From the moment Toronto Life's September issue called House Wars arrived in the hands of my clients, I began receiving emails. Each said the article featured properties they had viewed, and even considered. Hmmm. While I always like to keep abreast on what the media is saying about the market (in fact I consider it my professional obligation), my suspicion that it was a must-read was validated by the number of inquiries I received.
Granted, I can't say I was rushing to kick back on the couch and read what would inevitably be some sugar-coated version of a life selling real estate in downtown Toronto, for rarely is it accurately portrayed. So I saved it for my plane ride west as part of my detox from the daily stresses. "Yes", I thought, "I'll read an amusing tale on the housing market while escaping my oft-harrowing heart-thumping day to day reality.
Whatever physical, mental or emotional release that might inherently start when leaving the battle field of Toronto's downtown housing market, reading this article at 34,000 feet didn't provide that experience. To my horror and admiration, author Denise Balkissoon accurately captures the intense race Buyers and their realtor often endure in the quest to win the buy. Five riveting pages of text succinctly summarized the frequent hellish journey of buying a house.
Allow me to confess. Operating within the engine of the real estate economy (which has long been firing on all cylinders at a high octane level) can be exhausting. In fact, it's impossible to run one's company in that environment without taking the opportunity to occasionally shut down and cool the motor. One of my favourite ways to recharge is by spending time near water. This includes my good fortune to boat up the west coast to one of any remote ocean bays under the shadow of the Rocky Mountains every Summer. Here's a pic of the gorgeous vessel 'Rhinegold', one of my annual summer destinations and traditions! Click HERE to have a giggle reading some of my others.
As a realtor working from The Beach to Bloor West and up the Yonge Street Corridor, I trade real estate in most of the City's original 42 neighbourhoods. As a result, this story was a deja-vu nightmare for me. Along with accurately reflecting the Toronto market to date, with its bidding wars, bully offers and sky-rocketing prices, several of the properties coveted by the Buyers in 'House Wars' were familiar to me.
On the first page Ms. Balkissoon mentions "a detached two bedroom home on leafy Helena Avenue 'lovingly maintained by the same owner for 50 years'". How true she reveals that translates in 'real estate speak' as 'tear-down'. I was very familiar with this house. In fact my buyers seriously did the math on building their dream house here until, like the couple in the article, realized it was cost prohiibitive. The final sale price for the house shown below? $755,000 plus demolition, soft costs and hard costs for what was effectively a 20x140 foot lot! Click HERE to read what my Buyers purchased instead.
On page 3 of the article, the story segues into how pricing a house for competition can sometimes back-fire. The example is a house on Delaware that was initially listed at $449,000, then re-listed for $730,000, and eventually commanding $601,100. The Toronto Life article doesn't expand on what happened here, but if you're curious for the whole skinny (and learn a valuable lesson on the way) click HERE to see it featured in our June Home Of The Month blog. Here's a pic:
Amongst the 'House War' ticker tape photo montage showcasing houses that spiked over list, there's a snapshot of a detached renovated house on Fermanagh in Roncesvalles Village which, listed at $979,000, soared to $1,213,000. Here's urbaneer.com's real life backstory to this property.
In the first week of June, when this house came to market, I received a phone call from some clients who lived a few streets away from this dwelling just as I was getting on a plane from Charlottetown (where I had been overseeing the renovation of our investment triplex in Charlottetown). Having gone into the open house during the weekend, after a few days reflection and the offer deadline looming, the prospective Buyers called me to have a pow wow about the property. Instead of keeping the house they had bought a year earlier for $910,000 in competition against five others, the husband thought it might be better to jettison that house ( which they had planned to expand with an addition and live the next twenty years) and instead purchase for this slightly larger house.
I adore these clients but it didn't stop me from reading them my own gentle version of a riot act. "First", I said; "I know you well enough that you'll want to put a family room addition on this house after living here a year and second, just because it's $979,000 doesn't mean that's what it will go for. Count on it spiking well over $1,100,000."
While I don't think either of those comments served to dissuade them, I think they began to revisit their circumstance when I said "I'm landing in Toronto in 2 hours and 15 minutes, where I welcome drafting an offer and meeting you at the house at 4pm in time to sign an offer for presentation at 7pm. In the interim, you go to your lender and prepare a bank draft for $100,000." As much as I was thrilled at the possibilty of generating 50k in revenues for urbaneer through their successful purchase and the subsequent sale of their existing home, I had to ask them. "Why on earth do you want to spend $250,000 to make a near-lateral move, especially when over $60,000 of it comprises the double government land transfer taxes that accompanies the purchase of two properties in Toronto? I'd rather see you invest that 250,000 into building the addition!"
I called them once the plane landed. When we connected again the couple had talked it through and agreed with me. No need to proceed. My points were valid. And more importantly, they loved their house, their neighbours, and the potential of their property. They just needed someone to remind them and put the realities of the market in perspective. This is a photo of the house they were considering:
I LOVE my career in housing. It requires a strong balanced rational point of view, a lot of intuition and guidance, and the ability to protect the interests of your clients first and foremost when navigating the intensity of Toronto's scorching hot housing market. Oh, and the personal commitment to recharge from the frenetic intensity that can easily consume those of us who work in this environment on a daily basis. The article also reminded me that, ego and hubris aside (in the competitive world of commission sales, we Top Producers can't help but decry how we're 'the best!') with a multi-discplinary education on Housing and 22 years of renovation, design, and sales experience, I'm amazingly excellent at what I do.
The Toronto Life House Wars article is a well-crafted read if you want to catch up on the state of the market this year. Or, alternatively, you could sign up for our FREE monthly HomeWatch newsletter and enjoy our hassle-free pressure-free updates on the market. For example, click HERE for a funny-but-true March blog that reads just like the House Wars tale.
Will the bidding wars and bully offers continue this autumn? Stay tuned!