Priced low and ‘as is’ during March break, Toronto house gets 30 bids

Real estate agent Jason Wilson took a risk when he listed a house for sale in Little Italy.

Open this photo in gallery:

The investment property at 633 Euclid Ave. was vacant and empty of furniture, without even a coat of fresh paint over the graffiti covering the garage door. Mr. Wilson made clear the four-unit semi-detached dwelling was being sold “as is.”

“The house needed a lot of work and everyone walking through knew it,” Mr. Wilson of Milborne Group says.

He set an asking price of $999,000 and launched in onto the Multiple Listing Service of the Toronto Real Estate Board. After one week on the market, 30 competitors tabled bids and the house sold for $1,620,000.

Mr. Wilson took a chance by listing the house during the public school March break, when many agents avoid bringing new properties to market. The conventional wisdom is that the market slows while families are away seeking the sun.

“It almost worked out better than expected – because it was March break, people were around for it,” Mr. Wilson says.

Chinese investors still sold on Canadian real estate

A contrarian’s upside view of the Toronto housing market

For subscribers: Real Estate: Rules, rates and reality checks for first-time home buyers

He also listed the house far below his estimate of market value – which he figured was somewhere between $1.4-million and $1.5-million – in the hope of sparking competing bids.

That tactic has been used very sparingly in the past couple of years because so many potential buyers are reluctant to enter a bidding war. Slower sales over all also mean buyers can take their time.

In this case, he believes his strategy paid off.

Many agents believe such bidding contests become too emotionally charged for buyers and lead to the type of run-up in prices that create instability.

Mr. Wilson says the marketing strategy was good for the sellers because they were away at the time and wanted a quick sale.

“They were shocked as to how high it went,” Mr. Wilson says.

Open this photo in gallery:

Recently, another nearby semi-detached house in similar condition sold conditionally on Grace Street for $1,360,000, he says.

Rundown semi-detached houses are in high demand from investors who want the potential for capital improvement and the income streams from multiple units, he says.

Mr. Wilson did not hold any open houses, but during the week the property was on the market, 100 parties booked appointments to see it.

Many of the potential buyers flowing through Euclid were builders and contractors, he says.

The demand was clearly there, he says, and by creating some hype, he brought a buzz to the sale.

Mr. Wilson says he wouldn’t use the same marketing strategy for every property. In this case, he knew the location just south of Bloor Street West and close to Harbord Collegiate Institute would be extremely popular.

A few people tried to submit bully offers, but the seller rebuffed all offers that came before the scheduled date, he says.

Several of the bidders on offer night submitted lowball offers, but he was surprised at how many were very strong.

“We asked everyone to submit a best and final offer,” he says, so there was no second round of bidding.

The prevailing bid came way out in front in price, without conditions, and with a quick close, he adds.

Now that March is winding down, Mr. Wilson expects more listings to spring up. He’s receiving calls from potential sellers – particularly in the west end, he says.

In February, TREB reported, new listings in the Greater Toronto Area dropped 6.2 per cent from February, 2018. Sales dipped 2.4 per cent in the same period.

Mr. Wilson reckons listings have been held back so far in 2019 because some homeowners are nervous about selling if they don’t have another property lined up.

“If you don’t have something to move into, it’s difficult.”

Outside of the core, real estate agent Shawn Lackie of Coldwell Banker R.M.R. Real Estate says the market has picked up in Oshawa, Durham Region and places as far as the Kawartha Lakes.

His office brought out five new listings last week and more are on the way.

“It’s very active and I expect it to become more so,” he says.

Mr. Lackie says the area is popular with people who want to become mortgage free because a nice-sized home can be found around the $400,000 mark.

One agent he works with held open houses in the small Kawarthas town of Lindsay, Ont., on the weekend and had 19 groups through the property over two days. The potential buyers came from a wide range of places around the province, including Toronto, Aurora, Richmond Hill, Oshawa, Pickering and Ajax.

Mr. Lackie had a similar range of visitors at his own open house.

Last week federal Finance Minister Bill Morneau unveiled a new housing plan aimed at first-time homebuyers.

Under the scheme, the government will create a $1.25-billion, three-year program of zero-interest loans for low and middle-income people looking to buy their first home. Canada Mortgage and Housing Corp. will offer loans in the amount of up to 10 per cent of the purchase price of newly built homes and five per cent of existing homes.

The feds are also raising the amount that Canadians can withdraw from their Registered Retirement Savings Plans to buy a home to $35,000 from $25,000.

Mr. Lackie says, however, that the new plan was not on the minds of the potential buyers he saw on the weekend. Most are empty nesters looking to live year-round on the waterfront, he says.

Your house is your most valuable asset. We have a weekly Real Estate newsletter to help you stay on top of news on the housing market, mortgages, the latest closings and more. Sign up today.