For the record: I don’t have any clients who purchased a unit at
1 Bloor. Also, I haven’t purchased a unit. That’s right, I’m not the unnamed mystery person who supposedly offered $25 million for a two–storey penthouse suite. And yet this project intrigues me.

So what’s my interest?

Toronto’s 1 Bloor Project
Has A Familiar Vibe

It’s not that Torontonians haven’t seen line-ups at real estate sales centres before, with the obligatory flared tempers and frayed nerves. But this was just something … raw … out there for all to see on one of Toronto’s most famous streets. When it got all slappy out on Bloor Street, as captured by local tv crews, that got my attention.

If you follow my blog (and you should!) it’s no secret that I’m quite interested in the dynamics surrounding Toronto bidding wars and the underpriced listing. It’s the underlying motivations and drivers, what compels people to compete when the competition is out of one’s league, or to stand in line for days for the opportunity to buy, only to see the pre-construction prices jacked right before their eyes, that I find so interesting.

It’s All About A
Toronto Opportunity

The “Opportunity Factor” always draws me to this type of story. That people see opportunity and make the effort to get what they want. These people aren’t the buyers who dream of buying. They’re the buyers who buy (or at least try to buy). I admire their drive. I wish them well!

However, I just wish that more Toronto buyers could see that if the price is unexpectedly  “right”, chances are the price is unrealistic and designed to generate a bidding war. Why not find a neighbourhood that’s actually in your price range and make something wonderful happen for you (I know!)and not just for the seller of the underpriced listing who benefits from the buzz you help create.

And for those buying condominiums from floor plans reviewed in sales offices, as appealing as the location, pre-construction prices and anticipated (stratospheric) bump in market value can be, never forget that unforeseen circumstances can affect even the most reputable developers; so much can transpire between the time you sign your offer to purchase and the day you book your elevator for move-in. It doesn’t always take something as drastic as a global financial meltdown to cause a developer to delay or cancel a project. Do you know what to expect when delayed closing and occupancies occur? And while you’re contractually obligated, have you missed out on other opportunities?

Check back for What’s My Interest, Part 2, …

Toronto buyers and sellers! Are you looking for a Toronto real estate agent who’s in tune with today’s challenging market? Call Lauren at 416–550–6991, or send me an email.

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Same Old, Same Old
Toronto Bidding Wars

Given May’s market activity, it’s no surprise that the local media is buzzing about the re-emergence of Toronto bidding wars. And yet, how can it be called a comeback when bidding wars never really went away? Just asking!

Let me recap what’s being spun: Houses are selling for significantly more than asking price, underpricing is happening and there are buyers who “would not have bid on the property if they knew the price was not realistic”.

And that’s what gives me The Crazy Eyes. The idea being promoted that Toronto buyers are so uninformed that they don’t recognize an underpriced listing. How can that be? Is it possible that “should be well-educated” Toronto buyers are throwing themselves under the bus? Well, somebody’s throwing someone!

Top 10 Toronto Real
Estate Buyer Beware List

There’s no need to be the Toronto buyer that’s taken in by the underpriced listing. If you’re feeling frustrated with your results to date (many offers, no house), maybe it’s time to re-think how the market can work. The following Buyer Beware tips are must-read:

1. Not all bidding wars are the result of an evil conspiracy between seller and real estate agent. Sometimes a well-priced property is just that — well-priced — and it’s no surprise that the market recognizes a good buy when it sees it. The result of Intelligent Pricing is lots of attention from potential buyers, which often leads to multiple offers. You just might be the successful buyer. Or not, but if it’s in your price range you’re in the game for real.
2. Some bidding wars ARE the result of an evil conspiracy intentional marketing strategy to underprice the listing with the specific intention of generating buzz, bids and bucks. To be effective, they need you to be part of the buying circus, to create the buzz that powers the bids and bucks. It’s so simple: Don’t go to the circus.
3. Phantom offers exist, but they’re not typically used in situations where bona fide multiples are anticipated as they serve no useful purpose. Just beware of the situations where they might appear.
4. There will always be someone who has more money than you do and can out-bid you at the table. Always.
5. You will never know someone else’s true motivation. And what you don’t know is always a detriment in any business negotiation.
6. If you decide to compete, especially in hot Toronto neighbourhoods, your offer will be a firm offer (otherwise you’re sure to be sent home early). Be sure your financing is in place for the astronomical price you offer, and that you have an idea of what work, if any, the money pit property requires. And don’t forget that insurers might require certain work to be done prior to or just after closing in order for a home insurance policy to be written. Do You Have The Money?
7. Life isn’t fair. I suspect that all buyers and many, if not most, real estate agents would be delighted to see a halt to the underpriced listing strategy. But can you really envision a market where sellers give up their right to determine the list price of their properties? Me neither! So don’t waste your valuable time waiting for this practice to disappear. Seek out properties that are actually in your price range and work the offer.
8. You just might be looking in the wrong neighbourhood (read: price-wise) if you’re always on the losing end of a streak of multiple offers.
9. If the price seems too good to be true, it probably is.
10. Informed, educated buyers NEVER get played in the Toronto real estate market. So why not be that buyer??

Related MUST READ Posts:

Is A Wolf In Sheep’s Clothing At Your Door? Find Out Why Toronto Buyers Avoid The Underpriced Listing

Another Day, Another Dollar: Toronto Real Estate Market Endures Another Loonie Listing

Toronto buyers! You can successfully bid-to-buy in today’s challenging real estate market. Call Lauren at 416–550–6991 to find out how, or send me an email.

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Wow! If navigating the Toronto real estate market were only made that simple for buyers. Or IS it??

Underpriced Listings Aggravate
Toronto Real Estate Market

Unless you’ve been “off the grid” this summer, you’re probably aware there’s some … tense … feelings in the Toronto real estate market with respect to the practice of blatantly underlisting properties with the intent to generate fierce bidding wars. Although this marketing strategy has been kicking around for several years, it would appear that a cooling market has caused many real estate agents and buyers to question the merits of such a strategy; specifically, to suggest that the practice is a waste of time for both buyers and sellers, possibly detrimental to both (but especially to buyers!), harmful to the real estate industry, and so on. But I think what’s really being asked is: why won’t this practice go away, especially in light of excess inventory and statistics that point to a buyer’s market?

Are Toronto Buyers
Really That Gullible?

There are many Toronto home buyers who can attest to the fact that it’s no fun being on the losing end of a string of multiple bids. But buyers also know there’s always the possibility to be the successful bidder as long as they’re bidding on houses that are actually in their price range.

I find it hard to believe what I’m hearing these days: that there are lots of buyers being taken in by the underpriced listing, over and over again. Why? Because Toronto real estate agents (should) see the obviously underpriced listing for what it is: a marketing strategy intended to deliver buzz, bids and bucks. Because so many buyers are educated about the market and/or “how life works”. Because this strategy is just so transparent and easy to detect.

Which tells me that most buyers aren’t being fooled at all by the Toronto real estate market’s version of the proverbial wolf in sheep’s clothing.

Why Toronto Buyers
Ignore Underpriced Listings

That being said, I do understand how alluring the underpriced listing can be to buyers. I can see why buyers are tempted. The thought that there’s even the slightest chance to get into your most-desired neighbourhood can be hard to resist.

But think very carefully as to whether you want to be part of the buying circus for the underpriced listing that is, in fact, out of your price range. Think about your role and what you can expect to get for your efforts. Which is nothing.

Consider the following:

The list price is merely a tease intended to generate a buzz that will, in turn, generate lots of competing bids. A simple check of recent solds in the neighbourhood will be a very good indicator as to whether this listing is out of your price range.

By taking your valuable time to view the house, pay for a home inspection, arrange for financing, register an offer, and show up at the house to present at the time prescribed, you’ve created just the buzz this marketing strategy is intended to produce. That’s very thoughty of you!

The crowd scene at the offer presentation can further juice the competitive nature of many buyers. No one knows which buyer can’t afford to buy bubble gum, or who’s fabulously wealthy with a real estate acquisition addiction. But when face-to-face with the competition, monied buyers can dig deep and beat their own best offers prior to presentation. They’ll certainly best yours.

The successful buyer who is on the winning end of a heated bidding war knows that the seriously-underpriced listing is not what it appears. They see it for exactly what it is, they are well informed as to recent selling prices for comparable properties, and are in a financial position to make a competitive offer. They go to the table to win.

When all is said and done, you’ll be happy to know (won’t you??) that you’ve provided a very valuable service to the seller (that being the buzz), one for which you will receive no thanks or consideration. Ouch!!

I’m not seeing any upside for the buyer in this scenario. Do you really want to play into this strategy? How much free marketing buzz are you willing to provide? How many disappointments can you take? And given the Toronto real estate market’s excess inventory, what opportunities are slipping by while you chase unattainable listings?

There’s a lot to be said for the old adage, “Fool me once, shame on you, fool me twice, shame on me.”

Savvy Toronto
Buyers Bid To Buy

Here’s my suggestion to serious buyers: Let’s look at homes in your price range, find one you like and make a competitive offer. No guarantees you won’t end up in a bidding war, but savvy buyers know if not this one, then the next. If the one you like is overpriced, I’ll find out if the seller is willing to negotiate a fair price, and if not we’ll move on. If they’re underpriced but the market indicates the listing will sell in your price range, we’ll negotiate.

And here’s the upside for you in this scenario: your efforts will benefit YOU. Now that’s happy house hunting!

You CAN buy and sell successfully in today’s Toronto real estate market. Call Lauren at 416–550–6991 to find out how. I know a wolf when I see one!