The Art Of Debt

by Darrin DeRoches July 24 - 30, 2014

This week I had client who wanted to offer on a house that just came out and was set up for competition. They would not accept offers until one week later, after the open house. We viewed the property and I tried to show them that the house was not worth the asking price. I saw a lot of work and the price did not reflect the scope of work and market value. We left the showing and I thought that they would not want to make an offer, but they went to the open house and figured they were up to the task of doing the work if we got it for the right price.     The day arrived for offers and I called the company to register our offer, and asked if there were any other offers coming in. They said that it was early and no other offers were registered. I called again a half hour before presentation time and still no other offers. This just proved to me that the house is not worth its asking price and no one else was going to make an offer. We wrote up our offer just about 5 per cent below asking and drove to the office to present it. We were the only ones there and we presented the offer and waited for their response. They did not counter our offer and decided to put the house back on the market for 5 per cent higher than it was for the last week.     This is where the Art of the deal comes in and before the agent could even explain the reason, I stepped in and explained it. The sellers are so far in debt that they figured if they created “competition”, they would get over asking and be able to sell. Obviously my clients will not pay over asking and putting it back on the market higher than asking is only going to make the property sit for a long time. The agents are only doing their job for their clients but who is going to pay over market value for a property that needs a lot of work?     It is not my clients, I or the seller’s agent’s job to pay the debts of the sellers. They convinced the bank to lend them money on the property and ran up their debt and credit cards to a point that they now want a certain price to clear all the debts. Problem is, the property is not worth it. The only solution for this type of deal is to talk with a debt councilor and clear enough of the debt so that you can then sell the property – pay off all of your debts and even walk away with some money. The strategy they are using will just create a ton of time wasted and no sale. I cannot get involved with their clients and make the deal come together but I have done this for clients of my own and everyone walks away with money in their pockets! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.