Some sellers still long for the days when every single house in the city received multiple offers; those days when they could set up a lawn chair on a hot summer day and watch the throng of potential buyers pass through their threshold.
Those days have long since passed, and sellers need to be aware of the potential pitfalls that could plague them.
Or, you could walk right into it….like the seller in the following story…
Yesterday, a colleague of mine asked if I would be willing to help him with a listing of his.
He has listed a house for lease, but not just any lease – a short term lease. These are very hard to find tenants for, and from the Realtor side of things, they don’t pay that well.
I told my colleague that I’d be more than happy to take this listing off his hands, even as he moaned about what a headache it’s been for him.
Why? Because I have never turned down business in five years. Not one piece of business, no matter how big or small.
Ironically, all that changed the very next day as I sat across the dining room table of a potential seller in North Toronto.
This man was referred to me by a very good client of mine, who told me that he knew of a “friend of a friend” who was looking to sell his house. I gave the man a call, and the appointment was set up.
I did my research in advance, as always, and I found that nothing on this street had been selling all that quickly in the past three months. The highest ever recorded sale was $750,000, and there are two semi-detached houses on the street that are for sale at the moment.
The house is an odd one; it’s technically a 2-bedroom house, but it’s built upon a very large 25 x 135 foot lot. The second floor of the house is basically one massive “master bedroom” that comprises over 70% of the floor space. There is a small second bedroom at the front of the house, and a very small “office” which is like the size of a walk-in closet, and definitely NOT a third-bedroom.
The house was in miserable condition. Just miserable. This man had two sons living there, and if you can imagine how a typical 18-year-old lives and then multiply that by two or three, you’ll have an idea of what the second bedroom and the basement bedroom looked like.
The house in general was dirty, messy, cluttered, and it hadn’t been updated in almost a decade. There is an inground pool in the backyard; an outdoor space that was covered with leaves and the odd pile of dog waste.
I sat down with this man, a lawyer, to talk about the potential sale of his house.
Things didn’t get off to a very good start.
“So you know Vern?” he asked me.
“Yeah, Vern is a great guy; a total wealth of knowledge. He knows more about real estate in Toronto than anybody I know.”
“Well obviously you don’t know the right people,” said the lawyer.
I pondered how to respond as the lawyer cracked a smile and said, “I’m f*cking kidding, don’t get your panties in a bunch. Vern is a good sh*t,” he said as he leaned back in his chair and I saw the holes in the bottom of his socks.
I knew right away that this man was going to call all the shots, and that while he would see my mouth moving and hear words coming out, he would never truly listen.
I showed him comparables of houses that had sold in the neighborhood, as he starred out the window and made comments about the “stupid lady and her dog.”
I finally asked him flat out, “What do you think your house is worth?”
I had an idea in my head; perhaps $799,000, maybe less, maybe more, but I wasn’t prepared for…
“Just under a mil.”
My jaw dropped.
“I’ve been told that I should list it at $949,000 and create a buzz,” he said.
I asked him who told him $949, and he said, “That’s only for my ears, bud.”
“The days of creating a buzz are gone, my friend,” I told this man that would never actually be my friend.
“Yeah well,” he said as he trailed off and then came back, “What the hell do you know?”
I explained to him that the days of multiple offers have almost ceased to exist, and that houses that used to sell in seven days might take three weeks now.
He sat in his chair, with his finger in his ear drilling for gold, and then said, “Well I know what my house is worth.” And then in a moment I can’t even explain well enough to do it justice, he pulled his finger out of his ear, looked at his prize, and flicked it onto the floor.
What a class act.
How the hell does this man own an $800,000 house and have a law degree?
Every parent thinks their baby is the cutest baby that was ever born into this world. It’s totally justifiable, and I’m sure I’ll be in that position one day. Likewise, a lot of sellers think that their houses are the best houses on the street, and that they know what their house is worth better than anybody. You can show these people comparable sales, perform evaluations, or bring in other agents to give their opinion of value as well, but sometimes sellers just don’t listen.
I told this man that I really, truly felt in my heart that his bizarre, 2-bedroom house was only worth $799,000 in our current market and that I wouldn’t take his listing at anything higher than that price.
I couldn’t believe I’d just said that.
Realtors in this city fight tooth-and-nail for listings every day of the week, and here I was giving this man an ultimatum.
He sat quietly, sucking on his front teeth in the most annoying manner until he finally took out a toothpick and let loose right in front of me, and he finally announced, “Okay then.”
I’ll be honest: I had no idea what “okay then” actually meant. Was he saying “okay then” in acceptance of my $799K price?
He then continued, “If you do have a buyer for this house when it’s listed, I won’t hold this meeting against you.”
I got the picture.
And I got out of there.
I never turn down business, but the last thing I need – the last thing our market needs, is another overpriced property.
Markets fluctuate up and down, and the sky isn’t always light blue with no clouds in sight.
You can’t long for the market of yester-year, and if you’re upset that you didn’t get while the gettin’s good, then you can’t be stubborn and refuse to face facts.
This house came out on the market last Friday with another brokerage at $949,000, and I will say that judging from the pictures on MLS, the ear-picking-lawyer spent a few days cleaning up!
But it’s not worth $949,000, or $899,000, or even $849,000.
This listing is a complete waste of time, effort, and energy.
There is simply no point in putting your house up for sale at an inflated price, crossing your fingers, praying to whichever God you make-believe in, and then hope that somebody gives you 20% more than your house is actually worth.
Sellers need to ask themselves, “Do I want to sell, or do I want to stay?”
If you’ve bought another property, are being relocated for a job, moving in with a fiancee/girlfriend, downsizing, etc., then you have to sell, and you will only do so if you price your house right.
There are no magical buyers that come along and scoop up overpriced listings, and if your house sits on the market for five weeks with no offers, you can’t blame anybody but yourself.
But that won’t stop people from trying!
Wake up, and smell the dog crap in your backyard. Your home is just another house in the eyes of a buyer, and and just because you live here now doesn’t mean somebody is going to overpay to live there after you’re gone…