Welcome to urbaneer.com’s Home Of The Month Feature, which showcases what our Buyers have recently purchased in the City of Toronto.
In the past I’ve railed on about my disdain for House Flippers who renovate properties for profit without committing to quality (or style!) during the process. Nothing makes me more aggravated than a “Professional” who doesn’t deliver a good product, or who fails miserably in their design choices that ultimately costs the buyer money correcting the Flipper’s shocking taste specific decisions. However, sometimes an opportunity will present itself due to the oversights of said Flipper, where what misses the mark costs him profit, thereby presenting an opportunity for a busy Buyer.
Located in Prime Seaton Village north of Bloor Street West, just steps from the Bathurst subway station, this three bedroom, 2.5 bath semi with a finished basement and laneway garage had been renovated for resale in a mid-grade calibre with somewhat ubiquitous finishes. Here’s what the Flipper served up, with his bland predictable Big Box Store finishes:
Behold the blank canvas.
The property had last sold as an Estate Sale in June 2012 for $620,000 and substantially renovated from top to bottom. Back on the market in December for $949,000, by the time I took into account the seller’s closing costs (legals & land transfer taxes of around $25,000), the extent of renovations (down to the studs and back up with new insulation, drywall, electrical, windows, heating/cooling, plumbing including 2.5 baths, central vac, flooring, lighting, and a new kitchen with appliances, etc. of around $170,000) plus his resale costs (mortgage borrowing costs, realtor fees and legals which totaled around $50,000), there was a modest profit margin of around 7 percent built-in to the list price. And, may I add, my estimate on the construction costs was based on the Flipper being proficient in his organizational and contracting skills. Any lay person who had bought this house for its original $620,000 acquisition price would probably have invested a larger sum closer to $200,000 when hiring a contractor to complete the renovation to an identical finish.
While I believe any Flipper who makes home renovation his profession should renovate with care, pride and attention to detail, if they don’t then I’m going to ensure we bring in the best inspectors and sleuth out all the deficiencies with a fine tooth comb.
So yes, we found some issues.
First, the property still required some nicks and tucks. Like the flat roof which was aging, the walk way between the house and its neighbour wasn’t draining correctly, and the front facade looked patched up which impacted its curb appeal.
Worse, the Flipper got sloppy in his renovations. Some of the plumbing connections and venting solutions were askew. And he failed miserably paying attention to the placement of the electrical outlets, especially in the kitchen, living/dining area, and the master bedroom which were lacking outlets in exactly the location you’d want to plug in your toaster, television, or bedside table. Any Buyer paying close attention could see that, although the house was completely rewired, it missed being as functional as a Buyer of a newly renovated property would want. In fact, it was a turn off to most, because these glaring flaws made it far from “Perfect”.
And isn’t “Perfect” what any newly renovated house Buyer is fundamentally seeking?
As a result, we calculated a reasonable estimate to bring the property into top condition would cost about $20,000.
Taking into account all the deficiencies, what sold the house for our Buyer was location. Convenient to shopping, green space, and with easy subway access on the Bloor line, this was a solid townhouse alternative. The trade off as a Buyer was to forgive the design mistakes for the utility of the building space and having a generous lot with a garage. Yes, the poor design was irritating, but it wasn’t impossible to remedy.
Meanwhile, fast forward four months and the original list price of $949,000 was down to $899,000. Given the Flipper was into the house for around $865,000, it signaled the Seller wanted to cut his profit margin and move-on.
So, my Buyer, a busy professional who has neither the time nor inclination to undertake a massive renovation, snapped this house up after urbaneer negotiated a $20,000 price reduction to take into account the property deficiencies. At $880,000, with a contractor now engaged to remedy the issues, my Buyer now owns a fully renovated Seaton Village semi ready for adding his personal style ‘at cost’ with none of the stress!
Awesome, eh? Congrats to our Buyer!
If you, or someone you know, has particular real estate needs or requirements, please know we’re here to help at urbaneer.com. With a multi-disciplinary education in housing, over twenty years of real estate sales, marketing and development including a sterling reputation as one of Bosley Real Estate’s Top Producers, I, and the urbaneer.com team, make it our mandate to guide buyers, and sellers, through all their real estate needs without pressure, or hassle.
~ Steven and the urbaneer team
Buy Of The Month