I recall the first (and only) time I ran away from home. I was about 5. In truth, I didn’t actually run away but, in my mind, came dangerously close. Or at least close enough to send a message – or so I thought. I can’t remember exactly how it all went down, but it had something to do with getting scolded for eating hot dog wieners straight out of the freezer. Naturally, this was never my idea but one initiated by my BFF at the time – Terri – who convinced me this was just risky enough to give us some street cred but not dangerous enough to kill us. My parents thought otherwise and forbid me from ever doing so again. I don’t recall what I packed but I had enough sense to make sure I could quickly pivot if necessary. Easy to do when your worldly possessions consist of a bag of marbles and the latest GI Joe action figure. Always one to forge my own path, I knew better than to hop on a bus to nowhere, so I promptly demanded that my parents call me a cab. Which they did – or at least pretended to. My imaginary taxi never showed up. With my family watching from the window, I feigned moral outrage for as long as possible, before throwing my hands up and declaring that “Obviously, this just wasn’t meant to be!” This allowed me to saunter back into the house, head held high, oblivious to my recent invention: cancel culture. The tingling in my tummy turned out not to be humiliation, but hunger. I think we had hot dogs (fully cooked, of course).
In hindsight, this would be the first of many lessons about the dangers of a herd mentality. I’ve never considered myself a high roller and definitely tend toward the more conservative side of the risk spectrum. I’m totally fine with this. This doesn’t mean I avoid or find myself unable to service clients who have a much greater appetite for taking risks. It’s a free country and my services are free of judgement. As long as I explain the pros and cons of any situation, they can make whatever choice suits them. And I feel confident having fulfilled my fiduciary duties.
With recent housing reports from all around the globe reflecting the same eye watering levels of activity and price escalation, I can appreciate how hard it is for many people to stand by and watch everyone else jumping on the real estate band wagon and making money hand over fist. Well, at least on paper. Real estate can be a strange beast. Sometimes the fear of missing out appears to be contagious. So, perhaps it’s not surprising to see unprecedented froth in the midst of a global pandemic?
Back in mid-2016, Toronto began to see some interesting activity. Perhaps not that interesting to people orbiting the city centre where prices and activity have enjoyed a very long and protracted up swing. So much so that we even managed to escape the clutches of the dreaded Global Financial Crisis relatively unscathed. But something was definitely underway in Toronto that year and in the outskirts. I’m a numbers person so am often found crunching away with different scenarios looking for patterns or anomalies. That Summer I had a Buyer client north of the city and I began to notice some unusual activity in the condo building she was exploring. It was older, well built and well run but not one that ever saw much action so to speak. But things were changing. Just as they were changing elsewhere too. Nothing I saw was cause to pull the fire alarm per se, but it was enough for me to change my messaging to all my Buyer clients. “I’m happy to help but please be advised that, based on what I am seeing in some pockets of the city, you may be purchasing at or near the top of a market cycle.” In most cases, this was greeted with surprise or, at the very least, curiosity. What Realtor of sound mind cautions people about buying? Like EVER?? Some clients still proceeded – either because they had a longer timeline for remaining in the future property or for other reasons. Either way, I wanted their decisions to be based on facts, not impulse. I don’t have a crystal ball or presume to be some kind or oracle, but I knew enough and had already seen enough to know that things can change on a dime and I didn’t want to be getting a call from any client asking why I failed to advise them about potential risks – especially the one of overpaying. And there’s the rub. I work on contingency which means I don’t get paid unless a deal happens (and closes). But, in my mind, my role is that of a trusted advisor so I go out of my way to ensure that any decisions my clients make are based on facts. Lots of em. I try never to presume or assume – trusting that they will do what is best for them – as long as I have done my job and fulfilled my all important fiduciary duties to them. Did I get calls in 2016 and 2017 asking for help with purchases? Of course. Quite a few. Do I regret cooling a few jets and, as a result, working on far fewer purchases? Not at all. In fact, several of those clients quickly made referrals to sellers who decided the time had come to cash out. So I’m good. Oh, and for the record, more than a few sales in 2017 closed at a lower price, were delayed because of a gap in the appraisal or failed to close at all following a long protracted court battle over the deposit. Believe it or not, some of those record sale prices still have not recovered – even in the bonkers market we are seeing now.
So, is there a risk to following the crowd? I can only speak for myself. At age 5, my parents shamed me into thinking for myself rather than submitting to peer pressure. It was a hard lesson, but one that taught me the value in asking questions and doing what’s right for me, even when it looks like everyone else is having way more fun.