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It seems a sure sign of a chill in the real estate market when even the bullies figure they can undercut the asking price for a house.
That's what happened last Monday. Just as stock markets in Toronto and New York were melting down, agent Sally Moore of Chestnut Park Real Estate Ltd. was negotiating with two buyers who were competing for her client's large and stately home on Balmoral.
Her client had planned to accept offers on Wednesday, but one prospective purchaser jumped the queue by signalling their intention to make a bid before the appointed time.
Ms. Moore immediately notified all of the agents and clients who had looked at the house thus far: a bully offer was on the way.
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Working the phones, Ms. Moore managed to get one other offer on the table that day.
When Ms. Moore and her client looked at the bids, both came in under the asking price of $1.7-million.
That marks an unusual twist because usually the so-called "bully" offer is so eye-popping that the seller will leap at it before the official offer date.
"Normally you pay for the privilege of doing that," says Ms. Moore, who prefers not to use the term "bully". At the same time, the second bid was also less than the list price.
"Nobody — even knowing that somebody had jumped the queue — was going out in the stratosphere," notes Ms. Moore.
More than 40 people had gone through the open house for the 1906 property in the coveted Brown School district. The house had not been on the market in decades.
"It generated a tremendous amount of interest," says Ms. Moore. "It had never been ruined, but it needed a total restoration."
Ms. Moore's client was satisfied with a quick deal at almost 99 per cent of the asking price.
The other bright note, Ms. Moore points out, is that singular properties in good neighbourhoods are still selling quickly and generating multiple offers. The agent, who has been selling houses for 28 years, says business remains brisk.
For aspiring homeowners who have been patiently sitting on the sidelines — sometimes for three or four years — this is the opportunity they've been waiting for.
With the Bank of Canada's dramatic interest rate cut this week, more buyers will be able to afford houses, Ms. Moore says.
Agents around Toronto are grappling with blazingly-quick changes in the real estate market amidst tumultuous times in global financial markets.
"It's certainly strange because it all seems to have happened so quickly," says Geon van der Wyst of what he calls a "really, really interesting couple of weeks."
Mr. van der Wyst of Royal LePage Real Estate Services Ltd. says bidding contests are rare and clients on both sides of the trade are wondering where the market is heading.
"Interviewing new buyers and sellers, the question of the economy comes up every single time."
Mr. van der Wyst says some prospective buyers try to put in lowball offers when they see a property has languished for a couple of weeks but, for the most part, sellers are willing to hold on for an offer that meets their asking price. As a result, prices have remained fairly stable.
"Not all sellers are all that motivated to let go of their properties."
Peter Goodman is a developer and hesitant buyer.
The president of Treehouse Land Developments is building a niche in transforming worn, traditional houses in Moore Park into modern homes that retain their original grace while meeting the silver LEED (Leadership in Energy and Environmental Design) standard for energy-efficiency.
Mr. Goodman is looking for a house to buy now which he can improve and sell again in 9 to 12 months.
The risk is that he'll buy a house now, spend months and huge amounts of capital rebuilding it, then try to sell into a stalled market.
"That's a situation nobody wants to be in."
Still, Mr. Goodman stresses that he is not out of the market.
He's convinced that Moore Park will hold its value because it's a solid family neighbourhood close to downtown. And he sees huge demand for "green" building.
He has just sold one such house and thinks the current market favours his search for another. "I'm going to be much more discriminating, much more careful. I'll try to find that pearl."
Broker David Allen of Graydon Hill Realty Ltd. says some sellers still want to be too aggressive in setting a price. Many expect to better the prices tallied in their neighbourhoods last spring, but that expectation is too optimistic.
"Sellers are unwilling to listen to the reality of what the market is now doing."
But Mr. Allen points out that people still need to buy houses to accommodate their new babies, job transfers and other changes in their lifestyles.
"If you have a need to move, you're still going to be looking to buy."
