I’ve never been much of a card player.
This might come as a surprise to you (that was sarcasm) but I simply don’t have the patience for it.
A while back, my friend Aimee told me, “I’ve been crushing it lately in online poker. I think I’m going to make this a career!”
I told her that she, like millions of other people, were no different than the scores of pretty and handsome young folk that arrive in Los Angeles every single day, thinking they’ll be the next star on the Silver Screen.
But she challenged me on this. She said he had real talent.
So I told her, “Come to the office next week and we’ll go into the conference room and play poker. If I beat you, then you give up this dream now, no questions asked.”
She agreed.
While many of you think you know how this story is going to end, let me warn you in advance: I did not teach her a lesson.
Instead, I got exceptionally bored of this game in short order, annoyed that most hands resulted in a fold, and that any actual hand played ended up in a small pot, and that led me to make rushed, improper decisions.
And she won.
Patience is a virtue, and when it comes to playing Texas Hold ‘Em, I simply don’t have it. I’m not going to blame the day, or how busy I was, or the temperature of the conference room. I simply do not have the patience to fold thirty hands in a row and keep shuffling the cards and re-dealing, while moving the “BIG BLIND” chip back and forth, and anteeing up again and again.
I can keep my cards very close to my chest. My problem is: I want to play them.
When it comes to the inner workings of the real estate market, I have no problem being patient. In fact, I find my nature is actually the complete opposite as it would be while playing poker.
But patience is only one trait that can apply both to playing poker and selling real estate.
A more obvious one, and a trait that could have a greater impact: overplaying your hand.
While the following story might sound a bit like previous blog posts of the “How not to sell real estate in Toronto” nature, this one is more about an agent overplaying her hand, which stems from overvaluing her hand, which stems from not really understanding the game she’s playing.
Back in early February, clients of mine asked to see a home listed for sale in the east end.
They had a budget of $1,200,000 and were relatively new to the market, so I took a look at the listing, the history of the property, and comparable sales in the area, and was ready to talk shop with them when we met at the house.
The property was listed for exactly $1,000,000, which is a really odd list price.
Read my blog post from March, “The Psychology Of Real Estate Pricing” for more on this.
Why not list at $999,000?
I don’t believe this is a case of “everybody jumping off a dock, so you should too,” but rather I just think it was the first sign in what would prove to be an extremely odd listing, from start to finish.
I figured that the house was worth around $1,200,000, maybe more.
But the house really didn’t show well at all.
It wasn’t staged and all the furniture was old, out of style, and way too large for the home.
The basement could have been functional, and with a minor investment in painting and lighting, and with a basic staging of the space, this house could have had a great “rec room,” but instead felt like a dimly-lit cellar with tile floor and marks on all the walls and ceilings.
There was no pre-home inspection, which was odd in this market, especially considering this house was “under-listed” with an offer date.
Our appointment was from 7:30pm – 8:00pm and my clients had two children with them. At about 7:59pm, the front door opened, and a lady walked inside.
I asked, “Hey, are you an agent? Do you have an 8pm viewing?”
The lady said, “No, this is my home.”
She then proceeded to take off her boots and sit on the couch.
Odd. Very odd.
My clients felt like it was obviously time to leave, so we did. And for the record, the only thing to do in this situation, if you’re the seller, is to say, “Oh, take your time, please, make yourselves at home!” and then step outside. I mean, if you actually want to sell your house for the most money.
My clients were somewhat interested, so I called the listing agent to chat the next morning.
I asked her if there had been interest and she said, “A shit ton!”
She said that the market was crazy busy and that the property was “blue chip” all the way.
This house, by the way, was located on a very busy street and there was a TTC bus stop directly in front of the house.
In any event, I asked her if there was a home inspection and she said, “No way, don’t need one. This house is solid. They don’t build ’em like this anymore.”
I replied, “No, they don’t, but that’s sort of the point – this house was built in the 1940’s so I’d love to have seen a pre-inspection.”
She said, “Any intelligent buyer is gonna look at this house and know it’s solid. Agent too.”
I thanked her for her time and that was that.
My clients called me that afternoon and said that, although they liked the house, they were too new at this to “jump into competition” and that the timing was off.
No matter.
I flagged the listing and watched their offer night as it took place.
Listed for $999,000, and with my valuation around $1.2 Million, the house only received one offer. That too was rather odd.
Keep in mind, this was now mid-February and the market for freehold homes was very busy! To see an under-priced home in this price bracket not receive multiple offers was odd.
The next day, the listing agent called me and said that the property didn’t sell and that she would be re-listing at a higher price.
I asked, “Can you tell me what the price is going to be?”
She said, “Well, you just gotta do your homework, right? The comps are out there.”
But before I could even ask her which ones (which I wasn’t going to do…), she volunteered it!
She named three houses, all of which were on prime streets (remember, this was on a very busy street; think something like Gerrard Street East), all three of which were larger, one of which was detached (her listing was a semi), one of which had a private driveway (her listing had a widened mutual), and two of which had fully finished basements.
All three houses were more modern, more upgraded, and “prettier.”
But above all, these three listings were all staged and presented exceptionally well.
Those three houses, by the way, sold for between $1.35 – $1.4 Million.
The house that she was selling was previously listed for $999,000 and I had pegged the value at $1,200,000.
I continued to play dumb and I said, “Yeah, I remember seeing (property address), that was a nice house!”
She said, “Yeah, they got something like twenty offers.”
“Twenty-two,” I told her, since I knew the inner workings of that offer night intimately. But that house was emptied, cleaned, painted, staged, and represented by a fantastic listing agent.
Her house was not.
The next day, I received an email through BrokerBay:
123 Fake Street – Re-Listing Next Week At Fresh New Price! Stay Tuned!
I was thinking, “Okay, sure. They’re offering us a…..teaser?”
It was innovative, I’ll give her that.
But I was absolutely, positively shocked when I got another email from BrokerBay the following week that said:
123 Fake Street: Now Available @ $1,388,000
Good lord!
This agent was really overplaying her hand!
She didn’t seriously think the property was worth that much. Did she?
The house showed like dogshit! It’s on a main street! You can literally sit on your living room couch and see the whites of the eyes of a stranger seated on the TTC bus outside.
The agent called me three days later and said, “Hey, we spoke a couple of weeks ago about 123 Fake Street. I’ve just re-listed it. Did you see?”
I told her that I had seen it, and she said, “Any interest?”
At this point, my clients had passed on the house and were already looking at other properties. I told her, “Thanks for the call, but we moved on.”
She said, “Oh, that’s too bad. Well, what was the deal-breaker here? I mean, why did you move on?”
I said, “Well, to be honest, I think it’s the price.”
She said, “Really? That’s so surprising. What were you thinking?”
I said, “Well, being honest here since my clients have moved on, and from one professional to another, I think you’re going to have a hard time getting more than $1,200,000 for that house.”
I don’t know where she was calling from, or what the ceiling height was over there, but I’m pretty sure she hit the roof.
Even though she called me, and even though I told her my clients weren’t interested, she berated me for not having “sufficient market knowledge” and told me “my clients were losing an opportunity.”
The house sat on the market at $1,388,000 for 45 days.
But since I had shown it, and since my name was in the BrokerBay system, I was still receiving all communications about the listing. So before that 45 days was up, I received another email from BrokerBay:
123 Fake Street – New Price Coming Soon!
I swear, I have never seen this before. Maybe it’s a novel idea. Maybe…
The property was re-listed for $1,350,000 and it sat for another 19 days.
Then it was reduced on MLS to $1,299,000.
I wondered why it was reduced and not re-listed, and I wondered why I didn’t get a “COMING SOON” blast from BrokerBay.
It wasn’t something I was following closely, but I usually have about 50-75 listings “flagged” on my MLS system that I scroll through every day, so I always look for sales, terminations, and price changes.
The property sat on the market for another 16 days before I received yet another email from BrokerBay:
123 Fake Street – Re-Listing Next Week At Improved Price!
That improved price, evidently, was $1,249,000.
We were now into the month of May, by the way.
Recall that we first came across this listing in early-February.
The property sat on the market at $1,249,000 for several weeks before it was terminated and re-listed for $1,199,000.
But I didn’t get an email from BrokerBay. No happy “COMING SOON” this time. No teaser!
Not lost on me was the fact that the property was now priced below what I had felt it was worth three months prior. I understand that “Not everybody is in a rush to sell,” but just consider this for a moment:
In a hot Toronto market, no property takes three months to sell. Unless there’s something wrong.
What’s “wrong” could be the price, the listing strategy, the listing agent, or all of the above.
In this case, it was the agent, the overplaying of her hand, the overvaluing her listing, the lack of staging, the lack of a home inspection, and just an overall poor quality listing.
She wanted to get top dollar for the house without putting in the work.
The three comparable sales that she noted in February weren’t just better houses; they were better listings and they were listed by better agents.
A few weeks later, I noticed the “SC” next to the listing on TorontoMLS and I though, “Oh, wow, they finally did it! They finally sold!”
Sold conditionally, of course.
Not having provided a pre-home inspection, I figured that perhaps the condition was on a satisfactory home inspection by the buyer. I clicked on the listing and scrolled down to the bottom to find that it was not conditional on a satisfactory inspection, but rather something that I have not seen in Toronto in a long, long time:
The sale was conditional on the sale of the buyer’s property.
You have got to be kidding me!
In twenty years I have never sold a home conditional on the sale of a buyer’s property, and to be frank, this is really an “outside of the GTA” thing.
To see a property in the central core sell conditional on the sale of a buyer’s property is madness.
And yet, it just sort of “tracked” in this case.
The property remained “SC” on the MLS system for several weeks, and it remained in my “FAVOURITE LISTINGS” during that time.
Then last week I received an email through the BrokerBay system that read:
123 Fake Street – Good News: Property Still Available For Sale
Good news?
For whom?
Not for the seller, that’s for sure!
I checked MLS and saw the exceptionally rare “DFT” designation, for “deal fell through,” and simply shook my head.
That listing was terminated two days later and the property was re-listed once again for $1,199,000.
It’s still available for sale on MLS, by the way.
This property has now been listed for almost five months.
And now that we’re into July, with buyer activity down, there’s absolutely no way this house is going to sell.
It simply doesn’t take five months to sell a single-family freehold in Toronto. I don’t care what market you’re in.
This debacle is the by-product of the listing agent overplaying her hand right from the start, whether it was the quality of her listing, the value of the home, or the leverage that she thought she had, but didn’t.
I was just telling Lindsay, who works as our client care coordinator, what I was writing about today. She said, “Gosh, were do people find these agents?”
I don’t know.
Hopefully not at the poker table, that’s for sure…
