Thursday, January 26, 2012

From Rags to Riches


(5th in series “Real Real Estate”)

NARRATOR: The players are Ben (Builder and Vendor)
Mike (Buyer Sales Representative)
Rachel (Seller Sales Representative)

The scene is a spectacular 4,000 square foot custom design home nestled
on a generous 1/3 acre treed lot in Tyandaga Highlands, North Burlington.
Rachel is Ben's Sales Representative who has been marketing his home
(since early construction) at $665,000 for approximately one year.
She has had Open Houses for Realtors (when nearing completion)
and devoted one day each weekend to Public Open Houses from 1 to 4 pm.
Mike, a Buyer's Sales Rep. represents a young couple with a small child,
whose current accommodation is a 2-bedroom apartment. By good fortune,
she has inherited a large ... Very Large amount of Money!

MIKE: Rachel, I'd like to show your custom home to a young couple.

RACHEL: Great! I'll meet you there to turn off the security system; in the home
you'll find a detailed brochure outlining all the features.

NARRATOR: The following day, as we realtors do, Rachel called Mike
to enquire about his couple's interest (or lack of it) in the property.

MIKE: They really like this home, but I have arranged other homes for them 
to also view. Her father has advised them to see as many homes as possible.
But, we're really considering your Builder's home.

NARRATOR: In the meantime, Mike has shown them several other fine homes, one which interests them in The Woodlands about the same price, backing 
on a ravine; in addition, the home has a finished lower level. The 2 realtors discuss location vs location and which home would generate better resale value.

RACHEL: Ben, Mike's young couple is considering another home in 
The Woodlands that has a finished lower level which seems to appeal 
to them more.

BEN: Rachel, advise Mike that I will complete the lower level for them 
at no additional cost, depending upon standard specifications.


MIKE: Rachel, my buyers would like to meet with Ben to discuss the 
finishing of the lower level.

RACHEL: I know you're trying to get this couple on paper, Mike...
may I suggest they put in an offer, making it a condition to meet with 
the Builder for discussion.

MIKE: I'll try to arrange this.

NARRATOR: Mike booked a second appointment with Rachel so see
Ben's house. Several weeks went by and nothing has happened. By chance, 
Mike's couple pass by when Ben is at the house. He recognizes them from Rachel's description. They discuss the lower level to suit their needs. 
Ben and Rachel are anxious to receive an offer, but it rests in Mike's hands 
and his communication. Two appointments are arranged for her father 
from Toronto to meet with them and the Realtors. They waited for 1 1/2 
hours each time...NO SHOW! Later that week, her father recommended
that if he couldn't make it by the following weekend, to proceed with 
an offer on their own.

MIKE: Rachel, we have a signed offer on Ben's home. It's now 10 am.
When can we present it?

RACHEL: I'll try to locate him and establish a presentation time as soon possible.

NARRATOR: Rachel leaves messages for Ben to call, but decided to go
to the building site where he's currently constructing another new home.

MIKE: Rachel, there's a brief delay with this offer; she wants to make a change.
I'll call you within one hour.

RACHEL: Mike, that's fine! Just call...the office will page me if I'm not in.

NARRATOR: Three or four hours go by!

MIKE: Her father now wants to see this home plus one other at 3 pm. 
Can you open the house for us again???

NARRATOR: Rachel drops her present plans to accommodate this request;
she, Mike and his clients meet at the home again and wait ONE HOUR
for Dad to arrive...NO SHOW! He had apparently left Toronto at 1:45.
Mike proceeded to show his couple the second arranged home and spent
an hour considering it as a possible purchase. Rachel, in the meantime
drove over to see Ben on the building site to advise him of the delayed proceedings.

MIKE: Her investment bank advises her NOT to buy such an expensive home.
They should buy a normal family home, as other young couples do, then
gradually “move up” as their family grows. What will their friends think
of them in this kind of home? They'll LOSE their friends. This is the
psychological guilt-trip her investment people are giving them. I've
advised them that the investment bankers prefer her to invest in “their
offerings”, I've also told her that this is a “dream home” that everyone
yearns for! I believe her father wants her to move closer to Toronto...
he's even looked at a few homes there, but he wasn't impressed. 
Right now, she's torn with a decision to make. I DO KNOW that she 
really wants this home...and nothing will compare with it now.

NARRATOR: In this delayed state, Ben cannot continue to own two houses...
his home in Oakville and the one in Tyandaga.. Ben decides to rent his 
Oakville property. BINGO! It's rented that weekend to a couple doctors 
for 18 months.

BEN: Rachel, we'll be moving into the new home the end of June, so you 
have until then to sell it, but now possession will have to be 90 days in order 
for us to find alternate accommodation! We need to send in an MLS
Revision to change the possession date!

MIKE: My couple has presented me with a new twist! Would your Builder considering renting the home, since this way, her investment bankers 
would be satisfied? Rachel, please tell me that he “won't rent it!” 
I'd rather SELL the home!

RACHEL: This is almost laughable, Mike! The Builder has rented his own home in
Oakville, and moving into the new house. Advise them, if they want the home,
they'd better “move now” because after June 30th, it won't be available!
NARRATOR: On May 13th, Mike called Rachel that in essence he was meeting with them the following morning to sign an offer.

RACHEL: Mike, because of the circumstances we've been through, 
I recommend that you get a sizeable deposit. Also, Ben will commence to finish the lower level and complete it by the closing date.

NARRATOR: On May 14, Mike and Rachel presented the offer to Ben; 
it was a firm offer with no conditions, very close to the asking price. 
He accepted it since we didn't want the buyers to delay further.
It was accompanied with a $50,000 deposit cheque. Closing date was June 28.
Isn't that Wonderful? ... and everyone was pleased. Ben and his family
would find another home ASAP. If only this offer had come in one week
earlier! However, the custom home was sold and worth the inconvenience.
Almost Too Good to be True!

Rachel drove to a bank in North York upon which the cheque was written
to “certify” its authenticity. Guess What? NSF...not sufficient funds!
Occasionally it happens, that moneys fail to be transferred in time; she
returned to Burlington.

RACHEL: Mike, we've a problem! I went to her North York bank
this morning and was unable to certify the cheque.

MIKE: She TOLD me she had called at 1 pm and the funds were there. 
I'll come for the cheque and go to her bank myself tomorrow

NARRATOR: Thursday morning.

MIKE: I was notified by the buyer not to go to the bank...she was meeting 
with her account manager personally at 1:30 and will get the cheque certified 
and deliver to my office upon her return.

NARRATOR: Her account manager didn't see the necessity of
certification since he could vouch for the validity of the money. She has 
now made arrangements with him to to have a bank draft in the amountof $50,000 to be sent by courier to Mike's office same day. Guess What?
No Delivery!

This tedious experience, with various reasons/excuses carried on for another
five days. Ben, usually of great patience, became very frustrated:
...he had started construction on the lower level
...he had already spent $11,000 on this task
...he had to be out of his Oakville home in 30 days

MIKE: Rachel, I've left messages for her to contact me...just heard 5 minutes ago.
They Can't Get the Money!!! I am So Disgusted. She's obviously Lied to Me!
She's totally embarrassed.

RACHEL: Where is she now, Mike? Home? I suggest you go over there 
and confront them...she Owes You and Us Some Explanations.

MIKE: I've just returned from there...walked in on a family meeting. I surmised 
at first they had guests and I wouldn't be able to speak with them. Her guests were...Her Parents...having a serious discussion! The couple apparently told 
their parents just 2 hours ago what they had been doing. They were living a “fantasy” at everyone's expense. She was crying and not talking. They're apparently worried as to what they are liable for and the implications. 
The parents told me, “The kids have no money! They have debts!” The father didn't know anything about the three appointments made for him to view 
the house...knew only 2 hours ago! She had believed that when we could not certify the cheque, the episode would end right there!

RACHEL: Ben will find this totally unbelievable! You'll need to get Mutual Release
papers signed by them if this offer is nullified...then Ben needs to agree.

NARRATOR: Ben was determined to seek legal action to sue the buyers...
for fraud, for public mischief and non-performance. Rachel advised him that,
in essence, the deposit was part of the Agreement, therefore, without the 
deposit, the offer automatically became “null and void”.

As of this telling, the total "added cost" would amount to about $25,000
and he was unable to collect one cent from these self-styled-purchasers!
And the realtors involved can only “chalk it up to experience” with no
remuneration for their efforts! This was the “height of exasperation”!
Time to move on ... develop another customer/client relationship
that is hopefully more rewarding. 
In Retrospect:

I was Rachel in this “playlet role”.

If the Buyer Sales Rep had checked and confirmed that his clients
were financially sound, the entire fiasco would have been averted.

The sizeable deposit should have been certified
prior to the offer presentation.

But...who is going to question
an inheritance of a Million Dollars?
(It happens!)

Perhaps this article should be retitled
From Rags to 'Fantasy Riches' to Rags”!

Pearl of Wisdom”
He who makes excuses,
accuses himself.
(French Proverb)

Merle Baird-Kerr . . . rewritten December 21, 2011
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