Living a short walk to a Subway Entrance adds significant value to your condo. This is very important to owners who commute to downtown for work or play and want to have the option to drive. Usually lower prices per square foot come with an older building and suite that need renovation, or high maintenance fees… but not here. One of the few options available where you can buy high quality at very good value.
Typically, a new building (less than 5 years old), along the subway line would average somewhere around $550 per sq ft. If I told you there are options at $450 per sq ft you’d probably think that was good value… if I said $400 you’d think I might be exagerating… how about $364 per sq ft in a new Tridel building steps to the Subway AND a GO Station? Too good to be true? Tridel is arguably Toronto’s best Condo Developer as rated by customer satisfaction. The two sister buildings are 25 and 35 Viking Road which are right beside the Kipling Station. You won’t need to fight for a seat on the subway ride downtown and I think the value you get is well worth the extra minutes on the train. The neighbhourhood is steadily improving with a Starbucks and a shopping plaza across the street… not to mention Toronto’s Iconic “Apache Burger”.
This suite for sale is a corner suite just over 1100 sq ft and is priced at $399,900 including parking and a locker. It’s a 2 bdrm 2 wshrm suite with a great NW view. Here’s a nice video showing how far your dollar goes if you’re willing to have a little longer trip to downtown.
Usually when you visit a new construction condo project, they have price lists available showing the prices of all the different floorplans, parking and locker costs. They may have a promotion such as a free locker or $5,000 in “free upgrades”. Typically you should not expect to negotiate the purchase price at a new construction site but we really have to take it case by case. If you’re looking to buy a 1 bdrm plus den for $350k in a popular building then you should expect there to be no negotiation on the purchase price.
If you’re considering a $1.6M penthouse in a small boutique building which has completed construction, and perhaps even registered, typically you might expect the builder to come down $30-$50k to get the suite sold. Personally, I don’t think developers should negotiate their prices at all. I think they should offer their best price and take it or leave it. That way every purchaser feels that they’ve been treated fairly and equally. If buyers want the lowest price for a suite, they need to be prepared to buy on the opening weekend of sales with the understanding that it may be a 3 year wait until they can actually move in to their suite. With the most reputable developers such as Tridel, Daniels and Menkes, I have never seen them negotiate purchase prices but I have seen some of the smaller developers receptive to negotiation for their more valuable suites or if you’re buying more than one.
A very common question is “What time of the year is best to buy a condo?”. We have to interpret this question as really asking “Will I pay less money for the same product if I wait?”.
I graphed the last 6 years of condo prices for the downtown condo market. This first graph simply shows the median price each month throughout each year.
If we choose January as our starting point, let’s see the percent change going forward for each year:
The result shows that 3 of the 6 years had higher prices in December than if you bought at the start of the year, 1 year was the same and 2 years… prices were lower. The punishment for waiting in 2009 was escpecially harsh. Combining these past 6 years to get some kind of an average change in prices over the year results in this:
I believe this is actually very accurate as to how it feels helping Buyers. The Spring market brings a lot of buyers to the market and we see upwards pressure on prices, the summer months are quite calm and then another push in the Fall all the way to November. My advice is always that waiting usually means having to pay more and I think the statistics support this. There have been years when waiting did bring lower prices but having that strategy is really betting against the casino… and you know who always wins in the long run.
An associate of mine was deciding whether to buy real estate in the year 2000 or to keep her money invested in the market. She decided to buy an older home that was divided into apartments and keep them rented. The purchase price was just under $500k and the income more than covered the expenses allowing additional payments every month to pay off the mortgage faster. 10 years later, the tenants have almost paid off the house and it’s current value is just over $1M. Just like most real estate in Toronto, prices have doubled in the past 11 years.
When she was making this decision, her Financial Adviser was very upset and unhappy. He discouraged her saying that the stock market was just taking off… and then the tech bubble burst. Looking back that the performance of the stock market over the past 10 years, the Dow Jones is up a total of 13.3% and the S&P is up 5.0%. Inflation has been much, much higher making those numbers even worse.
Most people don’t know that currently Financial Advisers do NOT owe their clients Fiduciary Duties. A Fiduciary is someone who must act strictly in the best interests of another individual based on the nature of the business relationship between them. When you hire a Realtor, they DO owe their clients Fiduciary Duties as per our Code of Ethics. From a Buyer’s point of view, these include:
Loyalty: Must do everything possible to gain an advantage for their Client. Obedience: Must obey all lawful instructions of their Client. Disclosure: Must tell Client everything they can find out about property (good & bad) and any motivational reasons they can find out about the Seller. Confidentiality: Must keep all information about the Client confidential, including the Buyer’s ability or willingness to pay more for the property as well as the Buyers motivation. Reasonable Care and Diligence: Must prepare themselves through education and study to competently represent the Buyer in all matters. Accounting: Must account to Buyer for any money or documents entrusted to them.
The punishments for breaking any of these rules are harsh and enforced through RECO (Real Estate Council of Ontario).
If your Financial Adviser is not obligated to put your best interest before their own, how can you be sure they will? The advice they give to you will determine their own income. If they advise you to buy Mutual Funds, they will receive commission. I’ve often encountered Buyers who tell me that they want to buy but their Financial Adviser is discouraging them to do so. I think Buyer’s should be aware of all the factors taken into account when receiving such important advice. If your Financial Adviser will make less commission if you withdraw your investments to use as your downpayment, you should keep this in mind when listening to their advice.
Some Financial Advisers are great, and I think the ‘Fee Based’ structure for their compensation allows them to give you the most unbiased advice. That is when you pay them a set fee for helping you which is not affected by the choices you end up making.
Usable outdoor space is a very desirable feature for Buyers searching for their condo. All outdoor space is not created equal. One must take into account the following factors when determining a terrace’s value: exposure, noise level, view, wind, bbq gas hook up, access to the terrace ie. sliding doors, French doors, single door or completely detached as some roof top terraces can be a 5 minute walk from the suite.
Typically the standard price for an outdoor terrace is around 20%-30% of the interior value per square foot but you can wiggle up or down depending on the following: sunny is better than dark, more square is better than long and narrow, quieter is better than noisy, privacy and view. Don’t overlook the wind factor, typically the higher you go, the more windy it gets.
South is most desirable exposure for planting and west is the best for sunsets. Buyers must not confuse a balcony with a terrace. In my opinion, to be called a terrace, the total area has to be more than 100 sq ft with atleast both dimensions greater than 8ft.
Terraces are in high demand by downsizers as they’re moving from a house and don’t want to feel like they’re losing all their outdoor space. Tip Top Lofts, Brewery Lofts and the penthouses in The Candy Factory are a few buildings which have great terraces.
The reality of buying in a Seller’s market is that you’re likely to find yourself in love with a suite which is “holding back offers”. When a Seller decides to sell their suite, they have a couple strategies to choose from. They can price their suite a little higher than they feel market value is and accept offers anytime, or they can price their suite at or below market value and accept offers at a pre-determined time and place. The latter is what we a call a Bidding War or Multiple Offers.
For example, perhaps a Seller and their Realtor agree that the market value of a suite is $410,000. If the seller chooses to try and create a Bidding War, they may price the suite attractively at $399,900 with offers being accepted only after 5 days on the market. It is common that a desirable suite may have 20 or 30 showings over those 5 days. On offer day, all the Realtors with offers will gather at the property or real estate office to present their offer. Each offer is presented, confidentially, to the Seller and their Realtor. The final selling price is greatly influenced by how many offers are to be presented. Based on my experience, this is a rough guide to what the final selling price of a suite will be in a typical Bidding War when the suite was attractively priced to begin with:
1 Offer – 98% to 100%
2 Offers – 100% to 102%
3 Offers – 103% to 105%
4 Offers – 106% to 108%
etc.
If you are a Buyer entering in to a Bidding War, don’t be discouraged. Work with your Realtor to determine what you feel the true market value of the suite is, this can be very different from the advertised listing price. Considering the market value you deteremine, then decide what you would be willing to offer for the suite. You may make the choice to pay more than market value if it’s a unique property you plan on living in for a long time. You may offer less if you have budget or financing restrictions. Educate yourself, take some time to consider your options and then choose a number that you won’t regret afterwards. You should consider that you likely won’t have an oppourtunity to improve, one kick at the can so go in with your best.
Other than price, do the following:
1) Find out what closing date the Seller’s want and give it to them.
2) Give them a deposit larger than 5%.
3) If possible, have your Realtor present your offer in person and be nearby to accept any changes to your offer.
4) Register your offer as soon as you’re sure you will make one. This may discourage others who choose not to participate in Bidding Wars.
5) Go to your bank and get the deposit as a Bankdraft or Certified Cheque. Let your Realtor bring it with them to the offer presentation to show to the Seller.
6) Pre-arrange your financing so that you don’t have to make your offer conditional on Financing, that’s a big red flag for a Seller.
You can’t control the market, but there are still things you can do to help yourself win a multiple offer.
I think we’ve all dreamed about living in a large, stylish loft at one time or another in our lives. Typical owners are single professionals or a couple, usually no children as these wide open spaces aren’t ideal for families. Owners usually range in age from late twenties to downsizing boomers. Ingredients for your personalized dream loft include:
1 converted warehouse with high ceilings, lots of light and character
1 suite in that building, over 1200 sq ft, over 13 foot ceilings
1 owner with vision and financial ability to make dream come true
There are some great, hard lofts in Toronto. Hard lofts are converted warehouses and former commercial spaces. Soft lofts are new construction buildings made to look like a converted warehouse. Soft lofts never quite cut it though… they usually only have 9 foot ceilings and some exposed concrete. My favourite hard loft buildings are The Candy Factory, Broadview Lofts, Brewery Lofts, The Monarch Building and Merchandise Lofts. Many suites in these buildings are still blank canvasses in that owners have not undergone significant personalization of their suite. With so much space, there are a lot of options to install mezzanines, chef kitchens and spa-like bathrooms.
We just happen to have *cough, cough* one of these spaces available. Large, bright, corner suite in Brewery Lofts for sale. This is the perfect suite for someone who wants to move in and enjoy the loft in it’s excellent condition or take on a larger project. I believe Brewery Lofts is one of, if not, THE best value hard loft building in the city and it also has very low monthly carrying costs considering how big the suites are. Not only is this suite ideal, it comes with an 800 sq ft roof-top terrace facing directly West with a view of downtown, I can’t tell you how rare this combination is.
I was impressed by the images of work done in the Brewery Loft by Alan John Marsh Design, have a look at some of the amazing work he’s done in that building. This suite would be the perfect candidate for a lucky owner looking for something special.
I admit it, this post is a shameless plug for myself.
I recently wrote an article for CondoBusiness magazine which was published last month. The magazine is geared towards Property Managers, Real Estate Lawyers and Agents than it is for the general public as the topics are quite specific to the issues those professionals encounter. Having said this, some may find my article helpful. The photo they used in the article is not me, I’m not that good-looking.
I’ve attached a pdf file for anybody interested in reading my article about Condo Rules.
Twenty years ago, developers built one bedrooms mostly over 700 sq ft. The market just wouldn’t accept smaller sizes. Today it’s very common to see 1 bedrooms starting closer to 500 to 550 sq ft. We believe this is due to developers wanting to be able to market entry level prices to the large first time buyer and investory segment. To be able to provide product in the $300k price range, the rise in the cost of land, construction, city permits and taxes only allows a very small suite to be profitable for the developer. With new construction prices commonly around $575 per sq ft, a 500 sq ft suite with parking is affordable for someone looking to buy their first condo. The residents that end up living in these condos are willing to trade size for access to the urban lifestyle.
A condo shopper should keep in mind, if you’re looking for a more space, older condos offer better value… especially for a first time buyer. Condos such as 801 King St W offer much better bang for your investment dollar. Many of their one bedroom plus den condos, price around $315k, would be the size of 2 bedroom condos in newer buildings like Tableau or Theatre Park. If you think the condos in Toronto are too small, check out the suites in Vancouver. A new development called Burns Block has rental suite sizes that start at 270 sq ft.
As many people are aware, a Seller is now able to pay a few hundred dollars to have a real estate Agent upload their listing on MLS. That Agent does little else than data entry and owes little, if any, responsibility to that Seller. With this new option, if Agents want to book visits, ask questions, present offers or negotiate, we do it directly with the Seller. We refer to this as a ‘Posted Listing’. The Seller chooses this path to save on real estate Agent commission since they believe they will be doing all the work themselves and will only have to compensate the Agent representing the Buyer. I understand their motivation, selling seems like an expensive process.
I’ve heard a lot of Agents complain about their first experiences with these posted listings but I assumed those were isolated incidents. I just had my first experience with one and in the hundreds of deals I’ve been involved with, I believe it was the most unethical and disappointing. As frustrating as it was for me, it bothers me more that I don’t believe my clients were treated fairly and they know it.
My clients are a very kind couple looking for a downtown pied-a-terre, knowledgeable and well experienced themselves in buying and selling real estate. A particular building interests them and we found a suite they were excited about. I noticed it was a posted listing and that I would be talking directly with the Seller. Initially, I was optimistic about this and looked forward to my first posted listing. I made contact with the Seller, she seemed very nice and somewhat knowledgeable about the process. Having said that, this was going to be a more complicated transaction called an ‘assignment’ which is when someone wants to sell a pre-construction condo before the condo is complete and registered. She told me that there had been other offers in the past but those buyers were investigating their financing options. You can’t get a mortgage for an assignment so I questioned myself how much she really knew about the intricacies of the transaction. I tried to be helpful and eventually had to explain that to her. We agreed that we’d negotiate the details through email and I’d then prepare the final offer to present to her. I told her I’d appreciate timely responses to the emails as we had a lot to discuss. Things appeared great!
Hours went by waiting for replies, negotiating was painful and unsophisticated. I had to explain to her how to calculate the return on her investment, she told me she wasn’t going to make any money on the suite which I then calculated to be over $16,000 (after commissions), she justified her price by saying that she originally wanted even more money for the suite… not based on any recent comparable sales, the current market or how long her suite had been for sale. Her counter-offers didn’t mention any price other than full asking. After about 10 hours of negotiating, she told me another Agent was also bringing her an offer… but she said she “liked my emails and wanted to sell the suite to me”.
Getting into multiple offers happens all the time and it can still be a fair process IF the rules are followed. My next phone conversation with her was a perfect summary to the entire effort. Her words to me went something along the lines “I didn’t know it was unethical to tell the other Agent how much your clients were offering… but I didn’t… but his offer is more than yours… but only by a couple thousand dollars.” The number one rule when dealing with Multiple Offers is that you keep all the details of all the bidding offers confidential.
I believe this Seller wasn’t negotiating in good faith and was prolonging the process to give another agent enough time to make an offer. I believe she helped the other Agent make an offer that was just slightly better than my clients by precisely guiding, if not outright telling him our offer price. She then disclosed to me what their offer was which is just as wrong.
If an Agent behaved this way, they would be taken before the Ethics Committee and be at the risk of losing their license to trade real estate. Because the Seller was not an Agent, they don’t have to follow any ethics or rules that have been developed over decades to make the process as fair as possible. They can simply plead ignorance.
My clients are well aware of what happened. They had the best intentions to buy the suite at a fair price, negotiate honestly and close the transaction. In the end, they have a bad taste in their mouth about this process of buying real estate. I think the public needs to decide if they want a less expensive process where everyone tries to stab each other in the back, or a more expensive process where you can expect to be treated fairly. Every Seller becomes a Buyer, so in the end your savings can easily be overshadowed by a bad purchase experience.
I know that the Seller was able to save some commission on this deal, but the cost of their savings was my clients’ unfair treatment. I think we take for granted that we expect to be treated fairly when buying real estate in Canada. I understand that the real estate business appears simple from the outside, but a simple transaction can easily become very complicated. I’m the first to admit then entry standards to our profession are low, but the training we received is high quality and thorough. If you haven’t taken the courses to learn all the rules, I don’t see how you can do your share responsibly.
The new question Buyers need to ask is “Is this a posted listing?” If it is, you can’t expect to be treated fairly. They might be lying to us, sharing your offer details with others or perhaps not disclosing facts you should be aware of. They don’t need to behave ethically or follow all the rules… because they don’t know about the rules and there are no consequences for breaking them.
I know if we all look hard enough, we can all find someone who feels they had a bad experience with a real estate Agent… I’m looking for an Agent who’s had a good experience dealing directly with a Seller.
I would be happy if other Agents could share their experiences with posted listings on this page. It could become a sort of depository of experiences we can all learn from and help educate buyers about this new topic. Just post your opinions and stories in the Comments section below and let the community hear you!
Usually when you visit a new construction condo project, they have price lists available showing the prices of all the different floorplans, parking and locker costs. They may have a promotion such as a free locker or $5,000 in “free upgrades”. Typically you should not expect to negotiate the purchase price at a new construction site but we really have to take it case by case. If you’re looking to buy a 1 bdrm plus den for $350k in a popular building then you should expect there to be no negotiation on the purchase price.
An associate of mine was deciding whether to buy real estate in the year 2000 or to keep her money invested in the market. She decided to buy an older home that was divided into apartments and keep them rented. The purchase price was just under $500k and the income more than covered the expenses allowing additional payments every month to pay off the mortgage faster. 10 years later, the tenants have almost paid off the house and it’s current value is just over $1M. Just like most real estate in Toronto, prices have doubled in the past 11 years. 
Usable outdoor space is a very desirable feature for Buyers searching for their condo. All outdoor space is not created equal. One must take into account the following factors when determining a terrace’s value: exposure, noise level, view, wind, bbq gas hook up, access to the terrace ie. sliding doors, French doors, single door or completely detached as some roof top terraces can be a 5 minute walk from the suite.
For example, perhaps a Seller and their Realtor agree that the market value of a suite is $410,000. If the seller chooses to try and create a Bidding War, they may price the suite attractively at $399,900 with offers being accepted only after 5 days on the market. It is common that a desirable suite may have 20 or 30 showings over those 5 days. On offer day, all the Realtors with offers will gather at the property or real estate office to present their offer. Each offer is presented, confidentially, to the Seller and their Realtor. The final selling price is greatly influenced by how many offers are to be presented. Based on my experience, this is a rough guide to what the final selling price of a suite will be in a typical Bidding War when the suite was attractively priced to begin with:
Twenty years ago, developers built one bedrooms mostly over 700 sq ft. The market just wouldn’t accept smaller sizes. Today it’s very common to see 1 bedrooms starting closer to 500 to 550 sq ft. We believe this is due to developers wanting to be able to market entry level prices to the large first time buyer and investory segment. To be able to provide product in the $300k price range, the rise in the cost of land, construction, city permits and taxes only allows a very small suite to be profitable for the developer. With new construction prices commonly around $575 per sq ft, a 500 sq ft suite with parking is affordable for someone looking to buy their first condo. The residents that end up living in these condos are willing to trade size for access to the urban lifestyle. 
My clients are a very kind couple looking for a downtown pied-a-terre, knowledgeable and well experienced themselves in buying and selling real estate. A particular building interests them and we found a suite they were excited about. I noticed it was a posted listing and that I would be talking directly with the Seller. Initially, I was optimistic about this and looked forward to my first posted listing. I made contact with the Seller, she seemed very nice and somewhat knowledgeable about the process. Having said that, this was going to be a more complicated transaction called an ‘assignment’ which is when someone wants to sell a pre-construction condo before the condo is complete and registered. She told me that there had been other offers in the past but those buyers were investigating their financing options. You can’t get a mortgage for an assignment so I questioned myself how much she really knew about the intricacies of the transaction. I tried to be helpful and eventually had to explain that to her. We agreed that we’d negotiate the details through email and I’d then prepare the final offer to present to her. I told her I’d appreciate timely responses to the emails as we had a lot to discuss. Things appeared great!