FOMO is alive in the Toronto real estate market. Buyers, many with a fear of missing out, are coming out in droves. A Trinity Bellwoods property had more than 100 showings in seven days, 22 offers and sold for 42 per cent over the asking price. A Lawrence Park home had 128 showings, 26 offers and sold for 136 per cent of the list price.
Both properties are semi-detached homes and were priced to attract multiple offers, but neither listing agent expected the homes to get quite so much interest.
David Batori
David Batori, broker of record of Re/Max Hallmark Batori Group, was the listing agent for the three-bedroom, four-bathroom stone Lawrence Park home. He says in his 32-year career, he has never seen 26 offers on a listing.
Broker of record Elden Freeman of Freeman Real Estate, who listed the four-bedroom, four-bathroom Trinity Bellwoods house, says a shortage of inventory is the culprit, with homeowners deciding not to put their homes on the market for a number of reasons. Some don’t want strangers traipsing through their houses during the pandemic, others fear they won’t be able to find a property to buy if they sell the home they’re in and others don’t want the stress of being in the market right now.
Elden Freeman
However, it’s a perfect time for some sellers – those who are moving from their city home to their cottage, from an urban centre to a suburban or small-town location where there are more listings or those selling an estate property.
Freeman’s seller was in a perfect position to take advantage of the market. The seller is downsizing and moving to a rental property. “There was no supply, no competition and it commanded more money than in October and November because the market is tighter now,” he says.
The price was low enough to attract interest – $1.498 million. It sold for $2.12 million, more than expected. Half of the offers were close and were good offers, he says.
For showings, 30-minute appointments were set up 15 minutes apart (to meet pandemic protocols and avoid line-ups outside the house) every day from 10 a.m. to 7:30 p.m.
“We had a lot of people in a short time,” Freeman says. Luckily, the seller was out of province during that time.
The approximately 2,500-square-foot 1890 Victorian home has renovated kitchen and bathrooms. The 15×131-foot property has a detached two-car garage.
One in four people who viewed the home made an offer. Freeman says, “I feel horrible for all the buyers and agents. There were many offers and only one winner. Another 21 people are still looking for a home.”
Freeman had a pre-home inspection completed and it was available for potential buyers to view.
Appointments were booked virtually using the company’s own software so the front desk didn’t have the additional burden of dealing with so many appointments, he says.
The offers were reviewed and shared/reviewed with the seller virtually, some offers taking longer than others to review. Freeman says it took five hours to review all the offers. Reviewing offers remotely takes some of the pressure off by allowing other trusted individuals to attend, he says.
Batori’s listing was built in 1995 and has three bedrooms, four bathrooms and a third-floor loft that’s ideal for an office. The 18×150-foot lot has front-yard parking. His sellers were ready to move to their cottage.
“The sellers were incredibly thrilled by the interest and eventual sale price….Many of the offers were in the higher end of the range but we ultimately accepted the best offer in one round.”
Batori says it’s important to be organized during the offer. He maintains contact with the buyers’ agents throughout the process and creates an email data base, updating it during offer presentations so everyone knows what’s going on. “Be proactive and keep them in the loop,” he suggests.
To keep offers organized, he creates an Excel spreadsheet with the agents’ details, phone number and details of the offers, including deposit, closing and any conditions. The spreadsheet is sent to the seller. He shares a screen with the sellers and goes over the basics to expedite the process and narrow down offers.
Although the time required to go over so many offers can be lengthy, Batori says the sellers see the numbers and are in great spirits.
It’s different than when the pandemic first hit and the market came to a standstill. Some homeowners liquidated because they thought the bottom of the market would fall out. They could have seen hundreds of thousands more if they had just waited. Batori says, “Never act in times of fear….I’ve seen enough scary things in three decades. Things seem to bounce back.”
The strategy of pricing slightly below value is best for the seller right now, Batori says, adding that buyers know what’s going on and if a property is priced at market value, there’s not “as much exuberance.”
Now’s a good time, Batori says, to reach out to the database to explain what’s going on in the market. People want to hear from their trusted agent and find out first-hand what’s going on. Freeman says, “The typical single-family residential is in great demand. It’s not just downtown Toronto, but across the GTA. There’s a big shortage and it’s not going to change until the pandemic subsides.”
Or until inventory changes, buyers give up or the government throws up some sort of roadblock, Batori says. He is recommending that people who were planning to sell later this spring make the move now while inventory is low.
Interest rate increases won’t be as much of an issue as people think, he says. However if FOMO buyers throw up their hands and decide they’re not going to bother, it could affect the market, he adds.
Millennial want to buy – they don’t want to rent. They’ve seen the gains of their parents and older friends, Batori says.
Historical data doesn’t mean anything. It depends on how bad a buyer wants the house. After losing out on a few houses, one of his buyers upped their budget by $150,000, willing to take on more debt, he says.
A couple of tips from Freeman for when you are reviewing offers: take your time. Don’t push the seller and make sure agents leave enough irrevocable, at least 12 to 24 hours, to allow offers to be reviewed.
For sellers, Batori says they must understand the incredible opportunity to capitalize right now. Sell with a long closing, he says. “Sellers dictate everything. Inventory will roll out more as spring approaches….With prices like these, I would be very surprised if this doesn’t spur more interest from sellers to come to market.”
Connie Adair is a contributing writer for REM.
