Friday, August 22, 2008
SO CLOSE TO A HOME
For the last few days I had been negotiating with a seller for the purchase of his apartment in New West. The unit is less than a year old, the 16th and top floor, a beautiful view of the Fraser River, granite countertops, stainless steel appliances, a parking spot, and storage locker. The asking price was $249K but after some offers and counteroffers, the seller approached me with $238K. I accepted on Wednesday morning and within the hour my realtor had faxed me the contract, which I signed and faxed back in less than ten minutes.
It took about ten hours to contact and locate the seller, as he apparently keeps some odd hours or is hard to get a hold of. By 10pm, some ten hours after I had signed the contract, the seller was finally reached and contract presented to him. Unfortunately, because so much time had passed, another offer had been presented to his realtor. Though I had verbally agreed to his offer and actually had signed the contract, the seller instructed his realtor to tell me that he was not going to sign and that he would be entertaining the other offer. I was free to up my offer if I wished but he was going to look at both offers one after another and then immediately take the one he liked better. I was given a little over 12 hours to decide how much more I was willing to give him.
My own realtor was pretty choked about this as it was a pretty much a dick move on the seller's part. He was totally within his legal rights to do this as verbal agreements mean nothing, even if I had actually signed a document, agreeing to his offer. My realtor told me I could do three things: walk away from it, stick with my original offer of $238K, or increase my offer to what I felt comfortable with.
I was left with that to think about and sleep on. The next day, I elicited some opinions from some people at work whom I respect. The most popular sentiment was for me to ask myself how much did I really want this place? Indeed, that was the question that I had to answer. A lot of people told me to stick to my original offer and that was what they would do in my shoes. One or two people suggested something I had already thought about. I would actually submit a new offer of $100K as a big "fuck you" to the seller. Only one dude said that if I really like the place, I should go completely balls out and give it another $11K, giving him the asking price. On the other hand, many people said listening to that dude might not be the best idea.
I didn't actually know what the hell I was gonna do until about 15 minutes before I had to phone my realtor. In the end, I told my realtor I was willing to pay $242K, knowing full well that probably wasn't going to get me the place. Realistically, even another $7K more wouldn't matter that much on a 25 year or 35 year mortgage in terms of monthly payments. I just didn't like how things went down in the last 24 hours. Had this been a traditional multiple offer, escalating price bidding war, I would have been ok with it, since that's just how real estate goes. This was different.
It took a few hours but my realtor finally phoned back to confirm that I indeed had lost out to the single offer the other party had placed. She didn't know what the offer was but she did find out the other party had absolutely no restrictions or conditions on the offer. They didn't want to inspect building nor read any of the strata council minutes. Those kind of risky propositions are hard to compete against. It is possible, though I don't believe it so, their offer might have been lower than mine. Such is the lure of the condition-free proposition.
I certainly feel disappointment at the outcome but not because I lost out on the apartment but because the manner in which business was conducted. It was law abiding in the strictest sense but ethically, I'm still unclear how proper things were there.
This was my first real foray into buying real estate and even this small skirmish has taught me much about the whole business. My only consolation is that I'm wiser going forward.
If I had the foresight to know my offer was dead in the water, I really woulda given him the "new and improved" offer of $100K.
posted by Erwin |