[rbt]

I listed for $355000, with a one-week delay before I would accept offers. If somebody had given me a bully offer of $356000 before the scheduled offer date, I likely would not have accepted it,

No, but you definitely would have looked at and considered the offer even if you didn't accept it.

My point being that just because they say "no offers" doesn't actually mean they won't consider an offer made. Many people get talked into the bidding war scenario by their agent without actually being committed to it themselves. It can give an agressive buyer an advantage.

 

[Eug]

True, at $356000 I wouldn't have accepted it, but I would have considered it. At $365000 I would have accepted it, but there was no such offer, I waited a week and ended up getting way more than even $365000. Had the final buyer been smart enough to hand me a bully offer of $365000, that person could have saved quite a bit of money...

...or not. It should be noted that as soon as bully offers are submitted, all bets are off. Other real estate agents are informed, who then go ahead and tell their own clients to make offers. Had I gotten the offer my real estate agent would have gone into overdrive to get the other agents' clients to give offers too, and we're back to the same situation - a bidding war... unless the bully offer was so early that nobody else had the chance to see the place.

The problem here is that while bully offers were more effective years ago, it seems real estate agents in Toronto are more on their toes now, because they know this may happen. They no longer just assume that if it says 1 week before offers, they've got time to kill. A good real estate agent will prepare his clients for this possibility, which means a true bully offer may just require a significantly higher bid to actually win the bully offer, which in the end is the same result as competing in a bidding war.

 

[ISYM]

For the record RBT.

You’re correct the ‘agent’ must present the offer or at best make an attempt to present the offer. There is no need to demand the seller’s written instructions, just the seller’s acknowledgement that they’ve seen or refuse to review/respond to same so as to live up to the offer date and time as stated. The seller does have the right to verbally instruct their agent what they will or will not do which gives the representing REALTOR the legal authority to carry out their instructions.

When REALTOR and seller are both ethical and work as a team it is not so unusual to find that the seller will in fairness to others not permit bully offers. Goodwill goes a long way in negotiations where you might be amazed as to how much this is appreciated by buyers and the doors of negotiation it opens.

The chance of the seller accepting the bully offer is entirely dependent on the offer price and window of opportunity and I’d say when expecting multiple offers, the possibility of the seller under excellent representation accepting one at $1,000 more than asking is only good if the seller has much to hide. That’s classic buyer beware!

One thing that ought to be set straight for the record is, just as the ‘agent’ or REALTOR doesn’t have the legal authority to not permit offers it/they, also don’t not have the legal authority to set the price or any other terms unless given power of attorney and in the vast majority of cases neither the agent nor the REALTOR is given this authority.

I would advise buyers to stop randomly partitioning the role of seller and ‘agent’ because this assumes to their detriment that all sellers are ignorant and spineless which is common when a buyer has little exposure to buying and selling real estate; has had poor representation or have self-represented.

Lame excuse. Submit an officially registered offer with a short irrevocable date and demand a copy of the written instruction from the seller if your agent is not allowed to present to the seller immediately and in person.

The seller agent doesn't have the legal authority to not permit offers; only their client...

If it's a decent offer (asking price + $1000 or similar) there is a good chance the seller will take it anyway and you've just pre-empted the bidding war. If they don't take it then you know for certain the seller is trying to game the system and that you, as a buyer, don't want to be a part of the bidding process.

This is particularlay effective if the agent purposfully lowballed the property value without telling the client that. They can't say $ASK + $1000 is a bad offer without admitting they were trying to make themselves look

 

[Eug]

The chance of the seller accepting the bully offer is entirely dependent on the offer price and window of opportunity and I’d say when expecting multiple offers, the possibility of the seller under excellent representation accepting one at $1,000 more than asking is only good if the seller has much to hide. That’s classic buyer beware!

Yeah. If the asking price is absolutely perfect for the home, then $1000 over asking may seem reasonable. However, we all know it's difficult to be 100% accurate in setting the appropriate prices in a fluctuating market. I truly thought $355000 was a reasonable price point, perhaps 1-2% low, so I was hoping to get a bit more than $360000 if I was lucky, but would have been happy with the asking price if that was the only offer I got after a week.

However, the interest in the place went far beyond what I was expecting, so even after the first couple of days I was expecting a multiple offer situation, and thus asking + $1000 didn't seem all that impressive. And indeed, a bidding war is what I got, and the place sold for 7% over asking. OTOH, if interest had been low, with few showings, I would have jumped at the offer of asking + $1000.

Also, for my GF's place, we priced it at exactly what I and the real estate agent felt was fair price. I wanted to again to go maybe 1-2% low to stimulate interest but my GF was not happy with that, so we just went with our best estimate for fair price. It turns out the interest in her unit was even higher than mine. I think she averaged about 6 showings per day over the week, not including the large number that came for the open house. The place was sold for almost 8% over asking.

I think part of the reason for the interest was just the timing. Weather was excellent at the time, and looking back, according to Teranet the time we listed Toronto had prices that were 4-5% higher than just 3 months prior (which is when some of our comps were from).

 

[interested]

^^^
I believe Eug are describing an issue for buyers, sellers and realtors alike.
In a bit of crazy market, no one, not even many realtors are exactly sure of what the price of a property should be.
We all know "it is what a buyer is willing to pay or alternatively what a seller will sell for(or it won't be sold), but some of the numbers being offered are unexpected by both seller and seller's agent alike. Your girlfriend and your units are cases in point. 5-6 and 8% over what you thought was fair market value. 5% OK but 8% is getting up there. And 12-13%over 3 months ago comparable comps certainly should not be expected (after all that is close to 50% annualized jump) which the market is not doing.

That said, timing, season, and the actual supply/quality of the product you may have been selling may explain your results.

Congratulations to both of you.

 

[AKS]

Just to clarify, the land transfer tax is only applicable to the buyer, not the seller. It is also important to note when budgeting that realtor commissions are subject to HST.

Sorry I didn't clarify that. Yes, seller is not subject to land transfer tax. However, seller is also buyer if they intend to upgrade or downgrade their place unless they go from seller to renter.

 

[Eug]

^^^
I believe Eug are describing an issue for buyers, sellers and realtors alike.
In a bit of crazy market, no one, not even many realtors are exactly sure of what the price of a property should be.
We all know "it is what a buyer is willing to pay or alternatively what a seller will sell for(or it won't be sold), but some of the numbers being offered are unexpected by both seller and seller's agent alike. Your girlfriend and your units are cases in point. 5-6 and 8% over what you thought was fair market value. 5% OK but 8% is getting up there. And 12-13%over 3 months ago comparable comps certainly should not be expected (after all that is close to 50% annualized jump) which the market is not doing.

That said, timing, season, and the actual supply/quality of the product you may have been selling may explain your results.

Congratulations to both of you.

Just for clarity's sake, our sale prices were about 6-8% above comps, not 12-13% above. I was just saying that Teranet had the average pricing change in that 3 month period being about 4-5%, so in that context 6-8% above 3 month old comps doesn't seem so outrageous anymore. However, at the time we were selling it was impossible to know that, since things were changing so quickly.

Sorry I didn't clarify that. Yes, seller is not subject to land transfer tax. However, seller is also buyer if they intend to upgrade or downgrade their place unless they go from seller to renter.

Depends. If you move from Toronto one block north into Markham, there is no Toronto land transfer tax. This was actually a consideration for a family member, since one of the condos being considered was on the north side of Steeles.

 

[interested]

Just for clarity's sake, our sale prices were about 6-8% above comps, not 12-13% above. I was just saying that Teranet had the average pricing change in that 3 month period being about 4-5%, so in that context 6-8% above 3 month old comps doesn't seem so outrageous anymore. However, at the time we were selling it was impossible to know that, since things were changing so quickly.

Thank you for the clarification. It is still outrageous however in my view, especially if continued throughout the year. Think about it: 3-5% in 3 months is 12-20%/year.
6-8% in 3 months is 24-32% annualized.
Very hefty gains, if not the 50% first described.

 

[AKS]

Depends. If you move from Toronto one block north into Markham, there is no Toronto land transfer tax. This was actually a consideration for a family member, since one of the condos being considered was on the north side of Steeles.

You've just proved my point and the article's argument that the TLLT is stopping people from moving or moving within 416.

 

[klb86]

I recall someone in this thread saying they owned a unit at Shangri-La.

I was browsing mls and found 4 units for sale:

23rd floor, 1,746 Sq.Ft for $1,749,000 ( $1001 per/sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11931105&PidKey=697113826

25th floor, 1,537 Sq.Ft for $2,170,500 ($1412 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11907032&PidKey=-591955260

53nd floor, 1,961 Sq.Ft for $2,682,500 ($1367 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11907345&PidKey=-2035071557

56 floor, 1,823 Sq.Ft for $2,808,220 ($1540 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11913474&PidKey=958970975

How much were these units going for during pre-con?

 

[cdr108]

It's not totally off. The high TO r/e prices are out of the government's hands. They can't control the prices. TO will always be more expensive than 905 areas. If TO prices were to drop, so would 905 which makes it negligible. Commission is same across the board. If commissions were decreased, it would decrease all over the country or province (not sure who controls the rates). However, LTT is 2% over 400k so it's not 1.5%. People won't be getting rebates if they are up-sizing since they own their home, they won't be considered first time buyers. When selling, they would face the realtors commission plus land transfer taxes. 905 seems more attractive since housing prices are cheaper so you get the best bang for your buck plus there's less transfer taxes. If you argue that property taxes are more expensive in the 905, you also have to consider valuations are higher in TO, so that evens it out. You'll probably be paying about same amount of tax.

well cheap credit and loser lending standards, which have contributed to higher r/e prices throughout the country and not just TO, are within the government's hands (via BoC and CMHC).

the TLLT is graduated so ~1.5% was an average: http://www.toronto.ca/taxes/mltt.htm#rates

For property containing at least one, and not more than two, single family residences with a consideration value of:

Value of Consideration MLTT Rate
Up to and including $55,000.00 0.5% plus
$55,000.01 to $400,000.00 1.0% plus
Over $400,000.00 2.0%


sure up-sizers won't be first-time buyers but how often does one plan on doing that?
the TLLT is fairly new and its supposed to be also a deterrant for flippers.

besides, most of the time, it's less expensive to do an addition than sell and repurchase when one considers the r/e commission and the provincial LLT. alot of times ppl like the neighbourhood they're in and have established 'roots'.

 

[cdr108]

i believe you're referring to interested.

i don't know the exact numbers, so hopefully interested will chime in.
however, if i recall what he mentioned, the regular suites started from $650 psf and the private estates were higher around $950 psf.


ps. - just looked at the listings and quite disappointed the realtors, which are affiliated with Christie's, didn't take the time to get actual images from the units but posted the identical pics for all 4 listings.

as a seller, i would be questionning why i'm paying 5% commission for this type of 'work'.

I recall someone in this thread saying they owned a unit at Shangri-La.

I was browsing mls and found 4 units for sale:

23rd floor, 1,746 Sq.Ft for $1,749,000 ( $1001 per/sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11931105&PidKey=697113826

25th floor, 1,537 Sq.Ft for $2,170,500 ($1412 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11907032&PidKey=-591955260

53nd floor, 1,961 Sq.Ft for $2,682,500 ($1367 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11907345&PidKey=-2035071557

56 floor, 1,823 Sq.Ft for $2,808,220 ($1540 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11913474&PidKey=958970975

How much were these units going for during pre-con?

 

[rbt]

You've just proved my point and the article's argument that the TLLT is stopping people from moving or moving within 416.

Actual sales history over the last 3 years indicate that TLLT has had zero impact on buyers thus far.

In fact, the capital investments the money is going into (transit, roads, etc.) possibly help increase interest in Toronto real-estate.

Free restaurants suck. I have far more interest in paying $10 for a meal and getting edible food, a place to sit, etc. People want value for their money. If TLLT money is used wisely, it will attract buyers.

 

[AKS]

sure up-sizers won't be first-time buyers but how often does one plan on doing that?
the TLLT is fairly new and its supposed to be also a deterrant for flippers.

A lot of the houses in TO are around 1 million so I think it's a bit more than 1.5%. As for deterring people from flipping, it depends. If it's sold as an assignment and they don't close. They don't need to pay land transfer tax. If they close the unit, chances are it's probably rented out and they're providing rental stock and not flipping. It's not really that much of a deterrent unless they're buying old houses, renovating and reselling it.

 

[interested]

I recall someone in this thread saying they owned a unit at Shangri-La.

I was browsing mls and found 4 units for sale:

23rd floor, 1,746 Sq.Ft for $1,749,000 ( $1001 per/sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11931105&PidKey=697113826

25th floor, 1,537 Sq.Ft for $2,170,500 ($1412 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11907032&PidKey=-591955260

53nd floor, 1,961 Sq.Ft for $2,682,500 ($1367 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11907345&PidKey=-2035071557

56 floor, 1,823 Sq.Ft for $2,808,220 ($1540 per sq.ft)
http://www.realtor.ca/propertyDetails.aspx?propertyId=11913474&PidKey=958970975

How much were these units going for during pre-con?

I don't recall exactly.
Further to the SL post that I answered about this, these are developer units that the developers agent is advertising. These are not resales.

I am one of the individuals you refer to though perhaps not the only one.

I am going from memory and when I bought in 2007.

The 23rd floor is a NW exposure unit. At the time if I recall I priced out the 25th floor and it was $1.27 million or $727/sq.ft. Allowing about $8K which I believe was the per floor price jump or $16K for 2 floors lower, the price per foot or possibly $718/sq.ft. for the 23rd floor.

I believe the 25th floor 1547 sq.ft. was over a $1000 but not by too much, perhaps $1050/sq.ft.

The 53rd and 56th floor I don't recall but I do know that a West face (which commanded a large premium) was about $1000/sq.ft.

I know the West face unit I bought was $870/sq.ft. and the last sales were around the $1200/sq.ft. mark.

So in essence from builder since 2007 to 2012 (5 years, there has been about 40%) escalation.

I suspect however that resale will actually come in much lower than the prices being quoted here.

Some very early investors were in even earlier than me and probably even $100/sq.ft. less than what I paid.