What Happens When A Seller Receives Zero Offers?

Zero Offers! | Toronto Condos | Toronto Lofts | Toronto Real Estate Back in August I wrote about the sellers who received 7 competing offers on offer-night, and said "no" to all of them (read it here). (Update: That house didn't sell and is now off the market.)

This month I'd like to take a look at what happens when a seller receives no offers on offer-night...

I was recently out with some clients, viewing houses for sale in the west-end of the city.

We saw six houses in total, and each one had a scheduled offer-night for the following week.

Four of those houses ended up selling on offer-night (with multiple-offers, and sale prices well above what they were listed at).

The other two houses didn't sell.

In fact, those two houses didn't receive any offers at all!

So, what options does a seller have when they receive zero offers on offer-night?

Generally, a seller will respond in one of three ways:

Response #1 - Hold Your Ground

In this case, the seller believes that the property is priced where it should be. Despite the fact that they received no offers, they're going to hold their ground and keep the list price where it is.

Response #2 - Raise The Price

Here, the seller believes that the property was underpriced initially (as part of a strategy to create a multiple-offer scenario, and an above-list sale price).

The strategy didn't pan-out on offer-night, so they terminate the listing on mls and re-list the next day at a price that's more in-line with what they're hoping to sell for.

Response #3 - Lower The Price

Here, the seller believes that receiving no offers means the property is over-priced.

They don't want to waste any more time on the market, so they respond swiftly with a reduction in price.

Truthfully, we don't see this third response very often. A seller will usually hold their ground for a few more weeks before considering a price reduction.

Response #2 (raising the price) is the one we see most often. But it doesn't always work (take a look at the greedy sellers from my August blog post as an example).

Keep in mind, these are only the three most common seller responses. There are actually others as well.

I've even seen listings receive zero offers on offer-night, then turn around and try the exact same strategy all over again: re-list the next day, at the same price, with a new offer-night...

...and it worked!


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

7 Offers... And None Of Them Were Good Enough!

7 Offers... And None Of Them Were Good Enough! Photo What happens when a seller receives 7 competing offers on their house, only to reject them all and then relist the next day at a much higher price?

Is this a smart move on the seller's part?

Or is it a stupid one?

Well, it's certainly a risky move; one that can backfire and leave the seller kicking themselves for being greedy...

There's a house for sale right now in the east-end of the city that's been on the market for almost 100 days.

The Toronto market for freehold homes has been exceptionally hot this year, and 100 days is a helluva long time for any house to sit unsold.

There must be something wrong with the house then, right?

Nope. A few layout quibbles aside, it's in great shape, in a great location, and it shows very well.

The problem is that the sellers played pricing games early on when the house was first listed for sale, and now it's priced too high & they're struggling to find a buyer.

The house was first listed back in the spring for almost $200,000 less than where it's priced now.

There was a hold-back on offers, and the sellers received 7 competing bids on "offer-night".

7 offers!

Most sellers in that position would realize their good fortune, and take the money & run.

Not these guys.

From what I hear, the listing agent was quite upset with his clients for choosing to reject all 7 offers and essentially squander the momentum that had been built-up over the week leading up to offer-night.

It sounds like the listing agent knew it would be next to impossible generate that much interest in the property again.

And he was right.

Here we are, almost 100 days later, $200,000 higher, and the house is still for sale...

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

You Get What You Pay For

You Get What You Pay For Photo There are companies out there that specialize in sign installations for real estate agents.

For a fee they will pick up, deliver & plant your "For Sale" sign in the ground.

I generally like to take a more hands-on approach; I put my signs in the ground myself!

I guess I see it as an excuse to get away from the computer and breath some fresh air.

Ponying Up

Before heading out to install a sign on a recent listing, I realized that I'd misplaced my hammer and needed a new one.

I popped into the hardware store at Ossington & Dundas, took a look at what they had and saw that it came down to two options: the cheaper (smaller) one or the more expensive (larger) one.

I decided to pony up and get the more expensive hammer.

Once I got out to the house I was glad I'd spent the extra money.

It was cold, it was windy, it was raining... and even with the more expensive hammer it took about twenty whacks to get the frame into the ground.

If I'd bought the cheaper hammer I'd probably still be swinging.

I didn't cheap out though.

And I got better results.

Cheaping Out

It was only after I tried to hang the sign that I realized I was out of zip ties and my only option was the dollar store around the corner.

Of course, the only zip ties they had were cheap ones.

It took me almost twenty minutes to hang the sign because 4 out of every 5 zip ties either broke or came loose.

They were cheap pieces of crap and I ended up wasting more time & money than if I'd bought better zip ties to start with.

Discount vs Full Service

It occurred to me that the above story serves as a great analogy when talking about discount realtors versus full service realtors.

There are realtors out there who advertise that they'll list your home at a discounted rate.

We get their postcards in our mail all the time.

And then there are full-service realtors (like myself and the majority of my colleagues).

While I think it's great that sellers have a choice, I also think they need to understand that these options often yield different results.

Real estate is no different than everyday life; you usually get what you pay for.


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Should You List Your Home For Sale Before A Long Weekend?

Should You List Your Home For Sale Before A Long Weekend? Photo I've mentioned in previous blog posts that the spring market shifts into its highest gear right after the Easter long weekend (read those posts here and here).

Easter also gets the ball rolling on a series of long weekends that serve as sign-posts throughout the spring and summer real estate markets.

There are 5 of these weekends in total: Easter, Victoria Day, Canada Day, August long weekend and Labour Day in early September.

On any given one of these long weekends, a portion of the real estate market (buyers, sellers and/or realtors) is going to be out of town and unable to view properties.

Listing right before one of these long weekends means that you're potentially missing out on the full pool of prospective buyers.

If given a choice, I generally advise my clients to wait another week and list on the Tuesday/Wednesday after a long weekend.

This way, we’ll (theoretically) stand a better chance at exposing the property to a greater number of people.

And market exposure is the name of the game when you're selling your property!

Does that mean I've never listed a client's home for sale right before a long weekend?

Of course not!

In fact, I have an upcoming loft listing that we may put on the market just before the Victoria Day weekend...

So it's certainly not a hard-and-fast rule.

One could actually argue that a long weekend is an excellent time to have your home on the market.

Looking back at this past Easter weekend for example, a bunch of great homes came on the market and sold with multiple-offers & above-asking sale prices.

It's possible that the long weekend allowed some buyers that extra bit of down-time they needed to really focus on their home search and put in a strong offer.

I will say that long weekends certainly make for interesting open houses…

It’s always fun to see out-of-town parents tagging along and having their minds blown at what their kids are spending half-a-million dollars on.


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

The House Sold So Fast We Didn't Even Get A Chance To See It!

The House Sold So Fast We Didn't Even Get A Chance To See It! Photo Earlier this week a gorgeous house popped up for sale in the west end.

The house was so gorgeous in fact, that it sold in a day and for more than $200,000 above the list price!

I have some clients who wanted to go take a look, but never got the chance as they're out of town until the weekend.

I'm sure they weren't the only ones who missed out.

There are easily 40+ realtors and prospective buyers who never got to step foot in the place.

Not to mention all the activity that a couple of open houses would've generated.

So, the question has to be asked, "Did the sellers leave money on the table by not exposing the property to the entire market?"

It's hard to argue with $200k over the list price.

Still... What if everyone who's in the market right now actually had the opportunity to see the property and submit a competitive offer?

Could the sellers have gotten another $25,000? Another $50,000?

There's no way of knowing.

It's actually possible that the sellers did so well because hardly anyone got to see the house.

In other words, whoever paid $200,000 over the list price was obviously very motivated to snatch the property up before anyone else had the chance.

Either way, I think this is a great example of how setting a specific "offer date" can benefit both the sellers and the buyers.

People seem to think that holding-back offers only helps sellers, by generating multiple offers and a higher sale price, but the truth is it helps buyers too.

Just look at those clients that I mentioned earlier, the one who are out of town.

A hold-back on offers would've ensured they saw the house, but instead it was listed and sold before they had the opportunity.

Remember, a house that sells in one day is only seen by the small pool of buyers who are able to drop everything at a moment’s notice.

A house that sells on offer-night is seen by the entire pool of buyers.


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Are Authentic Lofts Really That Hard To Come By?

Are Authentic Lofts Really That Hard To Come By? Photo Last weekend I held a couple of open houses at my new listing in the Massey Harris Lofts building on King Street West.

The turnout was great.

As with most open houses, there were visitors who saw the listing on MLS, there were visitors who popped-in off the street, and there were visitors who already live in the building and were curious to see their neighbour's unit.

Regardless of what pulled them in though, they were really all there for the same thing... the chance to see an authentic loft.

Unlike a city like New York, Toronto doesn't have many authentic loft buildings, relative to all of the new construction that's happening.

That's not to say that Toronto doesn't have any loft buildings. We certainly do. To name a few; Argyle Lofts, Wrigley Lofts, Merchandise Lofts, Gotham Lofts, Robert Watson Lofts, Candy Factory Lofts...

Compared to all the newly built condo units on the market though (or those currently under construction), the ratio is small.

As a result, properties like the one in the Massey Harris building really standout.

This was evident in the conversations I had at my open houses last weekend.

I heard things like, "I've been waiting and waiting for something to pop-up in this building because the spaces here are so unique." And, "We've been looking for months but the majority of listings on MLS are just regular condos. Hardly any are real lofts."

My experience in working with buyers looking for lofts is much the same as above. The search does take longer and there are fewer properties to choose from.

My advice? If you're looking for an authentic loft and a good one does come on the market... snatch it up!

There's no telling when the next one is going to come along...


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Don't List Your Home On The Weekend

Don't List Your Home On A Weekend As a realtor, I have access to up-to-the minute updates on mls. And I'm checking-in periodically throughout the day, scanning the hot listings for anything that might be a good match for my buyer clients.

Additionally, I have all of my clients set-up to receive daily automated emails with any new listings that hit the market the day before. For example, they receive an email early Tuesday morning with listings that were posted between 12:00am and 11:59pm on Monday.

So, regardless of whether or not I forward a specific listing that looks good, they are still going to see a full list of everything that hits the market. This is a great way for them to get a sense of what's popping-up in their price range, and it provides context for when a really great listing does come along.

Of course, I'm not the only realtor who does this. Every morning, all over the city, buyers receive automated emails with links to new listings that were posted on MLS the previous day.

I'd say the majority of these automated emails arrive on Tuesdays, Wednesdays, and Thursdays. They arrive on Fridays as well, although this is less common.

What about Saturdays and Sundays?

Simply put, Saturdays and Sundays are less-than-ideal days to have your property reach the market.

By the time Saturday rolls around, buyers and realtors have already compiled their list of properties to view for the weekend. Anything that lands in their inbox on Sat/Sun is more likely to fall through the cracks.

The odds are just better that a buyer is going to see your newly listed home if it's put in front of them on a weekday.

Sifting through the MLS updates becomes a part of many buyers' Mon-Fri routine. They open the links in the morning at breakfast, then they connect with their realtor during the day to highlight the best of the bunch, then they run through them again at home later that night. It becomes ritual. A weekday ritual.

That's not to say that buyers aren't looking at listings on Saturdays and Sundays. Real estate is addictive and many buyers are plugged-in 24/7.

Generally though, weekends are spent on social obligations, trips away from the city, and running a week's worth of errands.

Not to mention that weekends are when a lot of buyers are actually out viewing properties!

Despite all of the above, sellers still list on Fridays and Saturdays (which means buyers see these listings on Saturdays and Sundays).


Why would a seller (and/or their realtor) actually choose to have their home pop up on a Saturday or Sunday?

Why would they choose to have their most valuable asset make its debut on a day when the least number of potential buyers are going to catch it?

I think there are probably two main reasons;

Some realtors struggle with the ins-and-outs of how to best market a home.

It's no mistake that a lot of the listings I see pop up on Sat/Sun are also the ones that have crappy photos...

Some realtors are afraid that waiting a few more days to list will also be giving the seller a few more days to possibly change their mind.

Sad but true. Some realtors have been burned in the past and they think, "Hey, I need to get this place under contract and listed IMMEDIATELY, whether or not it's what's best for the seller."

I think there's a third reason to consider as well. It's possible that, despite their realtor's advice, some sellers are in a position where they need/want their home on the market ASAP. "Saturday, Sunday, Christmas Eve, New Year's Day... doesn't matter. We need it on the market NOW."

And what's a realtor to do in that situation? Of course they're going to list the property. They've given their best advice and now they're going to follow their client's directions.

For those sellers who have the option of waiting just a few more days though, listing on a weekday is almost always the way to go.

And if you're realtor is insisting that timing isn't crucially important to a successful listing, maybe it's time to find another realtor.


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.


"Multiple-Offers" And "Bidding Wars" Don't Always Go Hand In Hand

"Multiple-Offers" And "Bidding Wars" Don't Always Go Hand In Hand Photo Last month I wrote a blog post about multiple offers (read it here). Among other things, I noted that having “multiple offers" on a property doesn't always necessitate a "bidding war".

Of the properties I've sold with multiple-offers so far this year, one actually sold for under the list price and another sold for only $100.00 over. (I represented the buyer in both cases).

Both properties sold for close to what other recent sales went for, and neither of these situations came anywhere close to being a "bidding war".


For starters, both of these properties were condos. It’s true that the condo market has cooled a bit and the buying activity isn’t as frenzied as it was a year ago. (Houses are a different story...).

Secondly, both properties were priced fairly to begin with (as opposed to being intentionally "under priced") and the sellers were allowing for offers at any time (as opposed to scheduling a specific "offer night").

In other words, neither listing was attempting to orchestrate a bidding war scenario and the fact that they happened to receive multiple offers was a matter of lucky timing more than anything else.

Even when there is a scheduled offer night and a property receives multiple offers, the prospective buyers don't always end up in a bidding war.

As long as cool heads prevail and everyone comes to the table with their top number in mind (and the good sense to NOT exceed that top number), then a bonafide bidding war isn't going to happen.

Throw emotion (and deep pockets) into the mix though...


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.


Are There Deals To Be Had In January?

Are There Deals To Be Had In January? Photo Earlier this month a I wrote a blog post answering the question, "Is January too early to start looking for a home?" (read it here). Among other things, I mentioned how a buyer might benefit by purchasing a property that's been sitting on the market all through December.

Guess what? Less than a week after that post a client of mine proved my point and snagged a great condo at a steal.

We were still only a few weeks into the new year, but my client was motivated, pre-approved and ready to start looking. His preparation and willingness to jump into the market while most other buyers were still sitting on the sidelines resulted in him scoring a pretty good deal.

Timing certainly played a very big part here. My client was able to take advantage of 3 key factors:

  1. The property had been on the market since mid-December (I'll go out on a limb and suggest that one week before the start of the holiday season is not the best time to list a home for sale).
  2. The property was listed under market value (to the tune of 5%+).
  3. The property had actually sold to another buyer before the holidays, but that deal fell through and it was now back on the market.
I'm guessing that many buyers (and their realtors) missed the fact that the other deal fell through. They likely assumed that the property was now sold and no longer available. Or maybe when it popped back up as available they were still in holiday mode and just weren't ready to start their search up again.

Either way, the property went to a buyer who was still in the game.

Are there deals to be had in January? Yep.


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Is January Too Early To Starting Looking For A Home?

Is January Too Early To Starting Looking For A Home? Photo I'll let you in on a secret... the spring real estate market actually starts in January.

Well, not officially. And certainly not in full swing (that doesn't happen until March/April).

The early beginnings of the spring market do start in January though.

I was out with a new client yesterday and he asked a question that I often get this time of year, "Is it too early to start looking for a place?  It's only January... Am I better to wait until the spring?"

My answer was simple: "Not if the right property comes along".

Sure, you could wait another month or two.  There'll likely be more listings to choose from in late-February/March. The flip-side is that there'll likely be more buyers in the market then as well. More supply, but also more competition.

Getting out there and actively looking in January means getting a jump on the rest of the market.

What if things start to heat up in March and prices start to increase? Buying in January could mean paying less than what the same property is going to cost you in the spring.

And then there are the properties that've been sitting on the market all through December with no action. You may be able to benefit from a seller whose time is running out and needs to sell.

Of course, the right property might not come along until the spring. Even then, you can still chalk your January efforts up to "getting familiar with market". None of it is time wasted if it leads to you making a confident, informed purchase.

What are you waiting for? The early worm catches the bird!


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Would You Buy A Haunted House?

Would You Buy A Haunted House? Photo Every buyer has a list of wants and needs when shopping for real estate.

No home is perfect though and there's always going to be some element of compromise. As the search progresses the question becomes, "What are your deal breakers and what are you willing to bend on?"

Some buyers are willing to stretch the geographical boundaries of their search and consider locations outside of their preferred area if it means getting the size of home they want. Others are willing to give up some outdoor space in exchange for a great interior.

What about a house that's haunted?

Are there actually buyers out there who would seriously consider purchasing a property that was known to have paranormal activity?

Apparently there are. I came across a 2008 article from the Toronto Star about a Meaford, Ontario home that's haunted. At the end of the article the listing agent says he's received calls from potential buyers who tell him that, "moving into a haunted house wouldn't bother them at all."


Check out the article below...


Is Meaford Dream Home Haunted?

Toronto Star | By Roberta Avery | October 25, 2008

Rachael Chapman is not easily spooked.

After a fashion modelling career that took her to New York and London, Chapman, 33, travelled the world as a flight attendant before moving to a remote rural area near the Georgian Bay community of Meaford, where she lived alone in an old farmhouse with her young son, Adrian.

"We were miles from anywhere, but I wasn't at all nervous," she says.

Then last year, just before Halloween, Chapman and her partner, David MacLeod, decided to buy a home together.

The older three-bedroom, two-bathroom home they purchased for $164,000 on a tree-lined street just a few minutes' walk from downtown Meaford has a large private backyard, so it appeared to be ideal for Adrian, now 13, as well as MacLeod's 12-year-old son, Brian, and the baby the couple was expecting.

"We thought we had found our dream home," she says.

The family has not lived in the house since May, although they struggle to make the mortgage payments while paying rent on another home, she explains, while reluctantly unlocking the door.

Chapman's self-confident demeanour disappears when she steps into the kitchen that feels icy cold, although it's a warm and sunny October day. The fully furnished house is neat as a pin with children's toys tidily stacked on shelves, an empty baby's crib and family keepsakes and photographs on display.

"We left our things behind because we were scared that we would take whatever it is that's here with us," she says.

Although she loved the home at first sight, there was something about it that made her ask the realtor if anybody had died in the home, she says.

"I was assured that no one had died here," she says.

There is a ground floor master bedroom and another room they decorated as a nursery for their baby, due in January. Upstairs are the two bedrooms she thought ideal for their two boys.

"Shortly after moving into the home, we began to notice strange happenings," Chapman says.

At first the couple tried rational explanations for the loud banging noises from upstairs, which happened at times when all the family and the pets were downstairs.

"We explored the possibility that animals had taken refuge in our attic or that branches could have been rubbing against the house or rooftop, but there was no evidence of any such cause," she says.

The boys were ill at ease and refused to enter certain rooms. One said he woke to a feeling that he was being choked.

"We chalked it up to the children having vivid imaginations and talked to them at length about the inappropriate nature of their stories," she says.

Things began to escalate: appliances and lights turned themselves on and off, things went missing and turned up in strange places. While they slept, a plaster column in the kitchen smashed as if hit by a baseball bat, and also while they slept, their phones called people.

Although they are not religious, in May they asked a minister to bless the house, but after he left, events escalated further. Their cellphones started beeping, indicating there was no signal. Chapman felt that she was being watched and had an overwhelming sense of foreboding.

That night Chapman took Adrian and then-five-month-old Locklyn and went to stay with her mother, who lived a few blocks away. MacLeod initially refused to join them, but just a few hours later, when the furniture started moving and he heard what sounded like a woman screaming when he picked up the telephone, he also left, she says.

Since they moved, neighbours have called them to report lights going on and off in the securely locked home and on one occasion, the hard-wired fire alarms started beeping, although they were disconnected and didn't have battery backup, she says.

Chapman expected her story to be dismissed as unbelievable, but when she started asking around town, she soon discovered the house had a reputation for strange occurrences dating back decades.

"It seems that everyone knew but us," she says.

Chapman's research at the Grey County records office indicates that at least two men died in the home, one who suffered from sleep apnea and choked to death in his sleep, and another who committed suicide in the living room. The county paper records, which go back to 1945, indicate the house has changed hands numerous times, with people rarely staying for more than 12 months, she says.

"That's really odd, because in 1945 people usually bought a home and lived in it for life," she says.

It doesn't take long to discover that, just as Chapman asserts, the house does have a reputation for being haunted. A few inquiries at the local coffee shop turned up several tales of the unexplained, relating to the house, but no one wanted to be quoted.

Meanwhile, Chapman and MacLeod have put the house up for sale for $184,900 in the hopes of breaking even after legal and realtor fees, but so far, prospective purchasers have lost interest once the realtor advises them that the house is haunted, Chapman says.

Legal expert and Star columnist Bob Aaron says that with the exception of Quebec – which has laws requiring disclosure of property stigma – rules for the rest of Canada are weak.

"In general, the rule is caveat emptor, or buyer beware," he says.

Chapman and MacLeod's realtor, Murray Petch, a broker at Wilfred McIntee & Co. Ltd. in Meaford, confirms in a telephone call that he advises potential purchasers there have been reports of paranormal activity in the house.

"I wasn't aware of it, but now I know, I'm obliged to tell," he says. "But it's okay, there are people who say moving into a haunted house wouldn't bother them at all."

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Why Wait Until After Labour Day To List Your Home For Sale?

Why Wait Until After Labour Day To List Your Home For Sale? Photo Around this time last year I wrote a blog post about why it might be better to wait until after Labour Day to list your home for sale (read it here).

There's always the other side of the coin though, and in that article I noted that there are potential benefits to listing before Labour Day as well. For example, a seller could do well if everyone else was waiting until September and their property was the only one on the market.

A great example of this happened in my office just a few days ago.

A colleague of mine listed a one-bedroom condo for sale on King West. They priced the property at what appeared to be market value and decided to hold-back offers for a few days. Come offer night, there were a total of three buyers at the table!

Three competing offers on your property is better than ideal.  In fact it's more than most sellers can hope for, especially at a time of year when many buyers are deciding to put their search on hold.

There are always a handful of factors that go into any successful sale; pricing, staging, marketing, negotiations, etc. These factors aside, I think that part of the reason the sellers of this condo did so well is that they listed at a time when most other sellers are standing on the sidelines waiting for summer to end.

There's always a bit of risk in deciding to put your property on the market in mid-late August. As the above illustrates though, it's a risk that can sometimes be well rewarded.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Are There Deals To Be Had In The Last Few Weeks Of Summer?

Are There Deals To Be Had In The Last Few Weeks Of Summer? Photo The last few weeks in August are similar to the last few weeks in December in that these are the two times of year when a relatively large portion of the real estate market (buyers, sellers, and realtors) are away on vacation.

Not everyone is out of the game though. We still see listings come on the market right up until Labor Day weekend and Christmas. If you're a buyer who's still actively looking you may be able to take advantage of the timing here.

I say "may" because it's actually quite rare to come across a bonafide "steal" in the Toronto real estate market. There are so many eyes on the listings at all times and nothing is ever going to slip past everyone.

Having said that, I've certainly had buyer clients do quite well by purchasing at the end of summer. They've benefited from the fact that there simply aren't as many other buyers out there actively looking. Less competition.

A property that might otherwise attract multiple offers may only get one. And there might actually be room for a bit of negotiation on the list price (imagine that!).

A handful of the buyers I'm working with at the moment have asked if they should put off the search for now and wait until after Labor Day weekend. My advice is almost always the same in this situation - "There'll be more listings to choose from if you wait until September. But there'll be more buyers to compete with then as well. If something really great pops up in the meantime, don't hesitate to make a move... You may be glad you did."


If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.


Ouch! Feeling The Sting Of Flaherty's New Mortgage Rules

Ouch! Feeling The Sting Of Flaherty's New Mortgage Rules Photo There’s been a lot of talk over the last few weeks about how many buyers out there are actually going to feel the sting of the new mortgage rules that came into effect on July 9th.  While the media has been playing up the severity of the implications these new rules bring, most industry insiders feel that only a relative minority of purchasers will actually have their buying power significantly reduced.

I thought it might be a good idea to shed some light from a realtor’s perspective and take a look at a couple of real world examples.

Example #1

A client of mine was previously looking to purchase a one-bedroom condo in the King West area for somewhere in the $325,000 - $330,000 range.  With the new rules in place, he’s been bumped down to well under $300K.  This means he’s likely going to have to say goodbye to a separate bedroom and settle for a bachelor suite.  Now he’s wondering if renting might be a better option...

Example #2

Some clients of mine were previously looking to purchase a 3-bedroom, 2 bathroom home in the east-end for around $600,000.  With the new rules in place, they’ll likely have to take on a basement tenant if they want to continue shopping for a house in the same price range.  This means that they may have to settle for only one bathroom, since 2nd bathrooms in these homes are almost always located in the basement.

So, there you go - two real world illustrations of how Flaherty's tightening measures are affecting purchasers in the Toronto real estate market.

I will note that, aside from these two buyers, none of my other clients have been noticeably affected by the new mortgage rules.  They're either purchasing with at least 20% down or they're planning on spending conservatively less than the amount they've been approved for.

What about you? Have you had to reassess your home buying plans as a result of the new mortgage rules?

For access to a Mortgage Calculator and other financial tools, visit my website here

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

When Does The Spring Real Estate Market Actually Begin? (Re-visited)

When Does The Spring Real Estate Market Actually Begin? (Re-visited) Photo Two years ago I wrote a blog post asking the question, "When does the spring real estate market actually begin?"

Among other things, I took a look at the downtown market stats (districts C01 & C08) and found that there was an almost 80% increase in new listings in the week after Easter, compared to the week before.

Although we only have three full days of stats for the same week in 2012, I thought it would be interesting to see how they stack up against those from 2010.

Interestingly, the contrast we saw in 2010 isn't there now and this week's numbers aren't looking much different from last week's...

Here's the article as posted in April 2010, with the updated 2012 stats (you can read the original article with 2010 stats here):

When Does The Spring Real Estate Market Actually Begin?

The answer to the above question depends largely on who you're asking.  Speaking as a Realtor I'd say that the spring market actually starts as early as January.  Granted, the number of listings and sales this early in the year aren't going to match the level of activity we see in March, April, May,...  None-the-less there's activity in January and it's certainly the start of a market that will grow over the coming months.

Many feel that the spring market doesn't really begin until the month of March.  There's some truth to this in the sense that March is generally when we start to see signs of warmer weather and buyers are more apt to tour the neighbourhood for open houses.

March is a little tricky though, as a number of buyers, sellers and realtors aren't fully participating due to commitments associated with "March Break".  At least those with families anyway.

I would suggest that the safest bet is to consider the week after Easter Weekend as the full fledged beginning of the spring real estate market.  A number of sellers wait specifically until after Easter to put their property on the market.  And a number of buyers wait until then to kick their search into high gear.

However, this year may be a bit of an exception. Monday through Wednesday of last week we saw 176 new listings (condos, lofts, and houses) hit the market in TREB districts C01 and C08 (east of Dufferin / south of Bloor / west of the DVP).  Monday through Wednesday of this week we saw 172 new listings. Not much difference at all.  A decrease actually.

What does this mean? I'd suggest that it means a number of buyers chose not to wait until after Easter this year to list. And indeed, if you look at the numbers you'll find that there were more new listings this year in the week before Easter (238) compared to the same week in 2010 (190).

Regardless of when the spring market actually starts, we're at mid-April now and things are movin' & shakin'.  And they'll remain so for the coming months.  Then what?  The summer market of course!  When does that start?  Well......

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

$421,800 Over The Asking Price. Seriously?

Seriously? $421,800 Over The Asking Price? Photo That's right. A bungalow in north Toronto sold earlier this month for $421,800 over the asking price. The home was listed at $759,000 and sold in multiple offers for a whopping $1,180,800.

According to an article from today's CBC News (reposted in full, below), there were a total of five bids above $1 million dollars. This tells us that the successful purchaser wasn't alone in their seven figure valuation of the property.

Needless to say, there's been plenty of attention from the media, realtors, and the home buying public over the last few weeks.

The price isn't the only reason this story is generating so much hoopla though. The location and style of the home are notable as well.

Remember, we're talking about a bungalow... in north Toronto...

Would the reaction have been as strong if this was a 3-storey detached in The Beach? Or a mansion in the Annex?

Or what about Queen West? A colleague of mine just listed a stunning million dollar property there. I popped into the agent's open house today and the place really is impressive - something right out of Architectural Digest. Now that is the kind of property (and location) that could sell for a significant price without all the accompanying hullabaloo.

Okay, we've looked at price, location, and style of home. From what other angle can we view this north-Toronto bungalow sale?  How about the type of buyer involved in the purchase? That's the focus of today's CBC News article. Check it out...


Offshore Buyers Pricing Canadians out of Housing Market

Globe & Mail | By Prithi Yeljaj | March 15, 2012

Overseas investors are snapping up properties in Canada's largest cities, driving up prices and pushing ordinary Canadians out of the housing market, observers say.

Real estate experts call it the "new reality," and the high price paid for a north Toronto bungalow is the latest evidence.

This month, the three-bedroom bungalow, circa the 1960s and without much updating, sold for $421,800 over the asking price, creating a buzz among agents and other buyers.

Located in Willowdale, where similar detached houses typically sell for just short of $900,000, the bungalow at 300 Dudley Ave. was listed at $759,000.

The winning bid of $1,180,800 came from a university student whose parents live in China and own a business in San Francisco. There were four other bids of more than $1 million.

Michael Adelson represented the seller of the Willowdale bungalow.

"The initial response was quite vociferous," said Michael Adelson, a Re/Max agent who represented the seller and received several phone calls about the deal after it was done.

"There's a lot of anger among Canadians who earn money here that they've been priced out of the market. There is some degree of anxiety about how people are going to compete with these hyper-inflated prices."

'Outrageous and borderline bizarre'

Adelson declined to discuss the specifics of the Willowdale deal, citing client confidentiality.

But CBC business commentator Michael Hlinka called the deal "outrageous and borderline bizarre."

The strong reaction to the price likely stems from how it changes the vision of affordability for average Canadians, he said.

Property markets in other large cities, such as Vancouver and Calgary, are undergoing similar pricing shocks, he said.

“We’re looking at this through a prism of our expectations growing up in Canada in the 1950s, '60s and '70s, when part of the Canadian dream was that you would own your own single-family home," Hlinka said. "But as Canada matures, we’re going to be looking at a new reality, where that may be out of reach. And I don’t think you can turn back the clock.”

Brad Lamb says people who live in downtown Toronto will have to be rich or settle for condos. (Brad Lamb Real Estate)

Toronto real estate mogul Brad Lamb said Canadians' home-buying expectations have to change, but he doesn't believe that overseas investors are to blame.

The scarcity of the product — in this case, single detached homes — is key, he said. And as the Toronto population grows and land available for new houses becomes scarce, the competition for these homes will become even more intense.

Condos are the alternative. Already, they're the norm for families wanting to live in the central cores of cities such as New York and Chicago, he said.

"It's an illusion for people to think they can live in downtown Toronto in a detached home and not be wealthy," Lamb said. "Ordinary people can't live in central London or central Paris or central New York.

"If you want to live in central Toronto, you're going to have to live in a condo or be a millionaire. That's the reality. ... It's not a bad thing. It's the way cities evolve."

Steve Matthews, a Re/Max agent in Toronto, says inflated prices make it harder for ordinary Canadians to buy houses. (Steve Matthews)

Inflated prices, such as the price fetched by the Willowdale bungalow, do make it difficult for ordinary Canadians to get into the market, no matter who buys the house, said Steve Matthews, a Re/Max agent in north Toronto.

"It skews the market. Now, the person who lives next door and the person who lives down the street think they should get that price, too. It also generates resentment because it makes it tougher for everyone — buyers, agents, banks — so there is a ripple effect that goes beyond the immediate sale."

Foreign students drive market

As more people get exposure to Canada as an offshoot of globalization, the overseas investor market will rise, Hlinka said. As an instructor at George Brown College in Toronto, he has seen an explosion in the number of foreign students.

“When their parents come to visit, they get an idea of what real estate costs here, and they can’t believe how cheap it is. They want to buy because they think it’s a bargain.”

In addition to China, investors pouring money into real estate are flocking to Canada from the Middle East, Korea, Russia, India and the Philippines as well, said Tony Ma, who owns HomeLife Landmark Realty in Markham.

Tony Ma, owner of HomeLife Landmark realty, says buyers from China find Canadian housing prices low, compared with what they pay at home. (Tony Ma)

About 65 per cent of Ma’s agents are Chinese and the bulk of his business comes from Chinese clients. Most are new immigrants to Canada, but about 20 per cent are foreign investors, including parents overseas who buy on behalf of their children studying in this country.

Fewer than five per cent are pure investors with no ties to Canada, said Ma, a former neurosurgeon who moved to Toronto from Zhengzhou, China, in 1998.

"Most of our buyers are part of Canadian culture. I don’t think they are going to push local Canadian people out of the market. When immigrants come to Canada today, they have money, not like when I came to Canada 20 years ago. I didn’t have money."

Last year, buoyed by his strong ties to the mainland China market, Ma’s agency sold 263 homes priced at more than $1 million, with about 40 per cent of those being all-cash deals with no conditions attached.

Chinese drawn to Canada

Canada’s stable government and banking system and the relatively low prices draw investors, he said, pointing out that while condos in downtown Toronto can sell for $800 per square foot, in Beijing, the price is $2,000 per square foot and in Hong Kong it's double that.

Moreover, to control prices, the Chinese government allows each family there to bank finance only two properties — one to live in and one to invest in — and buyers must pay 100 per cent cash for anything above the two-property limit, Ma said.

Not only are prices in Canada more affordable, homes and condos are a better value proposition, since they come ready to move into, unlike in China, where buyers get a concrete shell they have to pay to finish, he said.

“So they see an $8 million house here, they see the quality, they see the finishes and they think it’s cheap," Ma said. "They can move in today.”

Vancouver tops the list with Chinese investors because of the city’s temperate climate and proximity to their homeland, he added.

Janet Sinclair of Re/Max Hallmark Realty Ltd. in the Beaches neighbourhood of Toronto, routinely deals with foreign investors.

“They have driven prices up," she said. "Whenever we launch a new condo downtown we get a number of Hong Kong investors and a lot of people coming over from England. People want to put their money in Canadian real estate because they think it’s safe.”

Sinclair recently dealt with a Hong Kong investor representing a dozen buyers, who happened to be family members from back home. They snapped up units in a new waterfront condo building and are now interested in another project in the Beaches.

She also recently sold a penthouse condo in downtown Toronto to Swiss investors for $1.25 million.

“They didn’t bat an eye at the price. They said in comparison to what they pay in Switzerland, these prices are nothing. Our prices are not scaring them at all."

Builders tearing down old houses

The Willowdale buyer who paid the premium price is stinging from the negative reaction to the sale and declined to be interviewed.

Adelson said the Yonge Street corridor between Highway 401 and Finch Avenue is in demand because of the subway and its proximity to York University and Seneca College. Along with a thriving retail strip and a planned new Whole Foods, 10 new condominium projects are in the works.

The area is a magnet for certain ethnic groups, including people from the Middle East and China, Adelson said.

"It's a cultural thing. Their communities are already there. If you go down to the Danforth, their stores are not there, so that's not as attractive a location for them."

The area is also rife with redevelopment as builders tear down older homes and replace them with monster houses or two smaller units.

That’s just what a buyer from China, who recently bought a tear-down bungalow in the area for $720,000, plans to do, said Al Sinclair, the Hallmark Realty sales representative who sold him the property.

The buyer became familiar with the area through visiting his daughter, a doctor who lives there. He plans to rent out the house for two years until his building plans are approved, then tear it down and build several townhouse units.

“He thinks the Toronto real estate market has a long way to go," Sinclair said. "He’s right."

Only pockets of Toronto are of interest to overseas investors, including North York and the downtown core and not areas like Leslieville in the east end, Adelson said. Although that neighbourhood is considererd hot and the property values are rising, it has not experienced the overheated bidding wars seen farther north.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Five For Friday

Five For Friday Photo It's roundup time!  Let's take a look back at some of the more interesting articles and photos that popped up over the past few weeks...

#5.  What Apocalypse? Housing Market Predictions For 2012 [Infographic]

Five For Friday Photo     On December 28th, the folks over at BuzzBuzzHome  posted an informative infographic illustrating the CMHC's major predictions for the 2012 Canadian real estate market. The total number of units is expecting to increase by 1.9% over 2011. And the average price is expected to increase by 1.2% over 2011. Read the full article here.

#4.  Vintage Photographs Of Toronto In Winter

Five For Friday Photo     On January 4th, Dereck Flack of blogTO dipped into the city's digitized archival holdings to present us with a collection of snowy photos from Toronto's past. There are a bunch of wonderful images here, starting with a 12 horse team pulling a snow sweeper in the 1890's, to a snow storm seen from the corner of John & King in 1961. Read the full article here.

#3.  2011 Villain: CityPlace

Five For Friday Photo     On December 19th, Stephen Michalowicz of Torontoist.com nominated CityPlace condos in their year-end quest to name the very best and very worst people, places, things, and ideas that had an influence on the city in 2011. If you're not familiar with CityPlace, they're the buildings that sit at the foot of Spadina St, just south of Front St. The article points to poor build quality, poor insulation, water leaks, and poor planning issues as the reason for the nomination. Read the full article here.

#2.  What You Got In Toronto For $500,000 In 2011

Five For Friday Photo     On December 15th, the Globe & Mail took a look back at the year's home sales and highlighted 10 properties that sold in the $490,000 - $550,000 range. There's everything from a 160 year old coach house in Port Hope, to a detached home in the beaches, to 2 bedroom condo near Church & Carlton. Read the full article here.

#1.  Flatiron Building Sold For $15.3M

Five For Friday Photo     On December 15th, Tristin Hopper of the National Post looked at the sale of one of the city's most beloved structures - the Flatiron building.  The purchasers are a Toronto based company - the Commercial Realty Group. In case you're wondering, the $15.3M sale price works out to about $797.00/sq ft. Read the full article here.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

What's In Store For The 2012 Real Estate Market?

Last month, the Toronto Real Estate Board posted the above video to their YouTube channel. In the video, Senior Manager of Market Analysis, Jason Mercer, takes a look back at the 2011 real estate market and a look forward to what we can expect in 2012. Warning: the video is over 25 minutes long! Not to worry - I sat through the entire thing myself and have summarized the main points below (you're welcome).

1.  Where We Are At

  • We've seen of approximately 8-10% of price growth over the course of the year.
  • Inventory has been tight, resulting in a Seller's Market.
  • Record-low interest rates have fuelled a very active market.

2.  Interest Rates

  • Rates are likely to remain somewhat flat in 2012.
  • This is a reaction to what's happening, economically, south of the border and in Europe.

3.  Jobs And Income Growth

  • The unemployment rate has been moving lower, but this trend is flattening.
  • A 2% growth in income is expected in 2012, roughly in line with inflation expectations.
  • The average Toronto household income will increase from approx $102,000 in 2011 to approx $104,000 in 2011.

4.  Resale Market Outlook

  • An increase in the number of sales, from 90,000 in 2011 to 92,000 in 2012.
  • This increase in the number of sales is in line with the long-term trend for population growth.
  • The number of new listings should rise from 145-150,000 in 2011 to 160-165,000 in 2012.
  • More sellers will decide to list their homes in reaction to the strong price growth seen in 2011.
  • More listings = more choice for buyers = slower price growth than what we saw in 2011.
  • An increase in the average price from $460,00 in 2011 to $485,000 in 2012.
  • This amounts to approx 4.5% price growth, year-over-year.
  • Moderate price growth will keep affordability in check.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

An Upgraded Version Of Realtor.ca Is Now Available!

An Upgraded Version Of Realtor.ca Is Now Available! Photo There are a number of websites available that allow the public to search for properties currently listed for sale.  Many of these websites belong to real estate agents (take my website, for example).  Some belong to real estate brokerages (check out my brokerage's site here).  And then there are sites like Zillow.com (in the states) and Zoocasa.com (here in Canada).

Probably the best known and most widely used of these public sites is Realtor.ca (formerly mls.ca).  If you've used the site before, you know that it does have some limitations... Having said that, a handful of useful upgrades to the site were released on November 29th.

This upgraded version has new features and tools that allow users to customize their searches and find what they want faster.

The new interface’s features include:

  1. Collapsible panels on the map search. The previous map search was divided into three parts: search criteria on the left, the map in the centre, and property thumbnails on the right. In the new interface, users are able to collapse either the left or right panels to allow for a larger map.
  2. Drawing search areas on the map. In a manner similar to TorontoMLS, users are now able to draw shapes on the map to refine the geographic area that is of interest to them.
  3. Auto-sizing for high definition monitors. The REALTOR.ca interface now changes its size based on the resolution of the user's monitor, eliminating white space that appears on the periphery of high definition screens.

What do you think of the new upgrades?  Are there other improvements that you'd still like to see?

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.