In Toronto, even a house with a blemish is a hot seller these days

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A house divided into apartments on a busy street used to be the kind of property that took time to sell in Toronto.

In the current fall market, it's the kind of property that attracts two bully bids and 11 offers overall.

The house at 1690 Gerrard St. E. attracted a particularly aggressive bully who made an offer soon after the three-unit dwelling landed on the market, says real estate agent Lance Van der Kolk of ReMax Hallmark Realty Ltd., who represented the seller. The bully ratcheted up the pressure by stating the bid would expire the following morning at 10 a.m.

Mr. Van der Kolk points out that the rules insist listing agents contact anyone who has seen the house or expressed interest. In this case, he hadn't even held the agents' open house yet. The sellers were out of town. He resisted the 10 a.m. deadline and pushed it off until 7 p.m., when the sellers agreed to review offers.

During that time, 10 other parties put their offers together, including two of Mr. Van der Kolk's clients. In cases like that Mr. Van der Kolk has his wife Brenda or another agent in his firm represent one of the parties.

Mr. Van der Kolk says the sellers were a husband and wife who were astonished to be getting so much action the second day on market. "They were absolutely shocked and overwhelmed."

The wife in particular felt sorry for agents and their clients sitting outside in their cars with the heaters on. At the end of the evening, the house had sold for $755,000, or 26 per cent above its asking price of $599,900.

This is the kind of action that pushed the average selling price in the Greater Toronto Area up 7.6 per cent in the first two weeks of November compared with the same period last year, according to the Toronto Real Estate Board. Sales rose 8.3 per cent and listings 2.2 per cent in the first half of the month compared with the same period in 2013, TREB says.

In October, the average selling price climbed 8.3 per cent compared with the same month last year. The Canadian Real Estate Association reported this week that the heat in Toronto and Vancouver has skewed the national average price increase.

The national average price for homes sold in October 2014 was 7.1 per cent higher when compared with the same month last year. But if the data from Toronto and Vancouver are stripped out, the national gain comes in at a more modest 5.4 per cent.

CREA president Beth Crosbie says low interest rates continue to support the sales action in Toronto and other hot markets such as Calgary and Edmonton. But she points out that sales did not increase in many local markets in Canada.

On Gerrard Street, the buyer was real estate agent Kevin Smith of ReMax Hallmark, who intends to keep the three apartments and rent them out. On offer night, he knew there were four offers registered when he left home. By the time he got to Gerrard Street, there were 11.

"It was exciting to win."

Mr. Smith was drawn to the property for its landscaped backyard on the edge of a ravine. Fairmount Park is right across the street and the upper windows look out over the park's trees.

"The beautiful backyard is really appealing and it's ready to go," he says.

He wasn't the bully but he could have been because he knew he was interested as soon as it hit the market. "In all honesty I was going to be one of the bullies but it was Remembrance Day so I couldn't talk to the bank."

Mr. Smith met the owners as he signed off on the deal. They have owned the house for about 10 years and had done extensive renovations. The house has great flow, he says, and the two-level upper suite would make a great owners' unit.

"They put some time and effort into it and I'm sure it paid off for them."

He says he plans to hold onto it for a while.

Mr. Van der Kolk says some of the prospective buyers were thinking about converting the house back to a single-family home, while others wanted to live in one unit and rent out the other two. He says lots of first-time buyers in particular are looking at a substantial mortgage with prices rising as quickly as they have in the past several years.

"If you're a young buyer trying to get into this insane and hectic market … being able to get a unit and rent two out is very attractive."

It's also worth noting that not all Toronto houses sell with multiple offers.

Mr. Van der Kolk also represented a buyer recently who was the only bidder for a house in Riverdale. The buyer paid $860,000, or approximately $20,000 under the asking price of $880,000.

"On the buyers' side I like to win them in a single bid."

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Buying and selling real estate requires lots of savvy in such a fast-moving market.

The Canadian Real Estate Association and the Real Estate Council of Ontario are reminding house hunters that November has been declared "financial literacy month" in Canada. Both organizations are taking the opportunity to educate consumers about the ins and outs of buying a house. They realize that lots of house hunters out there don't have the knowledge and resources of a business editor.

RECO recently commissioned a survey that found that 41 per cent of buyers wish they had done something differently when buying or selling their property.

The online survey of 1,043 Ontario-based homeowners was conducted by Angus Reid. The margin of error is plus or minus 3.3 per cent, 19 times out of 20.

RECO found that 52 per cent of respondents incorrectly believe that buyer and seller representation agreements – those contracts that agents ask for – are standardized.

Forty-three per cent of those surveyed admitted that there were parts of the real estate contract when they bought or sold a property that they did not fully understand.

And 55 per cent of the respondents incorrectly assume that if you place a conditional offer on a home and the deal doesn't go through, you automatically get your deposit back. In fact, a deposit – which is held in trust by a brokerage – can only be released if both buyer and seller agree, or by court order.

Only 42 per cent had the correct understanding that real estate agents are allowed to represent both sides in a deal – that is, both the seller and buyer on a property – if the parties agree to it in writing. That circumstance, known as "multiple representation," can be seen as a conflict of interest so buyers and sellers need to know what they're getting into.

The RECO survey found that 19 per cent of respondents wrongly believed the practice isn't allowed at all.

RECO registrar Joe Richer points out that buying and selling real estate is confusing and stressful for plenty of people; he hopes more potential buyers will take the time to do some research so that they have less chance of making a move they later regret.

RECO has posted an online interactive game and other information on its website.

CREA has joined with the Financial Consumer Agency of Canada to create videos for CREA's YouTube channel. They cover basic terms and concepts such as the definition of "amortization" and "mortgage prepayment."