I’m not a poker player, but I was very good at watching body language in these cases. Is the seller biting the pen-cap? Did she flare her nostrils when the listing agent read out our price? Honestly, I was at a dining room table once when the seller said, “Wow-wa-wee-wa” when his agent noted our offer price. The agent literally face-palmed, and then looked up at me as if to say, “Well, I guess our cards have been shown, right?”
On the sell-side, I have zero use for in-person offer presentations. In fact, I prefer to avoid them altogether for the reasons I just mentioned above.
Since 2017, I’ve been doing an overwhelming majority of my “offer nights” over email, and it’s only when a seller requests an in-person presentation, or when I think it can be used to my advantage (ie. a higher-price property where the buyer agents see each other in the lobby of our brokerage, and competitive juices start flowing) that I’ll actually have the procession come through the living room of the house or the conference room of the brokerage.
I prefer a controlled environment, behind my computer monitors, with my earphones in, and no distractions.
It’s also far more efficient and the sellers prefer it.
If you have twenty-two offers on a listing, you know most of them to have no shot of being “the one.” So do you really want twenty-two buyer agents trekking through your home?
I will almost certainly never go back to in-person presentations, and while some folks will suggest that this makes it too impersonal, I honestly don’t believe that more than a handful of sellers want to know each and every name of every would-be buyer for their home.
So what are the ramifications of this new virtual offer presentation?
It saves us a lot of time, energy, effort, and emotions on behalf of both buyers and sellers. A buyer no longer has to submit an offer at 7pm and wait until midnight to find out his or her fate. Many agents are doing offers mid-day now (personally, I don’t do any 7pm’s anymore), and some agents have the property sold within a half-hour.
There’s no question that this is a better system, in my mind. But you know there are a lot of agents and buyers out there that are ego-maniacs and miss the power-trip of watching all those sad-sacks plead their cases…
No More Keys With Lawyers
Last, but not least, a small change of note: we are no longer having to deal with lawyers and their inability to deliver keys on time.
I shouldn’t say that. It’s not the lawyer’s fault, or at least not all their fault.
Traditionally, the seller would provide keys to his or her lawyer, who would then courier the keys to the buyer’s lawyer, and the buyer’s lawyer would give the keys to the buyer upon closing.
Can you see how easily this gets screwed up?
Factor in multiple paralegals, assistants, and agents who say they can help facilitate, and it’s an epic mess.
Now, what about the buyer who uses his friend’s uncle based in Barrie? How helpful is that when you want the keys for a Friday-closing before a long weekend?
I have never understood this system, and honestly, I tried to improve it!
For years, I suggested that my sellers leave the unit keys, mailbox keys, parking FOB, and door access cards/fobs in the unit on the kitchen counter, and then leave one unit key in my lockbox. When the deal officially closes, we can release the lockbox code to the buyer’s agent, and VOILA! Easy-peasy!
Try telling that to a power-tripping lawyer, or an old-school lawyer, or a power-tripping old-school lawyer.
Nope. No dice. They want the keys in their hands, because, wait for it, “That’s the way we’ve always done it.”
Do you know how many times my buyers have closed on a property and not received the keys that day because their lawyer’s office was closed?
Well, good news! The pandemic has minimized person-to-person contact, and thus a new system has been adopted.
Oh, and you’ll never guess what the new system is.
Well, it’s simple! Sellers leave the unit keys, mailbox keys, parking FOB, and door access cards/fobs in the unit on the kitchen counter, and then leave one unit key in the lockbox.
So will this change catch on, long-term? I see no reason why not!
The Globe & Mail editorial board put out an article about it being “time” for a capital gains tax on primary residences.
Anybody want to write the Friday Rant for me, or should I just let nature take its course?Back To Top Back To Comments
at 7:42 am
Your blogs are my favourite thing to read
Don't Trust In The Process
at 10:19 am
David’s intros are getting longer and longer (like he’s trying to hit a minimum word count) so I always scroll past and he never suggests improvements to what is obviously a very broken realtor system, but god damn is his insight ever so invaluable. Anyone participating in the market who doesn’t read this blog is going to get eaten alive.
at 8:21 am
Having bought and sold in the last five months I can vouch for everything you said except for the fact that we had showings every 15 minutes only I remember. In fact the buyer of our house came at 9 am then booked a free slot at 10:30 that same day to show the house to his dad and literally waited outside with his realtor while other people saw the property since only one set of buyers could be inside at once. Our house was on the market only 3 days and we had showings almost back to back every 15 minutes all day long! It was insanity. The one thing we had issues with was we explicitly stated only two adults allowed inside house with realtor and our Ring doorbell caught so many clients coming with children and grandparents. This COVID protocol was ignored repeatedly.
The not needing the lawyer for the keys and FOB was amazing. We left everything in the lockbox and kitchen countertop of our house for the buyer and sellers of our condo did the exact same thing. Closing both properties on the same day was a breeze thanks to this. Hopefully this stays post pandemic
at 2:01 pm
I liked Gerald Butts take on a “very lazy” Globe and Mail capital gains article.
How about a negative tax on flippers.
If the house is not resold within ‘x’ number of years the owner receives a tax credit.
at 2:05 pm
To clarify, the negative tax idea is not Gerald Butts. Butts thought the article was poorly written.
at 2:09 pm
We still use silly metal keys in 2021? Why?
at 2:32 pm
A cap gains tax does nothing more than give bitter bears a feeling of Schadenfreude. All the usual suspects (foreign buyers, flippers, speculators, Airbnb’ers, investors, etc) that get blamed for high house prices, are already paying cap gains, so no change there.
This tax would only apply to end users. If you think the lack of inventory and sub 1.0 MOI is bad now, you can just imagine how much less inventory there will be if end users had to pay a tax to sell. And on the Government revenue side, the Globe’s estimated 7.1B in cap gains that goes untaxed would need to be netted against the amount of expenses, such as mortgage interest and maintenance that homeowners would be allowed to write off. Which could very well end up creating a deficit.
at 6:16 pm
Sadly, we cannot Schadenfreude our way out of the housing crisis.
at 6:25 am
something must be done…how do you justify house prices increased 400k within 8 months…many houses i saw on house-sigma purely flipping…no upgrades or anything…people just bought those houses in July and flipped last month and made 400k….i strongly believe there is no issue on the supply side…only issue we are having low interest rate…if BOC increase interest rate today…you will see market flooded with the listing…i know the reality as i know how many houses people are holding…but realtors keep saying house supply blah blah…they also know the truth as many realtors also bought houses last year from the builders and now flipping…..
Don't Trust In The Process
at 10:26 am
Actually, house prices in some areas were rising even faster – $100k per month. But the CRA already counts house-flipping as taxable business income. It would be unreasonable to blanket label all sales less than, say, one year of ownership as “flipping” because there are a number of non-money reasons why someone would leave soon after purchasing – death in the family, new job opportunity, or simply not enjoying the house. In most instances, they probably have to re-enter the market so any gains they make are fully absorbed by their next purchase.
Real flippers running afoul of the CRA are the ones who actually renovate the house through personal connections (keeping costs low) and resell it immediately while claiming it as a personal residence the whole time.
at 11:34 am
i have seen people using CRA loopholes…some of the people are paying very small or hardly anything for capital gains as they know how to fake their expense
at 4:52 pm
If they begin taxing principal residence cap gains, i foresee flippers taking full advantage of claiming capital losses against other gains and income any chance they can. Especially since many flipping teams, provide the services that go into the project (e.g. design, construction, Realtor, etc), wouldn’t be difficult to adjust their project costs to get a loss.
at 11:37 pm
If they implement this tax, I’d never sell my house and just renovate and add an extension if I need more space. I bet most others would feel the same. So much for helping supply or affordability.
Hard enough to make it in Canada with low wages and ever increasing taxes. Maybe time to move somewhere a little easier to do business.
at 8:47 am
Exactly. I wouldn’t sell. We’re already having this issue with people not selling, the tax would just make things worse. But I seriously would not put anything past the federal government. A bunch of clowns.
On top of that, who didn’t foresee this happening? Did people forget all the money that was printed? House prices are not the only things that have skyrocketed.
at 12:07 am
Likely the feds will do three things:
1. Lifetime limit on the principal residence exemption.
2. Increase the capital gains inclusion rate from 50% to 75%; and
3. Introduce a 5% COVID-19 surtax until the debt from COVID is paid off (ie forever)
at 10:43 am
We’ve debunked the myth that supply/demand dynamics are primarily driven by immigrants flocking to a “world-class” city. It’s zoning, NIMBYs, property hoarding, land banking, loose credit, poor transit, and the concentration of professional work. Most immigrants arriving to work rent condos for a few years – they were never in bidding wars for family homes. They aren’t the problem – we are.
at 11:32 am
at 2:53 pm
You have debunked nothing.
What is proven is that new immigrants affect the demand for rental housing – which tanked badly and is only now starting to recover.
Who’s “we” ?
at 5:38 pm
but what is impacting the house prices? please help to me understand why on earth 400k increased within 8 months..This iall drama due to the low interest rates .
at 8:51 am
Agreed. Immigrants have been too easy to blame and we all know why. The pandemic has really blown up a lot of the talking points (many I’ve read here for years). Too easy to blame immigrant investors and money laundering.
Yes, NIMBYism, zoning, our slow process of building, shit transit, etc and low interest rates have created this mess. I don’t blame the interest rates as much as everything else. Everywhere has low interest rates.
at 9:38 am
This is bang on.
Also one third of Toronto millenials were living with their parents in 2019. A lot of these people are now in their 30’s and after being in lockdown and working from their parents’ home for over a year, i think a lot of them are anxious to take their savings to find their own place. So even with the pause on immigration, there’s huge demand from FTHBs.
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at 6:10 am
This is a very interesting article. Please, share more like this!
at 10:42 pm
All without a house/condo are just trying to find when they will be able to buy one. The ones with Mom and dad bank will continue buying as long as mom and dad bank can keep up pace with rising prices. Some of the new immigrants do have money and they will buy as long as their immigrant banks can help.
I was in Beijing for long time and prices there have risen considerably over years. Mom and dad banks, higher earning (specially for within china immigrants – best of the best land in Shanghai and Beijing and earn a lot from day one in job and dual income), and everyone’s willingness to move to Beijing and Shanghai, were the main reasons. Toronto seems to be have similar reasons. But even there rise is not as fast as here.
My own real estate experience has never been good – stagnant prices for tens of years for two properties, best case (realized) long term fixed deposit returns for one, and (unrealized) tripled price in 10 years in one property. This happened purely by chance as we were able to get in when the prices were just going up and builders didn’t swindle and delivered house just one year late. But all that was not Toronto.
There is no better investment in canada (and especially Toronto) than buying a house – assured increase in demand because of immigration, zero capital gain tax, low housing tax, and limited supply (thanks to government and builder collusion). I can’t even call it collusion, why should any land/home investor or builder should ever sell his/her ever appreciating assets (if they don’t need the money right away) unless there is cost of keeping the asset is unreasonably high – interest rates are low (if on loan) and will remain low and even otherwise housing tax is just too low.
If the government really wants Canadians (without mom and dad banks and new non-Canadian rich and younger immigrants) to own homes, they can reduce the income tax and increase housing tax to ensure that house horders (families with more than one propertIes) are forced to sell. They can also combine this with good capital gains on property. Will Canadian government ever do it? That’s the only reason I can see for house prices in canada (and Toronto) to come down. Why will Canadian government build high speed trains even in the Toronto area – what should be their motivation? Unaffordable housing for few Unprivileged is not a concern that makes or breaks an election. Majority of Canadians are well off and that’s the vote bank they need to keep happy.
For a buyer on fence, this should be the only question (change in real estate related policies) apart from the availability of funds and their mortgage limits. Many cannot afford a house in Toronto and their miseries are just going to rise with time and there will be more and more of these unfortunate persons as immigration is not going to slow down. What are their options – can they move out to Alberta? Only if they can find a job (there are none) or maybe switch to farming and build a farm house, or start a business and pray to be successful at it. Salaries And savings never keep up pace with Housing price rises even when you are not in Toronto.