Real Estate Part VI: The Spring of Our Discontent

I’ve decided that it’s worth concluding this series in proper form even though it’s been awhile because at least 3 of this blog’s readers (which, for all I know, is a good portion of the readership) asked for it. To see where we left off in the story, have a look at Real Estate Part V.

The winter wasn’t much to write home about. After the Rosemount place, the only other place we really loved was a 5th-floor loft on St. Laurent, in the same building as Laika, a bar we sometimes visit. Easily within walking distance of McGill and lots of fun stuff in the Pleateau, it was the offices of Parachute — a journal we liked that was folding — the view was astounding and we could imagine converting it to a residential space. The carpet hid beautiful hardwood floors, there was tons of space, but we would have had to install a proper kitchen and bathroom, not to mention updating the electric. Also, the condo fees were pushing $500 and we had no control over our heat. And it was HOT in there. For $375,000. So although we fantasized about it, it was really a no-go.

As winter turned to spring, more places came back on the market. We had taken to purchasing the Saturday La Presse and reading through the real estate listings to see what the good open houses were on Sundays. By March, things were starting to open up again and we saw plenty of nice-looking open houses. I remember a day of driving around the Plateau, thinking how beautiful it was, and seeing all these too-small places with beautifully sculpted backyards and just steps from St. Denis, St. Laurent or Mont-Royal. I remember a beautiful detached house — yes, a HOUSE — on St. Christophe just below Sherbrook, which was perfect in every way except the location wasn’t very interesting (on the plus side, you could walk to school) and was out of our league at $540,000.

But then we saw it. In the paper, a modest listing for a place in the Village, $374,000, 2000 square feet. We drove by and it was one of our top three from the summer (1200 Amherst), and it was back on the market. Alas, it appeared that they had ruined the place by building lots of small rooms inside it. Though we couldn’t quite tell what was going on. So we called Sandra, who called their agent, and we found out what happened. A law office had purchased the condo, begun the process of renovating it into offices and then was told by the condo association that they couldn’t have a business in that unit. Apparently there was a legal fight (this turned out to be an issue later) and the lawyers lost. So they were trying to get out.

We visited the place and even got to see the roof and storage (which we hadn’t before). We talked to a member of the condo association who seemed like a decent guy and gave us the honest ins and outs of the building. Yes, the neighborhood got loud on weekends but it was a fun place to live, he said. He explained the issue with zoning for business. We remembered the commute to work, which was nothing. We checked out the neighborhood and found some nice new places that we thought we’d like to go, even though the Village has a bunch of clubs in which we’d have no interest. We were satisfied. We were ready. We were going to make our first offer.

There was, however, a sticking point. The place sold for $340,000 in October. No doubt, that was below value. But the lawyers hadn’t added value. They’d done a bunch of construction to the place that we wanted undone (and to their credit, which they were in the process of undoing). Now they were listing it for $374,000. If you do the math between the construction and buying and selling costs, they weren’t making much on the place, but they were still trying to turn a small profit. And we were being asked to pay a $34k premium for being indecisive in October.

We bit. We bid $348,000. Now, at this point, I should say that we learned a couple important things. In Pittsburgh, the bidding process involved our agent making an appointment with the sellers’ agent and everyone sitting down together (except us) and phone calls back and forth and an hour of price haggling. It being Quebec, making an offer on a place involves filling out a ton of paperwork and then waiting a few days to hear back. So the negotiation I am about to relate took over a week. Which is quite an emotional ride. They balked at our $348k bid. They said they’d take nothing less than $361,000. We were willing to go there but in the spirit of negotiation, decided to test them, figuring they could say no twice. So we bid $355k.

Pause for effect. I can’t believe how much money this is. Remember, our last home cost $89,500. It is an obscene amount of money we were talking about. It is safe to say that I was completely freaking out at this point. Carrie a little less so, as she had her eyes on the prize.

Anyway, days passed and we waiting. The deadline on the offer was Saturday night. We were at a party with some of our friends and colleagues. It was a topic of conversation (as these things tend to be). At the 11th hour, we finally hear from our agent, who, along with their agent, agreed to cut their fees a bit so that the final price would be $358,500. We were satisfied (we would have paid $361 in the end, after all) and there was much celebrating.

But the signed contract never came.

Sandra called us to tell us the bad news. The sellers were also at a party Saturday night, and it was also a topic of conversation at their party. And guess what? Their friends thought they could do better. Their friends were sure that they could get asking price or close to it. So they never signed the deal and said now they would only take something closer to asking price. We were furious. Sandra was furious. They hadn’t negotiated in good faith. They had buyers in hand for a place that sat on the market for months the previous summer and they were dallying around. In fact, the only reason they got it for $340k was because the previous owner originally wanted $385k and held too long on his high price and then had to get out in the fall.

After an expeirence I had in college (the subject of another blog post), I had decided that I would make no more life decisions out of spite. And we did want the place. I had in my mind that the place was worth about $360k to me, given that they’d paid $340 in October. Don’t ask me how I came to that number. I have no idea. But I was, in my mind, firm at $360. $361 is fine (what’s a thousand at that point?) but this was getting silly. I don’t know whether Carrie had a number or not, but we came back one last time. I can’t remember the exact number, but it was either $365k or a little more. The sellers came back at $372k and I was done. Carrie was beside herself as well, though maybe she would have gone there if I was considering it. I don’t know. To me, the place just wasn’t worth it, the sellers were the kind of people you call lots of bad names and the best advice I’d gotten on real estate prices was that you make money when you buy, not when you sell.

Frustrated, we took a break from the whole thing for a bit. We’d never actually tried to buy a place and failed. It turns out this is completely normal. Our friends Bart and Jill told us they made 3 offers before getting their place. We should just expect it in this kind of market. Sandra sent us some new listings (her faith was no doubt renewed as we had really tried to buy the place). We started looking again a week or two later.