This is a copy of the email we sent out between Offer of Purchase and Possession.
We just bought a fixer-upper!
Recently a friend sent us an MLS house listing just for a laugh. In the description it said not much except; "alleged crack house", "as is".
Despite having no intentions to buy property, we were curious to see it and the neighbourhood, and what does a "crack house" really look like?
So we drove by on a Saturday and despite having all its windows boarded up, it looked like a nice, solid (maybe plain), two-story all-brick house from the 30's or 40's.
We called our agent and of course he was away for the Labour Day weekend but would call us Monday night. When we spoke he asked if we were seriously interested in it. By that time we had decided we were, and yes we'd like to see it.
First thing Tuesday, he made an appointment, and even though Lianne was at work, Andreas was able to tour it at noon.
Oh my!
If you've ever wondered what a crack house looks like, just think "rooming-house" dump! Lots of bedrooms, three kitchens, three full bathrooms, kicked in walls, wrecked door-frames from where years of locks and latches have been bashed in, writing on the walls, grease and filth everywhere. You know the fine-upstanding residence where drug addicts go to chill-out. With the windows boarded up, it was pitch-black inside and they had to tour the place by flashlight. The selling agent also warned them that the basement stairs were broken and that he was not responsible for their safety.
Also to be clear, this house is NOT a grow-op, where the entire house has been converted into a greenhouse. Think more frat-house than hot-house.
So our agent asks us if this is something we want to invest in. He agrees that the damage is mostly cosmetic and also tells us that there are three other offers already in on the property! It had only been on the market for 5 days.
We decide that as long as the house has "good bones", and has no expensive structural damage we should be able to fix it up to the level of the neighbourhood, and be able to sell it for a modest profit.
Besides, we need somewhere to live while our own home is being renovated, and this makes for a good "practice reno" so we can learn more about features and finishes without risking experiments on the house we are living in. This place will be fixed up to sell, but as mentioned we will be living in it for a while after renovations are completed (Did I mention that like much of Toronto, there is only street parking??)
So we decide to "go for it" and the agent tells us that it was priced so low because it is a power of sale, currently owned by the bank after the last guy defaulted on his mortgage. Apparently the owner had tried to sell it some months ago, but it was at a price nobody would touch. Now the bank owned it and the low price was intended to recover their cost, generate multiple offers and a bidding war. So into battle we go.
At this point, Lianne has not seen the place, nor is she aware that Andreas has decided to go ahead with an offer.
The agent asks Andreas what's the highest price he's willing to spend and we go with an offer that is slightly less, but with a large good-faith deposit.
Then Lianne phones to see how the house tour went. We tell her about the offer, to which she says; "Oh. I presume that's in both our names?" (Er, actually it wasn't).
So we revise the offer paperwork and ask Lianne to hustle home to sign it. By the time she gets home, we are now the ninth bidder, so we cross out the offer price and write in the maximum that we were willing to go. We also initialed about 75 places because the offer document had so many standard conditions crossed out we had to agree to. For example, the offer was NOT conditional on financing. It was NOT conditional upon inspection. It came with no extras or guarantees of any kind. It was sold in "As-is" condition, take it or leave it.
Lianne has now just signed her life away on a property she has not yet seen. For all she knows it comes complete with crack addicts. Good thing she loves and trust Andreas!
So now we wait. To be honest, we did not expect to get the place with so many competing offers.
Less than 24 hours later (Wednesday afternoon), Andreas calls Lianne at work and asks if she'd like a crack house?! (Is this better than flowers? <g>)
"WHAT!!" We won the bidding war?? Quelle Surprise!! How exactly??"
There were several factors it turns out.
First of all our agent is a true gentleman. We also had a serious offer, with a serious deposit, plus our agent was able to play up the fact that we were a nice young couple looking for a home to fix up. (note previous step of adding Lianne's name to offer).
We find out that our two biggest competitors had sleazy, ruthless agents who went right to the selling bank with their lawyers, bypassing the selling agent. This is a major no-no and against the ethics of the real estate board! So they were tossed out.
The selling agent liked us best, but still wanted to squeeze another $10K from us. Our agent said that "No, this is the most we can afford". So they agreed to give it to us, for our maximum price.
It should also be mentioned that the two sleazy agents started pestering the selling agent with "blank price" offers. Saying "write in what you want to get for the house, we'll pay whatever you wish". Of course the seller wouldn't have anything to do with these slimeballs. (lucky for us)
Who knew there would be so much demand for a crack house!
He also said that *our* agent was so nice (for a refreshing change), and he really liked working with him.
So now we all rendezvous that Wednesday night to sign off. Lianne still hasn't seen the place. However she does book in a tour the next morning and views the fine establishment by flashlight. Did we mention no electricity, no gas and all the windows are boarded up? Andreas comes along and takes photos because nobody is going to believe this place! In fact, only when we looked at the pictures did we discover the upstairs bedroom has blue walls!
Lianne's returns to work - a new job at that - and for the next few days she is introduced to people as the woman who just bought a crack house.
So now, we need to get a mortgage. We try the bank that owns the house now, on the assumption that it would be an easy transfer. They love us but hate the property and they want nothing to do with it ever again. Hmmm. Now what? The bank gives our 'package' to a broker. This broker thinks we're buying a grow op, and needs a little education. As a back-up we also call *our* broker, and he thinks we are a buying a grow op and suggests 'B' lender. Hmmm. Education again. Andreas checks to make sure they are not the type of lender to come by in the middle of the night and break your legs. ;) . In fact, they aren't. They are just not one of the Top 5 big banks. In any case, we'll figure something out this week.
So this is where we say; "To Be Continued".Possession Date is October 3rd.
$5 a tour. Free Labour Wanted.
Preview and listing can been seen at www.abach.ca/crackhouse