Personal Finance

Bidding War Advice - Selling House Downtown Toronto

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  • Nov 2nd, 2009 4:27 pm
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[OP]
Newbie
Sep 29, 2009
2 posts

Bidding War Advice - Selling House Downtown Toronto

I'm listing my house next week, super hot area downtown Toronto, everything selling for over asking in bidding wars since the end of summer. My attached neighbor (semi) sold recently for 80K over asking in a bidding war. My agent will market the same way, list, wknd open house etc, then set a date for multiple offer submissions. I am wondering if anyone out here has gone through a bidding war process selling their home and has any advice. I bought this house in a bidding war 2 years ago myself, but as a buyer - my agent is helping to educate me a bit on what to expect but has a different motivation of course.
If you've gone through this and have any suggestions/warnings/lessons learned I'd appreciate any feedback or opinions. Thanks!
25 replies
Deal Addict
Jan 10, 2007
1411 posts
411 upvotes
Abbotsford
I hate the low asking price/entice a bidding war nonsense.
Deal Addict
Mar 14, 2005
1793 posts
40 upvotes
CatShopper wrote: I'm listing my house next week, super hot area downtown Toronto, everything selling for over asking in bidding wars since the end of summer. My attached neighbor (semi) sold recently for 80K over asking in a bidding war. My agent will market the same way, list, wknd open house etc, then set a date for multiple offer submissions. I am wondering if anyone out here has gone through a bidding war process selling their home and has any advice. I bought this house in a bidding war 2 years ago myself, but as a buyer - my agent is helping to educate me a bit on what to expect but has a different motivation of course.
If you've gone through this and have any suggestions/warnings/lessons learned I'd appreciate any feedback or opinions. Thanks!
Greedy people like this is why I don't like to live in Toronto!!!

I've never understood a Toronto attitude of spending well over market value for a house in a "good neighbourhood" (the drug dealers and hookers are across the street), just to be walking distance to Starbucks, even though you can't afford Starbucks each day, due to being over your head in a mortgage that is more than you can handle.. but hey, you can walk to Starbucks.. (and I'm in the real estate business)

Simple answer, sell for what the house is worth..
Deal Fanatic
Dec 11, 2008
9959 posts
1470 upvotes
xstatik wrote: Greedy people like this is why I don't like to live in Toronto!!!

I've never understood a Toronto attitude of spending well over market value for a house in a "good neighbourhood" (the drug dealers and hookers are across the street), just to be walking distance to Starbucks, even though you can't afford Starbucks each day, due to being over your head in a mortgage that is more than you can handle.. but hey, you can walk to Starbucks.. (and I'm in the real estate business)

Simple answer, sell for what the house is worth..
If everyone is over-bidding and paying that amount, isn't that he market value? I don't get it???
Deal Addict
Mar 14, 2005
1793 posts
40 upvotes
speedyforme wrote: If everyone is over-bidding and paying that amount, isn't that he market value? I don't get it???
You're right, it is Todays market value.. but is it a correct market value, or just some over-heated, emotionally charged value, that's non sustainable.
Deal Expert
Aug 2, 2001
16376 posts
6552 upvotes
xstatik wrote: You're right, it is Todays market value.. but is it a correct market value, or just some over-heated, emotionally charged value, that's non sustainable.
Without knowing the "current market value" of his home it is impossible to know. For all we know he is listing it under market value in hopes of attracting plenty of traffic to his house to showcase it, which will in turn entice more people to bid.

In the end, he may receive what you refer to as "correct market value", or slightly above.


Further, the discussion around "correct market value" isn't all that relevant. When purchasing a home the potential buyers should be seeing what other homes in the neighbourhood went for. If there is a data that supports valuing his home at $xxx,xxx then that is market value. Whether you feel it is "correct" or "sustainable" isn't important. If that was the case, then real estate in the prairies would be worthless because of the vast amounts of undeveloped land at our disposal.
Deal Addict
User avatar
Sep 6, 2006
1511 posts
30 upvotes
xstatik wrote: You're right, it is Todays market value.. but is it a correct market value, or just some over-heated, emotionally charged value, that's non sustainable.
“The improved economic outlook and low mortgage rates have fuelled a strong comeback by buyers. The number of sales has taken back all of the ground lost during the recession, driving prices higher,” the Desjardins report said.
"
In Ontario “the nascent economic recovery ... has driven up demand for homes. The average home price hit an unmatched peak in the third quarter ($324,873) thanks to sharp growth in Toronto. Affordability thus deteriorated in the province, going to its historic average. The crisis has still left its mark; Ontarians' average disposable income has fallen substantially, going from $79,299 a year ago to $77,601 in the third quarter of 2009.”"

http://www.theglobeandmail.com/report-o ... le1342209/
Deal Fanatic
Dec 11, 2008
9959 posts
1470 upvotes
TrevorK wrote: Without knowing the "current market value" of his home it is impossible to know. For all we know he is listing it under market value in hopes of attracting plenty of traffic to his house to showcase it, which will in turn entice more people to bid.

In the end, he may receive what you refer to as "correct market value", or slightly above.


Further, the discussion around "correct market value" isn't all that relevant. When purchasing a home the potential buyers should be seeing what other homes in the neighbourhood went for. If there is a data that supports valuing his home at $xxx,xxx then that is market value. Whether you feel it is "correct" or "sustainable" isn't important. If that was the case, then real estate in the prairies would be worthless because of the vast amounts of undeveloped land at our disposal.
This is what I see it as. Yes there are incentives to buy now etc etc and yeah it may be for the wrong reason but when I see market value I see previous sold home comparables, not the sustainable value.
Sr. Member
Mar 15, 2006
862 posts
7 upvotes
CatShopper.. there really is nothing to it. The whole concept is just to scare buyers into thinking they have something to lose if they don't have the highest bid. Sit back, relax and let other people freak out. Your agent, the selling agent, has an interest in getting the highest price possible, and so does the buying agent. Frankly, if I were you, I'd go out to a restaurant and have a nice meal while your agent deals with all of it... Then come back and sign the highest offer.
The things you own end up owning you.
Deal Addict
Nov 11, 2004
3123 posts
301 upvotes
Ottawa
Wait it out, and Accept the Highest BIDDER :)
Hello
Deal Expert
User avatar
Feb 24, 2003
15908 posts
2593 upvotes
Toronto
xstatik wrote: Greedy people like this is why I don't like to live in Toronto!!!..
I guess I'm greedy too because I wanted as much as I could possibly get for my previous home in Toronto.
Deal Addict
Dec 13, 2004
3488 posts
175 upvotes
Toronto
I just recently bought a condo (like last week) We were looking at re-sale homes but there wasn't a whole lot out there.

Layouts were bad and prices were high. The few that had attractive asking prices was pretty obvious they wanted a bidding war. Just like the op said List, open house, firm date for bidding.

In the end we bought pre-construction that's done next year.
Deal Expert
May 17, 2008
15134 posts
158 upvotes
xstatik wrote: Greedy people like this is why I don't like to live in Toronto!!!
How is it greedy to want to get the highest price for your house.

Can anyone in this forum really say they would turn down an offer because they thought the person was overpaying for their house?

Worrying about paying to much is the buyers job.
Deal Addict
User avatar
Aug 26, 2005
3428 posts
36 upvotes
Coquitlam
It's a free market. Whoever puts the highest bid and is able to pay for it would take the house.

And this is not greed.

In the seller's point of view, if the owner put on a high price, and someone buys it without bargaining, it could imply that the demand is higher than supply.

If his next door neighbour sees that the house was sold for the asking price, and his house is identical to the one next door. It would be reasonable to bump up the asking price if it sells that well.

This is all about supply and demand. If you are in a good neighbourhood and there are virtually no listings of similar housing as the one you own, then there will be no competition in the area. If there is a huge demand for a certain house, of course it will go over the asking price.
Deal Addict
Mar 14, 2005
1793 posts
40 upvotes
Badger wrote: It's a free market. Whoever puts the highest bid and is able to pay for it would take the house.

And this is not greed. .

As someone in the real estate industry, Greed play a big part.
Anyone who has been in a "bidding war" know just how much BS is involved and the lack of transparancy stacks the deck against the buiyer..
An open bidding process is needed, which would ensure market value being paid.

As it is right now, all bids are private, the seller 9 times out of 10 will lie to all the buyers saying their bid isn't the highest, force them to re-bid, and usually a buyer will pay something crazy like $85,000 over asking price, becuase of the emotions and the pressure from the agents.

The bidding war process is not the correct way to buy the largest investment anyone would make in their life.

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