The last week has been one of the weirdest, best, worst, stupidest, annoying…ist of my entire life. I’ll openly admit that I’m one for hyperbole, but in this case, I really mean it. It’s been a ridiculous week.
7 days ago I made the decision to go to an open house for a property I’d seen on the (awful, awful) website realtors use in Vancouver. It ticked plenty of boxes – all of the prerequisites I had for a home, and almost all of the nice-to-haves, too. It’s in a great location, the strata is proactive, it’s an old building but is in good condition, parking, storage, outside space, and more than 600 SqFt. On top of that it has in-suite laundry, it’s partly renovated, isn’t ground floor, and is on a quiet street.
It also happens to have one of the best views of any property I’ve seen in Vancouver. As soon as I walked in I knew I loved it.
More importantly I knew I wouldn’t be able to afford it. The real estate market in Vancouver is, quite frankly, an absolute shitshow. The owners had done what many others are doing right now – intentionally underpricing it and getting several groups of people to make offers – a “bidding war”.
After the viewing I decided that it’d be wise if I went to the second open house on the Sunday – this time with Kate – my realtor (who is amazing, happy to pass on details if you’re looking for one). I was trying to temper my excitement with the fact that the only way I could afford this is by either being astronomically fortunate or stretching myself beyond what I could comfortably afford.
Sunday rolls around and I meet my realtor outside the property. She gives me some more details about the apartment and the condo building that my own research hadn’t brought up – not much, most of this is public info if you know where to look.
She did exactly what I did when I walked in the previous day. Walked straight to the balcony to look at the view. “Yeah, that’s pretty great, I can see why you wanted to come back to this one.” We spent the next 15-20 mins going around it with a fine-tooth comb unearthing as many potential problems as we could. Asked plenty of questions of the selling agent and (mostly) got the answers we needed.
“Let’s go and have a chat outside.”
“So, this one right now is in your budget. But I think it’s been priced quite a lot under market value. If I was the sellers’ agent, I’d probably be looking at a figure of around 100k over what it’s currently priced at, and that takes it out of your comfort zone.” sigh
“But!”, my agent continued, “I don’t see why we can’t put an offer in towards the top end of your budget and see how we fare. You never know. It’s a strange market.”
It’s a strange market.
“The sellers are taking offers on Wednesday, which gives us a little more time to get everything as ship-shape as we can. I’ll ring you Wednesday afternoon.”
The next 2 days – the Monday and Tuesday – were… odd. I thought I was fairly prepared to get an offer in. I thought wrong.
I needed a bank draft for my offer. Sounds simple. Move my money out of my RRSP into my chequing account, get bank draft. Job done. Heh. No.
It turns out that you can’t – quickly – remove your money from your RRSP; that takes several days. It also turns out that when you withdraw your money from your RRSP – if you’re doing so for your first home purchase (which gives you a tax-holiday for that money for 15 years) – you need to put the address of the property on the form. Which in turn means that should the offer not be accepted, you lose the ability to use the money from your RRSP to buy whichever property does finally fall to you.
So… what now? Some folks may be able to borrow money from their friends and family. That isn’t an option I could consider. Some just may already have enough money in a ‘liquid’ (in the financial sense) account which they could use. Also not an option for me. My only option remaining was to ask Vancity – my financial institution – if they would give me a line of credit. For a fairly substantial amount of money. And quickly. Like, within 48 hours. The idea here was that I’d use the LoC to create my bank draft and then replace it with money from my RRSP when I could fully commit.
An hour spent on the phone talking through the problem with Kevin, one of Vancity’s excellent support folks, and I was told he would do his absolute best to get this through in time, but it generally takes 3 to 4 days and because of the amount I was asking for, it may not happen quickly. He asked me for a load of paperwork and other bits and pieces, which I provided within about 30 minutes. “OK, I’ll see what we can do. I’ll get back to you. Don’t get your hopes up, though.”
I told my agent what the situation was and she said “It’ll happen if it’s meant to.”
I also hadn’t been pre-approved for a mortgage yet. Fortunately I had a great recommendation from a friend and after filling out a LOT of paperwork and emailing back and forth, I had a pre-approval in place. This was never really something I was stressed about – I’ve been fairly conservative with my ‘maximum’ – but it’s still a heck of a lot of money.
After work, I was a little dejected. I generally pride myself on being prepared, but it turns out I really wasn’t in this case. And it was likely that my lack of preparedness would cost me the chance of securing my first home. I probably couldn’t afford it anyway, but still, now I wouldn’t know.
Tuesday was uneventful. Work was fine, even if I was a little distracted. I spent some spare time looking at other properties that had come on sale this week, to see if anything got close to the one I’d probably miss out on. Obviously they didn’t. This was the one and I’d screwed it up. Nothing from Vancity.
Wednesday morning rolls around and my realtor rings me before work.
“They’re taking offers at 5pm, if everything works out with Vancity, I’ll put our offer in at about 4:55pm. I don’t like “round” numbers so can we…say… add a hundred dollars?” “Sure.” “OK great, let me know how you get on with Vancity.”
About 10AM I get a call from a Vancouver number I don’t recognize. I pop out of work and answer. It’s Vancity and they’re delighted to say I’ve been accepted for the line of credit and I just need to go into a branch to fill out some paperwork and then get the bank draft.
But there’s a problem. Of course there’s a problem. My own branch of Vancity doesn’t have any appointment slots today. Neither does the branch nearest to where I work. Likewise for the one nearest where I live. Neither does this one, or that one, or the other one. We go through about 8 different branches trying to find any time slot. “I’ll literally travel to wherever if you find somewhere” I say. Eventually, we find one. 4pm at a branch I didn’t know existed in a remarkably handy location.
I’m incredibly fortunate to work for such a wonderful place who are – within completely understandable boundaries – really flexible when it comes to situations like this. Many, many institutions large and small can learn a lot from how UBC (and especially CTLT) treat their staff.
Later that day, I go and sign the paperwork, move some money around, get the bank draft for a ridiculous amount of money, and call my agent. “I think I’m all set” I say. “Fantastic” my agent replies “even if this one doesn’t work out, you’ll still have everything in place for the next one” she continues – trying to temper the enthusiasm she’d obviously sensed from the tone and speed with which I spoke. “I’ll put the offer in close to the deadline, but will ring now to find out where we’re at. I’ll let you know.”
A very long half an hour later she rings back. “This is a bit weird. It’s rare, especially in this market, but it’s something that might work in our favour” she starts. “Huh?” I mumble. “There’s 4 other interested parties. With probably another one who haven’t completely shown their hand just yet” she continues. “But, and here’s the weird bit, none of them have put an offer in yet” she adds. “Aren’t they just playing the same game we are, and waiting to the last possible minute?” I proffer. “Not really, not in this case. It seems that all of the other interested parties are jaded with this market. None of them – literally none – want to be involved in a bidding war. If there are multiple offers, they are out.”
I sit there – in my car – a bit puzzled. “What does that mean for us?” I ask, rather meekly.
“Well,” she answers “It means we’re in a really good position. When we put our offer in, it looks a lot like it will be the only one.”
I immediately fire back “Does this mean we can put an inspection condition in the offer?” “It absolutely does” she replies. “You can have an inspection.”
I should explain what this means, perhaps. Basically, because the Vancouver market is so utterly ridiculous, folks are having to put an offer in on a place – a contractual, legally binding offer – without any conditions. You’re agreeing to buy a place without having someone come in and professionally inspect it. The reason being that because there are generally speaking so many offers on a place, the sellers, can just look at the best offer – and that doesn’t always mean the one with the highest price. It can be a lower one, but with no conditions.
It’s madness. It really is. You’re making (probably) the biggest financial decision of your entire life and you’re having to gamble that you’re not buying a lemon.
Anyway, somehow, through luck and I don’t know what else, I’d now managed to get an inspection clause into my offer. If my offer was accepted, I’d have the knowledge that I’d have an out, should the property have any serious issues. It was a huge relief.
“But… it means something else, too” Kate adds. “We can probably play around with the price a little” she adds, sprightly. “What? Go in under what I was going to?” I reply, somewhat confused. “Yeah. Look, this doesn’t happen very often – if ever – in this market, and it’s a situation we need to take advantage of.”
In my head I’m thinking, well, ok, but I don’t want to push my luck. If, by some miracle, I get the place at the money I’m prepared to pay, I already think I’m getting a steal. (Should the inspection go well, of course. After all, I’m getting a god damn inspection!)
“What, like, knock 5k off?” I ask, cautiously.
“Well, maybe. But I was more thinking 45 grand.” she replies without any emotion in her voice whatsoever.
“FORTY FIVE GRAND, KATE?!” I shout-splutter. “But what happens if the sellers just flat-out say ‘no, don’t be stupid'” I yammer. “Well, then we’ll know where the sellers are at. We’ll have the only offer on the table, and they would almost certainly start bargaining with us. They may well just reject it out of hand and put it back onto the open market. But at least we’d tried, and we could try again in that case.”
Forty five thousand dollars. That’s a stupid amount of money. I sat there for quite a while – a good 30 seconds I think – thinking it through, but also cognizant of the time. We only had about 10 minutes to get our offer in.
“Kate, if you think it’s doable, let’s give it a go.” I conclude. I realized that Kate is a professional. This is what she does day-in, day-out, and knows virtually 100% more about this topic than I do. She’s earned my trust, so I have to go with it. I’d decided to go with Kate because she is good at what she does, if she thinks it’s worth the risk, who am I to question that?
“Ok, I’ll get all this finalized and send you some stuff to sign. We’ll need to do this quickly.” (Aside: DocuSign is really quite incredible)
So that was it; the offer was in. An offer for substantially under what I was prepared to pay. An offer a frightening amount under what the market value of the property was. With an inspection. I drove home.
The next 3 hours went by slower than any other 3-hour period in history has ever gone by. Those 180 or so minutes were, in actuality, about 10 years. That’s how much I aged, anyway. 8pm. A phone call!
“Rich, things are looking ok so far. They’re just working through a few pieces, but they’re working with your offer” explained Kate.
“Err… ok… so, they haven’t just laughed at and subsequently torn it up, then?”
“Nope, they’re just looking at some details. That’s all I have right now. Our offer, as is normal, is valid until 10pm, so we’ll know in the next couple hours.”
An hour later, AN HOUR LATER, I get another phone call.
“Rich… things are looking good. They’re ok with the offer. They just –”
“They’re OK with the offer?” I interrupt.
“Yep, they’re fine with the figure, they just want to know if you’re ok with them leaving the wardrobe”
“I’m sorry, what?”
“The wardrobe in the bedroom, they want to know if it’s OK if they leave it”
“Kate, I want the fucking apartment, they can do whatever the hell they want with the wardrobe. They can paint it pink and leave it in the lounge if they want.”
“Ha.” (Literally one ‘ha’). “OK, the next thing is if you’re ok with moving in at 4pm on the 1st rather than the normal 12pm as they’re moving into a rental and the extra ti–”
Again, I interrupt, “Kate, I’ll move in at four AM if it makes them happy”
“Thought so, OK, I’ll get back to them”
It’s about 9pm at this point and the offer has about an hour left to run.
About a half hour later, I’m beginning to worry slightly, when I get another call.
“Rich, I think… I think we’re good. They’re just sendi– … SHIT.”
I sat bolt up right on my sofa.
“The sellers’ agent just text me to say they’ve just received a text from another interested party to see if it’s too late to receive an offer. Leave it with me, I’ll find out what’s going on.” She hangs up.
This can’t be happening, I thought. This isn’t some sort of story, this isn’t meant to happen in real life.
9:50pm (10 minutes until the offer isn’t valid any more) the phone rings
“Rich, the sellers have decided that it is too late to look at another offer, and they’re moving forward with your offer. You got yours in on time and they’re going to honour that. They need to adjust a couple things in the contract, nothing major, just what we’ve discussed plus they will pay for any special assessments mandated at the next AGM in June out of your deposit rather than cash specifically, I assume that’s OK?” She doesn’t wait for an answer. “I’ll send you the paperwork, let’s get this done in the next 5 mins.”
I’ve never read anything so fast in my entire life (If you know me, you’ll know that I’m a very slow reader). I signed, submitted, and rang Kate.
“OK done. Now what? What does this all mean?”
“It means, subject to the lender saying ‘yes’, and you saying ‘yes’ after the inspection (she adds an extra touch of emphasis on that word) that you’ve got it.
I didn’t know what to do. So, I think, I just said “Thank you” in a really underwhelming way. Kate sensed I was a bit all over the place. “Rich, the only reason this isn’t going to be yours now is if it would be a bad deal. And the only reason this would be a bad deal is if the building is falling down. Go have a beer.”
She knows me so well.
Buying my first home – which technically hasn’t fully happened yet – is definitely one of the most stressful things I’ve ever done. You read it and hear it everywhere. So even though I expected it, I didn’t fully appreciate how much of a gongshow it is. You’re having to trust some people who you barely know – some of whom you’ve never even met – with altering your life for the foreseeable future. I’m not a trusting kinda guy, so that alone was tough.
Then you need to make really big decisions, with very little information, really quickly. As someone who does a lot of research about almost everything he commits to doing, this really doesn’t jive with who I am.
Finally, you have to take a huge risk. Massive. Financially, probably the biggest you’re ever going make. Emotionally, it’s one of the most stressful things you’ll ever do in your life. I’m very risk averse and whilst I’m good in stressful situations, I avoid them as much as possible by being prepared. This was not a good week for me emotionally… until it was over.
And now it’s kinda, almost, sorta over. I still have to go through the conveyancing process and get the keys. I also want to do some renos before I move in. But… I own a home. I can’t quite believe it. Holy shit!