You Bought It, Congratulations – “They spent Sunday going to open houses in and around their Kits hood in Van, then fell in love with a place listed just under a million.”

“Jason and Maria are young thirtysomethings who, like most, lust for a house. Four weeks ago they did something they instantly regretted, which this time had nothing to do with blue berries or udder cream.

Per usual, they spent Sunday going to open houses in and around their Kits hood in Van, then fell in love with a place listed just under a million. Of course they couldn’t really afford it, but that never stopped coursing hormones. By the next night they’d contacted the listing agent, drafted an offer and submitted it. The deposit was $15,000 – part of a downpayment they figured would be $50,000 – and they handed over a cheque when the realtor asked for one. Make it certified, he suggested, since it shows you’re serious. They did.

A day later they’d done some heavy budgeting, gone to the bank to visit their loans officer and, most seriously, emailed me [Garth Turner]. “Maria really, really wants this house,” Jason explained, “but after thinking about this and doing the numbers, we’re a little scared. Do you think we should just walk away and, like you say on the blog [greaterfool.ca], wait a year?”

Of course you should walk, silly hormonal, self-destructive, irrational people, I said, letting my feminine side show through. Just tell the agent to stop payment on the deposit cheque before it’s cashed and before the vendors have a chance to sign back.

Unknown to me, the sellers immediately accepted the deal, and the deposit cheque had been certified. So when Jason called the agent – less than 24 hours after signing the offer, thinking that he could back out during a “cooling off’ period – as is the case in BC and other provinces with condos (usually seven days to exit) – he was shocked. “You bought it,” he was told. “Congratulations.”

And they did. Closing’s in seven weeks. They’re freaking.”

- as told by Garth Turner, at greaterfool.ca, 27 Jan 2013

29 responses to “You Bought It, Congratulations – “They spent Sunday going to open houses in and around their Kits hood in Van, then fell in love with a place listed just under a million.”

  1. pricedoutfornow

    Something is seriously wrong with our system when you only need a deposit of $50,000 to commit yourself to buy a million dollar house….

    • Agreed.
      And, as you know, some have bought with an effective 0% down, albeit lower priced properties.

    • What’s wrong with the system? I much prefer it to ones where real estate deals are generally all cash.

      Their deposit, $15,000. is also called “earnest money” or “serious money,” the agent apparently suggested as much when he requested that the cheque be certified, as it ‘SHOWS YOU’RE SERIOUS.’

      Now they didn’t really commit to buy the house in the sense that they absolutely must take ownership. If they notify the sellers at the earliest opportunity that they don’t intend to close, the sellers are more or less obligated to put it back on the market and try to get the best price they can for it. Things get more complicated if the sellers have already bought another property… Suffice to say that they’re unlikely to ever see their deposit again and might well be sued for additional damages, large or small, depending on the current marketability of the property.

      Another way of looking at is that $15,000 is the minimum price they’ll pay for wasting everyone else’s time.

  2. F*cking Realtor should be ashamed. If true I want to know who it was. Maybe one of the news reporters reading here can find out.

    Actually, asking for a certified cheque sound unethical. My bet is if they pursued it they would have a case to renege. They should talk to a lawyer who could threaten disciplinary action against the Realtor. Of course it’s probably too late now.

  3. Whoop, whoop congrats you greater fools, you won the lottery !!

    • Their mistake was being ignorant of the law. The big story here isn’t some damn fool couple letting hormones run away, it’s showing why Realtors can never be considered a professional association unless this practice is the extreme exception.

  4. Before blaming the system, banks or the sleazy realtor, you should put most of the blame on these idiots who made the purchase. Who signs documents, forks over $15k and starts asking questions after? They are NOT victims.They made their decision by themselves and acted proactively!
    And blaming this on hormones is just pathetic. Everybody has them…

    • The way to hammer home the point, in my view, is to teach couples like this one that selling houses can be akin to a confidence racket. Not everyone has the fortune of being raised to be a cunning negotiator, but this blog has the ability to teach what to look for.

      The blame rests with the buyer but I view it a civic duty to erect a Beware of Realtor sign.

      • Please don’t blame this on unfortunate birth/family circumstances (“Not everyone has the fortune of being raised to be a *”).
        And who is supposed to “teach” people like this? The information is out there. Do people in their thirties need a nanny to point them in the right direction?

      • Funny you should say that, Dr. J… for, as it happens, the Terrifying&Pityless ProtoRealtors™ of OgoPogo have thus far failed to thwart regional public service announcements / WaterFront CautionarySignage installations proximal to some of their most abymsal property developments…

        http://tinyurl.com/as2zffj

        Perhaps their SkitzSilano brethren are better organized?

      • “Do people in their thirties need a nanny to point them in the right direction”

        Stories like this are a reminder that buying property often turns into a confidence racket. For whatever reasoning we come up with for assigning blame, highlighting nefariousness of greedy salespeople needs to be a recurring task, as it always has been and always will be.

        Based on the information in the story the Realtor was borderline unethical.

        Or put it another way. When “hormones” get in the way, people need to always assume the Realtor is dishonest.

      • BS like this always leads to wrong solutions.
        These people (who are grown ups in their thirties) went to the open house by themselves, they contacted the realtor (not the other way around), they paid the deposit, they got the financing, etc.
        I am sick of the excuses.

      • I am with you Bubbly. I have no sympathy for the kids. They are locals and know the neighborhood. Most likely they figured Mom and Dad would step up to the plate once they heard the children had written a cheque for every penny to their sorry names.

        I Bet the leverage on the parental love scam worked too. They are closing.

      • I guess we’ll have to agree to disagree on this, if we’re disagreeing…

        Not everyone is prepared for confidence rackets without being trained, or experienced, to smell them out beforehand. Lessons like this one, properly highlighted, serve as warnings to others to be careful.

  5. Stupid is as stupid does….

  6. Real Estate Tsunami

    People have been drinking the Cool Aid for at least 10 years now.
    Hard to break the habit over night. The judge could order RE rehab and staying away from open houses.

  7. Couldn’t they tank their own financing or something? Seems like there are 20 ways to make an RE deal fall apart before closing. The $15k is probably gone however. Expensive lesson, but better than a $1 million mortgage.

    • That’s the thing that gets me– wouldn’t they put their offer in being “subject to financing”?

      If you’ve only got 5% to put down, it’d be risky to assume that the bank would simply grant you a mortgage, so their realtor *should* have counselled them to make it subject to financing. Then if the couple wants to get out of the deal, during that week when they’re trying to get the bank’s approval, it’d be easy to get the bank to deny your mortgage application– disappear some of your DP money into another account, tell the bank your job’s unstable, etc. Then you can back out of the deal, AND keep your $15K.

      Not to mention, the deposit cheque should have been made out to their own realtor’s agency, “in trust”. Not simply handed over to the 3rd party right away. Unless, of course, they were making a no-subjects offer and wanted to convince the other party that they were 100% serious. Morons.

  8. The realtor has done what the buyers asked him/her to do, facilitated a purchase. The story comes from the buyer, edited to enhance their helplessness with Garth’s help. They should have taken their step back at numerous times along the way, but didn’t see the offer, contract and cheque certification etc as anything but obstacles to be rid of. Fools and their money are soon parted. When you go to buy something and approach a salesperson, don’t expect them to talk you down. The buyer ultimately makes the decision. This is what they wanted, said they wanted and acted like they wanted. Changing their minds after the fact does not change that they signed a contract. Poor babies, now they have to follow through on their word and if they don’t it will be expensive. There are two sides to this story, the seller has been forgotten, but deserves just as much consideration as these boobs. They have a contract that they want upheld probably after crossing their fingers that the house has indeed sold. Are they bad guys too for not putting the buyers first? Why does the ones that keep their heads in the sand the only ones that everybody feels sorry for? They are the jerks as far as I can see.

  9. 50k for a million dollar property? That is like 5% down. And they say Canadian banks are conservative. That’s reckless lending. Not surprising since banks had been offering me, a young guy with no assets other than my income, enough money to buy a 3 million dollar property. If that isn’t reckless, I don’t know what is.

  10. Mansbridge's shoe shine boy

    i’d like to read a report on the Television shows and commercials these new homeowners watched the last few months… Brainwashing people to spend is easy…IF you can get them in front of the idiot box for any length of time.

    Three cheers for television and behavior modification psychology. I salute the Mainstream Media.. yo da (wo)MANNNN!!!!!

  11. You guys just don’t understand! They just bought a house in one of the best neighbourhoods, of one of the most livable cities in the world, for under a million dollars! And they only had to pony up $50K to do it. They’ll be on easy street in 10 yeas or so when the place is “worth” umpteen-and-a-half million dollars.

  12. Funny how people spend hours researching their next TV or computer purchase but on a dime will sign an offer sheet on the largest purchase of their life.

  13. Someone once said to me “Owing a million dollars actually isn’t much different from having a million dollars: you just have to get your head around it.”

    Of course he spent $8k a month on personal expenses and was had millions in debt between his property and his business.

    I still bet he’s rich now.

  14. You can’t buy a house in Kits for “just under a million”. Lot value for detached in this neighborhood is $1.3. We live in Kits,— anything detached that moves (lists, sells, or otherwise) we know about. Maybe they bought a townhouse. Thanks

  15. they live in a world class city, which is the best place on earth, they will live happily ever after in the cold rain

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