Spring real estate market has sprung: House goes for $1.3 million – almost double its $699,000 list price

Susan Pigg – Toronto Star

As bidding wars go, it was the ultimate battle and a warning for frantic buyers bracing for spring market: A five-bedroom detached house in the Yonge and Lawrence area has sold for almost double its $699,000 list price, with 72 offers.

Comment: As soon as I read that, I got mad. That is an incredible feat of under listing. It is one thing to list a $700,000 house at $599,000 and wait for bids, but half price?

“We expected in the $1.1 million range, but the market pushed it,” said listing agent Bradley Hutton, who sold the Glencairn Ave. house for $1.366 million, about 195% of list price.

Comment: Then why didn’t you list it at $1 million?

“There are a lot of buyers out there desperate to find a house. It’s definitely a sellers’ market.”

Real estate offices were abuzz with news of the sale Monday, with many realtors highly critical of two things: That the house was underlisted by at least $400,000, and that the winning bidder was one of Hutton’s own clients.

Comment: And there is no way at all for that not to look bad. Under listing it was a bad decision, his and his alone. We cannot say if there was anything funny with his client having the highest bid, but that also smells bad. Add them together and you have an agent who sure doesn’t look too good.

“We’re all very quick to blame the listing agent in situations like this, but in my opinion more of the blame should placed on uninformed buyers and their buyer agents who don’t have the experience or the knowledge to understand fair market value,” said Toronto realtor David Fleming.

Comment: Yes, but his actions were obviously not completely upfront. Listing at half price? Not cool.

“We’re in a hot market, but no house is hot enough to get 72 offers.”

Comment: And had it been priced correctly, around $1 million, it would not have.

And there appears to be no let up in sight after what realtors say is the worst spring on record for a shortage of listings coupled with intense pent-up demand.

More than 1,000 people booked appointments or toured the 1930s Glencairn Ave. fixer-upper over the last 10 days before the offer deluge Sunday night. About 80% of the offers were for over $1 million, even though the house, on a 30-by-127.66 foot lot in the prime Yonge and Lawrence area, was being sold in “as is” condition.

Comment: That is insane. Seriously, even with 8 hour days, that is a showing every 4 minutes and 48 seconds. That says a LOT about how few listings there are these days.

“Attention renovators & builders,” said the MLS listing, which attracted dozens of callers, many asking if the $699,000 list price was a typo. “House is full of knob and tube (wiring), fireplace has not been used in years.”

Hutton acknowledges that nothing has sold on the prime, tree-lined street, just steps from Yonge St. and the subway station, for $699,000 for at least 10 to 15 years.

Comment: So he priced it deliberately at 2000 prices? To be, that is simply underhanded.

He priced it so low, he says, “mainly to create buzz” and force realtors to realize that their buyers weren’t walking into their dream home but, rather, a place needing $300,000 or more in renovations.

Comment: No, he did not price it low so that people knew it needed renos. He priced it low to get 72 offers and his name in the paper. Not sure he likes the way he is being portrayed now, though…

“Surprisingly enough, that’s how it works — it gets the agents calling,” said Hutton.

Comment: And you come off pompous and arrogant.

Even then, Hutton said he was shocked by the number of offers — so many that he insisted on having realtors just email them in or drop them off at his office before the 7 p.m. Sunday deadline.

Usually, he prefers to meet face to face with bidding agents for 15 minutes or so to enable them time to make their spiel on behalf of their buyers.

“This house required a special buyer,” said Hutton, who has enraged many agents, because the winning bidder ended up being his client, a practice known in the real estate industry as “double ending.”

Comment: No it didn’t. It was a standard house for the area, a brick detached from around the 1930s. And it needed renovations. Not that uncommon these days.

That’s because the listing realtor is paid commission by both the seller and buyer.

But Hutton said he had a third party, an independent broker from his office, handle all the bids with the exception of the winning bid, which he brought to the table himself.

Comment: Which is EXACTLY what you are not supposed to do. You should have someone in the office present YOUR OFFER. So he was alone in the room with the seller and the buyer and the offer? Come on, how does anyone not think something is wrong with that?

It belonged to an area resident who just saw the listing online last week and has lived in the area for years. They are planning to renovate and live in the house, he said.

Comment: And this should be used at OREA as the text book example of what NOT to do. This is all that is wrong with Toronto real estate today.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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