Tomislav Hrkac worked on the transformation of his 100-year-old Edwardian house for eight-and-a-half years. If clashes were still erupting over Toronto houses in this quirky spring market, he wanted a bout in front of his place.
With a careful strategy in place, he got his wish last week: The house at 61 Peterborough Ave. near Corso Italia was listed with an asking price of $599,900 and received nine offers before selling for $728,000, or $128,100 above the asking price.
Even before offer night, three bullies had tried to muscle in and two neighbours had tried to siphon off prospective buyers. It seems that “all’s fair” is the overarching sentiment this spring.
Competition is definitely less pervasive, agents say. The Toronto Real Estate Board reported Wednesday that sales in Toronto were down 17 per cent in March. But when contests do break out, the action can be intense.
Sellers, like Mr. Hrkac, who want to foment competition need better preparation and tactics than they did last year at this time when a tumbledown semi next to the railway tracks would sell with 18 offers.
But Mr. Hrkac’s effort paid off with the highest recorded selling price on the street – even with triplexes and investment properties in the mix, says real estate agent Christopher Bresolin of Century 21 St. Andrew’s Realty Inc.
He worked with Mr. Hrkac to craft a plan that would bring as many potential buyers as possible to the property near St. Clair and Dufferin.
“I was hoping that it was a product that someone could fall in love with,” says Mr. Hrkac, a civil engineer who’s been around real estate enough to adopt the agents’ habit of using the word ‘product’ in place of ‘house.’
“We lowballed our price.”
Because they put out the “for sale” sign during students’ March break, when many buyers and their agents are away, they held offers at bay for nine days instead of the usual seven.
“That was definitely a wise strategy on our part,” Mr. Bresolin says, because some people did book appointments to see the house as soon as they returned from vacation.
The risk, says Mr. Bresolin, was that the prospective buyers who saw the house on the first day would lose interest.
“You might not be as excited or interested and you’ll be concerned there will be more competition as well.”
They cleaned and burnished the house to get it looking its best and also set out a detailed description of the renovation with permits, photographs and drawings on display.
They provided a home inspection so that there were no potential gaps for potential buyers to fill in. Mr. Hrkac earned more bragging rights by making the house so energy efficient that he received a government grant
“We made a bit of a story,” says Mr. Hrkac.
They had three bullies step up to make offers before the designated date and quickly shut them all down.
Mr. Hrkac admits it was nerve-wracking for him and his wife to turn away the enticing offers on the table. Mr. Bresolin pressed him to hold off until the scheduled offer night.
“It’s tough when a seller knows that something is there,” he acknowledges.
Normally it’s part of the bully strategy to refuse to participate in a bidding contest.
“Usually they say they won’t come back on the offer date and ‘good luck to you’,” says Mr. Bresolin.
In this case, two of the three bullies did return.
But those weren’t the only curves thrown at the family.
No sooner had they put out the “for sale” sign than another house a couple of streets over did the same – and made their date and time for offers exactly the same. Then the house next door to Mr. Hrkac’s was suddenly up for sale – with offers to be received 24 hours before.
“It throws you off a little bit,” admits Mr. Hrkac. “For us this was a big deal,” he says of his family’s investment.
Through all of it, they stuck with their plan.
The buyer is of exactly the type they expected: an empty nester who wants a house that can be moved into without the added hassle of a long renovation.
“Everything is turnkey,” says Mr. Bresolin. “It’s a masterpiece.”
Still, even he was astonished when the property sold for 22 per cent above the asking price.
“It’s amazing that we were able to get this type of money for a two-bedroom, two-bathroom home.”
Now Mr. Hrkac is experiencing the market from the other perspective: he is a buyer facing the challenge of finding a new family house.
“Right now product is slim,” he says.
He negotiated a bit of breathing room with a closing date more than three months away, but he also knows that he may have to rent accommodations for a while.
He’s looking for a house with three bedrooms and a larger lot. Despite more than nine months of slipping sales in Toronto, prices have remained steady and Mr. Hrkac says he is not tempted to wait for a possible steeper decline.
“I’m definitely not interested in sitting out for very long,” he says. “I really don’t see prices dropping.”
Noam Muscovitch knows all about the angst of buyers. The agent with Royal LePage Real Estate Services Ltd. found himself sitting outside a mid-century bungalow last week when he was competing on behalf of his clients with 10 other agents.
On a lot with 78 feet of frontage, the house had an asking price of $1.088-million. Cars lined the street near York Mills and Leslie as the rivals all vied for the renovated bungalow with lots of light and air under cathedral ceilings.
“It was like a parking lot out there,” says Mr. Muscovitch. “It was kind of ridiculous.”
He had registered a bid on behalf of his clients early on the offer date because he had to be on the road for much of the day. At the time, one competing offer was already in place.
He says some bidders register early on in order to deter others.
“A lot of people don’t want to get into a multiple offer situation.”
When he checked in just before 8 p.m., he found out that the number had gone up to five.
With every additional offer, his clients became more jittery, he recalls.
In all, 11 groups ended up vying for the house. Later that night, each party was given a chance to improve their offer in a second round of bidding and the number dropped down to nine.
Mr. Muscovitch’s clients were a couple engaged to be married. They loved the house and tried to think of some creative ways to increase their chances of winning the competition. Mr. Muscovitch advised them to be very flexible about going along with the seller’s schedule. He let the seller know that the pair had no plans to demolish it as had been the fate of so many others in the area.
He also employed the delicate strategy of pointing out to the sellers that his buyers had done their research on the house and were knowledgeable about possible defects. Homeowners sometimes worry that a deal will fall through later on if buyers get cold feet.
“We understand any issues. We’re aware and we’re okay with them – and that’s good for you,” he says of his message to the sellers.
At the same time, his clients wanted the homeowners to know they loved the house the way it was.
“You’re not trying to offend them, that’s for sure.”
All the while, he was making frequent calls to the couple, who had brought one of their mothers along to a nearby McDonald’s “because you can stay there for a long period of time,” says the agent.
“You need to have them close in case there are changes.”
About midnight, Mr. Muscovitch began to have a good feeling when he began to see the red lights of one car after another reversing back down the street.
“Then finally I got the call,” he says.
In the end, he thinks their strategy beat all of the others partly because the buyers made an emotional connection with the sellers.
“I think they responded to the fact that the young couple didn’t want to do anything to the house.”
Micro-hoods: Where to find affordable homes in Toronto
Young buyers flocking to Little India
The South Asian flavour of Toronto’s Little India is in transition.
The area centred on Gerrard Street East is attracting young buyers who have been priced out of the phenomenally popular Leslieville. Meanwhile, the traditional immigrant Indian, Pakistani, Bangladeshi and Sri Lankan communities have been steadily migrating to Brampton, Mississauga, Scarborough and other communities outside the city centre. Many business owners moved away decades ago but even the Gerrard Bazaar’s sari shops and restaurants are often shuttered these days.
Other entrepreneurs are renovating their premises in order to better compete with the suburban shopping centres.
At the same time, the relatively affordable older semis and new townhouse projects draw more first-time buyers and young urbanites to the area.
Now new projects are rebranding the area with such banners as East Village Leslieville and Leslieville Lofthouses. The City of Toronto is refurbishing Greenwood Park.
As the area is increasingly revitalized, property values are on the rise.
Editor's Note: In the original print and online editions of this story Mr. Noam Muscovitch's name was spelled incorrectly. This version has been corrected.