Some buyers and sellers in Toronto’s bumpy real estate market are finding ways to use the uneven terrain to their advantage.
One Riverdale family recently sold their house at 631 Logan Ave. when a “bully” stepped up and offered $1.503-million. The three-bedroom semi-detached was listed in April with an asking price of $1.195-million.
Robin Pope of Pope Real Estate Ltd., who represented the sellers, says the offer of $308,000 above asking came after only two days on the market.
“Someone made a completely emotional buy,” Mr. Pope says.
The sellers were hoping for multiple offers, he says, but they didn’t expect such a premium above asking in today’s unpredictable market.
The deal helped close the gap between the semi and the five-bedroom detached house the sellers purchased in the same neighbourhood at the tail end of the fall market.
The family was able to take advantage of the market conditions in that transaction too. In December, the seller set an asking price of $1.895-million and a date for reviewing offers.
But on offer night, Mr. Pope says, his clients had the only offer. After some back-and-forth, the clients agreed to pay the asking price.
Mr. Pope says the clients feel they got a deal because the sellers were expecting a bidding war that didn’t materialize.
“Frankly the timing was completely off – given the time of year – to expect multiple offers,” Mr. Pope says.
The sellers of the detached wanted a closing date in April. That worked well for his clients, Mr. Pope says, because they had several months to prepare the house on Logan for sale.
“They did very well in purchasing,” he says. “The whole thing was very serendipitous.”
When it came time to sell the house on Logan, Mr. Pope kept an eye on the other half of the semi, which sold a few weeks earlier. The two-bedroom house, listed with an asking price of $899,000, received one offer and sold for $1.168-million.
“That was our benchmark,” Mr. Pope says.
Mr. Pope advised his clients that they would need to do some work in order to fetch significantly more for their three-bedroom family home. He recommended they spend the time and money to upgrade appliances, paint, renovate three bathrooms and boost the waterproofing around the exterior. Even pot lights, mirrors and tiles were upgraded, he says.
“We did everything humanly possible without building a new house,” he says.
The sellers moved out of the house with their three young children and stayed with family for five weeks, he adds.
Mr. Pope stresses that in today’s market, buyers are fearful of paying too much. Sellers need to offer a property in turnkey condition if they want to make the buyers fear missing out, he says.
“We had someone who didn’t want to take a chance and not get it.”
Mr. Pope likens offer dates in the current market to a game of chance. Every week, he points out, a different cast of characters comes to the table.
Perhaps a couple will arrive with the mindset that they will do whatever it takes to get the house because they’ve lost a few bidding wars in the past.
“They just want to get it over with,” Mr. Pope says.
Another couple may have been looking for a long time and they’ll probably continue looking for a long time because “they don’t have the courage.”
“That’s why I think it’s a Russian roulette. Because every time it’s different players.”
Mr. Pope says clients sometimes ask him what a house or condo is worth. It remains very difficult to estimate what a property will sell for because it all depends on the mindset of the buyer.
“That’s irrelevant, what it’s worth – it’s what someone is willing to pay.”
Real estate agent Manu Singh of Right at Home Realty Inc. says the traditional spring market zaniness is slow to arrive.
“It’s not as crazy of a start as we’d normally see,” he says.
Mr. Singh says the slowdown in the market for detached houses partly stems from a lack of “good quality” listings.
He defines “good quality” as a renovated house in a desirable neighbourhood, with highly ranked schools nearby.
“Based on previous years, there’s usually quite a surge in April,” he says. “This year, April was really slow.”
Still, the slow dribble of listings means that desirable properties often end up with multiple bids, he says.
Mr. Singh recently worked with buyers who ended up in competition with five other parties for a large townhouse in Mimico. The three-bedroom townhouse had an asking price of $999,000 and his clients beat out the rival bidders with an offer of $1.13-million.
Condo units, however, are easier to come by.
“On the condo side, we’re seeing a steady flow of listings.”
Mr. Singh says some owners who purchased a unit as an investment are deciding to take money off the table. Sales have been slowing for several months while the growth in prices has slowed to single digits.
“The investors are thinking, ‘How long is the ride going to last? Maybe I should cash out.’”
Larger condos are still rare and may spark competition.
Belinda Lelli and Bruce Huggins of Royal LePage Real Estate Services Ltd. recently sold a two-bedroom unit at 130 Carlton St. after one day on the market.
The buyers, who live in the neighbourhood already, paid $1.35-million, or $61,000 above the asking price of $1,289,000.
The 2,200-square-foot unit is large enough for a family, Ms. Lelli says, adding that many buyers of larger condos these days are families looking for an alternative to a single-family dwelling.
“Full families could easily live here and they do,” she says of the building at Carlton and Jarvis Street.
Mr. Singh says aspiring buyers are still circulating, but they’re “more selective, more prudent.”
“Affordability is the number one topic for buyers.”
Douglas Porter, chief economist at Bank of Montreal, says the Bank of Canada has become more upbeat about the housing market recently. The adjustment in Vancouver, in particular, and perhaps Toronto may have a bit further to run, Mr. Porter says, but he points to the fact that central bank Governor Stephen Poloz noted that many other large markets are seeing solid activity.
Mr. Singh says it’s difficult to predict whether May and June will bring a bounce to the market.
Many investors are concerned about buying a property that may not continue to rise in value.
“It’s a big commitment because the closing costs are so high – let alone the price.”
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