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In April, 2017, my hubris soared along with the price of the Toronto housing market at the peak of its mania. But you know how these plotlines go. Like the ancient Greek Icarus whose ambitions got the better of him, I flew too high and my wings melted. Greed is an old story.
We put our home in midtown Toronto up for sale. The backyard was falling into a ravine and the house itself was politely regarded by our neighbours as a tear-down. But the lot was pristine. It would surely be coveted by a developer. I could win at this game. Sell high, wait for the housing hysteria to end, and buy low. Maybe with the spoils I could help my kids get into their own homes one day.
My wife Lisa has been into real estate porn for years, a master of neighbourhood nuance and price trends. In December, 2016, she casually mentioned that she thought our home was worth X. The beast inside me stirred. X seemed an extravagant amount.
She warned me, “Don’t forget we have to buy on the other end.”
I counter, “Doesn’t matter, we’re downsizing, it’s about price differential.”
I was so smart.
When our real estate agent suggested he could get a sale for X plus 25 per cent, the Steppenwolf lyric, “Get your motor running” started playing in my bloated head.
Not four hours after we shook hands on the listing, our agent procured an offer. Four hours! It was for X plus 25 per cent, plus another 20 per cent. The agent proudly called it a “pre-emptive bid.” It worked. It also pre-empted my sanity for the rest of the year.
Lisa saw me licking my chops. Taking care to make her words sound deliberate and unequivocal, she cautioned me: “Our next house shall also be X plus 25 per cent, plus 20 per cent.” I ignored her.
Like Icarus, the peak of my hubris occurred literally in the stratosphere. Three days after the deal was inked, Lisa and I hopped onto a flight to celebrate. It was the first time we flew business class. I had 100 luxurious cubic feet all to myself crossing the Atlantic. Five feet down the aisle was an absurd and audacious tray of Kit Kats, and apparently a free for all. I regressed 52 years and made off with a dozen of them, both for current and future indulgences. It was not my finest hour. I suppose my self-loathing began in that moment. My mother warned me of grabby little fingers.
The buyer of our home was indeed a developer. When I told my cocky brother-in-law, a trader by trade, the details of the deal, he chided me from his perch that the deposit was too low. "I’m not saying it’s gonna happen kiddo, but...” I dismissed this as his usual way of busting my chops.
I soon learned the developer was laying down offers across Toronto like a banshee on steroids. He floated the idea of becoming partners with me on building a new home on my old lot. I was seduced by even more dollar signs, until I pondered, "Why is this guy looking for capital after he has signed the deal?” When the next deposit payment was due, he stopped answering calls and texts.
He would, of course, ultimately bail on the deal. The banks wouldn’t touch him. But I didn’t know this at the time.
Lisa had already hit the ground running looking for the perfect new home. She must have visited 50 mini Georgians, Victorians or whatever, dragging me to open houses while I would quietly vomit inside when trying to digest the asking prices.
We made a few offers. We kept getting outbid.
Multiple bid situations are orgies of avarice. The seller is salivating, wanting to leverage every dollar from the buyer frenzy because the latter group is almost catatonic with the fear of missing out. The agents, coyly masking their casual collusions, are raking it in at both ends.
Lisa called one afternoon in early June while I was working out of town, absolutely gaga about a tiny Victorian. They were taking offers that evening. The house is over 100 years old. Moving from a tear-down to a big renovation. Perfect.
I get to the gist, "How much, Lisa?”
“What we sold our house for minus 30 per cent”.
Quick mental math tells me that with a looming renovation, plus a bidding war, plus the City’s extortionate tax grab, we are going to end up in a deep six-figure hole.
I agree to submit a bid, sight unseen. I figure I will reap marriage credits for decades to come. Fifteen months later, I am referring the matter to a collection agency.
The truth is that I just wanted the whole thing to end. The bid prevailed. We got the house.
When we learned the buyer of my original lot couldn’t close, I became the illustrious owner of two homes. My family’s cash flow started to bleed along with my pride.
Thank goodness for my friendly neighbourhood line-of-credit expert at the bank – appropriately named Penny. It wasn’t until our home was sold a second time that we were made whole. It could have been a lot worse.
But not for my agent. Get this. He made two commissions on our first house, plus one on the buying side. The original buyer sold his obligation to a second buyer for a tidy profit. Go figure. All is fair in the game of excess.
Nothing summons the demons of our nature like greed. I was awash in it on all fronts, but especially my own. I am sullied. I know many would regard my Champagne problems as trite, so I should stop complaining. I am to this day embarrassed, forgetting how much I had while pursuing “more.”
Greed blinds us to our own blessings. The year of pain and uncertainly and loss was real. The world stepped on my throat, insisting I wise up to my own audacity.
Today we find ourselves in a smaller, more expensive and lovely home in a downtown neighbourhood that still has parks and majestic maples, and where neighbours look out for one another. I thank my lucky stars I actually have a home, and a loving, healthy family to occupy it. Its feels a relief to be back on Earth.
Steven Gottlieb lives in Toronto.