Liar, Liar, Pants on Fire - The Business of Trading Properties

The Business of Trading Properties

Well there is a whole new concept of real estate I never thought I’d encounter. In fact, to this day I have no idea of how I managed to acquire the commercial listings I did or even the buyers wanting to do business, but I did so I might as well explain my view of the concept.

See, the whole idea is that you’ve got your various properties, mortgages, money, all with buyers and sellers wanting to make a deal to their own advantage. What you do is to take all these things together and throw them all into the air. How high you throw them depends on how complicated the deal gets. Then all these things come drifting down like confetti until they all settle in their rightful (new) place. It all makes perfect sense if you look at it that way (once it all clears Land Titles). Well, that’s the concept anyway.

Enter Mel Burry, lawyer and property manager whose client wanted to dispose of several properties. I won’t go into details of how we met or how I was selected to represent his client. Suffice it to say that I was our office’s “commercial” agent.

Also enter Russ Wright, a buyer who was interested in the properties I had advertised. I call him Trader Russ. Russ had a keen interest in a medical building I had for sale not too far from the Victoria Hospital. The building was not very old and there was room for expansion. The only problem was that Russ had a number of small residential rental units he owned or had equity in and needed to dispose of in order to buy the building, but he was really keen on doing the deal.

I discussed the whole business with Mel. To my surprise he said, “Let me get back to you.” A few days later he said, “Let’s have a list of what he’s got.”

It took a couple of days but Trader Russ, obviously excited, brought me a fairly detailed list of all his properties, including appraised value, mortgages owing, equity etc. It was impressive. Well, we ‘back and forth’ed’ for a few days, getting familiar with each other’s properties, and Russ put in a complicated offer. I won’t bother you with the details, but it took some doing. Finally, all done, Mel wanted to meet together with his client to clear up some details and sign off on the thing.

We met at my office, exchanged pleasantries and got down to business. It was a fairly long discussion, what with all the details of the various properties, values etc, but it all worked out in the end, except when it came to my commission. Now with a million and a half worth of real estate, especially with such a complicated sale, my commission was to be no chump change (at least in my mind). Stephan the client however, had other ideas. In his mind I was just the clerk who had put together a collection of things he might want and by way of thanking me he would give me a measly $1,000 bucks which he thought was generous enough.

This was obviously not my way of thinking and it completely surprised me. Now I make it a point to never get angry, but when called upon I can put up a pretty good act, so I launched into a lengthy lecture about honesty and honor and the commission rate signed on the listing agreement, and how I had been convinced he was a man of his word and how disappointed I was at his character and I don’t know what all else, but when I was done I was all out of breath and pleased with my self-righteous tirade.

Stephan sat there like a log of wood, eyes somewhat glazed over as though he hadn’t heard anything I had said while big Mel seemed to shrink in his chair, turning from a swarthy complexion to a pale white by the end of it. Stephan merely said in a dead pan voice that was the deal – take it or leave it. I think I replied with something like I would take it just to get rid of this whole messy transaction and that he – Stephan could live with his conscience. He left without shaking hands, leaving Mel and me sitting there.

“What the . . . . Where did that come from?” he wanted to know.

“Not bad eh?” I asked. “What’d you think?”

“I thought I was listening to the Sermon on the Mount for a minute there and was afraid you might be tagged. You just don’t deal with these Sicilian immigrants like that. Maybe I should have told you more about them ahead of time.”

My blood suddenly ran cold. Well, you know the rumors you hear about Sicilians and the Mafia. Mel said, “I’ll see if I can fix it.”

Mel obviously fixed it because the deal finally went through and I got my thousand bucks and another listing to boot. So you see, everything came drifting down to fall into its designated place.

Whew! 

Liar, Liar, Pants on Fire - More Farmland Stories

More Farmland Stories

While I’m at it, I might as well include another amazing farmland story. So help me, I couldn’t make this up if I tried. It’s the most amazing tale of appraising and selling farmland in my book.  

A year or two before, I had spent time in the Altona area. I was promoting log homes and underground shelters and had somehow come in contact with the Altona Credit Union, perhaps enquiring about mortgages for that purpose. The only thing that came out of that was one day Helmut Dyck from the Credit Union gave me a call, asking if I was interested in giving an appraisal on some property west of Winnipeg and submit it to him. They had three parcels they wanted to dispose of in a quasi bankruptcy situation and would appreciate my help. (It was more like a forced sale.) I would be competing with other realtors but I should give it my best shot. I would, and I did, so they gave me the co-ordinates in their terms and the name of the owner/occupant. I could get hold of him at Arc Used Autobody Parts. His name was Nate Fingold.

I tracked Nate down in the messiest junk yard I’d ever seen. There was junk everywhere, up against the counter, on the counter, behind it and into the shop. Two or three people were waiting on customers, all the while yelling at Nate to find this or that. Every time he would come up with the part out of all that rubble. It was amazing. He seemed to know where every piece or part was. I could have stood there all day watching this.

When I finally got his attention, Nate suggested we go down the road to the Salisbury House where we could talk in peace. We got our coffees and sat down to talk. It turned out that Nate was really a cattle man, even in his native Poland. When he came here he started up again, doing quite well. The Auto Parts business came from a lack of things to do and it turned out to be handy in terms of cash flow.

His wife, he said, while being a good manager, was fairly high maintenance so he had to do a lot of juggling to keep things afloat.  His troubles lately had come from cattle prices dropping due to “mad cow disease” in England. They just bottomed out and wouldn’t recover so he had to give up his beloved cattle and rely more and more on the Auto Parts business. It was really a bad patch for him.

Finally we got round to the location of the properties which were not too far away. I had to just go down Jefferson Avenue until I hit the number 7 Highway and it was right there on either side of the road west of the Highway. I couldn’t miss it. He also gave me the dimensions of the three parcels, where they began and where they ended. Somehow it sounded strangely familiar. I took Nate back to his shop and headed for Jefferson Avenue. It was not much of a ride, what with washboard gravel, pot holes and overgrown spots.  Finally I hit the number 7 Highway and my mouth fell open.

‘Oh for God’s sake!’ I muttered under my breath. I found myself at our boyhood playground! To the left was the big old elm tree we had all shinnied up and carved our initials in. It was right beside the pond we used to swim in. On the north side of the road was the bigger pond that I now supposed had been a gravel pit at one time. It held a body of water that was fed by an artesian well. Oh my, the stories I could tell you about that place!

After I got over the original shock, I drove on to the farm yard. There was a long, low unoccupied bungalow there and a few outbuildings – nothing much to speak of. Of course nobody was home so I didn’t bother to poke my nose in anywhere. It was clear that Nate was a frugal cattle man, allowing for his animals to shelter under an open roof. There was a separate area for hay storage and a machine shed that I presumed held his equipment. There were no longer any animals on the property.

Stopping again by the old elm tree site I had another good look around and then headed back to my office by a more familiar route. Assessing the real value of the property wasn’t as easy as expected. I had to take into account the inflated prices of the East Reserve and even to the West where the farm dealers were steering their customers. That was all fine and dandy if you were prepared to wait a year or two (or three) for the right set up to lure European buyers in. My understanding with the Credit Union was that they wanted to sell it and get out of the farming business. Actually it was more that they wanted to get away from Nate Fingold who had already agreed to make a payment in person, but given his busy circumstances, the only day he could come in was December 25^th. (He chuckled at that the next time I met him.)

Of course, if you live in Altona and its Christmas Day, you’re either in church or at home with family and friends. That’s one day you don’t do the devil’s dirty work! Nate, the wily old fox knew that and exploited it as much as possible.

So I set about doing my sales comparisons from about every angle I could, including the number of days until a sale was made. It was quite an extensive survey. What I came up with was quite a different number that what was floating around presumed land prices. So I wrote it all down with an explanation of my findings and sent it off to the Credit Union.

When the owner of the company I worked for saw a copy of my letter to the Credit Union, he literally flipped out. I could make a list of all the things he called me, but it would be too long. Suffice it to say that I told him I was off to Altona this afternoon to pick up the listing agreements. He would most certainly be welcome to write whatever offers he had in mind as soon as I got back. I left him fuming in his office and went about my business.

Of course there hadn’t been a lot of happy faces at the Credit Union Board room either when they discussed my proposal, but as detailed as my analysis was, the choice they had between my assessment and that of the other realtors was relatively clear in ridding themselves of Nate Fingold and the whole property issue in a relatively short time, so I came away with all the listing agreements.

Within a week all the properties were sold and the whole business wrapped up nicely to everyone’s satisfaction, even Nate’s who no longer had the burden of the farmland on his back was living leisurely with his wife in their Garden City home. While he was reluctantly out of the cattle business, he’d never given a rip about the land except as a means to feed his cows, so he could now concentrate on his Auto Parts junk store exclusively.

It was a happy ending pretty well all around.

Liar Liar Pants on Fire - Small Town Politics

Small Town Politics

Now that I think of it, I probably got the joint listing for the property out west because of the Matlashewski farm. Well that, and the fact that the owner of the company I worked for was busy bringing in foreigners from Europe to buy farmlands at exorbitant prices. But the small town agent was known to me over some other matter so he chose me to co-list with him, much to the chagrin of my boss. I think I wrote about this some time ago but I can’t find it in my computer anywhere, so I’ll do it again. This series of disasters is too good to keep hidden.

The other agent in question, I’ll call him Club Wilson because he always carried a flask of Canadian Club in his vest pocket (for emergencies) was on the town council, a veritable pillar of the community. The property in question had been in the Green family for generations and Elmer Green, the long time mayor of the town had sold the whole bundle to his two sons, Stan and Earl at going prices which were exceedingly high at the time. Well it was a time of the European influx so the boys had no trouble getting a huge mortgage from the TD Bank.

As I said, it’s not what you know, but who you know that counts in this game of high stakes real estate. That would certainly play out in this case. Of course, the boys had to submit a business plan for all of this to fly and they did that too. That was something they were good at. They were after all university graduates – one in civil engineering and the other in agriculture. They could write a proposal like nobody’s business.

The proposal all done and the cash in the old man’s pocket, the boys set out to execute their plan. Each lived in a house on opposite ends of the land that they got busy renovating and they began building huge feeding stations for their cattle. It was a very efficient operation as far as I could tell. The idea was to feed and fatten the cattle from their own grain and then ship them off to South America.

Well I’m not much of a farmer but I couldn’t see how the Green boys would compete with the Argentinean cattle market (from what I’d read). I guess the bank didn’t notice either because they kept shoveling money into the boys bank account like there was no tomorrow.

And this was no cheap operation either, what with Stan flying up to wherever in South America to talk to buyers and so on. They had the same idea with the sale of their operation by the time I got into it. Well, of all things, they wanted me to hire an aerial photographer to take a picture of the farm operation. THAT certainly wasn’t in MY budget.  That’s one thing you can say about the Green boys: they weren’t cheap with the bank’s money, or mine either.

I should explain how this whole deal came to be. At the time of their business plan and proposal, interest rates had been extremely low and so seemed to work, which is why it was approved in the first place. Then suddenly the banks deemed it necessary to raise the rates to some 23 – 24 percent – more than double what it had been. Well on a multimillion dollar mortgage, this was a real blow. It just didn’t work anymore. Old Elmer wasn’t about to step in. He had his cash out of the deal already and he was keeping it. Neither of the boys was worried either, nor was the bank. This was the time Europeans had been coming over with deep pockets and an appetite for Manitoba land. And so the bank let the Green boys proceed with the operation.

Well now I had to come up with a sales strategy that satisfied them and fit into my budget. I reckoned (rightly or wrongly) that having an aerial photo taken would take weeks to accomplish while I, with my Polaroid camera could shinny up one of the ninety foot silos and accomplish the same thing while I was right there on the farm. They bought the idea and I removed my coat, strapped my camera to my belt and started up the outside ladder of the ninety foot silo. NINETY FEET? UP AN OUTSIDE LADDER? What had I got myself into?

As my Missus likes to quote, ‘once you say “a”, you must also say “b”.’ So I stiffened my resolve and started up. It was a straight ladder all the way to the top with a sort of flimsy cage around it (supposedly to prevent being blown off the ladder by the increasing winds). That was a time when I could run up stairs two at a time – just like Rocky Balboa. I kept this in mind as I ascended (slower and slower).

Finally I was at the very top, railing against the wind, taking pictures furiously and hoping they would turn out. Looking neither up nor down, except for where the next step was, I came whizzing down like a lead balloon. I made a mental note never to do anything that stupid again.

For whatever reason, the Europeans didn’t materialize. It could have been the wrong time of year, or there were better deals elsewhere, or it was too cold here. Well, they just didn’t show up. It came to the point where the bank was putting on the brakes, so the boys had to consider doing something else like pursuing their professions.

Well I never did sell the property, but I heard some of the back story which was just as interesting. The bank finally foreclosed on the property and as far as I know they still own it. Old Elmer, with his bundle of cash stashed firmly away somewhere, convinced the bank to allow subdivision of the property to the extent of the two residential properties so they boys could live there (which they continue to do) and give up the rest of the property to the bank. I guess that cost him a penny or two but he got it done.

I’m sure there might be some differing opinions but as far as I’m concerned everybody was a winner in this situation. For one, I got an education of what it was like to climb straight up a ninety foot silo and get down in one piece. The boys managed to stay in their homestead houses now completely renovated and pursued their professions. Old Elmer still had most of his ill gained money which was stashed somewhere safe and could rightfully retire, having done a good turn for his boys. As for the bank, well . . . . Don’t get me started.

Liar, Liar, Pants on Fire - The Legals and the Gauthiers

The Legals and the Gauthiers

Ste. Genevieve isn’t even a town or a siding. It’s more of a place to put people called Legal and Gauthier than anything else. It seems that’s all there are there is Legals and Gauthiers. I kind of think they must all be related, because they all get along. It’s not like the Martins and the Coys where everybody’s shootin’ at one another. Actually, they’re probably all intermarried and related to one another.

I really have no idea as to how I got out there on real estate business in the first place. It was not an area I was familiar with. But travelling to new places is always an adventure, so off I went down highway 501. All I knew was that I was looking for Gauthiers in a brand new two storey house along the highway. I couldn’t miss it. Oh yeah? I certainly could – and did. Finally I stopped at a mailbox that said “Gauthier” on it and drove in. It wasn’t the place I was looking for but maybe the people here would know where to look. They did and I ended up a mile and a half down the road and a quarter mile south of the highway.

I pulled in to a great modern edifice that stuck out like a sore thumb in this community of small, modest homes. I didn’t quite get that Mrs. Gauthier was waiting for me at the front door until I heard about her parents living in the little place on the highway corner. They had phoned and signaled my arrival.

It was indeed a lovely two story home, a bit unusual in that there was a gigantic picture window facing north on the second floor. That notwithstanding, they invited me into the sizable kitchen to sit at the table around which we could have our conversation. I was awe – struck at the cabinetry which was, of all things, made out of rough plywood, stained and lacquered to perfection. It was, in its own style, as attractive and professional as any I’ve seen and it set the tone for the kitchen which was the anchor of the main floor. Oh, of course there was a dining area off the kitchen, a sitting room and so on, but none was as important as the overriding kitchen.

Mrs. Gauthier, a diminutive woman in perhaps her forties, called upstairs for her daughters to come down and greet me. Two drop dead gorgeous teenage girls came skipping down the stairs, shook my hand and introduced themselves. Oh my, I hadn’t seen such manners from youngsters in a long time.

“Mr. Epp wants to come up to view the upstairs in a few minutes and I want to be sure it’s clean and tidy up there,” she said matter of factly.

As polite and eloquent as Mrs. Gauthier was, I couldn’t help but notice that the velvet gloves she was figuratively wearing covered two iron fists that regulated the household. The girls went skipping upstairs, laughing and giggling to one another.

Well, you wouldn’t really notice it on Mr. Gauthier, even though I knew who the boss was in that household. He was itching to show me the bathroom which was his piece de resistance.

Eventually we got upstairs (which was immaculate) and viewed the rooms. I must say it was an entirely efficient design with a laundry room off the bathroom, and at last, the bathroom. As we entered, Mr. Gauthier seemed to puff up with pride. There at the back wall was a giant hot tub, directly across from the floor to ceiling picture window. If you sat in it you could see out all the way to highway 501.

“Well,” Mr. Gauthier started, “by the time I got the thing home I realized I couldn’t get it up the stairs so there was only one thing to do and that was to bring it into the room from the outside. It meant I had to knock the wall out and order a new window. But it was well worth it. In order for us to be in the south pacific every day, we just need to go to the bathroom. It saves money in the long run.” There was a smug look on his face as he told the story.

“But why in the world,” I started, “would you want to leave this place now that it’s all finished?”

“Well, I have an opportunity to take over a family farm up north of here. It’s something that I’ve always wanted and now I have the chance.”

“But the utopia you’ve built here – you’ve done all that work and it’s just completed. And now you want to abandon it all? I don’t understand.”

“Well, you wouldn’t. You see, with us Gauthiers it’s a matter of tradition. I promised my wife  I would build her a place that offered everything she could ever want and I did it. We’ve been here for about two years now and have enjoyed every minute of it. But now it’s time to move on. The family farm needs looking after and you can see that I can do whatever I put my hand to I can accomplish. My wife and I have already agreed on it.”

“What about the girls,” I asked.

Gauthier just grinned like a Cheshire cat. “There’ll come to a time they will thank me for that,” he said, and nothing more.

I don’t remember who I sold the property to or even if it was my buyer, but when it was all done, I had the feeling of having been a part of much more than just a real estate transaction. It was a good feeling, which is why I remember it.