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(CTV News)   Toronto house sells for $420k over asking price. This is all perfectly normal, right?   (toronto.ctvnews.ca) divider line
    More: Obvious, Real estate, Real estate pricing, Semi-detached, Single-family detached home, true costs of the high prices, CTV Television Network, Toronto townhouse, low interest rates  
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3241 clicks; posted to Main » on 16 Jul 2021 at 2:20 AM (20 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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TWX
2021-07-15 10:15:20 PM  
damn that's high.
 
2021-07-15 10:23:35 PM  
No, but if the same thing came my way I wouldn't question anything AT ALL until after the money was in escrow and I signed over the title to the buyer.
 
2021-07-16 2:23:39 AM  
I know a guy (real estate agent) that just closed a deal on a single family home for 200,000 over list price.

I can't wait until our government bails out the farking pensioners that decided to buy eight percent of the inventory at the peak of the market.
 
2021-07-16 2:39:34 AM  
Good for them for being able to do it.

Not only do they need to provide the down payment, they need to put up the $420k they paid to get the deal, and if the appraisal comes in short, cash to cover that difference too.

Mortgages are not like car loans, where they'll tack the balance of that upside down car loan you're trading in, and the added dealer markup because you need the HelloKitty Limited Edition Ford Ranger.  Which you probably don't.
 
2021-07-16 2:48:24 AM  

maxandgrinch: Good for them for being able to do it.
Not only do they need to provide the down payment,


You are assuming this wasn't a cash deal.

A lot of the current market craziness is being driven by corporate buyers paying in cash and using computer models to supposedly figure out what a property is worth.
 
2021-07-16 2:49:58 AM  
Fark user imageView Full Size


Some folks have more Money than brains.......
 
2021-07-16 2:51:35 AM  
It's a common practice to list a home below value to attract attention and spur a bidding war.  I've seen homes listed in the low 500s sell for 620.

This is just slightly more impressive.

/Also, remember that it's in Canadian dollars.
 
2021-07-16 2:51:44 AM  

Bazzlex001: I know a guy (real estate agent) that just closed a deal on a single family home for 200,000 over list price.

I can't wait until our government bails out the farking pensioners that decided to buy eight percent of the inventory at the peak of the market.


There are so many better ways to invest money when you are in the last decade or so of your life, than taking out thirty year mortgages on lots of investment homes that you paid way over market value to obtain.  Hell if you are pensioner, you should be slowly cashing in your investments, not tying up more of your resources into new ones.  Even if you "win" the only thing you are doing is dying with a big pile of hoarded wealth that you never got to actually enjoy.
 
2021-07-16 2:59:50 AM  
In California it is.
 
2021-07-16 3:09:17 AM  
That'll get ya a lot of toques eh?
 
2021-07-16 3:19:52 AM  
It's not normal normal, but it's not outrageous. It was already at 1.1 million, a 400k jump is closer to a 30% premium. That's a jump for sure, but it's like getting $300k when you listed for $200k. A bidding war can do that for the right property and this is a pretty redbrick in a major global city with a prime street location. So I sincerely doubt this is a launder, and I don't even think it's that outrageous.
 
2021-07-16 3:24:24 AM  
two words: money laundering
 
2021-07-16 3:57:06 AM  
Fark user imageView Full Size
 
2021-07-16 5:17:01 AM  
Toronto? Gosh!

Fark user imageView Full Size
 
2021-07-16 5:26:49 AM  

Alunan: It's not normal normal, but it's not outrageous. It was already at 1.1 million, a 400k jump is closer to a 30% premium. That's a jump for sure, but it's like getting $300k when you listed for $200k. A bidding war can do that for the right property and this is a pretty redbrick in a major global city with a prime street location. So I sincerely doubt this is a launder, and I don't even think it's that outrageous.


Who knew that fully renovating a luxury property and professionally staging it would result in a price increase?
It is very possible that the sellers lost money on this sale, renovations of this kind are not cheap, neither is professional staging (this alone could have cost $100,000).
Does Canada have similar absurdly high realtor fees for transactions?  Here in Best America it's typically 3% seller, 3% buyer on sale price, although some have reported higher lately.
 
2021-07-16 6:46:44 AM  
Do all of you get really excited about discount department store "Compare At..." numbers on the price tags?
 
2021-07-16 8:32:36 AM  
We have been looking for a a new house for months. We learned our lesson about the current market when a beautiful home came up in our price range a couple of months ago. We were told they were reviewing all offers on a specific day so we needed to put in our best and final. We crunched numbers figuring out the very maximum we could pay and then put in our offer with an escalation clause of to $30k over asking. Our agent told us to write a letter to strengthen our position too.

The sellers must have been laughing their arses off at our puny offer. They selected the top four offers to allow them to place final offers. The lowest of the four top offers was $125k over asking.
 
2021-07-16 8:40:43 AM  

Northern: Alunan: It's not normal normal, but it's not outrageous. It was already at 1.1 million, a 400k jump is closer to a 30% premium. That's a jump for sure, but it's like getting $300k when you listed for $200k. A bidding war can do that for the right property and this is a pretty redbrick in a major global city with a prime street location. So I sincerely doubt this is a launder, and I don't even think it's that outrageous.

Who knew that fully renovating a luxury property and professionally staging it would result in a price increase?
It is very possible that the sellers lost money on this sale, renovations of this kind are not cheap, neither is professional staging (this alone could have cost $100,000).
Does Canada have similar absurdly high realtor fees for transactions?  Here in Best America it's typically 3% seller, 3% buyer on sale price, although some have reported higher lately.


This wasn't a luxury property. This was a regular townhouse on a busy street east of downtown. A teardown anywhere in Toronto sells for at least a million. Add a second storey to a bungalow? It's worth at least $1.4M.  The market here is so bad that prices have gone up anywhere within a 2 hour commute of the city.
 
2021-07-16 9:00:06 AM  
This year it has been common for homes to sell for $100K+ over the asking price. Never seen anything like it before.
 
2021-07-16 9:00:38 AM  

MelGoesOnTour: This year it has been common for homes to sell for $100K+ over the asking price. Never seen anything like it before.


Oops, I forgot to mention "in my neck of the woods".
 
2021-07-16 9:05:37 AM  

MelGoesOnTour: MelGoesOnTour: This year it has been common for homes to sell for $100K+ over the asking price. Never seen anything like it before.

Oops, I forgot to mention "in my neck of the woods".


Damn.  $420k Canadian over the asking price is even a lot of money in real dollars.

/oblig
 
2021-07-16 9:07:20 AM  
Yea but that bubble is going to pop any day now.

/never mind people have been saying that about TO housing for decades now
 
2021-07-16 9:21:36 AM  
I bet the property tax board loves this.
 
2021-07-16 9:31:38 AM  
How much is that in Canada Tire money?
 
2021-07-16 9:33:05 AM  
The housing market in a lot of places has been insane since Covid, and it continues to be insane. I'm not sure exactly what's driving it at this point. But hereabouts, places routinely sell above asking price, with no inspection. Places are doing 15-minute showings. Some are being purchases sight unseen. It's nuts.
 
2021-07-16 9:48:36 AM  

someonelse: The housing market in a lot of places has been insane since Covid, and it continues to be insane. I'm not sure exactly what's driving it at this point. But hereabouts, places routinely sell above asking price, with no inspection. Places are doing 15-minute showings. Some are being purchases sight unseen. It's nuts.


That's exactly what I've been seeing and that's just in my own neighborhood. A 3bd/2ba recently sold for $990K. It's a nice place but not THAT nice. I just can't grasp who these people are with that kind of money for a regular house.
 
2021-07-16 10:00:34 AM  

Krieghund: maxandgrinch: Good for them for being able to do it.
Not only do they need to provide the down payment,

You are assuming this wasn't a cash deal.

A lot of the current market craziness is being driven by corporate buyers paying in cash and using computer models to supposedly figure out what a property is worth.


I've been repeatedly told here that investors are not driving the home prices up, sending (in this case, Canada) is collectively into a rent-or-die society, because they're only 2-8% of the overall market.

/I think this is sarcasm; the kid was up all night making noise, so I'm foggy.
 
2021-07-16 10:07:23 AM  
I grew up about 200 yards from that location.  Our house was a 2-bedroom bungalow on a 40 foot lot.  After my parents died I sold it for $207 000 in 1992.   Same house now runs about 1.2 million.  And some of the houses on my old street have added a second storey - those go for 1.5 mill and up.

How would a person with the income of a teacher or a cop or....  around $90 000 a year, come close to affording a house in Toronto?   and the "Underemplyed" folks struggling at or a bit above minimum wage?  Frightening...

Inflation alone would move my old house's value from 207k to about 353k in the same 30 years...not even double..... Bank of Canada website:
Fark user imageView Full Size
 
2021-07-16 10:18:04 AM  
It's all insane, and I'm sure the 99% will surely soon suffer the consequences.
 
2021-07-16 10:21:48 AM  

Alunan: It's not normal normal, but it's not outrageous. It was already at 1.1 million, a 400k jump is closer to a 30% premium. That's a jump for sure, but it's like getting $300k when you listed for $200k. A bidding war can do that for the right property and this is a pretty redbrick in a major global city with a prime street location. So I sincerely doubt this is a launder, and I don't even think it's that outrageous.


They underpriced the house, it's that simple. Lots of people do that to set up an auction. It's scummy but totally normal, and these guys just set up a really low price. I've seen "over asking" sold signs where it was 1k over asking to get the sign. Real estate agents aren't stupid, they know what gets the house seen...

Don't look at over asking, look at average prices. That is still worrying.
 
2021-07-16 10:25:59 AM  

bigbadideasinaction: They underpriced the house, it's that simple.


That's not what's going on where I live, seriously, though otherwise it'd be a good theory. Homes that a few years ago would have done well selling at $300K are starting at $550K and selling for WAY MORE than that. And these are "normal" homes, not mansions. It is, indeed, crazy.
 
2021-07-16 11:06:49 AM  

Boo_Guy: Yea but that bubble is going to pop any day now.

/never mind people have been saying that about TO housing for decades now


Prices dropped hard after the 2008 financial crisis. Governments around the world (via their central banks) then started running the modern monetarist playbook enthusiastically (central banks drop interest rates, buy mortgages, buy government debt). Home prices have been climbing at about a 45 degree angle for the past decade as a result.

So: will it continue on forever? Plateau? Drop? Will the stimulus eventually not stimulate?

Bubbles do exist (check out the 5 year view). Granted, housing is unusual in that governments actively and aggressively support house prices, so hard to say how it will react. Maybe more like oil cartel behavior than free market.
 
2021-07-16 11:38:01 AM  

MelGoesOnTour: bigbadideasinaction: They underpriced the house, it's that simple.

That's not what's going on where I live, seriously, though otherwise it'd be a good theory. Homes that a few years ago would have done well selling at $300K are starting at $550K and selling for WAY MORE than that. And these are "normal" homes, not mansions. It is, indeed, crazy.


Sale prices are definitely up. Just sold a townhouse in Markham (Toronto suburb) and got easily 20% over what I thought I'd get in mid 2019. The "over asking" bit is the norm now in the GTA. List is always lower than expected sale price now.
 
2021-07-16 11:38:15 AM  

Alunan: It's not normal normal, but it's not outrageous. It was already at 1.1 million, a 400k jump is closer to a 30% premium. That's a jump for sure, but it's like getting $300k when you listed for $200k. A bidding war can do that for the right property and this is a pretty redbrick in a major global city with a prime street location. So I sincerely doubt this is a launder, and I don't even think it's that outrageous.


They listed it way under value.  So, it is completely normal.  My current house is worth around $200,000, if I listed it at $100,000, there would be a bidding war, and it would sell for $200,000.
 
2021-07-16 11:41:04 AM  
House around the corner from me has a base of maybe 25' x 20'.  Basic barn shape; it's cute.  It just got listed and sold in the course of a few days.  I don't know what they got but they were asking $379K.  I'm in the Niagara region and not a good part of town (that house had homeless squatting in the vacant house across the street).
 
2021-07-16 12:02:26 PM  
This is a common situation in Ontario right now.

As someone mentioned, don't get too concerned about the $420k over asking piece. I am Executor for a relative who died recently and I sold their house last month.

The current rules around here appear to be:

1. Sales are all delayed bid. You list it on a Monday (for example) and specify that you are accepting bids starting on Friday at 11:00 am until 13:00 pm. No early bids accepted.
2. The listing price is specifically set much lower than the expected sale price to create a bidding war on Friday.

That's exactly what happened in my case. In the end, the house sold for what the Comparative Market Assessment  suggested would be the final sale price. In a sense it sold for $100k over asking, but in reality it went for exactly what the market suggested was appropriate.

One question for the Americans in the thread. In Canada you can't write off mortgage interest on your income taxes. Two questions:

1. What is the reasoning behind that?
2. Does that lead to inflation of house prices because people can afford to pay more knowing that they get money back at tax time?

Not familiar with the rules so I don't know what impact that would have on a comparison between Canada and the US.
 
2021-07-16 12:29:16 PM  

Rock Krenn: One question for the Americans in the thread. In Canada you can't write off mortgage interest on your income taxes. Two questions:

1. What is the reasoning behind that?
2. Does that lead to inflation of house prices because people can afford to pay more knowing that they get money back at tax time?

Not familiar with the rules so I don't know what impact that would have on a comparison between Canada and the US.


1. Prior to the tax reforms of the early 80s you could deduct *all* interest - mortgages, credit cards, auto loans, etc..  Since mortgage interest rates were very high and politicians like to be re-elected the mortgage interest deduction was left alone even though the rest of the interest deductions were removed.

2. If interest rates were higher it would impact housing prices but currently, not really.  As a practical matter, the 2018 tax changes from the former guy did away with the mortgage interest deduction for most people by raising the standard deduction to $24K and limiting the state & local tax deduction to $10K - this means that a married couple would need to pay at least $14K in interest in a given year before having enough deductions to exceed the standard deduction.  Also, the deductibility of mortgage interest starts to become limited on houses over $1M.  There's a window between, like, $800K and $1.2M where the mortgage interest deduction may be a small factor in house affordability but it isn't the big deal that it used to be.
 
2021-07-16 12:39:55 PM  

OptionC: Rock Krenn: One question for the Americans in the thread. In Canada you can't write off mortgage interest on your income taxes. Two questions:

1. What is the reasoning behind that?
2. Does that lead to inflation of house prices because people can afford to pay more knowing that they get money back at tax time?

Not familiar with the rules so I don't know what impact that would have on a comparison between Canada and the US.

1. Prior to the tax reforms of the early 80s you could deduct *all* interest - mortgages, credit cards, auto loans, etc..  Since mortgage interest rates were very high and politicians like to be re-elected the mortgage interest deduction was left alone even though the rest of the interest deductions were removed.

2. If interest rates were higher it would impact housing prices but currently, not really.  As a practical matter, the 2018 tax changes from the former guy did away with the mortgage interest deduction for most people by raising the standard deduction to $24K and limiting the state & local tax deduction to $10K - this means that a married couple would need to pay at least $14K in interest in a given year before having enough deductions to exceed the standard deduction.  Also, the deductibility of mortgage interest starts to become limited on houses over $1M.  There's a window between, like, $800K and $1.2M where the mortgage interest deduction may be a small factor in house affordability but it isn't the big deal that it used to be.



Thanks for the info.
 
2021-07-16 2:18:19 PM  

MelGoesOnTour: someonelse: The housing market in a lot of places has been insane since Covid, and it continues to be insane. I'm not sure exactly what's driving it at this point. But hereabouts, places routinely sell above asking price, with no inspection. Places are doing 15-minute showings. Some are being purchases sight unseen. It's nuts.

That's exactly what I've been seeing and that's just in my own neighborhood. A 3bd/2ba recently sold for $990K. It's a nice place but not THAT nice. I just can't grasp who these people are with that kind of money for a regular house.


Investors who then charge 20x what the mortgage would've been for rent. And people will pay it because it's either pay, or have a 4 hour commute each way from the nearest affordable housing.

A friend of mine that has to stay in Toronto for her daughters healthcare says there's 2 choices: stay in a collapsing slum for $1000/mo, or move and drive 3 hrs back in 3x/wk for dr. appointments.
 
2021-07-16 7:12:38 PM  

Krieghund: maxandgrinch: Good for them for being able to do it.
Not only do they need to provide the down payment,

You are assuming this wasn't a cash deal.

A lot of the current market craziness is being driven by corporate buyers paying in cash and using computer models to supposedly figure out what a property is worth.



you would thing the corporate types would know how to leverage their money and not use their own cash.
 
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