Car­olyn Ire­land – The Globe and Mail

Toronto real estate agent Monte Bur­ris looked out the front win­dow of a Sun­ny­side Avenue house recently and saw a small crowd lined up on the side­walk. That was 45 min­utes before he was sched­uled to receive the hordes at the first open house as the prop­erty hit the mar­ket with an ask­ing price of $1.45-million.

One week later, the sell­ers had accepted an offer of $1.65-million.

Dur­ing the inter­ven­ing days, they had also repelled a hand­ful of bully offers and turned down the seven other bid­ders on offi­cial offer night.

“It was obvi­ous early on that every­one wanted the prop­erty,” says Mr. Bur­ris of Keller Williams Real Estate Inc.

The red-brick detached house has six bed­rooms and five bath­rooms. Recently ren­o­vated, it has a gas fire­place in the foyer, a large kitchen, and an expanse of glass over­look­ing the deck and backyard.

When the first bul­lies launched their open­ing salvo, Mr. Bur­ris advised his clients to wait until the sched­uled night for review­ing offers. Bul­lies often step up with an eye-popping offer, but with the pro­viso that it’s only good for a short time. They gen­er­ally refuse to par­tic­i­pate in a bid­ding war.

But list­ings for detached houses are so thin that Mr. Bur­ris knew the prospec­tive buy­ers would likely come back to the table.

“I was pretty con­fi­dent they would all show up on offer night. There’s still very lit­tle inven­tory on the market.”

This one sale is emblem­atic of the fickle Toronto mar­ket right now – or as agents like Mr. Bur­ris are say­ing more and more – the two Toronto markets.

Com­ment: True enough. I have a lit­tle semi in Hill­crest that peo­ple are lin­ing up to get into. Open house is today, I am afraid of the hordes that will come…

“Con­dos are a com­pletely dif­fer­ent mar­ket,” says Mr. Burris.

That seg­ment is awash in “inven­tory” as agents say. Sell­ers are forced to cut their prices or wait a long time for a sale in some cases.

Com­ment: For some, not for all. Any­thing generic is sit­ting, as there are tons of sim­i­lar units avail­able. The larger or unique ones, with a view or in a bou­tique build­ing, they are still mov­ing nicely. The prob­lem is that there are more and more bor­ing lit­tle white boxes, the condo mar­ket is awash in sameness.

Detached houses will gen­er­ally attract mul­ti­ple offers if they are ren­o­vated and located in a prime neigh­bour­hood. Condo and loft units will attract mul­ti­ple offers in many cases if they are in a bou­tique build­ing or supremely well located. They need to stand out from the competition.

The num­bers show how unpre­dictable the mar­ket is now: sales in the Greater Toronto Area remained flat with a dip of about 1% in the first half of April com­pared with the same period last year. That’s not as grim as the double-digit drops recorded in pre­vi­ous months, but it’s not the spring bounce many agents were hop­ing for.

Com­ment: Sales jumped 16% from –17% to –1% and that is not a big bounce? Sure looks like a large increase to me.

Mean­while, the aver­age price rose 4.3% in the first two weeks of April from the same period last year. List­ings rose 16% in the first half of April com­pared with the first half of April, 2012.

Com­ment: After list­ings being down, sell­ers had held back when things looked bad. Less list­ings and fewer sales, now more list­ings and higher sales. Seems sim­ple enough. And bet­ter weather helps for sure. Spring 2012 saw 25 degrees in Feb­ru­ary for Pete’s sake, which really boosted sales. This year it was cold and crappy until almost the end of April. These things make a difference.

The num­bers were buoyed by sales of single-family homes in the sub­urbs, accord­ing to the Toronto Real Estate Board.

In the City of Toronto, sales of detached houses slipped 3.4% com­pared with the first half of April last year. Condo sales in Toronto declined 4.3% year over year for the same period.

Chan­der Chad­dah of Sut­ton Group-Associates Bro­ker­age Inc. spe­cial­izes in the Ron­ces­valles area. He says sales are def­i­nitely down and the mar­ket remains spotty.

He’s advis­ing his clients who want to buy to aim for a house that does not incite a frenzy.

“I had to talk clients out of an offer last week.”

The house was listed with an ask­ing price of $849,000 and Mr. Chaddah’s clients thought they might be able to stretch to an offer of $875,000 or so. Mr. Chad­dah checked out the num­ber of bids on the offer date and told his clients not to get their hopes up. “We don’t have a chance,” he advised them.

The house sold for $1.020-million.

Mr. Chad­dah says many buy­ers seem to fall into the trap of bid­ding for a house as soon as they know that other peo­ple want it.

Com­ment: I can­not say that I have ever seen that. But I have seen them try to throw in a low bid “just in case” they get it. The prob­lem is, they won’t. And if there are 20 bids, at least 10 of them are hail mary bids hop­ing beyond hope that it goes for list price or less. It won’t. What that does, though, is push up the seri­ous bids. All you have to go on in a bid­ding war is the num­ber of bids. And gen­er­ally you see the sale price around $5–10,000 per bid over ask­ing. So 10 bids could push an $849,000 house to $900,000 but 20 will eas­ily send it to $1,020,000. The peo­ple who do not want the price to go too high are the very ones push­ing it up. Had they stayed out of it, the house would have sold for $100,000 less than it did. Now, the next house on the street is listed for $899,000 with bids and sells for $1,100,000 and so on… The peo­ple who were never in the run­ning for the house have now pushed the prices even higher. Exactly what they com­plain about. I try to explain this to peo­ple but they just get mad at me. They think it is their right to make an offer… “just in case”…

“There’s no ques­tion that there’s this per­verse need for affirmation.”

He says house hunters who hear that sell­ers who find out that they won’t have to join a con­test – either because the sell­ers haven’t set an offer date or because no rivals have shown up – then start to ques­tion their own judgment.

“The ques­tion starts to creep in, ‘what am I missing?’”

Lots of good houses are over­looked that way, he says, and he thinks buy­ers often end up pay­ing too much as a result.

“I do more talk­ing peo­ple out of houses than I ever do talk­ing peo­ple into houses,” he says.

Usu­ally buy­ers know pretty quickly if a house feels right to them. If it does, he encour­ages them to be grate­ful if other buy­ers are pass­ing it buy.

Com­ment: Exactly. Your gut tells you it is the right place. If you don’t know it the moment you walk in, then it is not for you. You should never have to con­vince your­self or jus­tify it.

“If we think it’s a good house, it’s a good house and we don’t need three other peo­ple to con­firm that. Then I’ll tell them, let’s see if we can go in and knock a cou­ple of bucks off the ask­ing price.”

Mr. Chad­dah is wish­ing that many more sell­ers will decide to list soon. Often peo­ple who are think­ing of putting a “for sale” sign on the lawn will wait for spring flow­ers and bud­ding trees.

“More prod­uct,” says Mr. Chad­dah. “That’s what I hope happens.”

At the same time, he tells condo sell­ers that they have to be patient.

“There’s a ton of prod­uct out there.”

A really slick condo town­house, or a high-rise unit with a really good view will some­times stir up com­pet­ing bid­ders, he says.

He worked with a buyer recently who bought a nicely ren­o­vated condo on Que­bec Avenue in High Park. The ask­ing price was $489,000 and the buyer beat out the other con­tenders with an offer of $511,000.

“Even when it goes over list, it’s more mea­sured,” Mr. Chad­dah says of the action.

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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