Great Expectations!

TorontoRealtyBlog

Here’s a story that I promise will serve a purpose….eventually…

Eons ago, when I was in my early 20s, a good friend of mine who was in the music scene moved out on his own and into an apartment in Queen West.

It wasn’t actually his apartment, though.  He was renting a room with a couple who had this really odd loft space on the second level of their unit, which was located above a storefront on Queen Street.

If that sounded confusing, then good.  Because the room that he was renting made very little sense.

It was probably only 8-feet by 10-feet, but for some odd reason, the ceiling was eighteen feet tall.  There was a skylight at the top, and I wondered if this room was actually an old elevator shaft, or a smoke stack, or something that would explain why this tunnel to the sky existed in the first place.

He suggested that we could construct a platform that would allow him to sleep up top, add a desk for a workspace, and allow him the floor space for his entire drum kit, speakers, amps, guitars, and other equipment.

I always loved building things when I was younger, so I figured this would be a fun and rewarding exercise.

I drew up some blueprints with my friend, and I drove to a lumber yard downtown to pick up everything we needed.

By the time we brought everything up to his loft, it was evening, and I was completely wiped out.  I told him I’d come the next morning at 9am and we’d start to make cuts and assemble the platform.

When I got there the next morning, however, I could smell the sawdust from the entrance.

“Yo man,” he told me, “I was up all night cutting the planks,” he said.

I looked at the floor, and he had, indeed, cut through every 4 x 4 and 2 x 4 that we had purchased, and he’d neatly stacked them into piles.

But when I started to pull them out and try to prepare them for assembly, I noticed that they were the wrong size.

All of them were the wrong size.

Every.  Single.  One.

“Did you measure these?” I asked him.

He said, “Of course I did!  I was on a roll, man!  I was on fire!”

I asked, “How many times did you measure these?”

He was silent.  He didn’t quite understand.

“Did you measure them more than once?” I asked.

He looked at me and slowly began to nod his head.  But he wasn’t nodding in agreement, ie, that he had measured each plank of wood three times, but rather he was nodding in agreement with my insinuation that he had royally screwed up.

“Measure twice, cut once,” he said, with a laugh.  “They taught that in Cub Scouts,” he said.

But then he sighed and said, “Too bad I never went to Cub Scouts…”

Measure twice, cut once.

It’s a metaphor, of course.  But in the situation I story I just told, it wasn’t a metaphor, or a proverb, or a philosophy.  It was literal!

This is also, literally, a proverb that I have always held very near and dear.  For somebody who is admittedly often impulsive and operates at a fast pace at all times, I repeat this to myself on a regular basis, in an attempt to remain calm, adopt a strategy, and be methodical with everything that I do.

“Measure twice, cut once” is about preparation

In the real estate industry, preparation in all areas of a transaction is absolutely essential.  We talk often about preparation in terms of readying a house or condo for sale, but one aspect of the preparations that we haven’t talked about, and that very few agents talk about, is expectations.

You know that proverb, “Failing to prepare is preparing to fail”?  I have always felt that preparation is all for naught if you fail to outline expectations as well.

Have you ever sold a house or condo?

If you’ve been through this exercise before, think back to the start for a moment.  What understanding did you have of the process?  What were your expectations as you undertook the very first steps?

We’ve talked a lot about staging, renovating, and listing a property for sale, but the discussion that I want to have today is about when the property is actually listed for sale.

Do you remember what your expectations were?

How many showings did you think you’d have?

Did you wonder what the “indicators of interest” were?

More to the point, did you ever ask yourself, your partner, or your real estate agent, “How many showings does it take to result in an offer?”

When listing a property for sale, just about every seller asks this question.  But whether or not the seller asks the question to themselves or directly to the listing agent is another story.  Now, whether or not that listing agent answers the question, and does so based on knowledge and experience, can make or break the listing experience for those homeowners.

Having heard from many of my clients about their previous experiences, I can tell you that it would seem very few agents actually explain to their seller-clients what to expect in terms of showing activity, interest level, and offers.

For those of you who have never sold a home, trust me when I say that it’s a stressful endeavour.  Even when the market was absolutely ripping in 2021 and 2022, and when sellers were seeing 80 showings in a week, those sellers were still walking on eggshells.

I have been through the process of selling my home twice, and as I write this, my mother is likely sitting on the couch in my living room with knitting needles firmly working away, as she has vacated her home for the listing period

That’s right, folks; my mother’s house is for sale!

Talk about hitting close to home.

Three weeks ago, a moving truck pulled up to my client’s house in Leslieville and picked up FORTY large plastic storage bins, in addition to a slew of cardboard boxes, and small pieces of furniture.  The movers took all these items to a storage unit, where they will remain until well after the house is sold.

The very next day, the same moving truck pulled up to my mother’s house and repeated the same exercise.

So trust me when I say that I understand exactly what it’s like to go through the rigours, uncertainty, and anxieties associated with preparing, listing, and selling one’s home.

But preparing one’s house for sale is only half the battle and only incorporates one set of emotions.  Once the house is listed for sale and buyers are trekking through, a completely different set of thoughts and emotions takes hold.

No matter where you live, and in what size or style of home, there’s always going to be a little voice inside your head that asks, “What if nobody likes my house?”

Even the most confident among us is going to have doubts.  Whether you own a 1-bedroom condo or a six-thousand square foot mansion, there are going to be moments where you question whether your offering will resonate with the buyer pool.

And while it truly only takes one buyer to sell a home, there’s not a homeowner in the world who would feel good about achieving one showing.  That’s why homeowners need to understand the process before the property is listed for sale, and thus be given some sort of expectation.

The night before I list a property for sale, I always set up a call with the sellers to discuss the process that lies ahead as well as set those much-needed expectations.

When I spoke to my Leslieville clients, I told them, “I want to set expectations.  There are two metrics that we can use to measure the interest level in the home, assess whether we’re on the right track, or not, and attempt to predict the number of offers we’ll receive.”

Those two metrics are:

1) The number of showings booked.
2) The number of requests for the pre-listing home inspection.

Here’s where an agent can only set expectations if that agent has ample experience, is well-versed in today’s market, and is well-versed in the specific market that the property is in.  This speaks not only to the geographic area, but the property style and price point as well.

In terms of setting expectations for my clients, I put specific numbers to it.

I told them, “I’d really love to see forty showings on your house in the seven-day period that we’re listed.”

That, right there, gives them a measuring stick that they can use moving forward.  That simple comment, one sentence in nature, relieves a tremendous amount of uncertainty right from the get-go.

I told them, “If we ended up with thirty showings, it wouldn’t be terrible, but it would be below my expectations.”  That too was an important barometer for them, and it’s rooted in a level of honesty that some agents are afraid to provide to their clients.

Moving on to the next metric, I told them, “I would be happy to see a dozen agents ask for a copy of the home inspection over the course of our seven-day listing,” which is a sign that their buyers are interested enough to take the next step, and are thus contemplating submitting an offer on the scheduled date.

But then I took the expectation-setting to another level.  I broke down the number of showings that I expected by day.

“On the first day, I would love to see 6-8 showings booked,” I told them.  “I don’t measure when the showings take place, but rather when they’re booked.”

I explained, “The first day is typically a busy one, but the second day is usually busier.  On the first day, agents will view the listing, email it to their clients, and then the day after, they’ll book a viewing.  So we’ll get a handful of folks booking on the first day, but the second day is the big one.”

Then I set that expectation accordingly.  “On the second day, I’d love to see 8-10 showings booked.”

I explained that, after the second day, showings will naturally taper off.  “We’ll see that number slow to a trickle by the weekend, as most people will have already decided by then if they want to see it or not, and thus they’ll have already booked a showing.”

But by the weekend, we are provided with yet another metric on which to gauge interest:

3) The number of people who attend the open house.

I told my clients, “For a house in this location and at this price point, I’d like to see 10-15 groups through the open house, on each of Saturday and Sunday.”

That’s a tall order, of course.  Not every house gets 20-30 groups over the course of a weekend, but for this house, in this location, and at this price point, it was exactly what I expected.

So with the expectations set, all that was left to do was list the house and see how it went.

We listed the house first thing on Tuesday morning.

By about 10:00am, that delightful email first hit my inbox: “SHOWING NOTIFICATION.”

I emailed my clients and said, “First showing is booked!  Let me know that you received the notification from our booking system,” to which they responded with excitement.

By mid-afternoon, we had already booked six appointments, and thus we had reached the lower end of the prediction/expectation I had set.

But from there, it started to get really, really busy…

By the time I sat down to email my clients at 11:00pm that evening, I had the delightful task of informing them that fourteen showings had been booked.

That blew my expectations out of the water.

I was hoping for 6-8, and we were somewhere in the neighbourhood of double what we were hoping for.

Not only that, five agents had reached out to ask for a copy of the pre-listing home inspection on the very first day.

On the second day of the listing, we had eight showings booked.

It was less than the first day, which sort of went against the expectation I had set, but over two days, we had booked 22 showings, and that was well ahead of the combined 14-18 showings I told them I wanted to see in the first two days.

By the third day of the listing, we had received nine requests for the pre-listing home inspection, and we were pushing thirty showings.

The weekend rolled around, and we were eager for a busy open house.

On Saturday, we had fifteen groups through the home.

On Sunday, there were twelve eager sets of buyers on site.

When I called my clients on Sunday night to discuss the week that we’d had and set expectations for “offer night” on Monday, I gave them the final tallies.

“We had forty-six total showings on the house, sixteen requests for the pre-listing home inspection, and twenty-seven groups through the open house on Saturday and Sunday, combined,” I told them.

But what did this mean?

Here’s where I really stuck my neck out…

Predicting activity, interest, and offers is a thankless task.  Because when you’re right, it’s taken as a given.  But when you’re wrong, you’re taken to task.

In this market, and for a home like this, I use the number of showings and the number of inspection requests to attempt to predict the number of offers we would receive ont he property.

My metrics:

10-15% of buyer showings result in an offer
40-50% of inspection requests result in an offer

For forty-six showings, that would mean 4.6 to 6.9 offers would be submitted on Monday night.

For sixteen requests, that would mean we’d see 6.4 to 8.0 offers on Monday night.

My Sunday night call with the sellers lasted about twenty minutes, but I gave them one more pearl of wisdom:

“Offer day is a very, very, very long day.  No matter how you expect to feel, it will be much, much harder.”

Can I be any more honest than that?

With offers set to be reviewed at 6:00pm on Monday night, we received offer registrations as follows:

12:23pm
3:51pm
4:03pm
4:41pm
5:57pm
6:12pm
6:45pm

That’s when offers were registered.  Not submitted, but rather when offers were officially registered by the buyer agents.

Now, some of you are reading through the timestamps above, your lips are moving, and you’re counting “…five, six, seven.”

That’s right.  We received seven offers.

But some of you are hyper-focused on the 6:45pm timestamp and wondering why in the world anybody would register an offer at 6:45pm when offers were set to be reviewed at 6:00pm!

It happens.  And as a listing agent, you welcome every offer you receive.  You can’t control how other agents are going to act, but “expect the worst, and you shall not be disappointed” might ring true here, because there’s always going to be somebody who submits an offer well after offers are “due.”

So what did we sell the house for?

That’s not the point of today’s story!

The point is that we received seven offers on this property, which was completely in line with the expectations that I had set for my clients.

Don’t get me wrong, the math doesn’t always work like this, but it sure is nice when it does!

So while you might be reading this blog post weeks or years down the line as you try to ascertain or predict how many offers will result for your home, remember that there’s no hard-and-fast rule.  My metrics above were based on this specific property type, in this geographic location, and at this price point.

Getting the home sold is obviously the goal of any home seller, and achieving a great price comes hand-in-hand with that.  But being able to set expectations for how the process will play out, reduce uncertainty, and keep emotions in check is pretty good too.

Now, about my mother’s house…

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