The full intensity of the spring market will be upon us soon. Can bidding wars for Toronto houses get any more zany?
Lots of people watching the eruption of extreme bidding in the city’s real estate market this spring are wondering who the victors are in these contests.
Real estate agent Wilfred Veinot says the winning bidders are often educated couples or single professionals in their early 30s who have watched their peers prosper from buying real estate.
“They see their friends’ houses and say ‘I want a piece of that’,” says Mr. Veinot of Sutton City Realty Inc.
The age of the new buyers doesn’t seem much different from the past but their fearlessness does.
“Everything’s got to be instant,” says the agent.
In one recent deal in the east end, a cute bungalow within walking distance of the subway was listed for $499,000. The winning bid was $610,000.
Mr. Veinot has queried clients about their decision to offer $100,000 over the asking price, which is not an unusual figure these days for even a modest detached house.
“Are you putting yourself in jeopardy?” Mr. Veinot asks. “Oh no, we can afford it,” the clients will assure him.
With interest rates so low and house prices so high, they look at the added monthly cost of another $100,000 it seems like nothing.
If a couple’s friends bought three years ago, they’ve seen a healthy return on a 15 per cent down payment, to use an example. The potential buyers out there today feel that they are three years farther behind. There is a sense of urgency.
Do they fret that if they don’t buy now they will never get into the market?
“I hear it on a daily basis,” agrees Mr. Veinot.
Mr. Veinot concentrates on Riverdale, which is a neighbourhood perennially popular with young parents searching for a detached house with a well-regarded school nearby.
Whether they are purchasing for the first time or moving up, the potential buyers are doing extensive research online, lining up a pre-approved mortgage, and then looking only at the houses that suit them, he says.
“No one can waste time.”
Of 10 people who pass through an open house, he estimates that eight or nine are qualified buyers.