Under Asking: “Bidding wars are back, but buyers are wary.” Three realtors share why they went down in price
Their properties include a brick box in Long Branch, a semi with a finished basement in Corso Italia and a townhouse overlooking a courtyard in the Beaches
Toronto’s real estate market is heating up after a long winter lull. Most agents agree that growing demand and limited inventory means sellers have the upper hand. Compared to a year ago, the number of active listings is down nearly 21 per cent, and many sellers are pricing their homes under market value in hopes of sparking bidding wars.
Here, three different realtors selling three very different three-bedroom homes explain why they sold at a discount. They also have advice for those jumping into the market this spring.
Related: “There are still deals to be had, but the market is heating up fast.” Three agents explain why they sold at a discount
Long Branch: Long Branch Avenue
The place: A newly-built townhouse with a parking spot and a private terrace
Listing price: $1,199,000
Sold for: $1,145,000
Date sold: April 25, 2023
Size: 1,500 square feet
Agent: Kyle Bridson
“Right now, a lot of buyers are looking to upgrade from condo apartments to townhomes for more living space. This kind of property is a rarity in Long Branch, which mostly features classic suburban semis and detached homes. Right now, the cheapest detached you might get here is a $1.3-million fixer-upper. To drum up as many offers as possible, our initial strategy was to list this unit under value at $999,000.
“After a week, we ended up getting only one solid offer at a little over $1 million—which my clients would not accept. We terminated the listing and put it back on the market at $1,199,000. In late March, we started seeing more showings. This unit is just a year old and its price per square foot was only marginally higher than similarly sized listings. It was a deal, even with the higher price. We just had to wait for the right bid.
“On April 25, we finally got it: $1,145,000. It was $44,000 under the listing price, but by shifting from our original strategy, we were able to get nearly $150,000 more. My clients weren’t in a rush to sell, so patience paid off. Today, limited inventory means sellers have the power to hold out.”
Corso Italia: Norman Avenue
The place: A renovated semi with two parking spots, a finished basement and a backyard
Listing price: $1,385,000
Sold for: $1,365,000
Date sold: April 26, 2023
Size: 1,500 square feet
Agent: Dave Elfassy
“My clients purchased this property for $1.35 million in March 2021. It happened to become a precedent-setting price for buyers looking for a three-bedroom semi in Corso Italia—the market was incredibly hot back then. This time, we wanted to take advantage of the lack of available inventory in the neighbourhood. To generate a bidding war, we priced the home low, at $1,189,000.
“A week later, we received several offers. Unfortunately, none of them were good enough for my clients to break even. We immediately re-listed the property at $1,385,000, which was above market value. The idea was to negotiate a lower price with the right buyer.
“After just five days, we sold for $1,365,000. It was $20,000 below asking, but my clients were able to make a modest profit. Even though bidding wars have made a comeback of sorts, buyers are wary to engage.
“In today’s landscape, house seekers are exhausted of putting in multiple offers and getting outbid again and again. They’d rather sit back on offer days to see what happens. But, in my opinion, this approach is too passive. Too many buyers are missing great opportunities. Even if there’s a bidding war, you never know a seller’s motivation. If you get outbid, at least you tried.”
The Beaches: Hammersmith Avenue
The place: A townhouse with a parking spot and a shared courtyard
Listing price: $925,000
Sold for: $920,000
Date sold: May 1, 2023
Size: 1,000 square feet
Agent: Kendra Connelly
“I was the owner and seller of this property, which is one of 13 units in the complex. It’s part of a tight-knit and safe community, and you can walk to the beach in two minutes. I was leasing the home to a tenant, and when they gave me notice this winter, I decided to sell.
“The market was picking up in March and nearby properties were getting multiple offers. I thought I’d be cheeky and list a bit higher than market value at $1,050,000. Very quickly, I was told by fellow agents that this was too expensive. On March 21, I brought my ask down to $1 million, but the home still wasn’t getting much attention. One obstacle was that a lot of similarly-sized homes were being put up for sale in the Upper Beaches, and they didn’t have the $960 monthly maintenance fees that came with mine.
“I didn’t want the property to just sit on the block for months, since I’d have to pay an extra $30,000 in mortgage payments. I had to position my property as the best deal around, so I aggressively went down once more to $925,000. Less than two weeks later, my listing sold for $5,000 below asking.
“Instead of holding out for a little extra money and dealing with the psychological and financial stress, sometimes it’s better to drop your price and move on. My advice to sellers: do what’s best for you, and that doesn’t necessarily mean maximizing profits. As for buyers, now is the time to pounce. If you’re waiting for prices to soften, you’ve already missed the boat.”
Are you an agent who recently sold for under asking? Send your story to [email protected].