It’s Not About The House

It's not about the house

At the end of April, I showed my client a condo townhouse at Don Mills and Lawrence. I grew up in a similar condo townhouse a block away, where my parents still live. I’ve seen the area change over the last decade. Where once there was a mall with outdated shops and senior citizens, there is now “Shops on Don Mills” with upscale restaurants and fashionistas. Over the last five years, I’ve been keeping up with the real estate values.

I supplied my client with the most recent sold data directly within this particular complex: condo townhouse A sold in October for $455,000, condo townhouse B sold for $429,000 in November, and there have not been any sales since.  There aren’t many of them, and they come in all states of repair. The one for sale was finished, and showed well. I suggested at $525,000, she might win if she went in firm, of course depending on how many Buyers would compete for it. It followed the formula for selling a house in the city. Price low, $479,000 in this case, clean it up, make it look pretty, open house Saturday and Sunday, take offers next week. 

The timing wasn’t right for my client to proceed, and even the situation wasn’t right, but of course I followed the events unfolding on offer night. My parents were curious; they wanted to know how this sale would impact their own investment one block over.

Offers started coming in days before the offer date, yet the Seller was not going to review any until the date that was set. By the end of offer night, there were 11 offers, at least. I texted my mother that it looks like it will be a record-breaking sale for our little condo complex. I guessed, at that point, that the condo townhouse would sell for closer to $550,000.

When it comes to real estate with a back yard, in Toronto, it’s a mess. Buyers are pushing themselves more every year.

The final sales price for this condo townhouse was $605,000. That is more than a record-breaking price. That is unreasonable. There is a $150,000 gap between this sale and the last highest sale in the fall. That is massive for our little condo complex. Thank goodness my client was absent from offer night. I wouldn’t have advised her to go that high; if we were involved, our participation wouldn’t have ended on a positive note.

There are people from many walks of life who will buy real estate this season. Some of them will afford what they purchase; others will stretch themselves to the point where it becomes risky. Outbidding every other buyer is difficult, but qualifying for the mortgage or keeping up with the monthly payments are more difficult. What happens if the appraisal only comes back at $525,000 and a Buyer now has to scramble and find another $80,000 to close on the property or risk breaching the contract and all the legal implications that follow? Buyers need to be careful. Buyers need to explore their options. That condo townhouse wasn’t the only option for my client.

Buyers can stay put, they can rent, live in condos, live in apartments, move outside the city, buy a fixer upper, renovate, buy in less popular neighbourhoods, they can forgo the parking spot, forgo the 2nd bathroom or the finished basement, or keep trying until they succeed. That condo townhouse doesn’t mean that every condo townhouse in that little condo complex is now worth $605,000. The next one may not have the right timing, may not have the same finishes, may not show as well, may not attract as many Buyers and may sell for $500,000.

What is important to me is to that my clients know they have options, and explore them. They should never put themselves in a dangerous position because of the pressure of the moment.

My parents immigrated from Poland. I grew up in a two-bedroom apartment and I shared a bedroom with my little sister. When I was 11, my parents bought a condo townhouse at Don Mills and Lawrence for $155,000. When my parents bought it, it wasn’t perfect or pretty.

Over time, they fixed it and reno’d it, planted a garden and furnished it well. It didn’t change overnight, just like the neighbourhood didn’t change overnight. When my parents purchased it, they didn’t know what the neighbourhood would become 15 years later, or that the value would reach $600,000. They purchased it because they could afford it, and what mattered to our family was the time we spent together. It didn’t matter to me that I had friends who lived in bigger homes, or newer homes, or Royal York for that matter. The house isn’t responsible for much of anything I am or have today.

It’s the people in my life that are responsible for my happiness. It’s not the house.

I will prepare my clients who want a backyard for what lies ahead for them, provide them with every ounce of research, and remind them on offer night, that’s it not about the house.

 

 

THE PRECEDING COMMENTARY IS THE OPINION OF HANNA MACDONALD AND DOES NOT REPRESENT THE INTERESTS OR OPINIONS OF RIGHT AT HOME REALTY INC., BROKERAGE OR THE TORONTO REAL ESTATE BOARD. THEREFORE, RIGHT AT HOME REALTY AND THE TORONTO REAL ESTATE BOARD WILL NOT BE HELD RESPONSIBLE AND/OR LIABLE FOR ANY OF THE OPINIONS HEREIN.

THE AUTHOR IS NOT LICENSED TO PRACTICE PSYCHOLOGY. THE RESEARCH FINDINGS REFERENCED IN THE COMMENTARY ARE USED TO MERELY UNDERSCORE THE AUTHOR’S OPINION AND OBSERVATIONS.

 

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1 comment so far ↓

#1 Magda on 05.19.15 at 1:26 pm

Thanks for this blog post Hanna! It’s exactly what I needed today :) We bid on a gorgeous place that was $400k…. we offered 21k over asking (as did 10 other bidders), and it sold to the 11th bidder for $472k. Cash. That was 3 weeks ago, and while I’m still sad about losing out on my “dream home”, I know that we will still be happy even if we don’t live there.

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