From the Trenches

30 November 2017
Wilson Sisters
Last evening was a nailbiting and frustrating night for our buyers. We were one of twelve offers on a beautifully renovated, though quite small home in the Brockton Village area of Toronto, with no parking and a 50 foot deep lot. Our clients' offer was strong, at 12% over the list price and above market value for the property, but they still missed out. We hope the buyer who won the bid has a sizeable down payment because the bank appraisals we've seen lately have been coming in quite low, and this can cause major problems with the buyer's ability to close if they don't have enough of their own funds to cover the difference between the appraised amount and the sale price.

For buyers there are actually some deals to be had out there but one has to know where to look and to have an open mind. There are some properties that have been overlooked, were maybe priced too high initially, or that didn't receive offers on "offer night", or maybe they could use some minor renovations to make them more appealing or suitable. This is where a buyer can get a better value, rather than setting sights on the property everyone else wants. Location can't be changed, so looking for the right neighbourhood or school disctrict is important, but if a buyer is willing to change a kitchen or bathroom, freshen up landscaping/house exterior or redo some floors, it's likely a better outcome than bidding on a home that scores of other buyers also want and will fight hard to get. 
These frenzied offer nights could very well be the last minute dash to buy before the new stress test is implemented in January, but it sure feels like regular Toronto real estate fall market conditions to us. It's anyone's guess as to what is going to happen when the stress test for conventional mortgages takes effect. It's possible that buyers will see some relief in terms of price and competition for a short time, but we think it will be short-lived. There is just so much demand for housing in Toronto and not enough supply. 
Looking forward to an interesting 2018! Never a dull moment in Toronto real estate.