Competing bidders are still scrapping over rare or sensational properties in Toronto, but with the fall market appearing to wane just a bit, November can offer house hunters the opportunity to snag a property that other buyers have overlooked.
One young couple was pretty much in despair recently as they kept missing out on houses in their target neighbourhood in the east end. They had a small house in the burbs but wanted to move to a location closer to the Bloor-Danforth subway line.
On a recent Friday afternoon, real estate agent Shawn Lackie of Coldwell Banker R.M.R. Real Estate took the couple to see a semi-detached house on Woodington Avenue with an asking price of $699,000. Once they arrived for the showing, however, the key wasn’t in the lock-box and Mr. Lackie had to spend 20 minutes chasing it down. Inside, they found a couple of bedrooms had been locked by tenants and they couldn’t get in.
All in all, it wasn’t an auspicious beginning.
Mr. Lackie’s clients weren’t enthused but he sensed an opportunity and pressed the listing agent to book another showing the following morning with all of the hurdles removed. If his clients were having this much trouble seeing the entire house, their rivals would too, he reasoned.
In addition, the home’s location wasn’t properly mapped on the Multiple Listing Service and there was no sign on the lawn. “There were any number of reasons other people were not going to have a chance to look at it,” he says.
Just in case his clients agreed, he brought along the documents to make an offer on the spot. However, the couple wanted a couple of days to think about their decision. They liked the home’s location but it was definitely a fixer-upper. They also asked the question that plagues so many buyers who’ve become accustomed to the mad panic of bidding wars: “If no one else is making an offer, what’s wrong with the house?”
Mr. Lackie stresses that it’s important for buyers to put that thinking aside. “You have to develop a plan and stick to the plan.”
In this case, he thought the house had lots of good qualities, including a private drive and the potential to develop the third floor. It was a three-minute walk to the subway and there was a good school nearby.
As for the interior, it was in decent shape and it could be improved over time.
After a bit of vacillating, the couple decided to bite. Mr. Lackie advised them to offer $700,000 with no conditions. He figured if they spent time haggling for a lower price, they risked having a competing bidder come to the table. He showed them data from nearby properties that had sold recently for $800,000 to $900,000.
By this time, the couple was beginning to feel that they might have stumbled on a bargain and they began to worry that they might lose out. Their anxiety ratcheted up when Mr. Lackie had trouble connecting with the listing agent to present the offer.
In the end, the two agents connected and the seller accepted the deal.
Mr. Lackie says that, sometimes, a listing with a slight hitch can turn into a mess of trouble, but it can also be the type of opportunity that determined buyers can take advantage of while their rivals are looking elsewhere.
“You have to be prepared to turn on a dime and you have to see through things.”
Since his clients struck a deal, a smaller house with a shared driveway on the same street sold for $720,800. Soon after that, another more renovated property nearby hit the market with an asking price of $699,000 and sold for $796,000.
Mr. Lackie says the property his clients bought needs more work than the other two but he believes that gives them the opportunity to increase the value with their own improvements. “They’re not willing to pay through the nose because someone else has done the work. Those are the buyers that are going to win out every time.”
Davelle Morrison, an agent with Bosley Real Estate Ltd., says the number of new listings arriving on the market has slowed a bit but the number of buyers circling has also diminished. The less hectic pace makes things a bit easier for buyers, she adds, but she thinks some drop off because they are finding less to look at.
She figures that buyers will have an easier time finding an overlooked property in the current market but many are still holding out for the ideal place. “People still want to wait for that perfect, perfect thing. They’ve got their wish list and they’re not willing to budge.”
Ms. Morrison recommends that people try to find a house or condo with a good layout in a desirable neighbourhood but be willing to do some work on the cosmetics. “You don’t even want to compromise on the location. Everything else can be changed.”
In a market where almost every buyer seems to want a place that’s move-in ready, Ms. Morrison says the houses that are completely renovated still spur competition.
She has clients who recently lost out on a beautiful, modern house on Windermere Avenue in the west end. The house had an asking price of $1.398-million and sold to another buyer for $1.515-million.
She observes that bidding contests are also springing up in the condo market, especially when buyers find a unit they feel has special attributes.
Ms. Morrison recently listed a condo unit for sale near Mount Pleasant and Davisville with an asking price of $410,000. Five buyers tabled bids on offer night and the unit sold for $459,000.
Ms. Morrison decided to set an offer date after a colleague sold a similar unit a few floors down two weeks earlier. In that case, the unit was listed with an asking price of $405,000. Seven offers came in and it sold for $441,000.
She says the building at 245 Davisville Ave. was built about 12 years ago. Units on the building north side of the building overlook Davisville Park and buyers are willing to compete for that view.
Ms. Morrison says lots of people are buying newer condos with great vistas only to find their sight lines blocked by rising buildings. “Every time you think your view is safe, it’s not.”
But Davisville Park’s tennis courts, baseball diamonds and trees are not likely to disappear, she says.
The seller of that condo kept that principal in mind when he purchased his next, larger unit, she adds. He purchased in a nearby condo building on Merton Street with a south-facing view of Mount Pleasant Cemetery.
Ms. Morrison says not many units there hit the market because of the protected sightlines. “When they do go, they go fast.”
She adds that older condo units tend to provide better value for the price-per-square-foot. As a result, they are returning to favour after being overlooked in favour of brand new projects.
In 2008, she says, the average condo had 800 square feet of space. Today the average condo has shrunk to 600 square feet.
“The finishes may be a little bit tired but you can always change those. You can’t change the space, and I think people are starting to wake up to that.”Report Typo/Error