It seems like the topic of bully offers just keeps coming up in this blog, and believe me when I say I am sick of writing about it, much like I’m sure Tom Petty is sick to death of playing “Free Fallin” every night to a crowd of paunchy middle-aged sad sacks. But the reality is that it has become sadly inevitable, so here we go.
This blog is (as usual) being written with mixed feelings. On the one hand I am thrilled for today’s sellers, as they are routinely netting more money than they ever believed possible. But on the other hand I am always mindful of the buyer side of the equation, and in this instance the “winning” bidder paid a huge amount of money and lobbed a big, juicy spitball in the eye of all future buyers in the area.
The property in question was a 3 bedroom semi located in the West end of the city reasonably close to the subway line. I had showed the house to a prospective buyer and they were interested, but we feared it would sell beyond our means (we were certainly proven right). The house was undeniably nice and smartly renovated and ideal for a family. It was a very good house, and we expected it to perform well. But man did we NOT expect what unfolded after only 2 days on market.
The house was listed at $599k with an offer holdback – par for the course for the product and the area. With the right kind of week we thought it would approach $700k and that “felt” right. It came out on Monday, and by Tuesday all hell was freaking breaking loose (again). The first bully offer came in on Tuesday afternoon but wasn’t accepted. I was told it was a very good offer but not quite good enough to foresake the offer date in the hottest real estate market imaginable. Fair enough.
The next morning another bully offer came in from a different agent, and at this point the offer date disappeared faster than a lush who mistakenly stumbles into a Church group. When the price was finally posted I couldn’t believe it…$800k!!! That’s right, 800 freaking k. To put this in perspective the previous street record sale was $725k, and that was for a fully renovated DETACHED with front pad parking. Clearly this sale price was incredibly high, and my buyer was a country mile away on this one.
I never like to say somebody overpaid, because in real estate (like art) a house is ultimately worth what somebody will pay. But in this case, I can’t help but feel the other buyers were overly aggressive and put extra money on the table. You might say it was somewhat akin to walking into Subway and voluntarily paying $10 for a $7 footlong cold cut sub. My only sound reasoning is that the house ticked off every single box they ever had on their wish list, and they plan to live there for the next 30 years. Or maybe they had lost 9 times in competition and were simply overwhelmed by the agony of the process. In any event good luck with the appraisal.
The Sold Over Asking rider has become a staple in this market. I think we now need a new one, something to the effect of: Sold Way The F@#k Over Asking, To A Scorned Yahoo Buyer. It’s not a bad idea really, because I have a feeling there will be need for it again in the very near future.