Another day, another series of multiple offers.
And who says the market is slowing down?!?!
This situation was different from the rest, however, since the property in question happens to be in my building…
Where, oh were do I begin…
Well, as I type this, I’m sitting on my large patio in my unit at 230 King Street, also known as King’s Court. I absolutely love my building, love the area, and love my large patio as I have mentioned in this blog on more than one occasion.
The reality has just set in: I did NOT win tonight in multiple offers.
It hurts for several reasons:
1) I feel like I got beat in my home ballpark
2) I really felt strongly about putting my client into this unit and this building
3) The client is a good friend of a good friend of mine, who refers me on a regular basis.
My client, Mark, came to me about two months ago and basically said, “I don’t know much about condos, but I know that I would like to purchase one.” The rest was an education waiting to happen.
Mark is an extremely intelligent guy with a business degree and now a professional designation. It was refreshing to see how quickly he picked up on my teachings with respect to the Toronto market and both how the business works, and how to value a property.
Mark told me he had only ever seen “a few condos belonging to some buddies,” so he really didn’t know what he wanted. He wanted a 1-bedroom unit with parking somewhere in downtown Toronto.
Where do we begin?
I showed him both units that I like, and units that I hate, just to demonstrate the contrast between high quality units that will appreciate in value, and crap that will be impossible to sell when the market turns. He understood completely, and we zeroed in on a couple of areas and buildings.
Mark liked the Entertainment District, consisting of the grid loosely bordered by University Ave, Richmond Street, King Street, and somewhere just west of Spadina. He also liked the St. Lawrence Market area which is where I call home.
Last week, a unit came out in my building at 230 King Street at $269,000. I emailed Mark and simply said, “This is it.”
The unit was a 1-bedroom, 1-bathroom condo of 585 square feet with a clear east view from the 16th floor. It also happened to be fourteen stories directly above MY patio!
I feel very strongly that the St. Lawrence Market area, more specifically, 168 and 230 King Street, are two of the better buildings on the east side of Yonge Street. I wanted Mark to buy this unit as I saw it as a perfect fit for him, and a great investment to boot.
Not too long ago, the same model unit sold for $290,188, but was listed at a ridiculous $249,900. This created a frenzy of activity, and they received SEVENTEEN offers! As I wrote on my blog last week, hopefully we are moving towards a market where agents and their sellers would simply price this unit at $289,900.
Mark and I discussed “strategy,” and determined that since the last unit sold for $290,188, and that the unit we were looking at is the exact same model, that the price should be the same. The fact that the asking price is $269,900 is almost irrelevant.
We prepared an offer for $292,500, and felt pretty confident.
I registered our offer an entire day early just in case there were any agents or clients who were sitting on the fence and didn’t want to be involved in multiple offers.
Tonight, I presented our offer at 7PM. I was the first of seven offers to present.
Then, I got in my car and went to Loblaws, and bought seventeen prime rib steaks and twenty-one packs of bacon.
You see, I’m planning my brother’s bachelor party for this weekend, and I’m responsible for feeding and entertaining eighteen guys from Thursday to Sunday inclusive. This has been a long week, considering I have to balance my real estate career with the bachelor party, not to mention being the emcee at the wedding the following weekend.
I came home to my condo at 230 King Street, and waited by the phone.
As I stood over my barbecue, and grilled one of the aforementioned seventeen steaks (there’s only sixteen guys at the stag the first night…), I looked up towards the patio outside the unit we had offered on, and wondered what was going on in there.
Had they finished reviewing the offers?
Was ours the best?
My phone rang as I was just flipping my steak, and it was the listing agent. What she said surprised me. “David, we are going to give you an opportunity to improve your offer.” This is not abnormal at all, and usually happens when two offers are very close. I asked her how many offers she was “working with,” and she said, “all of them.”
“David, we are giving everybody a chance to improve their offers. All seven people.”
That was just ridiculous. It’s not so much the greed, but rather the unorthodox method!
Usually, you’ll send back two offers if they are very close, but you’ll eliminate the other five. Here, she was just sending back everybody, just for the hell of it!
I called Mark and told him that I didn’t think he should add a penny. Why would he? He had no clue where he stood! Had they come back and said, “David, your offer is very good, thank you. There is another offer that is close, and we are going to work with both offers,” I would have told Mark to add another $3500 to the offer, and cross his fingers.
But they didn’t work with two, they worked with all SEVEN!
I told her we were going to stick to our offer, and she said she’d call me back when they made a decision.
I finished eating my steak, an entire pot of Lipton Sidekicks Fettucine Alfredo, and a bowl of broccoli & cauliflower, and turned on the TV to watch Roy Oswalt strike out ten batters through seven innings.
After seeing Dustin McGowan throw a complete game for the Jays, my phone rang. It was the listing agent.
I can tell within the first breath and the first words to come out of the listing agent’s mouth. In this case she stared, “I just wanted to let you know…..” I knew we were toast. She wouldn’t say, “I just wanted to let you know….that your offer is the highest and you’ve got it.” Nope.
They took a “higher” offer, and already I’m beating myself up wondering if I should have pushed my client higher.
The emotional roller-coaster has seats for the buyer, the seller, and the agents involved.
I pegged this unit at $290,000 before I ever looked at the comparable sale for $290,188 from last month. I advised my client to offer $292,500, and I felt confident in my offer. We lost, and that means that in my (humble?) opinion, somebody else overpaid for the condo.
But, that “somebody” now owns a 1-bedroom unit at 230 King Street, and Mark is still searching.
There are over five-hundred-thousand condominium units in the GTA. I will find Mark something eventually, and he wasn’t married to this unit at all, nor does he only want to look in this buidling or this area. But as I said before, I took this loss personally since I happen to live here.
I don’t know what can make this pain go away.
I can think three things that I need to cure what ails me:
1) Seventeen steaks
2) Twenty-one packs of bacon
3) A huge smile on my little brother’s face during our four days up in Port Severn with baseball, golf, paintball, and the aforementioned bacon & steaks.
Yeah, I guess that will have to do…