Real estate bullies have become so zealous in Toronto's Leslieville neighbourhood, they sometimes don't wait for the "for sale" sign before making a bid to buy a house.
On Alton Avenue recently, Sameer Ismail of ReMax Hallmark Realty Ltd. was getting ready to list a two-bedroom rowhouse across from Greenwood Park.
He put up a sign saying "coming soon" to let avid house hunters know that the house would soon be launched onto the multiple listing service of the Canadian Real Estate Association.
Listings swelled in April compared with the inventory in the first quarter, he says, but even the 40 or 50 properties that arrived right after Easter weren't enough to fill the demand.
"That was massive compared to what we were seeing in January, February and March but the demand is still greater than the supply."
When Mr. Ismail signalled that the listing on Alton Avenue was imminent, a bidder who had recently lost in competition on a house a few doors down was quick to put an offer on paper. The "bully" made the bid good for only four hours.
The homeowners were a bit frazzled, but Mr. Ismail advised them to reject the bid. "It is someone that just wants to jump the queue – who doesn't want to wait – and just bully you into selling the home."
If a prospective buyer was that eager before the house even hit the MLS, he pointed out, imagine what the owners could fetch at auction. "Based on my pulse on the market and the lack of inventory, I said 'let's just wait it out.'"
The sellers also did not warm to the bully's strategy of disparaging the improvements they had made to the small house, which had been opened up and renovated with new windows and bamboo floors. If the prospective buyer had seemed to actually love the house, they say, they might have been more tempted by the bid.
In any case, they turned it away, listed the house with an asking price of $499,000 and set an offer date.
On the night set for reviewing offers, 12 parties came to the table and the house sold for $683,000, or $184,000 above the asking price. That 37-per-cent premium was far more than the homeowners expected and it also trumped the bully's original offer.
When a prospective buyer makes a "pre-emptive offer," as bully bids are more formally known, the usual tactic is to make it clear the bully won't come back on offer night if the offer is spurned.
Mr. Ismail says the practice is just another gambit in a blazing hot market. "It's a strategy and, lo and behold, they did come back They weren't the winners."
He says bidding in the segment between $550,000 and $750,000 or so is particularly rabid because lots of people who own condo units and starter homes want to move up to that range. A lot of them have equity from a first property and many also have help from the older generation. Parents are remortgaging their own houses or dipping into savings to help out young adults.
"It's probably the most competitive price range you could possibly be in because so many people can afford that. There's hefty competition," he says.
Mr. Ismail tells another tale of a detached house in the Upper Beaches that he recently listed with an asking price of $699,000. A pre-emptive offer quickly arrived, only to be surpassed by another. "The bully got bullied by another bully."
The second bidder beat the first with an offer of $969,000, or $270,000 above asking. "They're shattering any sort of record because they really, really want the house."
The agent believes buyers are full of brio because Canada's banks are strong and the rules around borrowing are generally stringent. "You're getting a very robust pool of buyers."
And battles are not just happening in $600,000 territory.
Plenty of houses in the $3-million range are selling within days at more than the asking price – which usually signals there was more than one buyer vying for the luxury listing.
"This means many people are competing for multimillion dollar properties," says Ira Jelinek, an agent with Harvey Kalles Real Estate Ltd.
In Lawrence Park, 5 Pote Ave. is a traditional four-bedroom house within walking distance of the Yonge subway line. It was on the market for six days when a buyer stepped up with an offer of $3.65-million, or $200,000 above the asking price of $3.45-million. Nearby, 281 St. Leonard's Ave. was bearing a sold sign after two days. It sold for $3.050-million, above the asking price of $2.995-million.
Meanwhile, 3 Honeywell Place near York Mills and Bayview was on the market for 18 days but still sold for $311,000 above the asking price of $3.395-million. The house with 5,600 square feet of above-ground living space, a sweeping staircase and five bedrooms fetched $3.706-million, or 9 per cent above asking.
In the same Banbury enclave, 48 Sandfield Rd. sold for $2.898-million after five days on the market. That was a small premium over the asking price of $2.888-million, but it suggests the buyers didn't want to risk losing out on the house with four bedrooms, an oak-panelled library and a lavish backyard swimming pool with waterfall.
The listing agent pointed out the curb appeal and park-like setting of a 5,200-square-foot home in South Hill. Listed with an asking price of $2.899-million, it sold for $2.904-million after seven days on the market.
In Moore Park, 71 Garfield Ave. is a large four-bedroom house with a centre hall plan and a backyard swimming pool. It had an asking price of $2.795-million and lasted only two days on the market before it sold in February for $2.907-million.
Mr. Jelinek has clients who made offers on two houses around the $2-million mark and lost out on both.
In one case the house in the east section of Rosedale had an asking price of $2.195-million and sold slightly above that. The second house was listed with an asking price of $2.075-million. Mr. Jelinek's clients offered $2.1-million but they were outpaced by buyers who paid $2.3-million. "It's crazy we're doing multiple offers in the 2.5 range," he says.
Then they looked at the ultra-modern house at 166 The Kingsway.
Modern design is still relatively rare in the staid Kingsway neighbourhood, he says, so he figures many house hunters didn't consider looking there. That could be why the house languished on the market for 229 days. A price cut from the original asking price of $2.595-million to $2.188-million also attracted new interest, he says, including a look from his clients, who struck a deal for $2.03-million.
The young buyers have one child and another on the way, and they're thrilled to find such a modern and beautifully designed house, he says. "Sometimes you can find something that has been overlooked."
Looking ahead to May, Mr. Jelinek says the market will likely remain heated. "We had bad weather for so long, I feel like it's going to be prolonged," he says of the spring action.