Car­olyn Ire­land – The Globe and Mail

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% in March. But when con­tests do break out, the action can be intense.

Com­ment: Thank dog we are not see­ing 70% houses in some neigh­bour­hoods going for over ask­ing like they did last year, that was nuts. A lit­tle more sub­dued now, though not what I would call calm or easy.

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.

Com­ment: Not really. It is not so much prepa­ra­tion as hav­ing 18 crazy peo­ple ready to cage fight to the death over a dump.

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.

Com­ment: While the owner cre­ated an awe­some house, he needed the advice of a real­tor to get top dol­lar. Sure, he would have done well sell­ing it alone, but he would not likely have set the street’s price record. From plan­ning when to list and when to take bids, cre­at­ing the story, tak­ing March break into account – this is where our knowl­edge and expe­ri­ence come into play.

“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% 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.

Com­ment: Urgh, not a smart move. Know­ing you have a great house that will sell in min­utes, he should have bought first. Now he has a time crunch to find some­thing new. When you have some­thing hard to sell, sell first. If it is an easy sell, then buy first.

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.

Com­ment: Steeper decline in what, sales? How will that help? Decline in prices just ain’t going to hap­pen. He counted on high prices to sell and get a ton of money for his house, but then wants prices to drop for him to buy? That makes no sense…

“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.

Com­ment: Huh? When there are 9 offers on the table, it really only comes down to price. Why would the sell­ers care a whit that the buy­ers knew about pos­si­ble defects? If they buy with no con­di­tions, then that is that. If they get cold feet, they lose their deposit. You have noth­ing, noth­ing, as a buyer in a bid­ding war. The seller has all the power and will sim­ply take the high­est price with no con­di­tions. If it was you, why would you do any different?

“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.”

Com­ment: And they had the high­est price. Emo­tional con­nec­tions mean noth­ing, I am sorry to say. I wish they did… I had clients make a great con­nec­tion with a seller. Then another bid came along. All the good­will we had went out the win­dow and it came down to sim­ple dol­lars. We beat the other side by only $1,000 but we had to pay more – emo­tional con­nec­tion or not.

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 cen­tered 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 re-branding 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.

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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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