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…
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