The Tao Of The 2014 Buyer (Part IV)

Stories! | September 12, 2014

I predicted that the Fall 2014 market would be even busier than that of the Spring, and if the first two weeks of September are any indication, I think low inventory levels are going to be a major problem.

Demand has outpaced supply in just about every segment of the market over the last several years, and the run-up in pricing has been the unpleasant result.

In the Spring of 2014, every B- house or better was getting 6-8 offers, and the great ones were getting over a dozen.  And even when you tried to “bully” your way to the front of the line, you could still end up losing out…


I often explain in my blogs that I don’t consider myself a “salesperson,” per se, but rather a consumer advocate, as evidenced by the sheer amount of insider information I post on TRB, as well as the topics I touch, when no one else will.

A true salesperson looks to sell anything, to anyone, but if I have one “flaw” as a salesperson it’s that I get way too involved emotionally with my clients.

Just today, I was on the phone with somebody I had never met, trying to convince her not to purchase a condo that she had seen at a weekend open house, that I didn’t like, and thought was a miserable investment.  I could have easily said, “That’s great, let’s get it on paper,” and sold a condo I’d never even taken her to see, and made $7,500, but that’s not how I run my business.

There simply has to be a higher standard.

At the other end of the spectrum, there are a lot of dirty deeds in this industry, which we will never rid ourselves of.

And as I sat in my car, with Andrew, in April of 2014, I had no choice but to let him in on the sordid inner workings of our business.

If you recall from Thursday’s blog, I had submitted a bully offer on a house for Isabella and Andrew, only to be told by the listing agent, “We’ve accepted another offer.”

When I went to meet Andrew outside his work on Monday morning to return his deposit cheque, he got into my car and said, “We have to talk.”

He didn’t look happy, nor should he have been.  He and Isabella were having an exceptionally difficult time buying a home, and we had just lost for the seventh time.

The bully offer on Monarch Park should have been a slam-dunk.  Or, if the sellers didn’t accept it, we should have been able to go back to the table on “offer night,” like we did with the house on Langford Avenue a couple weeks earlier.

But the house sold out from under us, and Andrew wanted to know why.

“What happened, over the weekend?”  Andrew asked, very open-endedly.

“I mean, what are we missing here, David,” he said in a stronger tone.

I told him that what had happened was unfortunate, and that it shouldn’t have happened, and that I was sorry that it did.  But that wasn’t enough for Andrew now.  He seemed to think that there was something I was hiding, and to be perfectly honest, he was right.

My fear here was that Andrew and Isabella were starting to doubt my effectiveness, or at the very least, wonder if I slipped up, even just once on this very occasion.

That wasn’t the case, of course.  But telling Andrew, “It’s fine, it’s fine,” wasn’t going to cut it.  So I had no choice but to tell the kid there was no Santa Claus, and expose Andrew to what really goes on in our business.

“We got cheated,” I told Andrew, “And I don’t know why.”

“The listing agent broke the rules, acted improperly, unethically, and completely fucked us over.”

Andrew told me to explain it to him, point blank, so I did.

When an offer is registered with a listing brokerage, that brokerage has a responsibility to inform the agent with the registered offer of any subsequent offers on the property, and do so in a timely manner.

There are dozens of RECO cases where agents have been fined for not telling other agents about competing offers, and I’m sorry to say that it happens all the time.

When we submitted our bully offer on Friday night, we had the only registered offer.  On Saturday, the house was sold, to somebody else.

The listing agent did NOT inform us of another registered offer, which she was legally required to do.

She then sold the house to the party with the other offer, unbeknownst to us, and while she didn’t have to give our offer any consideration whatsoever, she DID have to inform us of the existence of the other offer.

Had we known about the other offer, we could have, would have, should have, increased our offer.  Andrew and Isabella were upset because they said they would have gone to $815,000, but they were never given the chance.

Regardless, this wasn’t about “chances,” or hindsight.

This was about the rules – whatever few real estate “rules” we might have, we do have rules.  And a listing agent MUSt inform all agents with registered offers, of any subsequent offers registered.

I explained all of this to Andrew, and then told him the worst part: even though she breached RECO rules, there’s no point in filing a complaint, because it won’t go anywhere.

Ain’t that the truth.

RECO is not some wing of government with 10,000 employees, diligently working away, investigating complaints related to real estate.

RECO just doesn’t have the resources necessary to work on every complaint filed, and when they do investigate, they usually prioritize cases from the general public over those filed by one Realtor accusing another, since there are so many squabbles between agents that have no merit.

“So what you’re saying,” Andrew said, asking me to summarize, “Is that the listing agent simply sold the house to somebody else, without telling us there was another offer, without giving us a chance to improve our offer – even though the other party knew about our competing offer, and while she’s in the wrong, there’s nothing we can do about it?”

“Yes,” I said, since there was really nothing else to say.

“Well that’s shitty,” Andrew said, and then took a deep inhale and said, “Okay, well, I’m glad we got that straightened out.  Now we can go back to making fun of hipsters, and insulting home-owners wardrobes….”

It was tough to swallow, but this is a blip on the radar of what goes on in this industry on a daily basis.

Isabella and Andrew did the right thing, and decided not to dwell on it, and to move on.

Two weeks later, we were back where it all started: Lamb Avenue.

We were looking at a monster house: 3-storeys, 20 x 135 foot lot, with 4-bedrooms.

This was by far the largest house we’d looked at, and it gave Isabella and Andrew the potential of a “twenty year house” rather than something they’d outgrow in a decade.  It also backed onto a park, had 2-car parking, and a deep basement with a ton of space.

The house itself wasn’t exactly A++, but the bones, and the lot, meant they could stay there a long time.

Listed at $689,000, the house next door had sold for $819,000 one month earlier.

We knew that the market was increasing every single day, and even though the house next door sold for $819,000 only a month earlier, we figured this one could fetch $840,000.

On offer night, there were seventeen offers.

I hated going to the listing agent’s “home office” and sitting around with a dozen other agents, listening to people bitch about the market, their clients, their children, and their cats.

It must be nice as a seller or a listing agent, to have seventeen agents walk in on their hands and knees and look at you with stars in their eyes, hoping that maybe, you will be the “chosen one” by the end of the night.

Our offer of $840,200 wasn’t even in the ballpark in the end.  The house sold for a whopping $908,000, or 11% more than the attached house had sold for one month earlier.

132% of the asking price.  Who’d have ever thought?

We looked back to the first house on Lamb which we bid on seven months earlier, which had sold for 110% of the asking price, and wondered, “Where does the market go next?”

The 7.5% margin between our bid and the selling price was the largest spread we’d ever experienced, although despite all this, we didn’t bat an eyelash.  I think we knew that if we got this house, for $840,200, which was almost an uncomfortable number for Isabella and Andrew, it would be a small miracle.  It was a massive, gargantuan house, and it just wasn’t in the cards.

The market was in full swing by now, since it was April, going on May, and we weren’t without options at this point.  We were seeing 4-5 good candidates per week, often one solid house that interested us, and sure enough, the day after we lost out on Lamb, we found an awesome place on a street that I will call……..Milverglebemoremount.

I know, I know – I’m blowing the suspense here.

But you had to know, in addition to changing the names of my buyer-clients, that I wouldn’t divulge where they live, so I have to fudge the name of the street on which they live, and alas, you now know that the story is about to come to a close.

We started our search in September of 2013, and here we were, in May of 2014, over 8 1/2 months later, finally buying a home.

The house was a semi-detached, 3-bed, 2-bath, on a 20 x 120 foot lot, with a finished basement, and an incredible main floor, both in terms of finishes, and layout.  The room sizes upstairs were huge, the basement was deep (for Andrew…), and the backyard was awesome.

While we may have bid on a monster home on Lamb, an A++ designer house on Langford, and an A++ location with respect to Hazelwood, I honestly think that Isabella and Andrew bought the house that was “meant” for them all along.

They didn’t really “need” the space of a Lamb, the style and upgrades of a Langford, or the school district (at least not for a decade…) of a Hazelwood.

The house was listed at $649,000, and we got it for $775,000, amid nine offers.  The listing agent was such a nice guy, and it made the experience more enjoyable.  Actually, it made the experience absolutely stupendous when he told me we got the house by less than $4,000!

I remember driving to the house to meet him to hand over the cheque.  It was 12:15am, and I was in the middle of the busiest week of my career when I sold seven houses in seven days.  I was working 16-hour days, I saw my wife (awake…) once from Monday to Friday, and I had eaten lunch and dinner behind the wheel of my car every night that week.

But getting the house on Milverglebemoremount for Isabella and Andrew was probably the best moment of 2014 for me so far, and I say that with deep respect for all my other buyer and seller clients, many of whom are reading this right now.

I say that I get emotionally involved with many of my clients, and while it’s the first “no-no” in sales, it’s what makes me absolutely, positively, love what I do for a living.

I can picture Andrew right now – down in the basement, oiling the chain of one of his many bikes, and see Isabella walking up the steps of the house, with their dog, who we’ll call “Wolfie.”

We submitted nine offers on houses in our 8 1/2 months, and it was definitely a trying time.  While I’ll be quick to point fingers at buyers and sellers in this market climate, Isabella and Andrew never did anything incorrectly, and they always listened to my advice.  They were in good spirits all the time, an absolute dream to work with, and as is the case with many of my clients, I felt a bit of a void when they finally purchased a house.

We had a standing “Saturday at noon” appointment for the better part of a year, and when they finally bought, Andrew asked me, “Any chance you still want to get together every weekend and go through people’s things?”

It may have taken some time, but Isabella and Andrew finally got, dare I say, the “perfect” house for themselves.

It’s a tough market out there, folks.  And I’m sure many other Realtors have stories like this one.

We have no choice but to work within the market that exists around us, or not work in a market at all.

The market will change one day, and stories like this will be folklore.

But until that day comes, we’re stuck with what we have, and with legends like that of Isabella and Andrew’s journey…

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  1. Patty

    at 7:59 am

    Wow! Good for all of you working through this. I’m going to miss them as well. Great read.

  2. Vlad

    at 8:28 am

    “They always listened to my advice.” Um…if that was true, they would have gotten the house on Hazelwood and this story would have ended last December.

    1. Appraiser

      at 8:38 am

      Ah, lament. I am reminded of Shakespeare:

      “And summer’s lease hath all too short a date”.

      Sonnet 18.

  3. Kyle

    at 9:03 am

    Great story David! I’m sure they will enjoy their new house on Milverglebemoremount, the whole Greenforth neighbourhood is really nice. And i hear the neighbouring Danbine neighbourhood is coming along too.

  4. Jonathan

    at 9:33 am

    Seriously, whoever decided on the street names was just phoning it in: Glebeholme, Glebemount, Woodmount, Woodington, Milverton. You can easily end with with directions like “go up Woodbine, turn left onto Glebeholme, go past Woodmount, then turn right on Glebemount”. Who can remember that?

    I call the whole area “North Beach” because it’s a quick trip from “The Beach” through “Upper Beaches” and “Beach Hill”.

  5. Geoff

    at 9:37 am

    Just a comment on “A true salesperson looks to sell anything, to anyone, ”

    That’s actually pretty insulting to professional salespeople. A true Shyster will sell anything to anyone. A true professional salesperson tries to match what a customer’s needs/wants as honestly and effectively to what they have to offer. When I sold items that ranged in price from $2,000 to $30,000, I truly tried to find the product that matched their needs, wants and budget. That’s professionalism.

    It’s unfortunate that ‘selling’ has become a bad word. Selling is a honest profession, and a bedrock of capitalism. Anyone can get the first order. Selling is about getting the second order.

  6. Chroscklh

    at 9:49 am

    What is happen to unscrupulous realtor estate agent?! In my country, sentence is easy 3-5 minute in cage with bear – could be 10 min if malicious intent. This crazy story. So many bids. This why I bid double times ask -cuz I believe u get what u pay for. Neighbors say I crazy because we have identical house but I say yes but I pay 2mm $ for mine, u pay under 1mm $. Who is crazy, unstable, must-stay-100-metre away neighbor now?!

  7. Joe Q.

    at 10:00 am

    I appreciate David’s point about the priority RECO places on complaints from the public vs. complaints from Realtors, but from a cursory first glance at judgements I get the impression that Realtors who mess with “the system” (i.e. by not treating deposit funds properly, not updating MLS in a timely way, or generally screwing over other Realtors) are penalized more harshly than other types of infraction.

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