The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise – Part 1: Greed And Luck

The 2001-2010 Vancouver RE market has affected our city profoundly, and touched many of us in ways that have changed our lives. We started collecting anecdotes here at VREAA out of a fascination for the personal and social effects of the boom.  A similar captivation has led a Vancouver homeowner to write of his own experience, and we are very pleased to bring you his serialized account, with its numerous anecdotes. ‘Froogle Scott’ will share his story of buying a house in Vancouver, and the journey that he and his wife have been on since that day in September 2003. In the first episode, we hear the story of the buying itself. Here begins one couple’s multi-faceted experience of this boom. -vreaa

Part 1: Greed and Luck

September 2003
My wife and I, first time buyers, purchase a 1940s stucco bungalow in the Grandview area of East Vancouver for the asking price of $355,000. This is about a year and a half into the current eight-year real estate boom/bubble. The lot size is 33 x 117, just slightly smaller than standard. The MLS listing gives the square footage of the house as 1860, which later turns out to be a 20% exaggeration. The house is only about 1550 square feet, split over two levels — the main floor, and a two-bedroom, ground-level rental suite. The rental suite is tenanted — a quiet single mum with stable employment and her teenaged son, who look at us with a certain amount of trepidation when we first tour the house. They needn’t worry. We’re happy to inherit good tenants, and do not increase their rent ($560 a month, plus 40% of the utilities) for the year and a half that they continue to live in the suite.
……. We avoid a bidding war because of the listing agent’s greed. She wants to sell the house to her own clients and pocket both ends of the commission (“double-ending”). So she doesn’t have an open house. And the home owners perhaps aren’t savvy enough to demand that she have one.
Feeding frenzy
The very first house we look at, a beautifully maintained 1950s stucco bungalow with a full-height basement suite in the heart of Grandview, the house we still wish we’d been able to buy, is snapped up at the open house. Nine bids, and a sale price of $402,000, about 9% over asking. In hindsight, not a bad deal. But we’re newbies in the RE game, and our buyer’s agent, a personal friend, is unfortunately out of town that day. When we ask the listing agent if we can come back in the morning with our agent for another tour and to potentially put in an offer, he looks at us with amusement. “Sure. But the house will probably already be sold. Why isn’t your agent with you? Your agent should be with you.” The open house is a feeding frenzy. You can hardly navigate the rooms. A weird tension is in the air, people shooting covert glances at one another, as if to say: “Get out. This is my house.” We’re quickly getting the picture.
Getting played
On RealtyLink, I find the house we do end up buying. The picture, which highlights a dark smudge beneath one of the front windows, makes the house look crummier than it actually is. Which is probably our first bit of luck. How many people took one look online, and skipped right over it? This time our agent is with us when we show up to tour the house. We see that another couple has already arrived ahead of us. We’d thought we were getting a private showing, but apparently not. The listing agent lets us in, and invites us to look around, but does little more, and then, somewhat unnoticed by us, slips away. A few minutes later my wife spots the listing agent and the other couple whispering together outside, and looking our way.
…….The house is solid enough, but everything about it is a little tired, and out of date. A 1940s East Van workers’ house overlaid with a cheap, do-it-yourself, 1970s facelift. Vinyl peel-and-stick floor tiles. Garish cayenne, and harvest gold, and pink kitchen and bathroom appliances and fixtures. A 50-year-old furnace. The do-it-yourself rental suite is dreary — poorly laid out, with a ceiling height of just under 7 feet. But we tell ourselves: “We can fix it up.” Famous last words.
…….Despite the shortcomings, of all the houses we’ve seen over the past few weeks, this one, with its good location, and comfortably within our budget, makes the most sense. With the memory of the one that got away still fresh, we decide on the spot to put in an offer, subject to a home inspection. But the listing realtor has disappeared. The three of us look all through the house and she’s not there. We finally go out to the street and spot her in the driver’s seat of her car, madly writing, the young couple sitting in the back seat, studiously ignoring us. All the windows up, doors locked.
……. Our realtor strolls over to her window and knocks on it. The listing realtor looks up, startled, as if caught in the act of doing something she shouldn’t be — which, we soon discover, is exactly the case. She hides whatever it is she’s working on, rolls down the window a crack, and screams at our realtor, “You’re trying to look at my offer!” A heated discussion follows between our realtor and the listing realtor while we wait a number of feet away beside our realtor’s car. We don’t really know what’s going on. Our realtor comes back to the car, pissed off. “We’ll have to put in the offer later,” he says.
……. It dawns on us that we’ve been played. The listing realtor purposely double-booked the showing so she could use us as a lever to force her own clients — the young couple — into making an offer. She insists she can’t take our offer at the moment, she’s required elsewhere, and will have to take it “later.” “Later” no doubt means after she’s got the owner to accept her clients’ offer. Yes, this sort of behaviour is against various rules of the real estate profession. But it doesn’t appear to have hurt this realtor. I continue to see her listed among Vancouver’s ‘top sellers’.
There are no bargains
We go to see another house. A very nice, and large, stucco bungalow near a leafy park in the South Fraser Street area. I love this house. The rooms are big and open feeling. Everything’s immaculate. And the price is just within our budget — well, with a little stretching. But a large guard dog chained up in the yard next door barks incessantly the whole time we’re there. The barks seem to penetrate every nook and cranny of the house. I notice earplugs on the kitchen counter and think that the owner, a nice fellow and a realtor selling his own house, should have hidden those in a drawer. My wife isn’t keen. In a subtle way, she probes the owner about his reasons for selling. Could the dog be one of the reasons? The owner says no, but his face twitches just slightly. I’m disappointed, although I recognize the wisdom of my wife’s sentiments. There’s a reason this really nice house is a relative bargain, and those telltale foam earplugs are it. Outside my wife and our realtor both agree that the owner was lying about the dog. We leave and go for dinner at a restaurant.
My cell phone doesn’t work
Throughout dinner our realtor works his cell phone, calling the listing realtor of the previous house multiple times. She won’t answer. She obviously knows his number and she’s ignoring us. A feeling of resignation sets in. After looking at numerous houses over a number of weeks, and finally deciding to put in an offer, it’s tough to be blocked out like this.
…….Our realtor convinces us that it’s still worth faxing an offer to the listing realtor’s office. The house may already be sold, but he’s seen a number of real estate deals fall apart at the eleventh hour. The fax will be time-stamped, and in the morning he’ll phone the head of the listing realtor’s office to complain about the treatment we received and if the house isn’t already sold, demand our offer be presented to the owner. We go to our realtor’s office and fax in an offer about 9:30 pm. Two thousand dollars over asking, subject to a home inspection, with a 48-hour time limit. Somehow we figure out that the husband of the listing realtor is also a realtor and our realtor finds out his home phone number. He phones it, gets the husband, and explains to him in a fairly forceful way that his wife better phone us. I’m starting to realize that our realtor’s belligerent side, which I had feared might be a liability, is actually an asset. The phone rings a few minutes later. It’s the listing realtor. Magically, her phone is working again. I’m not sure what she’s saying on her end, but our realtor keeps interrupting her, and repeating in a very loud voice: “IS THE HOUSE SOLD?” The conversation eventually ends. Apparently the house is not yet sold, but the listing realtor has told our realtor that, “Your people shouldn’t even bother. My clients have a hundred thousand dollars in their back pocket.”
……. My wife and I go back to the apartment we’re renting. The next morning, our realtor phones the head of the listing realtor’s office to make sure our offer has arrived, and that it will be presented to the owner. Perhaps more importantly, he goes back to the house and knocks on the door, and tells the owner that we’ve put in a cash offer of $357,000.
We hear nothing, and two days later our offer expires. We’re bummed out, but we move on. As our realtor says: “Houses are like trains. There’s always another one that comes along.” We start the search again. One of the houses we look at during this period is another stucco bungalow, also listed at $355,000, a somewhat better house than the one we believe we’ve lost, but overshadowed by two larger houses on either side, one of them hideously ugly, and in a less desirable location, sharing a back alley with a busy part of East Broadway. When we’re down in the basement and out of earshot of the owner, the realtor, of the slightly frightening, glamour queen variety, whispers to us, “He’ll take three twenty-five!” The basement is dark, even in the middle of the day, and feels damp, and we’ve both lived in this particular neighbourhood before. We pass.
There’s a hole in my pocket, dear Liza, dear Liza
Two weeks later our realtor phones. Are we still interested in the Grandview house? The listing realtor has phoned our realtor (on the explicit instructions of the owner, we later find out) and she’s interested in presenting a renewed offer from us. Apparently the young couple’s financing has fallen through. I guess there must have been a hole in that back pocket.
……. A little more hardened by this point, and wanting just the slightest bit of revenge, we offer asking price, rescinding the extra two grand we had previously offered. The owner accepts.
……. The home inspector gives the house a passing grade, although he tells us that he got an elevated moisture reading in the back corner of the suite kitchen and that we should keep an eye on it.
Dumb, but lucky, and getting handed a house on a plate
If the timeline for buying a house had been solely up to me, we would have been quickly priced out of the market for centrally located single family residences. It would have been a centrally located townhouse or condo, or a modest house in the burbs. Only recently back from seven years in Ontario, with a much more sedate real estate market at the time, I was all about careful looking and comparing, taking our time, microscopic home inspections, lists of mandatory and nice-to-have features, researching neighbourhoods, becoming an expert in “the perfect mortgage,” and so on. I wanted a nice, hundred-year-old “character house” with maybe a bit of fixing up required. (Ha! I shudder at the thought now…) Growing up, I’d hated stucco bungalows. My wife, who’s lived in Vancouver all her life and grew up in a Vancouver Special, was a little more in tune with the reality of the RE situation, and gave me enough kicks in the butt to ease up my natural cautiousness and agree to pull the trigger.   So I wasn’t smart about timing. I was dumb, but lucky. And by trying to screw us out of the house, the listing realtor actually handed it to us on a plate — in the middle of one of the most incredibly overheated housing markets any of us have ever experienced.
Financial Details
Asking Price: $355,000
Sale Price: $355,000
Down payment: $88,750 (25%, ergo, no CMHC insurance, representing thousands of dollars of additional cost)
Mortgage: $266,250
Terms: 3 year fixed at 4.00%, 18 year amortization, bi-weekly payments
2003 Property Assessment (estimate of market value on July 1, 2002): $260,600
2004 Property Assessment (estimate of market value on July 1, 2003): $330,500
Equity based on assessment: $64,250

Further episodes of The Froogle Scott Chronicles will be posted at regular intervals over the coming weeks. Comments are welcome below. – Froogle Scott & vreaa

Next Episode
In the three years following the purchase of our house in the fall of 2003, its assessed value increases by 72%, or almost a quarter of a million dollars. This windfall changes the way I think and feel about money.

13 responses to “The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise – Part 1: Greed And Luck

  1. Great post. I look forward to hearing what happens in 2005 and on!

  2. Good read. Although your last sentence is funny, I wouldn’t characterize 2003 as “incredibly overheated”, although I was a little surprised at the prices being charged at the time.

  3. Excellent post – looking forward to the rest of them!

    Amazing that realtors can behave like that, and still keep their license…

  4. “Amazing that realtors can behave like that”

    Get used to it. Ignore such antics and concentrate solely on the price and subjects. That’s all that matters in the end, in terms of your (luckily) brief business relationship with the Realtor.

  5. Wow I shudder to think what I would have done if I was looking at this point in time.

    “2003 Property Assessment (estimate of market value on July 1, 2002): $260,600
    2004 Property Assessment (estimate of market value on July 1, 2003): $330,500”

    That is a 27% jump in a single year! To me that screams “bubble!” and I could have decided to wait for a while. Then I might have gone completly insane watching the price of that place (and others I was looking at) shoot to 600-800K in the next few years.

    That was less than 7 years ago and already those prices look like they will never be seen again. Then again people in Las Vegas may have thought the same thing, so who knows what will happen.

  6. Interesting read. This totally reminds me of my experiences when I bought my first (and second) place. I can’t believe some of the tactics realtors use.

  7. Reality continues to ruin my life. – Bill Watterson

  8. Best place on meth

    What was the listing agents name?

    I’m putting together a nice package to mail her – just need a name.

  9. Warren, the prices may not have been overheated, but the zealotry was. I attended a few open houses, and people were putting down insane offers without inspection or consideration. It was alarming and a little creepy.

    It’s why we walked away; there wasn’t any time to consider, and anything livable (our price point was condos) was a stretch for our young family – I wasn’t about to stretch and THEN get hit with a “special assessment”, which I couldn’t even get an inspector to comment on.

    So 2003 made me a bear, because of the vulture culture: something feral was crawling into the market decisions and I didn’t want to play.

  10. Put 88k down on a house. I wouldn’t. Way to much risk involved. You worked and worked or someone did for that money. What you have into that house is too much at a risk for loss. You may have job loss. Way to fragile.

    What is needed is some financial sense. A people that reads nonsense. Without knowing who is behind everything that is pointed at them. To buy into their so called economics. Finance and investments. Has no sense. To be a lemming and follow others off the cliff who succumb to such things. It’s a shame people have to loose money by getting into way more debt than they can afford. When they could live simply. Instead of looking like a big shot with a fancy car and living in a really big house.

    It would make more sense to buy a house that was only 88k and save your money. You may not look like a big deal. But you would own your own house. If you lost your job no one could take that house from you. You could work just about anywhere and not be ashamed you had gotten into such a mess. You would also not loose face because you had fallen so hard, so fast.

    You plan ahead for job loss. Things you financially may loose out on in the long run. Otherwise that is not responsible behavior either for yourself or to your family. Instead of trying to keep something that is dying out running. Try planning ahead this time. Instead of getting into things. Like jobs and houses you can’t afford, cars, student loans, purchases. That will be nothing but loss for you in the future.

  11. Thanks to other blogs who have headlined and/or linked Froogle Scott’s first episode. See these links for their comments and discussion:

    Froogle Scott buys a Vancouver house (thanks pope!)

    What the hell is a ‘Froogle’? (thanks whisperer!)

    Special thanks to Patrick Killelea at, one of North America’s largest housing related blogs, for linking ‘Mortgaging Our Souls In Paradise’ on their front page.

  12. Woe is me because in 2003 here in Brooklyn NY I let my girlfriend (it’s my own fault of course) spook me out of buying a 2 BR condo for $380k because she found out that the owners had paid $149k 3 years prior, and that the place next door had sold for $315k just 3 months earlier. I just sort of freaked out and couldn’t move forward. So then I spent the next 4 years watching prices climb toward $650k for the same home, and I finally resolved to keep renting even though I’m now well into my 40s!

    It’s been a drag to watch the economy go so haywire and my housing dream evaporate because of other people’s greed. I just keep heeding the fundamentals and so I won’t buy until they make sense or until I know I’m there to stay.

  13. Thhе Froogle Scott Chronicles: Mortgaging Our Souls In Paradise

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