Welcome to Urbaneer.com’s May 2019 Home of the Month! This feature provides a snapshot of what my Buyers have recently purchased in the City of Toronto.
This month’s journey begins with a couple who are related to previous Buyers who recommended our services after securing this property featured in our August 2018 – Home Of The Month – Coxwell & Gerrard In The Upper Beach. May I take this moment to say we’re always grateful your referrals, which are the foundation of our business!
The Buyers who secured this month’s Buy are a couple who were occupying her first purchase – a 1bed condominium in the Fort York area – who had the objective of purchasing a house for under $1,000,000 while keeping the condominium as an investment property. In the past I’ve had many couples pursue purchasing a house with the aim of keeping their condo. However, it has always been the case that, during their search, these couples discover that in order to climb the property ladder into a freehold dwelling that ticks all their wishes, wants and needs, the condo they own must be sold in order to extract its equity in order to fully secure the family-friendly property they ultimately desire.
So – allow me to tip my hat – and acknowledge this couple are the first who managed to buy a turn-key dwelling in their preferred location within budget, that didn’t require the sale of the condo, which is now part of their income portfolio!
The Search Criteria
These buyers started their search in January 2019 after going into an Open House in the Upper Beaches which had sufficient appeal that it prompted them to reach out to me for my vetting. This was the first of over 2 dozen dwellings these Buyers would view over a 12 week period, and the first of 4 offers they would submit on properties listed under $1million before securing ‘the one’.
Like many Buyers, these clients were open to a range of locations, and the requirements for the property were one which had at least two bedrooms, didn’t require a total gut, and was in a central location where they could commute downtown by transit easily. Like many couples who begin looking both east of the Don Valley and west of the Financial District, they quickly realized the east side is a better value proposition, providing one is locating east of Coxwell, because Riverdale and Leslieville are seeing property values selling for sums similar to the central west side. Here’s my post called Why Toronto’s East Side Real Estate Has Historically Been Cheaper which offers some insights on why this has long been the case, while this blog outlines why the price differential is evaporating in How Toronto Real Estate Near Queen Street – East & West – Is Climbing In Value.
During their search, these Buyers were drawn to some dwellings which were located closer to downtown but had just 2 bedrooms. Now, I’m all for securing a 2bed dwelling if you’re a single or couple who are not considering having more than one child. but if you’re a buyer who may have more than one child and your budget is sufficient to buy a 3bed residence, then be prepared to hear me gently suggest we focus our attention on the larger dwelling. As I advise all of my buyers, if they have the capacity to purchase a freehold property that can serve them for the long term – even if that means digging down the basement, developing the attic, or putting on an addition up or out – they’ll do financially better in the long run if they can bypass having to pay the real estate commissions and land transfer taxes required to climb the property ladder – which can easily be 100k. Better to reach for a property that can serve you for the long term than a more polished property that does not offer sufficient opportunity to grow into, which may force a sale sooner than later because of size constraints.
As a realtor who is always assessing the highest and best use of any property – along with its value proposition – I’m all for Buyers purchasing a fixer-upper, as long as they’re well-informed on the challenges associated with upgrading a property. If you’re new to the property market, take a moment to Understand The Six Essential Layers Of Property to assist your learning curve. In the case of these Buyers, they did indeed consider some residential wrecks, including bidding on an Estate Sale which required extensive work (knob and tube wiring, asbestos, moisture issues, a failing rear addition) in an up and coming location. If you’re considering embarking on a property search, where you land on the property continuum may be resolved reading my blog called Move-in Ready Or Fixer Upper? What’s Your Housing Match? The question is whether, as a prospective homeowner, you prefer to channel your energies into ‘living’ rather than ‘renovating’ a house from top to bottom. If your answer is ‘living’ I also want to caution you that – as your search unfolds – you may be seduced by the turn-key highly-stylized fully-staged renovated properties which tend to attract more bids and spike significantly in price. Why? Because in Toronto – where career-pathing requires long hours – there are more buyers willing to put all their money into the down payment for a dwelling requiring as little maintenance and repair as possible, than buy a dwelling for a lesser sum which may require more capital than you they have left over to do the necessary upgrades.
The Dwellings They Bid On
Here’s a snapshot of the three properties my Buyers bid on during their search:
Property One – Corley Avenue – Offered January 2019 – List $799,900 Sold $928,000 with 9 offers.
This Upper Beach semi offered good value for the money. Having 3beds 1bath, the kitchen was tiny and closed off, necessitating a future renovation and the possibility its limited size could deter future buyers. The basement was unfinished and not terribly high which meant to realize its full potential would require digging out. But overall it was a great buy. Coming to market mid-January as winter snowstorms hit, the sale price may have been higher had the sellers waited for the Spring market momentum to build.
Property Two – Dixon Avenue – Offered March 2019 – List $799,000 Sold $999,000 with 8 offers
This 3bed 2bath semi located in the Beach Triangle was in fair condition, with some slight settlement issues. It also had several rented building components including the furnace, hot water on demand and a water softener that totaled over $200 per month. We aniticipated that might deter some buyers, but it still generated a lot of interest because of its Triple AAA location just steps to the Queen streetcar, Kew Gardens and Lake Ontario. That it sold for $999,000 signaled it likely went to a buyer who had less than 20% down, which is required when you purchase for $1mil or more.
Property Three – Galt Avenue – Offered March 2019 – List $699,000 Sold $906,888 with 8 offers.
This Estate Sale looks better in these photos than it did in person. It required extensive and significant renovation, such that we were a bit surprised to see it spike so high in competition. That said, having a decent lot with laneway access, and just a few streets east of Gerrard Square which may imminently become both downtown relief line subway and Go Station stops (which would likely result into a future nodal concentration of high-rise condos, offices and new retail development) this sale was likely secured by someone banking on this property’s future value, which could be significant if Gerrard Square does get redeveloped. If that does happen, the sale price would represent land value.
Statistics & Counts
As the chart reveals, these 3 properties sold anywhere from 16% to 30% over their asking price within a week using the ‘list low holdback strategy’, whereby the dwellings went into bidding wars on their offer dates. Garnering 8 or more offers, these statistics helped inform the buyers so they could be competitive moving forward.
Want to learn more about the ‘list low holdback’ strategy? Here’s my posts About Holdbacks On Offers, Bully Offers & Bidding Wars For Buyers -and – For Sellers.
Located on Gerrard Street East, this renovated 3bed 2bath semi with finished basement and 3car parking outshone all the properties we’d viewed to date. Yes it fronted onto Gerrard Street East – which is an arterial road – but the benefit my buyers saw was that they could pop out the door just as the streetcar approached during a winter storm and save themselves any extended periods of shivering and chattering teeth waiting for its arrival. And – if you commute by streetcar or bus – you inherently know how value-added having that ease and comfort in your daily life could be.
Here’s some snaps from MLS of this listing:
Priced at $760,000, this East End gem was ripe to incite a bidding war. Our brave buyers stepped up to the plate, swung, and hit a home run against 8 other Offers with their bid of $982,500!
Congrats to our Buyers!
Are you, or someone you love, considering a Toronto real estate purchase?
Here’s a step by step summary of how I analyze listings of merit for my clients, including the preparation and delivery of our comprehensive due diligence packages for every property our Buyers indentify as a possibility:
Dear Urbaneer Helps Buyers Make The Right Real Estate Purchase
Did you enjoy this? You may also like these informative Urbaneer.com blogs:
On Flipping – Or Building Equity – For Toronto Real Estate Buyers
The Psychology Of Real Estate, Housing & Home
How To Search For Your Next Property Purchase
Thanks for reading!
Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage – (416) 322-8000
– we’re here to earn your trust, then your business –
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Buy Of The Month