With the busy Fall real estate market now upon us, there are hundreds, if not thousands of young buyer-couples, out and about, searching for their first family home.

The market for single-family-homes, as we all know, is the toughest segment of the real estate market for today’s buyers, and has been for quite some time.

Over the next three days, and in three parts, I’m going to regale you with the story of one set of clients I worked with throughout 2014 to find a home.  If you’ve ever wondered what it’s like to be a buyer in today’s market, this story will tell you, and then some…

My new business comes to me in one of three different ways:

1) A buyer or seller is referred to me by a past client.

2) A buyer or seller is a past client, who is now looking to move up, down, or onwards.

3) A buyer or seller comes to me from this very real estate blog.

A large majority of my business comes from Toronto Realty Blog, and in September of 2013, I was contacted by a young lady named Isabella, who was looking to purchase a home with her boyfriend, Andrew.

Like many first-time buyers, she basically said to me, “I’m not too-too familiar with the process, but we’re both quick learners, and we’re eager to get started.”

I chatted with her briefly on the phone, just trying to get a sense of what she and Andrew were looking for, and it sounded like they were a classic “step-skipping” couple, who didn’t ever purchase an entry-levl condo, but rather rented and saved for what constitutes the “second property” for most people.

They had fooled around with online mortgage calculators, and figured they could buy for as much as $800,000, but didn’t want to go that high.  That’s very common for today’s buyers; banks are lined up to give away money, and many buyers get approved for amounts far, far more than they ever contemplated spending.

Their needs were quite simple: they just wanted to move out of their apartment, stop paying rent, and find a house where they could live for the next 5, 10, or 15 years.

They weren’t fussy in the slightest, and their “must have” list was virtually non-existent.

Isabella was relying on me to steer her in the right direction, and I told her, as it stood in the fall of 2013, that the east side offered fantastic value for 3-bedroom semi-detached houses, close to the TTC and retail of Danforth, with above-average schools, and room to grow when it comes to price.

I told her I would start sending new listings along, and that as soon as she and Andrew were ready, we’d go out and take a look at a few places.

Not to sound too lax, but this is the way the process usually works with a new buyer.  I let them steer the ship, and if they want to get started by meeting me in person in a conference room at my office, then so be it.  If they want to chat via email, that’s fine too.  Every buyer works at a different speed, and while some buyers respond to my emails within the hour, and look to schedule viewings that evening, some take a week to get back to me, and might take a very relaxed attitude to the process.

I wanted to get Isabella and Andrew started by looking at properties priced anywhere from $549,000 to $799,000, from Broadview to Woodbine, and some in need of TLC, with some being in A+ condition.

The goal isn’t to confuse the client, but rather to get them thinking.

There’s only so much you can learn from looking at listings online.  Often, you don’t know if that $599,900 house you love so much ended up selling for $800,000, or if the virtual tour of a house glosses over dozens of imperfections, and quite possibly, red flags.

I met Isabella and Andrew at a house on Milverton Boulevard, that would set the tone for all of our future interactions.

I can work with just about anybody, but more often than not, I seem to be found by buyers who have the same sense of humour as me, a somewhat similar personality, and quite often, similar backgrounds.

As soon as we walked up the front steps, Isabella jokingly said, “We’ll take it,” and Andrew replied, “Neddy, the home-buyer’s guide says to actually go inside the house before buying it.”

I got the joke right away.  It was a reference from The Simpsons, circa early-90’s, and I thought to myself, “Oh yeah, we’re gonna get along just fine.”

That’s the best part about my business: I always seem to gel with my clients.  And shouldn’t we?  I mean, we spend dozens of hours together, driving around, going in and out of houses.  We’re not best friends, but we’re most definitely friendly.

The house on Milverton was an absolute disaster, and we had fun counting the different types of tile flooring (there were seven), as well as the attempt at staging, with a bowl of green apples in the middle of a kitchen that needed to be gutted.

We walked outside, and Isabella said, “I think it’s all downhill from here, isn’t it?”

Not quite.  We saw another house that day where an elderly gentleman was clearly dying slowly in one of the upstairs bedrooms (not literally right then and there…), as there was a hospital bed, tons of machines, and an ungodly amount of medical gear, and medication.

By the end of the day, Isabella and Andrew were shocked at just how different one house could be from the next, in terms of the condition of the house, the layout, the price, the location, and even little things they’d never considered, like ceiling height.  Andrew is about 6’4″, and suddenly ceiling height appeared on their “must have” list, which was a blank piece of paper before we started.

After the first time out, I always tell my buyers to go home and digest everything they saw, and then come up with their “nice to have” list and their “must have list,” but also determine how price, location, and style/condition of the house play off one another.

For example, would you live in that A+ house if it were in a less desirable location?  Or would you target the location you want, and consider a B- house?

Price, location, and style/condition of the house is the A + B + C equation for buyers, so once you figure out two of the factors, the third is determined for you.

The next day, Isabella and Andrew sent me a very detailed email, that reviewed all the houses we’d seen, the locations we visited, and analyzed the type of houses we saw.  And honestly, for somebody who has never gone through this before, you have absolutely no idea what the process entails until you go through it.

You think you know what you want in a house, but when it’s just imagined in your mind, or perhaps viewed through a two-dimensional online tour, it’s just not the same thing as when you get out and start pounding the pavement.

Isabella and Andrew honed in on their location and decided that they didn’t want to go east of Woodbine.  They both ride their bikes to work in the downtown core, and that’s just too far.

They also identified that a garage and/or a room in the basement was an absolute must, as they had 5-6 bikes, some very expensive, and they needed space to store them, and work on them.

They figured at least “a small patch of grass out back” was also a must-have, since they had a dog, and of course, they realized that the basement height had to be high enough for Andrew to stand up in.  If the basement was finished, they wouldn’t look at houses where the duct-work ran down the centre of the room (at the ceiling), since nobody likes that “bob-and-weave” style where the ceiling is 6’6″, then 5’10” in the middle of the room where the duct is, then back to 6’6″.  If the basement was unfinished, then they would be renovating, and thus the position of the duct work didn’t matter.

Isabella and Andrew came up with a good dozen items on their “must have” or “nice to have” list by the time we had gone out on our second weekend of viewings, and most of these items were things they had never considered before.

As luck would have it, a house we saw while out on our second weekend of viewings really struch a chord with them, and even though we had just started the search, we found ourselves aggressively considering it.

The house was a 3-bed, 3-bath, semi-detached on Lamb Avenue, priced at $699,900, and it was absolutely spectacular.

It had a fully-renovated main floor with an upgraded kitchen, a finished basement with great ceiling height, a ton of storage, and a 4th bedroom that could serve as the “workshop,” and a garage out back with parking off the laneway.

It was amazing, but we knew it wouldn’t sell anywhere near the asking price.

At $699,900, this was the best property to hit the market on the east side in the Fall 2013 market, and we knew it would fetch a hefty premium.

There were seven offers on “offer night,” and we submitted an offer of $755,000.

The crazy thing is – if this was today, that offer wouldn’t even be in the ballpark, and I would laugh if a colleague told me they were “only” offering $55K over asking.

But the Fall 2013 market was what set the table for the insane Spring 2014 market, and back then, a 10% premium over the asking price was something to write home about!

Of the seven offers, we were told that two were “significantly higher,” and they were working with those two.  The listing agent handled the offers in a very classy, very professional manner, as I knew she would.

The house ended up selling for $771,000, and Isabella and Andrew didn’t really lose any sleep over it, since we figured we weren’t that close.

It was our first offer, and our first taste of defeat, but to be perfectly honest, I don’t know if any of us could have foreseen what was coming.

After all, this blog post is called “The Tao of the 2014 Buyer,” but here I am, telling a story that takes place in September of 2013.

If you think you know where this story is going, you have no idea.

Stay tuned for Wednesday’s blog…

(TO BE CONTINUED)