I usually write my blogs between 10:30pm and midnight, but I also write them in my head, as the events unfold.

My wife will often see my lips moving with no sound coming out, as we drive in the car, sit on the couch, or even play with our daughter.  “Are you writing a blog?” She’ll ask me, as if she doesn’t already know the answer.

Real estate is such an incredibly dynamic industry, and the fact that people are the largest variable element in the mix ensures that new experiences will arise time and time again.

Last week, I had a listing that was probably one of the more eye-opening experiences in my career, and all along the way, I made mental notes of my interactions and experiences, because I knew they would be blog worthy.  However, upon the conclusion of the listing and sale, and having sat down to make sense of all that transpired, it was only then that I was able to take stock of just how many realizations and revelations I came do during the process.

The following is not flattering of buyers, the general public, agents, and essentially all of mankind.  Try as I might to eliminate negativity where possible on this blog, and although this experience actually was a positive one, the revelations I came to were, for the most part, inherently negative.

Honesty is the best policy, and it certainly always has been mine.  So I don’t aim to sugarcoat just how many nut-bars I met during this listing, how many clueless beings I encountered, and how many bizarre conversations I had.

The listing was for a property that had been in one family for over a half-century.  It was an estate, and with an estate usually comes family matters.  That complicated the listing, but it became the back-story once the property was actually up for sale.

The home was a complete “gut,” if you will, and many suitors for this property might have torn the entire structure down.

A detached, century-old Edwardian, 3-storey, 6-bedroom, on a 140-foot-deep corner lot with a rare 2-car private driveway, in an upscale central Toronto neighbourhood.

I co-listed this property with a colleague of mine, Chris, who actually took the lead on the listing.  At times, I was the bystander, and adding his experiences to my own essentially tripled the amount of blog-worthy stories I was accumulating along the way.

The property was listed at $1,995,000 with a scheduled offer night, and no pre-emptive offers, because of how complicated the disposition of the asset was made by the rules governing the estate.

We put up a “Coming Soon” sign a week before the listing, and the calls started immediately.

The calls continued through the listing period, and they never stopped.

Every time we heard the “beep” overhead at the Bosley Real Estate head office on Merton Street, Chris and I both held our breath, expecting the call to be for one of us.

We ended up receiving 12 offers on the property, and it sold for $2,700,000.

This property was extremely difficult to value, since it was somewhere between a gut-renovation and land value, and we knew that the eventual buyer would simply be the one with the most money, irrespective of real estate knowledge and/or experience.

We figured the price would land anywhere between $2.4 Million and $2.65 Million, and in the end, we were fairly close.

One method we used to come up with that price range was a simple comparative market analysis, based on sales in the area, and adjustments for variable features.  Another method was to work backwards from the $4.5 Million we felt that house would be worth in 8-12 months if it was completely renovated, with A+ finishes.

Both methods saw us come in around $2.55M – $2.6M, and we adjusted both high and low to come up with an overall range of expectations.

So where is my beef?

What are the realizations and revelations that I promised?

Hmmm…..where to start?

–

1) The public has absolutely no clue what they’re doing.

For all those who believe that they don’t need a real estate agent, or they can “do it on their own,” or that through House Sigma or Bungol, they’ve got everything they need – just listen to the following.

From the minute this property was listed, we entertained call, after call, after call from the most uninformed, naive, and clueless people in the city.

For a house that was listed at $1,995,00, and eventually sold for $2,700,000, we must have had a dozen people tell us that the house wasn’t worth the asking price.

I know what you’re thinking – that perhaps this was a negotiating ploy on their part, or that they were slow-playing us.  I assure you, that’s not the case.

These were also not nobodys, for what it’s worth.  Everybody who called on the property seemed to be a partner at a downtown law firm.

Now considering that Chris and I were working for the seller (more on this later…) and not the cold-calling buyers, we were in a tough spot when it came to answering the question, “What do you think this house is going to sell for?”  We take agency relationships and representation seriously, and it’s a fine line to walk when trying to work for the seller, and advise unrepresented buyers at the same time.

For the most part, we told people what I had written above – that we had done an analysis on the home and come up with values from $2.5-$2.6M, but the house could sell for less, or more, or who knows – it’s the Toronto market.

You might argue that our job should have been to entice as many stupid buyers as possible who wanted to offer the list price, just to increase the number of offers, and ultimately the sale price.  But we didn’t need “dummy offers.”  We knew we’d have anywhere from eight to upwards of fifteen offers, and the people bidding on this house weren’t going to be affected by the number of offers present.

Every day from the Wednesday on which the property was listed for sale, to the following Wednesday when offers came in, we were inundated with people who didn’t understand the market.

I showed the house to one gentleman – nice enough guy, who followed up with me the next day and said the following:

“Hi David, thanks very much for showing me the house yesterday.  It’s a diamond in the rough, and I would love to make this my next project.  I am a very serious buyer, I want you to know that.  But just nowhere near the list price.  If we could work something out with the seller, I would be willing to make an offer today.  And by the way, I would work through you.”

More on the “I would work through you” part later.

Now as I said, this was a really nice guy, smart, successful, and capable in every way.  But how in the world could he think that there was a chance this property would sell for “nowhere near the list price?”

This was a running theme, all week.

I received a call from a woman one night at 11pm (that should have been my first clue…) who said she wanted to make a “bully offer” on the property.  She said she was not working with an agent, and that she would like me to draw up an offer immediately…….for $1,995,000.

Yes.  A “bully offer” at the list price.

Oh – and conditional on inspection, even though this house was a complete gut, and being sold in “As Is Condition” with no representations or warranties.

I explained to this woman that, while I couldn’t really educate her on price, since she was not my buyer-client and I was working for the seller, that she would be wasting her time submitting an offer at that price, and that we weren’t able to work with pre-emptives/bully-offers because of the complexity of the estate selling the home.

She completely ignored what I said, and essentially demanded that I draft an offer as soon as possible, for the list price, and present it to the seller.  She added, “I’m doing the bully offer because I won’t bid in competition against others.”

If only it were that easy.

This went on, and on, and on, for a week.

2) Everybody thinks he or she is a genius.

Many of us can hit a baseball, as it’s spinning toward us at a high rate of speed, but who among us are good enough at doing so that we can turn this skill into a full-time job?

I can hit a baseball.  In fact, when I was coaching Bantam-age from 2007 to 2013 at Talbot Park, I would routinely show off my ability to “go yard” and sock dingers out of the park and into Sunnybrook Plaza.  But not once, for a moment, did I ever think of calling the Toronto Blue Jays and asking for a tryout.

Last week, every wanna-be house-flipper in the city called us, looking to make their millions on this house.

Perhaps it was attending one-too-many get-rick-quick seminars, or maybe the allure of Bitcoin had worn off, but every neighbourhood genius showed up at this house, looking to make their mark.

As Point #1 explained, none of them could come anywhere close to affording the property.  But that didn’t stop them from inquiring.  The inquiries led to an attempted negotiation on the price, then to a bitter take-down of the property and the marketability (some went as far as to talk about the “terrible market conditions” that currently existed), then eventually an angry departure.  All of these cowboys expected to pick the houses up for under-list, so they could do a crappy IKEA renovation, and expect that buyers in the $4,000,000+ price range wouldn’t know the difference.

When we told them that a “proper” renovation would be roughly $1,200,000, they scoffed.  “Bit more than a coat of paint,” one gentleman told me, and although he was looking to cynically counter what he deemed an astronomical estimate on my part, I think his statement was an indication of where he intended to take this home.

We had people telling us they could “build new” for $500,000.  We had people telling us the renovation would be $200,000.

For a house like this, and to attract buyers in this market, you might spend $200,000 on your kitchen alone.

And if you’re wondering where these people got their money, that’s a whole other story.  Because while some were just rich and stupid, others were stupid and poor.  One person asked me about a vendor take-back mortgage (I’ve never seen one before in Toronto), and another asked if I knew anybody looking to invest in a flip.

Imagine that.

This neighbourhood genius wanted to renovate and flip the house, but also wanted to know if I had any names and numbers in my Rolodex for people who would finance a first-time-flip.

The geniuses were coming out of the woodworks on this one…

3) Joe Average Buyer would cut his or her agent’s throat in a heartbeat.

Of the twelve offers submitted on the property, guess how many were from buyers to whom we had shown the property?

Five.

And all five of those buyers, as you’ll read further in point #5, wanted to use us as their conduit to the sellers.  All five buyers, who were working with an agent, were willing to spurn that agent, whether it was a life-long relationship or just the start of their real estate search, in order to get a better “shot” at winning the property.

As each successive offer was received on Wednesday night, I looked at the name of the buyer to see if it was familiar.  Over and over, I remembered this buyer, and that buyer telling us, “I don’t have an agent, I’d like to work with you guys,” only to end up going back to their agent once we turned them down.  None of these agents know how close they came to losing a client, and by that I mean that while we weren’t going to work with buyers and engage in multiple representation, many other listing agents would have.

The best was this one guy, what a beauty!

He approached my colleague Chris a week before the property came onto the market and was all hot-to-trot.  He said he didn’t have an agent, and wanted to make an offer through us.  In conversations around the office with some colleagues, Chris found that he had actually been working with another agent from our company, for a year.  But she ended that relationship because he was also working with another agent.  On offer night, he was set to make an offer through a fourth agent, but pulled out once there were 5-6 offers.  Maybe he was going to offer the list price as well?

Folks, if you want to use four agents, be my guest.

But I assure you, it gives you no advantage.

The winning bidder last week was somebody who was using a life-long family Realtor.  There was trust, history, and a relationship there.  This was also an agent with three decades of experience under her belt.

The second-place bidder was also somebody who had bought and sold with her Realtor four or five times, as the Realtor told me.

This one guy who ran around the city, bouncing from agent to agent, just didn’t seem to understand that he wasn’t gaining an advantage, and was really just making people not like him.  While I run a fair process, and I would never go out of my way to ensure that Person A, B, or C did not get the property, I know there are a lot of agents out there that can’t say the same.

So many of these buyers were looking for that “edge,” when all the while, they should have spent more time focusing on the property.

One of the buyers to whom we showed the house, to whom we also explained we would not represent as a buyer, called us on the day of offers to say, “We’re buying this house tonight, no doubt.  Just to let you know, I’ll beat anybody’s offer by $100,000 tonight.”  We called his agent – the one he would actually be making the offer through, and told him three things: 1) To stop calling us, because we were not his agent, 2) To not expect any favouritism, because it seemed like he believed there was some, 3) That he would not get a second chance, and/or the opportunity to bid $100,00 higher than anybody else.”

In the end, his offer was in the bottom half.

Again, I feel as though I can’t stress this enough: looking for some inside track, or some sort of advantage does you no good when you don’t possess the market knowledge to begin with.

4) Agents might be as clueless, or more, than some of the public.

We had twelve offers on the property.

The property sold for $2,700,000.

The property was listed for $1,995,000.

Can you guess what the lowest offer was?

$1,800,000.

And that was for a real estate agent purchasing on behalf of him/herself.

Some of you might find this funny, but it’s more serious than anything.  Just think that this agent is out there representing clients.  This agent, who bid $200,000 UNDER the list price, for a house that sold for $700,000 OVER the list price, has buyers and sellers that trust he or she.

That’s downright scary.

And this isn’t like the fat personal trainer or the doctor who’s sick with a cold.  This is way, way worse.

5) The public hates us for the same reason that they want to love us.  We are damned if we do, damned if we don’t.

This, believe it or not, may have been my biggest take-away from the week.

Chris and I decided very early on that we would not be representing any buyers in this process.  The sale was already complicated enough with the estate, but more to the point, every single person we showed the house to wanted to make an offer through us.

Had we decided to represent buyers, and had we placated every person who wanted to offer the list price, we could have had a dozen of our own offers.

But we told people that we wouldn’t be representing buyers, and we wouldn’t be, as the saying goes, “double-ending.”

The public hates double-ending, right?

Real estate agents are dirty, scuzzy, sleazy, and greedy!  Do away with double-ending, right?

Sure.

Until you want to buy a house, then you flog the listing agent for being “too ethical.”

Honestly folks, we took actual abuse last week from buyers who were irate that we wouldn’t represent them at the offer table.  One after the next, buyers called us, viewed the property through us, told us they wanted to submit offers through us, and then chastised us when we said that they wouldn’t.

I had a conversation with one buyer – a downtown lawyer, like many of the others, whereby he told me:

“Look, this is very simple: I’m going to buy this house, and you’re going to make $65,000 selling it to me.  Money in your pocket, the seller gets more, I get a house.  Don’t overthink this one.”

He was rude, disrespectful, and arrogant.  And the more polite I was, the ruder he got.

I told him the same thing, five times, in five different ways: that I would not be presenting his offer and representing his interests.  Eventually, he changed his tune and said:

“Do you have kids?  I’ve got two of them.  I’m buying this house for my family, okay?  I’m not a contractor, I’m not going to tear this thing down, I’m going to make it into a beautiful home to cherish the memories of your clients who lived there for so long, and we just can’t wait to get in there, okay?  We love this house, my family is excited, and we need some help, okay?”

When I told him, for the sixth time, that my colleague and I were not representing any buyers, he went back to his original tone, and said:

“Fucking real estate agents, thick as thieves, dumb as a post.”  And then he hung up.  I never saw his name on paper on offer night.

Points #1 through #4 all sort of tied into this point.  In fact, they all kind of tie into each other.

–

If I could sum up the theme of these learnings in just five words, it would be the following:

Trust, ethics, loyalty, experience, knowledge.

There was almost no loyalty shown through this process, except by the three or four bidders at the top.

The buyer pool lacks knowledge and experience, and doesn’t know it.  What’s more, is they don’t seem to have any interest in gaining it either.

Everybody in the public wanted us to act unethically, and chastised us when we didn’t.

Trust is a two-way street, in theory.  In practice, it’s a fork in the road.

Perhaps this isn’t the most endearing way to start the week after the Victoria Day long weekend, but I enjoy sharing stories from the trenches of real estate, good or bad, positive or negative, with happy endings, or sad.

This listing certainly taught me a few things.

I hope some of you can learn from it as well…