Do you know how to access the dark web?
I don’t.
But they talk about it a lot in Mr. Robot, and who can forget the movie War Dogs with Jonah Hill?
A reader emailed me on Tuesday morning and said, “You’re trending on Reddit right now,” and that was, for a guy like myself, my dark web moment.
Reddit?
Okay, I’m 40-years-old, and like most people my age, I believe I was the first person that any of you have ever met to download an MP3 from Napster. I knew Word Perfect 5.1 before they taught it in Grade-9 “Keyboarding,”, and I was the first of my friends to pass the level “Greece” in the original Command & Conquer, 1995.
But Reddit?
Other than using it to search for illegal streams of UFC fights, I have never used Reddit. The interface alone intimidates me.
So when Monday’s blog, “Behind The Scenes Of A Toronto Offer Night” was a topic of conversation on Reddit, I had no choice but to read the discussion and subsequent comments.
Do you know what my largest take-away was?
That the TRB readers are far, far brighter than the average Internet dweller.
Oh boy, that’s not going to sit well with Reddit…
Blessed are thee that peruse TRB. That rhymed. Nice.
The discussion about my “offer night” on Monday was exactly what I had expected, however, the discussion was different on Reddit. I expected the TRB readers to take what I was saying as given, ask a few questions about the process, or some “why didn’t you do this, or that,” type comments, and for the most part, the detractors would be in the extreme minority. But the comments on Reddit were far more critical of the offer process, and I feel that’s because those folks are lacking the proper education and understanding that is necessary in this market.
On Monday’s blog, a reader made the following comment:
You know what?
I love this!
As far as blogging goes, this is like getting to drink two beers from the same bottle!
I have penned no shortage of multi-part blogs over the years, and I think the idea of seeing the offer process from the other side would be entertaining and informative.
Then again, I think that combining stories about an unsuccessful offer with a story about a subsequently successful one would make for a more thorough explanation of the process, the lessons learned, and the journey that the buyers go through.
Add in the fact that, in the following story, something happened to me that has never happened to me before, and is something that I deemed to be an urban legend in real estate (start guessing…) and it makes for the perfect blog.
So without further adieu…
Lex and Andrea are long-time clients of mine, with whom I have transacted twice previously.
Like many buyers, they had looked passively, then actively, then passively again, but only became very serious about purchasing this year.
Lex and Andrea reached out to me about a very unique, or, if we’re being specific, a very unique property.
The house was nothing special, and they, the other interested buyers, and even the folks who eventually purchased the home would all freely admit that the house wasn’t in good shape. There were kitchen doors literally falling off the hinges! The tile was cracked and heaved – like an earthquake had run through the house, much of the interior was original, and zero effort was made to clean, paint, or stage the house whatsoever.
So what was special or unique about the house?
It was on a double-lot.
The idea of owning a house on a 40-foot frontage, in the middle of a sea of 20-footers, was appealing to Lex and Andrea. Even though the house needed a ton of work, they were willing to take that on in order to get an incredible lot with tons of potential.
As Lex but it, “There are ten years worth of weekend projects in this house.”
The house was listed for $899,900, but we knew that was exceptionally-low.
The question was: what would somebody pay for a double-lot, upon which a neglected house sat?
I should also add that due to the right of way on the driveway, it would not be possible to build two houses on the property.
Lex and Andrea were willing to submit a bid of $1,200,000 on the house. I was honest and told them that I didn’t think this would be the big-winner, but that, given the uniqueness of the property, you just never know.
Before you accuse me of being a hypocrite here, saying “you just never know,” here me out.
When I write blogs about the agents who submit an offer of $699,900, on a listing that’s $699,900, amid twelve competing offers, saying, “You just never know,” it’s not the same thing.
In today’s market, for a neglected house, on an odd lot, $300,000 over the list price isn’t an offer you simply pass on.
I also felt that, if anything, this initial bid would give us some insight into where the eventual price might land. I knew the listing agent very well and I figured that he would be straight with me. At the very least, it would enable me to go back to Lex and Andrea and tell them what they would need to do in order to be successful.
On the day of offers, I had Lex and Andrea sign “Form 801” to officially register their offer, and I believe we were the second or third to do so.
As the hours ticked by, I continued to get email notifications:
OFFER UPDATE: There are currently 2 offers on this listing.
And so on, and so on, all day long.
OFFER UPDATE: There are currently 9 offers on this listing.
Wow, that escalated quickly!
OFFER UPDATE: There are currently 14 offers on this listing.
Wait, how long was I gone from my desk?
OFFER UPDATE: There are currently 19 offers on this listing.
Seriously?
OFFER UPDATE: There are currently 26 offers on this listing.
Alright, I’m taking a nap on my office couch…
That’s how “offer night” can play out sometimes when you’re on the other side.
In this case, it was “offer day,” since offers were at 3pm – something I may start doing on my listings, but that’s a topic for another day.
I submitted my offer by email at 3:00pm, and when I hadn’t heard from the listing agent by 3:45pm, I gave my old friend a call, just to make sure my offer wasn’t lost somewhere with Netscape Navigator and Alta Vista.
“David, good to hear from you,” my old friend said. “I’m just sorting through this mess of offers right now…”
“You have twenty-six offers?” I asked him.
“Twenty-nine now,” he told me, as I could hear him literally shuffling papers in the background. “And I’ve got……let me see here…..I’d say…..probably a good six or eight higher than yours,” he told me.
What a gem, he was.
Not like most agents, who aren’t experienced enough to get out from behind their own fear, my old friend had no problem basically telling me, “Don’t waste your time here, go home, and don’t let your clients sit anxiously any longer.”
I told my clients that even if we came up $50,000, we wouldn’t be even close.
They sounded defeated, but who wouldn’t?
It’s not just losing that’s hurtful in this market. It’s losing when there are thirty competing offers, and knowing that the competition out there is fierce. Because where do you go from here? Are those thirty buyers going to follow you up the street? Down the block? Over the bridge? Those buyers aren’t leaving the market; in fact, you start to see the same damn people at showings as you saw last week, and the week before! It begins to get personal when “that couple” who drive “that car” are waiting outside the house with their agent, holding “that hand bag,” and maybe the guy is wearing “those shoes,” and your agent hands off the key as you head out and they head in.
Lex and Andrea considered a few more properties, but we switched gears and found a detached bungalow on a wide lot in an area where development is only starting to ramp up, where we felt we could buy a great house for today, with major upside for down the line.
This property too was under-listed: $849,900.
What a joke!
How many offers is this property going to get?
I told them I felt it was worth around $1,150,000, but I wavered on that. I went up, then down, then up again.
Why?
The market.
A really “done” bungalow on a super-busy street had sold for $1,320,000, and it was on a smaller lot, with a way smaller footprint.
This had a great footprint, and the basement was absolutely massive.
It needed TLC, no doubt. But that’s what my clients wanted. They did not want to pay for somebody else’s work!
Offer day came, and once again, we registered first thing in the morning.
It made for a very long day, but at 7:00pm, we submitted an offer of $1,200,000, no conditions, seller’s desired closing date, and bank draft attached.
How many offers were there this time?
Not twenty-nine, thankfully.
This time around, there were “only” twenty-two…
I had spent the previous five days buttering-up the listing agent. I spoke to him over and over again, often calling him with pretend questions just to strike up a conversation. I stopped short of being annoying but tried to keep it light.
We had built a great rapport and a mutual respect. He mentioned several times, “I love the way you do business, you’re a real professional.” He was from outside the GTA and had dealt with all kinds, I’m sure!
Around 8:00pm, he called me and said, “Sorry man, but you’re in second place.”
I asked what I needed to do in order to be successful, and this is where, quite often, agents don’t help you at all.
In this case, he said, “Look, there’s one offer that’s just way, way up there! You barely beat out, like, three other buyers. So you’re not without company. But this other offer, wow! It’s up there, man!”
I told him I would speak to my clients, and I let them know the good and bad news: we were in second place out of twenty-two offers, and the door was open for us, if wanted to walk through it.
They spoke privately, and eventually came back and, armed with the advice I gave them, decided to increase their bid to $1,230,000.
Before I submitted the revised offer, I called the listing agent to talk shop.
“This other guy, man,” he began to unload on me. “This other agent, wow, this guy is such a prick!” he told me.
He explained that the agent with the highest offer had included a 90-day closing date and his sellers preferred a 60-day closing. When he asked the agent if the agent’s buyers would consider moving up their closing date, the agent barked back, “Not a chance. We’ve bought five houses in this area in the last month, and all of those are 90-day closings.”
The listing agent said that it had rubbed his clients the wrong way, and divulged that these sellers were actually his fiancee’s parents!
He said that they were house proud, and they didn’t like the fact that this guy’s buyers were running around buying up all the real estate.
So an idea dawned on me: I would try to tug on the heart-strings a little. Even though I always say this doesn’t work, I figured this might be that 1% of cases where it does.
I submitted my revised offer of $1,230,000 and wrote a couple of paragraphs about my clients.
Lex and Andrea were engaged to be married and had planned on a 2020 wedding. The pandemic changed all of that, and although they tried again in the fall of 2020, it wasn’t in the cards. So, they decided to cancel the wedding and spend the money on a house instead. I may have invented that last part, I honestly can’t remember. But I wrote about how they loved the home, they felt the warmth of a family that had lived a life there, and that they had planned to pick up where that family had left off.
Then, I emailed my offer.
Ten minutes passed, and my phone rang.
“DAVID….” the listing agent breathed into the phone, “…..this is so, so crazy,” he said.
“My fiance and I were supposed to get married in 2020 too!”
Uh-huh. This was interesting…
“Buddy, we’re in the same boat as your clients,” he said. “We’re gonna try to aim for fall of this year, and fingers crossed, we can make this happen.”
He told me about how close he was with his fiance’s parents, and how much this sale meant to them.
“They don’t need the money, man,” he told me. “They were so pissed at this other agent – the fact that he’s got some buyer, probably offshore, scooping up all these family homes,” he went on. “They don’t want to sell to him.”
I felt a “but” coming on, and I was right.
“But the other offer is $28,000 higher,” he added. “Lemme talk to them a little bit and see what we can do.”
See what you can do? What were you going to do? Sellers leaving money on the table is an urban legend! It’s a headline in the Toronto Star!
I submit over a hundred offers per year, and I’m so desensitized to the winning and losing that I never get anxious. But this time around, I was feeling it.
This was a low-percentage play. Almost zero-percent.
The agent called me ten minutes later and said, “Sorry man, I tried my best.”
My heart sank.
I honestly thought there was a shot, but I should have known better.
“I appreciate the efforts,” I said.
I continued talking, but he interrupted me and said, “Nah man, I’m just fucking with you! They’re gonna accept your offer!”
I was dismayed and in disarray.
I didn’t know whether to thank him or cuss him out.
I was, if for only a moment, speechless.
“Honestly, David, my fiance’s parents, they just didn’t wanna take that guy’s offer! That agent was such a prick and his client is buying up everything, so screw them! My fiance’s parents wanted to know that another young couple would be moving into the area, and they’re fine with the price. It’s a great price! They just turned down an even better price, but whatever.”
This was like music to my ears. I now know what my parents felt like when they heard The Beatles for the very first time…
And to show me he wasn’t just selling me a bale of hay, he followed up an hour later with a picture of the other offer. It was indeed $28,000 higher.
This was the first time in my career that I had “won” in competition without having the highest offer, and I don’t know how long it will be until I experience this again.
Say what you want about the sellers and their decision, but realize that it was their decision, and nobody else’s. You don’t have to sell to anybody you don’t want to, and it just so happened that they were disgusted with the idea of “big money” buying up properties like they were souvenirs.
For my clients, it was a whirlwind couple of weeks, and I couldn’t come up with enough hyperbole to explain the situation that they found themselves in.
Not all experiences are like this one, of course. And when you’re going up against five, ten, fifteen, or forty competing offers, very few of the outcomes are successful.
But as I sat and wrote this blog on Tuesday night, I received three bully offers on one of my listings, all from buyers and buyer agents who are trying to think outside the box out there, and avoid the disappointment that awaits most buyers who make offers in this market.
I wonder what the Reddit users would say about all of this?
Appraiser
at 8:56 am
What a market.
Appraised a house yesterday in Brampton. The property sold on MLS for $1.07M in early December 2020; with a longer than usual closing date (end of March, 2021).
The subject appraised easily for $1.22M, with loads of recent comparable sales to choose from.
That amounts to greater than a 20% increase in 3 months.
Annualized, that is a bonkers rate of price acceleration!
Bal
at 9:00 am
This is very bad situation and market is totally in bubble….
J G
at 11:52 am
What a stock market! RE Bulls finally come out of their hiding after one year of blah, while S&P surged the whole time.
Chris
at 2:32 pm
I think it’s pretty safe to say all of us were wrong with our bearish calls on both real estate and stocks. Year over year comparisons in March and April for both are going to show eye-watering jumps if these trends continue.
Bal
at 6:24 am
we all know that this trend is not sustainable if treasury yield keep moving higher.
Bal
at 6:34 am
housing market is all interest rate game….
Dan
at 10:05 am
There are no rules in this market. 3 years ago I presented an a good offer for a house, kids selling the house for their old mother. When they heard my client was an investor they were really not happy with the idea.
3 hours later I learned they sold it to another investor but for 15,000 more than my offer. Everything has a price.
Libertarian
at 10:33 am
I know you can’t answer this David, but going back to Monday’s blog, if you were a buyer agent for that condo instead of the listing agent, would you have recommended your client offer $800K for it?
Would you have known in your gut that the top offer was conditional, which is why it didn’t win, and so your recommendation to your client would have been to keep the offer at the same price or slightly increase it, but not go up to $800K? Or put another way, if they could afford $800K, would you have told them there are better condos out there for that price?
JL
at 11:10 am
Good question. Interesting what would be the optimal way to play the buying side in that scenario. When faced with a sellers strategy to up the price via multiple bids, is there an effective strategy/response as a buyer, or is it essentially just a simple matter of how much the clients value what they are buying and go to that max point?
Condodweller
at 1:22 am
It boils down to how desirable the property is and how badly the buyer wants it. You always have the option of walking away but you have to realize it may take a long time to actually get a property this way, or according to David you will never get one.
I always said that the best thing to do is to not be part of the crowd and do the opposite. Buy when people don’t want to buy. Recently, the best opportunity was in April for houses when there was a lull in sales (and actual drop in prices), and the last few months of last year for condos when everyone thought prices were going down and people were holding off. If you were buying a house, anytime after the 2017 correction would have been a good time to pull the trigger. The funny thing is that people tend to follow the herd mentality and do the opposite.
Pragma
at 11:10 am
Foreign buyers buying up homes in neighborhoods. Perfectly healthy and great for Canada and great for our future! We don’t allow foreigners to own our natural resources, why do we not treat land as a natural resource?
Marty
at 12:34 pm
Why would we want to limit the market to “non-foreigners”? Is there a limit on the number of houses we can build in this country? You know, the second-largest country in the world.
Isn’t it good for the home seller or the home-builders that they can get good prices and thus pay good wages (in the case of the builders)?
Pragma
at 1:35 pm
Because we’re Canadian, and we care about our economy, and our kids, and our future? Or maybe all our kids should go into carpentry and we can just build houses for foreigners so that they can park their money somewhere?
The net effect on Canada is not positive. Canadians will never be able to compete with a foreign buyer. We have paid taxes our whole lives to build this country. The companies we work for have paid taxes. The companies we work for have internalized their costs(pollutants, treating people with dignity). If you made your money under a completely different regime, then you have made more money because you never bore those costs. So what do Canadians do? They take on increasing amounts of debt to compete. And increasing amounts of debt become a tremendous drag on our economy as our consumption and investments in other areas are sacrificed. Our innovation suffers. Our productivity suffers. We are supposed to be a first world knowledge based economy but we have had zero productivity growth over the last ten years. So that’s why I want residential real estate in Canada to be for Canadians.
Kyle
at 2:18 pm
Sorry but this is pure nonsense. Around 70% of Canadians own their own home and estimates of foreign ownership is around 5%. The only people i see putting this divisive “us vs them narrative out there are the bitter bears, who unlike the other 70% of Canadians, don’t own but wish they did (in many cases because of their own pig headed beliefs that there is a pending crash around every corner). So they try to make it out like this a problem for Canada, when it is really just a problem for them.
Chris
at 2:29 pm
“The vast majority of British Columbians would follow in New Zealand’s footsteps and ban most foreigners from buying homes in Canada, a new poll from Research Co. finds.
In an online survey of 800 adults in British Columbia, 78 per cent of respondents said they were in favour of a New Zealand-style ban on foreign buyers, while 15 per cent opposed the idea and 7 per cent were undecided.”
https://www.huffingtonpost.ca/entry/foreign-home-buyers-ban-poll-bc_ca_5eebb40fc5b6674372346b60
From an older survey:
“A day after the Ontario government announced a 16-point plan—which includes a 15% foreign-buyer tax similar to Vancouver’s—aimed at increasing housing affordability, a new poll released by Zoocasa.com shows most Canadians are in favour of such a tax.
The survey found 69% supported a foreign-buyer tax, and 61% said they believe foreign buyers are pushing the cost of real estate higher.”
BIV, April 20, 2017
Kyle
at 2:46 pm
Sure, because 800 people in BC, where the narrative around foreign buyers is stronger than anywhere else in Canada, is a good representation for Canada as a whole?
Chris
at 3:10 pm
Did you miss the second half of the post, where it cites a 2017 Zoocasa survey across Canada?
Here’s another one:
“Fully 82 per cent of baby boomers said they either “support” or “strongly support” the foreign buyers tax compared to millennial respondents where only 69 per cent did so.”
https://www.macleans.ca/news/canada/is-a-foreign-buyers-tax-needed-generations-disagree/
If you have any data, beyond simply your own personal anecdotes, with which you’d like to offer in rebuke to these surveys, by all means, share away.
Kyle
at 4:59 pm
The tax isn’t banning “Foreign” ownership, if the government wants to collect a reasonable tax, go for it.
That’s a very different thing than banning, that’s benefiting from foreign ownership.
Chris
at 6:00 pm
So, in your estimation, a ban on non-residents purchasing real estate is “pure nonsense”, “pig headed”, “divisive” and only advanced by “bitter bears”, whereas a tax that financially penalizes non-residents who purchase real estate here is “a very different thing” which is completely reasonable?
Also, I assume you have no data to counter even the British Columbia survey, or you would have presumably shared it by now.
Kyle
at 9:58 pm
Yup
Chris
at 10:30 pm
Bit of an odd line of distinction to draw.
And got it, no data, only one personal opinion. Not sure anyone would rate that as more representative of Canada than a survey of 800 British Columbians.
Kyle
at 9:12 am
Not odd at all, in fact it is very straightforward. If you’re loooking at it from the perspective of the Country’s well-being, as Pragma claims to be doing. Like i already explained, a Foreign buyers tax directly benefits Canadians. As Sirgruper also points out they pay foreign buyers tax, land transfer tax, property tax, capital gains tax while not consuming services. Foreign buyers in effect are subsidizing our taxes. While a ban is completely different, it chokes off immigration, which is an engine of growth, therefore detrimental to the economy.
Chris
at 9:35 am
A ban would prevent non-resident foreigners from purchasing real estate here, while the tax dissuades them from doing so through financial penalties. Obviously, the ban is more stringent, but they’re relatively similar in their goal of reducing the number of non-resident foreign real estate purchases.
Also, how/why would banning non-resident foreigner purchases choke off immigration? People would still be permitted to migrate to Canada to work and study, apply to be PRs, apply for citizenship, etc.
You have repeatedly conflated immigration with non-resident foreign purchases of real estate in your comments, and I suspect it is, as Pragma suggested, in an effort paint any supporters of a ban as xenophobic.
Yet, as the survey from BC shows, there’s clearly support for this policy from more than just a few pig-headed bitter bears, as you previously suggested, with zero supporting evidence I might add.
Kyle
at 10:16 am
There’s no conflation. I already clearly explained that below. Immigration is a long process, and people who come here begin living their Canadian life, long before they receive their PR (which happens on a timeline that isn’t in their control). If that means they can’t own until they receive their PR, then of course that’s going to dissuade people from choosing Canada.
Also there are foreign buyer tax exemptions and rebates for those who get their PR. So that doesn’t have the same choking off effect.
Since you seem to really really want to go there. I already said your survey is not representative of anything more than 800 BC’ers, nothing more. Something you seem to keep having to relearn is that logic and reason, that is based in reality beats your garbage data every time.
I can’t even count how often you’ve shared/spammed the comments with data that you found, only for me to tell you it’s useless garbage, then low-and-behold your data turns out to be…well useless garbage. Let’s take a look at a few examples this by no means is exhaustive:
– When you pumped and defended Bitter Dwellings’ article on vacant homes for sale…Pure garbage
– When you rabidly pumped and defended Bitter Dwellings’ article about unoccupied dwellings…. Pure unmitigated garbage
– When you spammed the board with all your data supporting your “fundamentals”. Even your heroes Ben Rabidoux and John Pasalis have said your fundamentals are useless
– When you shared your survey data on how many Canadians are on the brink of insolvency…yet more garbage
– When you shared Josh Gordon’s kaka meme calculation on how there is adequate housing supply….still more garbage
– When you incessantly spammed the comments with Evan Siddall and CMHC doom predictions and talk of deferral cliffs….Even Siddall and CMHC has walked back that garbage
I get that you need to mine these nuggets of data to pin your hopes on in order to battle the cognitive dissonance and keep the faith in your dogma, that’s your choice. But before you go waving your data around like you were holding gold, i once again suggest that you give it a big ole’ sniff test before you post it here, lest it turn out to be more garbage.
Chris
at 10:40 am
Most immigrants come here seeking a better life, not just property ownership. Plus, a hypothetical non-resident ban could easily carve out exceptions, for example for those who reside in the country for a minimum number of months per year.
A survey of 800 British Columbians is absolutely representative of more than just the respondents. That’s how surveys of public opinion work. We don’t need to survey every single person to get a good sense of where the population’s general sentiment lies.
And despite your breathless tirade about it being garbage/kaka/spam, data is and always will be superior to individual anecdotes and unsupported opinions. You’re free to agree with the data or not, argue what it means, how to interpret it, etc.
John g
at 3:14 am
It’s not nonsense. It makes sense. And if we had a politician in this country that spoke like this I would vote for them in a heartbeat.
Kyle
at 2:29 pm
You know what actually truly would hurt our Country’s productivity? Putting up barriers to immigration. How many of those “foreign buyers” that you want to block from buying are people waiting for their PR status? Most immigrants to Canada arrive and start living their Canadian life long before they actually get their PR. Blocking them from owning would be a huge disincentive to people choosing Canada. So let’s not pretend this is about the Country’s well being.
Pragma
at 3:13 pm
Great strawman argument! You didn’t make much of a point but you did manage to paint me as anti-immigrant, a “bitter bear”, and “pig headed”. I’m not sure why the level of discourse needs to be so low.
So banning foreign ownership somehow equals anti-immigrant? Foreign could easily just mean “non-residents”. It could easily mean numbered corporations with non-resident directors. And because I bring up this point it means I don’t own my home? Maybe I just happen to care about more than just myself? As pointed out above most Canadians would favor an approach of restricting foreign ownership, and as you pointed out, most Canadians own their homes. So… are most Canadians racist pig headed bitter bears?
And if foreign ownership is 5%, that is not a small number. That is a HUGE number in the context of supply and demand.
And if foreign ownership is not a problem in Canada, then great! Bringing in any rules will have no effect.
and how is Canadian productivity over the last 5 years?
Kyle
at 5:02 pm
Methinks thou doth protest too much.
Sirgruper
at 12:11 am
Damn foreign speculators. Hate them all! Including Grampa and Grandma in their seniors town home in Sarasota and Bubbie and Zaidy in there condo in Hallandale. Pretending to live there in the winter for 30 years, paying property taxes and buying services and products without using the school system etc. Speculating bastards. Any non Canadian buying any property is a monster. Sarcasm and xenophobia in one post. I can rest for the day.
Appraiser
at 9:43 am
A Canadians right to buy property in the U.S., Europe and elsewhere shall never be infringed!
But those damn foreigners can’t buy our / my? Canadian property.
Did I make myself clear?
Ok then.
(Funny how some people feel that they own Canada by birthright, or something.)
Chris
at 9:57 am
Sorry, but you’re wrong again appraiser. There are plenty of infringements in Europe:
Switzerland imposes restrictions on where and what foreigners can purchase, set at the national, regional and local levels.
Bulgaria allows foreigners to purchase buildings but not land, unless you’re an EU citizen or establish a Bulgarian company to hold the land.
Croatia requires foreigners to seek approval from the Ministry of Foreign Affairs to purchase real estate.
Cyprus restricts non-Europeans to an apartment or villa on no more than one acre of land, subject to approval by the Council of Ministers.
Czech Republic requires Canadians to have a visa, remain in the country for seven year, or marry a Czech citizen, to purchase property.
Poland allows foreigners to acquire one acre of urban or 2.5 acres of rural land, subject to approval from the Polish Ministry of the Interior.
Romania allows foreigners to purchase apartments and buildings, but not land.
Dan
at 12:49 pm
@Pragma – why not banning moving from a big city to a small city? Guys in Toronto sells their homes for 1 million and they come in my small city and pay 500 for a home that the locals can afford to pay only 450.
What exactly is the difference in this case?
Or why not banning people to pay cash for a property when a first time home buyer has only 5% down payment and can’t compete writing an offer without conditions?
Appraiser
at 4:00 pm
Foreign buyers are buying all the real estate – laughable!
Bal
at 7:12 am
actually it is due to low interest rates and all domestic buyers…so there should be speculation tax on all…
Sirgruper
at 8:58 pm
And paying an extra 15% non resident speculation tax for the privilege.
Frances
at 1:27 pm
Before we bought our current condo we lost out on purchasing a condo in Liberty Village. The listing agent informed our agent that while our offer was indeed the highest the seller had bumped into the other couple when they were viewing the property and thought they were lovely. God we were mad! Like, we’re bloody lovely too y’know! And we were mad with our own agent for sharing this incredibly annoying story with us!
It all worked out for the best anyway because we ended up with a great place.
JPR
at 2:50 pm
Hi David – thanks for sharing your experiences from being on both sides of the table. A few questions in relation to Monday’s & today’s post:
a. Why would a property be stigmatized if it’s put back on the market (e.g. if a conditional offer doesn’t firm up)?
b. In Monday’s blog you mentioned: “Other than the one stipulation that a listing agent cannot divulge the terms and conditions of a competing offer to another agent, there is no set, identifiable set of rules, or pattern, or accepted principles…”
From a regulatory perspective, was it legal for the seller agent to disclose that the competing offer was $28,000 higher, not to mention forward you an actual picture of it?
Dan
at 12:58 pm
@JPR – you list a house and you have all the interested people thru the house, you get 8 offers. Everybody wants to know what is going on, they learn there is a condition offer in place and then they learn that didn’t firm up.
Public perception is that there is something wrong with that house.
JPR
at 11:30 pm
Thanks Dan. Out of curiousity, are you a realtor? If so, what’s the best way to remedy a situation where a property needs to be relisted after a deal falls through?
Don't Trust In The Process
at 4:56 pm
Sounds like you’re a wee bit thin-skinned, David; I looked up the Reddit thread discussing your post and most commenters appreciated your perspective, with only two comments that accused you of rambling (love your blog but they’re not exactly wrong…). You’re dismissing a whole website because TWO people hurt your feelings?!
What Reddit users – as well as TRB readers, as well as the vast majority of your unsuccessful buying clients, I bet – would say about all of this is that the buying process is inherently flawed. If the ONLY way to win is to benefit from what you’ve admitted is an extremely unlikely series of events (competing agent being a dick + listing agent thinking too emotionally + sellers being rich enough that a Honda Accord’s worth of money means nothing), then clearly the system needs to be reformed from top to bottom.
You always preach “acceptance” to buyers and agents about the reality of the market but at the core of it, the reality is that the system is unfair. It lacks transparency, it (by your own admission) lacks ethics, and it arguably lacks sustainability – all this FOMO-buying will draw too much attention from those who love to regulate and control. No seller would ever want to fix the system, of course, and by extension no listing agent would ever want to hurt their own clientele. But the problem exists regardless.
JL
at 8:20 pm
Well put. I feel like even though most readers here buy into “acceptance” of things as they are (as David frequently urges us to), I would guess that few of us actually believe that the system is working efficiently or well. There IS a problem here; whether there is a ready solution to it, and what that solution should be, is a whole other matter.
Don't Trust In The Process
at 8:44 pm
Truthfully, I have no hope of a real solution. I for sure don’t expect David to sabotage his livelihood by offering one. No one who matters is getting “hurt” as long as the banks keep doing stress tests and the price of housing rises – the ones who can afford to buy will always have the ear of politicians over the ones who cannot afford to buy. Any solution that’s implemented will be extremely painful to practically everyone in the real estate industry except for buyers, which is unacceptable for a country so disproportionately reliant on the RE industry.
Condodweller
at 12:54 am
I actually don’t think the system is inherently unfair or lacking transparency. The idea of everyone submitting their best offer and the highest offer wins is pretty straightforward. The problem IMHO has to do with the inconsistency in which various agents implement the “auction” process.
Consider that there are a small number of unscrupulous agents who are willing to cheat, add in the inexperienced/incompetent agents who sometimes themselves don’t know how the system works and can’t price a property to save their lives, then take the “sharks” who treat the system as the wild west where they will use any opportunity to take advantage of a given situation to their benefit. Now add in high demand, mix in some FOMO and you have a recipe for chaos and frustration.
Tak Loo
at 8:41 pm
I work in wealth management. Around 2016-2017, regulators mandated transparency through disclosure of true costs, actual performance and fees paid – naturally the financial advisor community expected public backlash when the public discovered paying tens of thousands in fees. However none of the backlash actually materialized in any significant way to impact the industry or the advisors livelihood.
In the same vein, why can’t regulators make the entire process transparent? Why should a buyers agent trust the listing agent to reveal the jump required to win – for example in Monday’s post, what’s to stop David from telling the buyers agent the winning bid needs to be at least 50k higher instead of 30k? Sure there is risk of pissing them away and going too far but for the most part, this process plays on human emotions and creates massive FOMO.
Not to mention the agents inverted compensation structure! I maybe the only one here, but I would want my agent to get paid more if they are able to save me money not make me accept a higher price as just the way of the market.
Condodweller
at 11:53 am
Speaking of stigmatized units, I came across a listing for Unit 1402 – 90 Fisherville Rd.
David what’s the record length on the market? These poor people have been trying to sell this place since 2015! Assuming 3 months closing the first owner put it back on the market after a month or so of living there in 2011. The next owner sold within two years, and the current owner also first put it up after about two years.
You could have a field day weaving a story around their pricing strategy.
I’m guessing this one could be had for below listing?
jeanmarc
at 2:15 pm
The GTA RE market must be in bubble territory. When you start seeing home prices increasing $300-600K+ in 2 years ago or less, there is something seriously wrong. If it has 4 walls, a front door and a roof, it’s worth $1.3M+ in the Toronto area. Bank of Canada screwed up royally gifting 1.45% variable rate mortgages to fuel the fire.
Bal
at 2:30 pm
Agreed
Chris
at 2:48 pm
Will definitely be interesting to see how things play out.
Just the other day, Scotia’s Derek Holt mused that Ottawa could introduce macroprudential regulatory measures in its upcoming budget to rein in the market.
RBC’s Robert Hogue stated that Canada’s “Super-strong Housing Market Is Far from Risk-free”, raising concerns around interest rates, employment, immigration, affordability, and policymaker interventions.
CIBC’s Ben Tal was on BNN stating that household debt levels have “never been so sensitive to the risk of higher interest rates”, as bond yields continued to rise.
And earlier today, the Toronto Star published an article proclaiming “‘By all objective standards it’s a bubble’: Even realtors say accelerated prices and sales of Toronto-area homes are worrying”
jeanmarc
at 2:58 pm
The younger generation growing up will be paying a hefty price for a home in the GTA.
David’s kids will either:
.will live with mom and dad forever or
.need a huge loan from the bank of “mom and dad” or
.must find a high paying profession
in order to afford a property in the future within the GTA.
Condodweller
at 4:35 pm
@Chris I’m surprised your “friends” haven’t spammed/trolled you about Ben Tal yet. I also saw an interview with him where he was asked if the government should intervene as prices get out of control and he had an interesting response. He said no, rising interest rates will naturally put a lid on and eventually lower prices.
I have been saying that along with others that low rates simply enabled higher prices and it’s logical to work in reverse as well. The problem is that for now only the fixed rates are going up but variable rates will be held low until 2022/23. First-time home buyers tend to use fixed rates so we should start noticing things level off. Investors are more likely to use variable rates but if I’m not mistaken they still have to qualify using the fixed rates.
@jeanmarc I would not be surprised to see the same thing as we did in 2017 as these kind of increases are not sustainable. Eventually, even the pool of buyers who have enough money to “bully” everyone and throw insanely high bids to secure the sale should be exhausted.
Chris
at 4:56 pm
I think Tal raises fair points, on multiple fronts. And I don’t think Hogue or Holt are saying government should or should not intervene, but rather the political reality of the situation will be such that they are increasingly pressured into taking action.
As for variable rates, I believe it was Holt who expressed a few weeks ago that with GDP showing positive growth, progress on vaccinations, and bond yields rising, the Bank of Canada may have over-committed itself on the overnight rate.
Tough to say what the future holds, but Macklem did say their commitment on QE and interest rates was “until the recovery is well underway”, which they thought would be in 2023. If the timeline of the recovery moves up, no reason to suspect the slowing of QE and increasing of rates doesn’t move up along with it.
Derek*
at 3:29 pm
These were great posts as always! Hope everyone is happy and healthy!
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at 8:23 am
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