We Bought A House!

Stories! | October 28, 2019

Bought A House

In order to be impactful, blog posts must also be timely.  Considering this story starts over 2 1/2 years ago, it’s certainly anything but timely.

Having said that, many of the stories I tell on TRB are for more for entertainment than education, like, oh, I dunno, maybe, “That Time I Was Punched In The Face During Multiple Offers.”

That’s a true story, and worth a read for those of you that didn’t see it back in 2018.

While I feel as though the story about my wife and I trying to buy a home is more for entertainment purposes, given the timeline, it’s also educational in a sense.  Any story about home-buyers having a difficult time in the market is educational, and since there’s so much emotion and psychology involved in the home-buying process, I feel as though others can learn from my experience.  I also find a tremendous amount of irony in the fact that we had a tough time buying a home, since we got to experience exactly that which my buyer-clients experience every single time they set foot in the dangerous arena of Toronto real estate.

However, this story comes with a couple caveats, notably related to privacy.  My wife reminds me regularly that just about every blog reader, casual or frequent, knew where we lived previously.  During our home-buying journey, she nudged me a few time and said, “When we do move, will you promise me that you don’t give out our address to the entire city?”

If that’s the only thing she asks of me, then I’m a very lucky man.

So where do we begin?

Well, perhaps it’s November 20th, 2016; the day my daughter was born.

Living in our condo at 112 George Street, going on seven years at the time, I had absolutely no issue with being in a condo, as opposed to a house.  We spent months “setting up” the nursery as new parents are accustomed to doing, and while we had discussed our eventual move into a house, we weren’t in any hurry.

I took two weeks off work when Maya was born, which I openly describe to my wife today as “being in jail.”  It was a weird feeling, being home all day, and stuck to the couch, or the glider chair, and with no real objective other than being there for Maya and for my wife, Jenna.  To go from the frenetic pace of Toronto real estate to being sedentary and shut-in all day was not easy, and while that sounds like crying over spilled milk, I can honestly say that working 12-hour days in real estate would have been a lot easier than being home 24/7 for 14 days with a newborn!

It was during this time that I began to reflect on life and realize that I really did want to move to a house.

I’m a huge proponent of condo living, and having sold all of my close friends houses, it was somewhat ironic that I was the only one still in a condo.

Condos are zero-maintenance, and the lifestyle is easy.  Our condo at Jarvis & Adelaide was a 12-minute drive north to my office on Merton Street, and it enabled me to jump on the Gardiner or DVP in minutes to get to appointments.  I never had to rake leaves, shovel snow, take garbage bins in and out (not to mention foregoing the luxury of a garbage chute in a condo, wow!), or really do maintenance of any type in the condo.  There’s an easy argument to be made that one could live a lifetime in a condo, and never waver.

But at 36-years-old with a newborn, I decided that I wanted to look at options in early-2017, and I was pretty set on the idea of building a house.

The occupational hazard of working in real estate is that you will never truly love somebody else’s home.  You’ve seen hundreds if not thousands of homes, and in your mind, you’ve taken little pieces of all of these houses, and put them into one perfect home.

That home, was my home.

And the only problem was: it didn’t yet exist.

My wife is amazing, I’m truly blessed to have such an incredible woman at my side, who supports me in everything that I do, and trust me when I say that I’m not easy to get along with.  When it came to the idea of building a house, my wife simply said, “I trust that you know what’s best for our family.”

And that was it.

No discussion, let alone fighting – she just said, “Go for it.”

When January of 2017 rolled around, I was very committed to finding a “builder’s lot” and designing our dream home from scratch.  The numbers didn’t exactly work in our favour, but we would be able to purchase a lot, take out a massive construction loan at 8% interest, and keep the condo for the time being until the house was ready.  Nobody likes the idea of paying 8% interest, but it’s a necessary evil in this particular process, and I didn’t think twice about the idea.

Now in terms of the area in which we wanted to live, this is where Jenna and I may have differed in opinion.

I grew up in Leaside.  Born on Airdrie Road in 1980, we had stops on Parkhurst Boulevard and Bessborough Drive thereafter.

My wife grew up at Bathurst & Eglinton in an apartment, and the first time we drove south on Bessborough Drive on a spring day, with the tree-canopy hanging down overtop of us, she said, “This is the kind of street I’d kill for one day.”

Great.  This was literally the street on which I grew up, and I did not like the idea of “moving back home” one bit.

She kept putting the bug in my ear about Leaside, but there was something unsettling to me about going back for parents’ night at the very school I had attended thirty years prior, or doing my grocery shopping at the same store I frequented with my mother as a child.  I know that many people have done this, including some of my friends and clients, but I just didn’t want to re-create my childhood.

I wanted to plant new roots, and I really loved the idea of living in Chaplin Estates.

Chaplin Estates, for those of you that don’t know, is one of the many areas in Toronto that has a name that may have been made up by real estate agents to give the area an identity, because I would love to see some literature from the 1940’s with the term “Chaplin Estates” on it.  Just like “Leslieville,” and many others.

Editor’s Note: A reader emailed me on Wednesday to tell me that this name dates back to the 1920’s:

Boy, do I have egg on my face!

I loved the location here, since it was close to my office, on the Yonge subway line, close to my wife’s grandparents as well as her mother, walking distance to a “main drag,” and the streets were gorgeous.

It’s tough to really know what your life is going to to be like as you move through the decades ahead, but one can make assumptions.  I assumed that my wife would be pushing a baby stroller out to Yonge Street for many years to come, that our kids would make use of the Yonge subway as did I in the 80’s and 90’s, taking the Leaside-88 to St. Clair station, and I assumed that Brown Public School would continue to be sought-after and highly-ranked.  I just felt a “connection” with this neighbourhood, and I felt like we could call it “home.”

Early in 2016, there was a sale for a 40 x 135 foot lot, strictly land value (don’t tell the home owners that…) and I remember thinking, “If that same property came out when I was ready to buy, I’d be all over it.”

I’ve worked with a lot of clients who built their own homes, over the years, and I knew what this would cost, how long it would take, and of course – how both of those estimates would fall short.

In late-January of 2017, I was on the phone with a midtown agent who does a lot of business with builders, and I casually mentioned, “Hey, while I’ve got you here, do you know of any building lots coming out in Chaplin?”

He said that he didn’t have any pocket listings, but that I should check out “the new one just posted this morning,” and boy did I feel stupid for not having seen it already!

What are the chances?  That very day, a 40 x 135 foot building lot hit the market, as I’m on the phone with this agent, asking him if he knew of anything.

The first builder’s lot – the one that sold back in April of 2016, was listed with a holdback on offers, as most houses are, and sold for a modest 12% above list.

This one, on the same street with the same 40 x 135 foot measurements, was now on the market for essentially the same price, but also with a holdback on offers.

I spent the rest of the day speaking to colleagues, playing that “What do you think this will sell for?” game, where the leader of the game is always trying to get the participants to say a lower number.

See what I mean about agents buying their own homes?  Even we fall into trap that most buyers do, trying to convince ourselves that what we want to happen actually has a chance.

“The market for freehold in this area has only gone up about 5% in the past twelve months,” I told anybody that would listen.  “We’re taking nine months’ worth of appreciation here, what could this house possibly go for?”

A colleague of mine who lives on the street laughed in my face.  “So you brew your own Kool-Aid, and drink it now, do you?” she said, suggesting that the market had long passed me by.

It bears mentioning now that the first four months of 2017 were the hottest I have ever seen in my 16 years in the business, but who knew that at the time?

My colleague also laughed when I estimated $250 per square foot to build.

“Does IKEA build houses now?” she asked.

Totally fair, and part of me thinks that I was so nervous about the process that I was lowballing myself to provide an “out” in case I changed my mind.

I had been speaking to a reputable home-builder for the previous four months; somebody who was referred to me by a long-time contact in the industry who I trusted.  My wife and I had met the builder at his own home, with his wife, and checked out a property they were working on as well.  We were all in with these folks.

The builder and I checked out the house, but there really wasn’t much to look at.

We went during the agent open house on a Tuesday afternoon, and it was madness.

I was already thinking in my head, “None of these people have a chance against me.  I’m taking this house, come hell or high water.”

My wife met us at the house, with our 2-month-old child.  Unbeknownst to Jenna, I just wanted to carry my baby through the house so the listing agents would remember us on offer night and maybe give us a nudge in the right direction, if it came down to that.  Who could resist a cute baby, right??

There were no pre-emptive offers allowed on this house, so the week was long, but we were well-prepared for offer night.

I was prepared to go about 20% above the list price, which was absurd, given the same lot had just sold nine months earlier for slightly less than the list price.  But I wanted this house, and it was a 40-year plan.  Market bears – prepare to snicker, but it didn’t matter what we paid for this house, because we were going to be in it forever.

On offer day, I was very calm, however that calm wasn’t for lack of emotion but rather lack of foresight.  I had no idea what was about to happen.

The lot that sold up the street in 2016 received three offers.  I was preparing myself for 5-8 this time around.

In speaking to another colleague in my office on the day of offers, she said, “Oh that’s too funny, you’re offering?  I have a friend in commercial that’s offering too.”

Great.  Another agent offering?

I convinced myself that commercial agents are bums and that this guy wouldn’t have the right hand when the cards were shown.

I was actually the first person to register my offer, as if that would do any good.

My memory here might not be completely accurate, but I believe they hit double-digit offers before noon that day?

Yep.  That’s how it was shaping up.

And by 6:00pm, I was told by the listing agent that I was no less than the fourth agent bringing an offer that night on behalf of him or herself.  That reinforced my decision – that we were doing the right thing, but four offers from agents looking to buy themselves didn’t make me feel any better.

Offers were by email, and by 7:00pm, there were twenty-two offers on this house.

We upped our bid even more; now thirty-five percent above the list price, and may I remind you, again, that the SAME lot had sold nine months previously for slightly less than the current list price.

I was in my car at 9:30pm when the phone rang, and it was the listing agent.  There was bad news, and then there was worse news.

The bad news was: there were actually twenty-eight offers in the end.  And the worse news, in what perfectly articulates just how frustrating our market can be, he told me, “We’re sending the top four offers back, and while you’re not one of them, you’re certainly welcome to improve.”

Okay.  So by that logic, if you’re telling all the buyer agents the same thing, then I guess you’re really sending twenty-eight people back?

I knew where we were on price, and I knew where this was going.

I felt that awful feeling in the pit of my stomach, I call it “the roller coaster feeling,” ie. that awful emptiness that runs from the top of your stomach to the pit, just as you roll over the first hill and hurdle down toward the loop at full speed.  It’s actually called “panic” or “anxiety,” but I reverted to a childlike state, if only for a moment, when I realised that I wasn’t getting this house.

Surprisingly, I didn’t call my wife right then.

I called my dad.

I’ll admit that, right here, right now.

And now I’ll admit something else: I cried.  Just a little, but even a single tear still counts as crying.

“Dad, we’re not getting the house,” I told him.  “There were twenty-eight offers, and we’re not in the top four, so those guys are going to throw more money at this, and I just can’t do it,” I told him.

My Dad played devil’s advocate, told me what any parent would tell their child, even a 36-year-old.

Then I bit my lip, choked back tears, and said, “I worked so goddam hard for this.”

That’s when I cried, just a few tears, but enough to remind myself just how serious a life moment this was.

“David, you can’t compete with thirty other people on this.  These people are almost twice your age.  They’re buying their third or fourth home.  You’ve got some CEO and his wife building an estate over there!  That’s not you guys.  You’re just a kid compared to them.”

This went in one ear, and out the other.  At the time, that is.

Today, it makes perfect sense.  Truer words have never been spoken by my old man, at least not as far as I can remember.

And the sad part is – this same theme would be repeated in a few months, only far, far worse this time.  And having been told by my dad exactly why I shouldn’t be surprised or disappointed, I ended up as both.

I’ll tell you that story on Wednesday, after I first explain how my wife and I decided that we were not going to build a home after all…

(TO BE CONTINUED)

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22 Comments

  1. Francesca

    at 7:07 am

    Great story so far David. Looking forward to hearing what happens next! I can relate to you wanting a brand new house. My husband and I have always bought either brand new or less than 3-5 year old. My parents always preferred modern houses to old charm ones so I get my love of modern architecture from them. In fact my childhoods home is not far from Chaplin estates. I grew up on St Clements just east of Yonge street in a house that a builder just built brand new at the time and rented to us long term.

    1. Marina

      at 3:55 pm

      I know two people who built their homes while caring for small children and they both regretted it. Basically the headaches were not worth it. They could have come close buying a finished home with 1/1000th the effort.
      So likely it all worked out the the best. Looking forward to the rest of the story.

      1. Julia

        at 6:03 pm

        We are gutting and renovating the basement right now and while I personally enjoy the experience as we can truly tailor the space to our needs, I can see how this could drive someone crazy – especially when the whole house is involved.

  2. Sunshine

    at 9:27 am

    Excited to follow this story as we just had a baby 9 months ago and are now looking to move up from our townhouse into a house sometime in the next year.

  3. Kyle

    at 10:09 am

    “My colleague also laughed when I estimated $250 per square foot to build.”

    She was right. The construction cost to build is probably closer to $500/ sq ft for a luxury home, not including design fees, mgmt fees and HST, which are usually a percentage of construction cost. So it ends up being $500 sq ft + X% + Y% + 13%. Then you have to add the price of the Surveyor, Engineers, Arborists, City, etc. On top of all that you still have to pay to live elsewhere while the work is going on.

    1. Professional Shanker

      at 12:46 pm

      Years back when I investigated the process/cost of building new it was an eye opening experience, the cost/premium to build brand new (not builder grade) is astonishing for someone who does not live and breathe this stuff daily.

      Non-luxury reputable builder is ~$300/sq ft today’s money without landscaping which could be an arm and a leg if you prefer stone/rock.

      David – Hopefully your next blog will incorporate some of the financial analysis you did on build vs. renovate vs. buy renovated. What number (I know that just becomes the output of the build exercise) were you loosely working with from a build standpoint?

  4. AK

    at 10:34 am

    Soooooo
    You’re not going to give us prices and Street Names??
    I get the privacy argument but c’mon the story would be so much better!

  5. Jay

    at 10:57 am

    oh man! It’s like a Netflix episode where I’m left on a cliffhanger!

  6. M

    at 11:35 am

    so agent who says other agents who bring in offers far too low” don’t understand the bidding process are idiots/don’t know the market/are wasting time” – brings in offer too low and …… ?

  7. Parkhurst.Bessborough.OCD

    at 12:18 pm

    Loved reading this……I felt like I was there 🙂

  8. condodweller

    at 4:33 pm

    With foreshadowing like “But I wanted this house, and it was a 40-year plan. ….cheap shot at market bears cut….. but it didn’t matter what we paid for this house, because we were going to be in it forever.”

    After David found himself in competition with not only a bunch of ill-advised buyers but agents as well, I was expecting today’s installment to end with something to this effect:

    ~I used my experience in valuating properties and getting most of them spot on and stepped up to the plate and submitted an offer $1,327 above that value to beat out the other four expert agents who would also get the value spot on and bid a little bit over to secure the property. But others normally use round values and typically bid $100/$500/$1000 over so I pulled the wool over their eyes and used a random number to be sure I was the winner. I didn’t mind over paying by $3,000,000 because it meant I got the house today and 20 years from now when it’s worth 10 million it won’t make any difference.~

    Perhaps the next part will have a more exciting ending. Or maybe not given we know the outcome.

    1. Andrew

      at 6:30 pm

      This post was guaranteed to get trolled. Condodweller & M — A bit too predictable in your responses, IMO.

      1. Appraiser

        at 9:08 am

        Trolled indeed buy angry bears and haters alike.

        “To argue with a man who has renounced the use and authority of reason…is like administering medicine to the dead…”
        ~ThomasPaine

        1. condodweller

          at 12:11 pm

          Correction: I meant to write $300,000 not $3,000,000. This is an obvious mistake to me but may not be to others.

          I normally wouldn’t respond to this type of typical response but since I’m writing anyway I will point out that despite the fact I have stated many times over the years that don’t consider myself a bear or a bull, I actually did not take any view in my post. I simply stated that the end of the story wasn’t what I expected and offered an alternate ending based on what David has blogged about in the past. It was on topic and reasonable in my view. You know, the exact opposite of a troll. I guess you like to look for arguments where there is none. Enjoy arguing with yourself….

        2. Derek

          at 12:22 pm

          In fairness, many of the thoughts or thought processes that David has acknowledged going through on that property have been described as coming from other buyers and then been criticized in a condescending manner, in the past. I interpret what David has done, which deserves tremendous credit, is acknowledged that even the most seasoned expert can be caught off guard by market activity and only with hindsight is the situation now obvious (“…the first four months of 2017 were the hottest I have ever seen in my 16 years in the business, but who knew that at the time.”). I was looking at houses in that time period and things were insane.

          1. condodweller

            at 6:19 pm

            Yes, FOMO was in full swing yet the mantra from agents, including from David, was that if you wanted the house you had to keep bidding higher in order to secure it, no matter how ridiculous the amounts were. It sounds as if David got very lucky walking away from this property.

  9. Jimbo

    at 7:24 pm

    I think it is very humble to admit that the sticker shock surprised you in the bidding situation.

    Things change a lot when you let emotions become involved, how can they not be involved when you are talking about your forever home with your wife, child and maybe future children…. I’m sure you have said in the past that you don’t represent yourself when selling your property for that reason? I honestly thought you would_ve got representation for the bidding process given your past comments on not self representing.

    I could be remebering wrong, but great story so far.

  10. Max

    at 8:47 pm

    As much as emotions play a role from a negative aspect of perhaps overpaying for a home, it is also necessary to feel positive and emotionally attached to a home before wanting to buy it and live in it. Sometimes it’s not feasible to “keep looking” while trying to explain to the wife and child that patience will necessarily pay off all the time. Love there long enough and it’s definitely worth the risk.

  11. Tammy

    at 11:48 pm

    This is the coolest series you’ve ever done.

    But we’re spoiled by that binge-factor that Netflix gives us. This is more like the early 2000’s when we had to wait a week to see the next episode of The O.C.

  12. Pingback: We Bought A House! (Part 2) - Toronto Realty Blog
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