June 2012 Home Of The Month – Bloor Dufferin


Welcome to urbaneer.com’s Home Of The Month. This feature provides a snap shot of what urbaneer.com’s Buyers have recently bought in the City of Toronto.

Today’s blog asks the question: ‘Does the list price of a property really have bearing on what it might sell for? In this Home Of The Month Feature, the answer is both a resounding “Yes!”, and “No!”.’

If you’re a regular reader of our blog, you may recall we typically advise our Buyers that it may take anywhere from six months to a year plus to purchase the right house. That may surprise you, but take this into account: In Toronto, becoming an educated, well-informed buyer familiar with the market values of a diverse range of housing stock (in varying degrees of condition in your preferred locations), takes time. With only a limited supply of properties fitting your criteria, and budget coming to market at any given time, it can logistically take three to five months for any buyer to personally see enough comparable listings to truly establish where values lay. Add to that the complexity of successfully bidding for any of those in a competitive climate, where demand has long been outstripping supply, and you can soon see your six month anniversary of property shopping arrive and pass.

Such was the case with these particular clients, who took a full year to secure this property. But, along with serendipity, it was this year of searching which ultimately helped our Buyers acquire what, in the end, after some ups and downs, was very good value.

We met our Buyers when they contacted us in February 2011 to view a listing we had in Dufferin Grove, which is located south of Bloor and East of Dufferin. Like many downtown neighbourhoods, this pocket of leafy tree-lined streets with century vintage homes has sky-rocketed in demand, and value, over the past five years. Listed at $689,000, the property received six offers and spiked to a final selling price of $745,000. This was out of the budget for these lovely folks, whose ideal threshold of financial comfort was up to $650,000, preferably with an income supplement.

For a buyer keen to live in this central west end part of the city, there are four neighbourhood quadrants located on north / south / east / west access of the intersection at Dufferin and Bloor, each worthy of consideration. Dufferin Grove, in the south-east quadrant, is the most desirable and expensive ranging in value from $700,000 to in excess of $2million. Bloorcourt Village in the north-east is second, with prices in the $500,000 to $1million range. Brockton Village in the south-west is third in value, with housing typically selling in the $475,000 to $800,000 price points, and Wallace-Emerson in the north-west is fourth, priced anywhere from $400,000 to $800,000. Like many areas of the City, property values for a fairly similar sized dwelling using the same subway stop can have a price spread of upwards of $250,000 depending on which quadrant they’re located. This disparity in property values has long supported the diversity that makes Toronto so vibrant. By having an urban fabric like this, where one subway stop may have a mix in incomes, household structures, and cultures, is what makes our City so dynamically rich. We love this!

A quick segue. Depending on our buyers’ needs, wants, and budget, in tandem with their tenure objective (such as how long they plan to own the property), the urbaneer.com team will recommend specific quadrant(s), along with the type, style and condition of house within their budget, that will ultimately provide the highest return on investment over a time frame that compliments their long term goals.  For example, if a buyer is looking to purchase their first home with the intention of upgrading it over a 4 to 7 year period, and then trade up the property ladder, the quadrants we’d recommend in the Bloor – Dufferin quadrant are the south-west and north-west sections where gentrification is in the earliest stages of flourishing, where property values are lower, and where one can see a significant number of properties are being upgraded. For the astute buyer keen to improve their dwelling, these quadrants are expected to be increasingly ‘Hot’ in the span of five years. The section of Bloor they share, which currently is a hodge podge of services and shops, is seeing the arrival of small entrepreneurial businesses that signal the beginning of a new life cycle for the area. Within a few years (if not sooner), a Starbucks will arrive, art galleries will become established, and some hip shops will open up, spurning buyers to flock to this area. For the calculating investor looking to attain top dollar, the objective is to time the sale of their freshly renovated property when the most affluent first-time-buying target market become most keen to pay the new premium price of admission. For the prudent risk-taker, buying when a neighbourhood is in the early stages of rejuvenation can provide a financial windfall.

In the case of these buyers, their objective was not to buy, upgrade and climb the property ladder, but to secure a spacious solid dwelling for the long term in an already established family-friendly quadrant. Their priority was to buy a well-constructed house with parking that was large enough it wouldn’t require a future move. Given their affinity to the cultural make up, amenities, and convenience of the Bloor Dufferin quadrant, although Dufferin Grove was deemed prohibitively expensive, Bloorcourt Village remained exceptionally ideal. Boasting well-constructed Victorian and Edwardian row, semi-detached, and detached houses, a burgeoning community of young families, and a reasonable price point for such a spectacularly central location, this area is assuredly good value with plenty of room for values to rise.

Before our buyers purchased this house, they had attempted to buy others in the area in competition. With each attempt our Buyers became more astute on the dynamics of the market. So when this Edwardian three-bedroom all-brick semi-detached dwelling, with an unusually high basement featuring a separate entrance, kitchen and bath, plus a newer concrete block two car garage (value $30,000), came to market at $450,000 they immediately knew it was grossly underpriced. To our delight, we knew they were truly well-informed educated buyers when they said “This house should be listed for at least $550,000, and it should still go into competition and potentially achieve a price over 600k”. This awareness signaled they were educated consumers, and it gave them an edge against less-informed purchasers. We personally pegged the value at $630,000.

There is an interesting lesson here for buyers and sellers alike, which is that the list price a seller chooses to offer their property for can have a tremendous bearing on its final sale price. Some sellers think if they list low, it will bring more buyers to the table and drive the price up even higher. But there’s a danger in this. Here’s our query:

“If a house is listed at $450,000, which is clearly a price that targets first time buyers in Toronto, then how likely is it that the price will spike into the price range of second and third time family buyers, especially when it requires work that buyers with children may not have the time or energy to tackle?”

-and –

“Is it possible a low list price might only attract those who are limited by the affordability of said low acquisition price? For a $450,000 house that required immediate capital investment for upgrading, how many first time buyers can bid substantially over list, without any conditions, and remain confident their lender will place a mortgage based on their purchase price?”

Although our buyers had the capacity to pay more, their decision to set aside funds for upgrading, and remain cautiously prudent in their actions, prompted them to bid $601,100 without conditions against 8 others. However, despite submitting the highest offer at 33 percent over the asking price, the greedy sellers decided they wanted more. Promptly rejecting all 9 offers, the Sellers increased their $450,000 asking price by an additional $280,000, to a new list price of $730,000. Huh?

My Buyers were crushed.

This is not the first time this has happened to the urbaneer team. We advised our Buyers to sit tight and wait out the Sellers greed.

Which brings me to a second interesting lesson for Buyers and Sellers alike. Some sellers think if they list high, Buyers will not hesitate to submit offers even when they are substantially lower than the list price, but will somehow miraculously be higher than their ‘true market value’. However, in a real estate climate where properties, for the past decade, have rarely sold for much lower than 95 percent of their asking price, Buyers are reluctant to even bother. Why bid on anything over-priced in a market of bidding wars?

Which leaves me to conclude that the list price of any property ultimately serves as the perceived barometer of value, either from the Buyers, or Sellers, point of view. As a result, even though a list price may not be realistic, those who cross the property’s threshold are almost always the target market shopping within the realm of its asking price, and who will ultimately decide if the price is realistic or not. If the price is too high, Buyers won’t bother submitting an offer, because they think the high price simply reflects the unrealistic value the Sellers must believe their property to be worth.

In the case of this property, guess what happened over the next two weeks?


The house sat on the market with little action and zero offers. After being listed for $450,000 with a holdback on offers that generated nine bids all rejected by the Sellers, the new $730,000 asking price was so high no one felt the Sellers were being realistic about its value. Considered grossly overpriced, even though the house might be worth more than the $601,100 our Buyers had offered, no one was prepared to even bother bidding because of the $730,000 list price.

So we waited. And wait we did.

Two weeks later I received a call from the listing agent. Would my Buyers be willing to resubmit their $601,000 bid?  My response? “No, I don’t believe my Buyers should have to do that, only to risk disappointment again. But I encourage you to have your Sellers submit our original bid as a Seller’s offer to our Buyers.”

Why? By having the Seller submit the offer to our Buyers, it mitigated any risk of being party to any untoward strategy on the Sellers’ part, like being manipulated into a second bidding war. Take note, in the cut throat world of real estate, make sure your realtor knows how to navigate through questionable intentions.

In this instance the listing agent, who was quite relieved to be ending her nightmare of an ordeal, followed through. The next day we received a Seller’s offer for $601,100, which our Buyers’ happily, and promptly, accepted. Listed first at $450,000, then at $730,000, the final sale price was $601,100, well-below my personal appraised value of $630,000. 

This was a stellar buy brimming with opportunity. Despite the old school furnishings, this house had great room dimensions and proportions, some upgraded building components (roof, heating/cooling), and oodles of original charm (despite all that shiny paint). We are thrilled to have successfully placed our Buyers here.

Do you like? If you, or someone you know, has particular real estate needs, wishes and desires and requires some gentle guidance, please know we’re here to help at urbaneer.com.

~ Steven

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