….that is the question!
But perhaps that isn’t the question you should be asking yourself, as a seller, when you’re sitting at the bargaining table at 9:30PM on offer night!
Surely you had already made up your mind…….right?
We are definitely in what I would call a “seller’s market,” but that doesn’t mean that every seller walks away happy.
Some sellers are greedy and some sellers are unlucky.
A couple weeks back, I encountered a seller who was both.
I was showing a house on the east side, listed at $589,000, and before I had even set foot inside the property I told my client “You’re looking at $625,000 here.”
I was right.
Well actually, as the story will eventually explain – I was wrong. But what I mean is that as soon as I walked through the house, I told my buyer “You know how I said you were looking at $625,000? Well I think you might be looking at more.”
The house was a beautiful century-old Victorian on a very sought-after street and it had been converted into a turnkey duplex.
Now consider that most “duplexes” in Toronto consist of a house with a basement apartment. This isn’t a duplex to me or you, but to all the sellers of crappy houses with basement apartments – it is. They list these “duplexes” on MLS and just frustrate the hell out of buyers who are looking for something more “real.”
The propery that my client and I were looking at was just that – a real duplex where the front foyer of the old home had two doors – one leading to a gorgeous second-storey loft, and one leading to a two-level unit with 2-beds and a bath.
On the main floor of the home, there was a very spacious living/dining room with all of the original character and charm of the old Victorian – mouldings, trim, stained glass, and great ceiling height! The floors had been redone, and there was a great kitchen at the back of the house with granite counters, stainless steel appliances, and a great gas range.
The kitchen walked out to a new back deck, and the deck led down to a large stone patio that could comfortably seat 15-20 of your closest friends.
The basement contained two very large bedrooms, and a laundry room that was cleverly built next to the exit so that the second-floor tenant could come around the side of the house, go down the steps, and enter the basement to do laundry without disturbing the main floor tenant.
The 2-bedroom unit on the main/basement level would likely rent for about $2,200.
The second story unit was phenomenal.
This house was a 2 1/2 storey, but the owners opened up the half-storey to the second level to create 16-foot cathedral ceilings! So many Leslieville, Riverdale, and Cabbagetown Victorians have a useless “loft” space on the 1/2 storey that is either a finished space you’d never use, or just a musty attic.
The owner of this duplex created a very unique loft out of the extra 1/2 storey, and this one-bedroom, one-bathroom unit was likely the nicest unit I’d ever seen in a duplex or triplex.
But once I saw the 200 square foot patio at the back of the unit, I was sold!
This unit would likely rent for about $1,500.
So after walking through the property with my client, going over the impeccable home inspection, and looking at comparable sales, I told her that this could likely go for upwards of $640,000.
Offer day came along, and I was surprised to find that there was only one registered offer by 5PM.
My client kept asking about $610,000, and I told her there’s just no way she could get the property for that price.
I’d buy it at that price, and I’m not even in the market!
By 7PM, a second offer had materialized, and we were the third offer.
We went up to $615,000, and I expected to get the “thanks but no thanks” call shortly thereafter.
It took an hour to get a response, and the listing agent said that her seller was “mulling over his options.”
At the time, I made nothing of it. I asked her – did we win, lose or draw? But she just kept saying, “hang tight.”
Something was up, but I wasn’t sure what.
I honestly thought we had no hope in getting this property for $615,000, when on a good day it might sell for $650K.
By about 8:45PM, the listing agent called me and said something that I’ve never heard in all my time in real estate:
“David, thank you so much for your offer. Unfortunately, I think I’ve wasted everybody’s time. Well, my seller has wasted everybody’s time. Yours, mine, everybody’s. He’s not going to accept ANY of the three offers. I’m sorry.”
That certainly was a new one!
Now I know what you’re all thinking – that the seller was playing us. Or rather, the agent was.
That thought did pass by me as well.
A few years back, my buddy Dave bought a house on Winnifred where the sellers tried to pull the same stunt. We offered $410,000 and they said they were “expecting” about $440,000, and they were going to re-list the next day at that price.
They were trying to play us, but it was obvious. Not just because the listing agent had been drinking red wine for three hours and her efforts were transparent, but because our offer was irrevocable for about two hours and she was calling me more and more frequently as the expiry approached. They ended up taking our offer, which the listing agent spilled red wine on. My office administrator tried to tell me that it was an “illegal” contract – with the Merlot as evidence of why.
So when I heard this same song and dance two weeks ago, I thought perhaps that could be the case once again. But the listing agent was despondant, and our offer was set to expire at 9PM. I didn’t think she’d try this with about 15 minutes to spare.
The listing agent said her client was on his phone for two hours talking with somebody about his “options,” and ultimately he couldn’t let the house go for $615,000. He was expecting $650,000, or more.
Well, I was right! Somewhat.
I often say, “I don’t mind being wrong, when it suits us,” and predicting a potential $650,000 sale price but being the highest offer at $615,000 is a win-win situation. Unfortunately, the listing agent told us that the seller didn’t want to work with our offer, or any of the offers!
My client was as shocked as I was, but she took it in stride, and I told her “have a good night.”
At about 11:45PM, shortly before my daily dose of Law & Order repeats on Bravo, the listing agent called me back.
I knew what was about to happen, even before it happened.
She told me that after much soul-searching (and a few more phone calls), the seller wanted to work with our offer.
I asked what “work with,” meant, and told her that we weren’t going to add a penny to our offer. She said that was fine, and asked if I could bring the offer back.
Don’t forget – the offer expired at 9PM! So even if the seller wanted to take our offer, he couldn’t! We would have to re-submit!
That’s how I knew it was never a “ploy” and this seller really had no clue whether he wanted to sell or not.
I really can’t say I blame him.
The market is red hot and this house “should” have sold for $25,000 higher. This seller had some awful luck, but his terrible greed almost put him even further behind the eight-ball. If he had re-listed the property at a higher price, he’d scare off any rational buyer who saw the property hit the market the first time.
I had my client re-submit the offer with a 1:00AM irrevocable, and the deal was done just before the deadline.
She got a house for $615,000 that I honestly thought could have sold for $650,000; but one that I know in my heart of hearts is truly “worth” $25,000 more than she paid.
What a deal!
And it almost didn’t happen as the seller was up, down, back, forth, east, and west – all in the space of a few hours.
Perhaps there is a little bit of luck involved in real estate.
I’m just glad my buyer was finally on the receiving end…