Environment upgrade part 2: The bartering

Bartering. It is the oldest form of trading since the beginning of human civilization and is often viewed as a lower form of transaction by people in the civilized society (Don’t know about you, but I feel that way.) Which is why, I am surprised to find, that something as important as buying a house, in an advanced society that is Canada is still reduced to the rules of basic bartering when it comes down to the gist of it.
All the documents I signed, all the bullshit process that I went through, was so that I can finally write a number down and call the seller’s buff. I chose not to buy a new condo because they usually don’t barter on prices. You either buy it or you don’t. So I resolved to buying second hand homes that’s only been there for one or two years, so I don’t have to pay that extra tax and can play some well received psychological game with people.

Here are some tips for others that might be following this path soon. Although good bartering skill is important, it still can’t beat the right timing which you decides to buy. These are good when there are more sellers than buyers.

• Start the bid 20% lower then the advertised price
• There’s a reason they are selling the house, find out about it
• A final offer is never final, you can always come back with a higher bid. It’s called a shit test
• Don’t let your agent understand you too much, they exchange informations with seller’s agent
• Be ruthless, you won’t see the person again.

As mentioned before, I didn’t start my bid on my dream house. Instead, I started my bid on the condo which will generate the best investment return. Since I don’t care about losing this bid, I was able to offer a ridiculous price (Bid down from $194 to $160). It sends two messages: “I think your place is worth shit.” and “I am ruthless” to my agent.

Of course, because it’s new on the market, the owner turned it down even after I raised it higher a few times. (They get to have their ego for a while) In any case, their final offer was $184 000 and wouldn’t budge. I later found out that the father of the girl who’s selling is staying in montreal to help sell the house, so I gave up because they don’t have any time pressure.

The next one accepted a low offer before I can bid on it so I decided to move on to the dream house which I wanted.

This whole bartering experience goes against my conscious and my belief in how business should be done. I believe that a good partnership has to be formed on a basis of mutual benefit so it can last long and reap benefits. Add that, to the fact that I like the current owner as a person. You can say, I am buying this place because I trust the owner. Yet still, I couldn’t believe my own ears when I bid a ridiculous price and she responded by lowering her offer. I was tempted to go lower, but since it is already very close to what I was aiming for and I like the person, I didn’t. (I did the calculation of their bottom line by getting the purchase price from the agent and adding the mortgage interest plus tax etc to the equation).

So I closed the deal with her on May 10th for $179 500 to buy the condo and this is the previously password protected information.