After witnessing the meltdown of the global economy and hearing countless reports on CBC radio about the collapsing real estate market, we decided that Spring 2009 was the perfect time to buy our second house.  The much ballyhooed “move up” house would have everything the “starter” home we purchased at the near peak of the market in 2006 lacked.  We’d get to avoid the stress of bidding wars that plagued our first search and we’d secure a fabulous deal on our dream house in a dream location.  Sure, we were jumping ship on our 850 sq ft three bedroom Leslieville semi sooner than the recommended five years, but with a busy toddler, even busier dog, self-employed working at home husband, and lots of out of town guests, we were more than ready to take advantage of unique market conditions and move to greener pastures.

The wish list was long.  “Forever” house territory is serious business.  My husband and I came to the search with equally picky “must haves”.

Me –

  • Detached (I have the blessing and curse of unusually sharp hearing)
  • Great neighborhood (Beach preferred, Riverdale, Davisville, Leslieville and Roncesvalles also considered)
  • Excellent schools
  • 3 bedrooms, 2 bathrooms
  • Eat-in kitchen with good flow to living room/dining room
  • Mudroom or at least hall closet (no spilling into the living room off the street or exposed coats and shoes, please and thank you)
  • Period details like stained glass or wood-burning fireplace
  • Lot depth of 100ft or more
  • Brick construction
  • Decent basement ceiling height
  • Private parking
  • 5 minutes or less to parks or nature (thank Richard Louv’s book on kids and “nature deficit disorder” for that one).

Him –

  • 3rd floor office space with good ceiling height and windows
  • 5 min walk or less to major thoroughfare with TTC links
I used to pass Castle Coch every time we drove from our village into town when I was growing up in the UK.  They say an Englishman's home is his castle...and real estate dreams die hard.

As a child, I used to pass Castle Coch every time we drove from our village into town. They say an Englishman's home is his castle...and real estate dreams die hard.

All this and a bag of chips for under $700,000.  I’d seen houses before like the one in my head.  It was possible, although I think I irritated my husband and real estate agent with my pickiness.  The great thing about my story is despite the pain and suffering that you’ll soon read about, we actually got almost every single thing on our wish list except the mudroom.  I hate staring at those damn coats and shoes and don’t get me started on the stroller.  But back to the story.

I’ll skip through all the boring details of how we realized early on that the market wasn’t in fact dead and had been resurrected about a month before we began our search.   Completely against market fundamentals and in stark contrast to our friends down south, business was starting to boom.  I’ll explain how and why more in another post.  We quickly realized our $700,000 budget may be a bit tight so we decided we would increase it for houses with “income potential”.

 

First love

We should have learned all these difficult lessons with our first purchase but it didn’t take long before we were suckered into the dream house in our not-so-dream location debacle.  Our first offer in May 2009 was on a 4 bedroom, 3 bathroom detached with “nanny suite”, aka illegal basement apartment, at Danforth and Jones listed at $799,000.  We overlooked the shared parking due to the incredible 140 ft lot but the lack of real nature nearby troubled me.  We spend countless hours outside with our dog and having to stand around in the tight confines of a small off-leash zone making conversation with other dog owners (“Hey what kind of dog is that?” “How old is he”?) is not my dream scenario. Also, upon investigating the listing’s assurances of “Jackman school district” (a tony public school we were not even that enthused about), we learned that the house was only in the Jackman French immersion district and there was a higher likelihood of our daughter playing in the WNBA than getting in.  We also learned that the realtor listing the house was also the owner of the house and she had her own client who was submitting an offer.  Two days after seeing the house for the first time we took our agent’s advice of “throwing our hat in the ring” and bid $836,000 against two other players.  I know, I know, how does a $700,000 budget spiral into an $836,000 offer?  It seems to be a disease that plagues most house hunters.  It is virtually impossible to stay within your original budget when dealing with multiple offers.  In this case, the agent’s own clients successfully bought the house for $820,000, a hair above our offer given realtor fees on the “double ender”.

 

Rebound

Now on to the house that you know isn’t right for you but you feel burned from losing a house you really liked, you’re sick of the process and feel like you need to settle if you’re going to get something.  House #2 was so radically different from all the houses we considered in terms of neighborhood, renovation requirements and budget.  It was like when ER shot their totally live episode.  Let’s toss out the rule book!  Despite rarely crossing the Don River over the past five years, we found ourselves in Roncesvalles Village, a lovely area that reminded us of Leslieville but had great access to High Park.  It is scary to think about buying your forever house in a neighborhood you’ve never visited but we got high on real estate fumes… “plenty of detached 3 story houses with character”, “a house here typically costs 100k less than in Riverdale or the Beach” and other urban legends and truths.  The house in question was a detached, 4 bedroom, 2 bathroom Edwardian on a small-ish 90 ft lot with a grotto-like basement.  Can you buy a house because of stained glass and an Enid Blyton-esque secret staircase that our daughter would love?  We did.  The house had been sitting on the market at $869,000 for just over two weeks.  I love the whiff of a potential deal and if we could get it under asking, wouldn’t it be the coo of the century considering other houses in the pocket were selling for over a million?  After some hard work from our agent, our offer of $810,000 was accepted.  That night, she promised we wouldn’t be able to sleep due to excitement.  Three gravols and eight sleepless hours later I couldn’t shake the deep-down sick feeling that we were in way over our heads.  How did the $800,000+ range become our “go to” rather than an exception we were willing to make if the house had income potential?  Following our home inspection, the situation became even more dire.  The basement had been wallpapered with asbestos sheeting and the inspector had no idea how much it would cost to remove, the walls had 100% moisture content making a basement reno prohibitively expensive, the windows all needed immediate replacement and there were “small” repairs that added up to 50K throughout the house.  This didn’t take into account the cosmetic renos we needed to do, like a new kitchen and bathroom, back yard fence, and more.  Now we understood the purchase price.  This was a million dollar home like all the others on the street, it just needed 200k of work.  Confusion, tears and physical illness culminated in termination of the deal.

 

House goggles

WHY SO SERIOUS?

Frayed nerves and a summer of dismally scarce listings brought us to new lows.  I found myself waking up at 4am to check my email for prospect matches and unable to sleep on Tuesday night, the night before most listings are uploaded to MLS.  At the end of August, a house came on the market that seemed to bring us back to our financial comfort zone.  At $649,000 the price was much lower than we had been considering and it was located only two blocks away from our current house in Leslieville.  Although there wasn’t a viable office space for my husband (one of the main reasons for our move), there was an attic space that according to the listing agent could be renovated for $5,000.  Some research revealed that true renovation costs would be closer to $30-50,000 if we wanted dormers and decent ceiling height and there was no guarantee that we would get planning permission as the house was quite close to the neighboring property.  Again, we were suckered in by finishing details like reclaimed barn board floors and a two sided fireplace.  We knew the location well and weren’t completely surprised to find a guy peeing at the street corner the morning of the open house.  Since the house had only been owned for a year and had sold the previous summer for $650,000 with a list price of $599,000, I figured an offer in the high 6’s would secure the property.  This is Leslieville after all.  Offers night rolled around and we learned there were four other offers.  Ugh.  We decided to offer $702,000, based on the math that each offer represented $10,000 over asking.  Although it was more than we thought the house was worth and we would be setting a new record on the street, we just wanted to buy a house already.  Within an hour we learned that we had been outbid.  And that two additional offers had snuck in at the last minute.  I was furious.  This is a very slippery technique that gives the last-minute buyers a huge advantage over the pre-registered offers as they know how many people they are actually competing against and can adjust their offer accordingly.  We were angry that we weren’t given the chance to increase our offer based on the now seven parties at the table.  I figured we’d lost it by under 10k but the surprises kept coming.  The selling price was $750,500, $100,500 over asking and $150,500 over what the house had listed for only one year ago.

 

Marriage of convenience

This is the point where most normal people decide not to move after all and just renovate their starter home to meet their current needs.  Sure, a good idea on paper but we were too involved.  I kept saying I would put our search on hiatus but I just couldn’t do it.  The fall market was in full swing and new listings were finally starting to trickle on to the market.  But with each viewing I felt a growing sense of emptiness inside.  I had lost my mojo.  The next house we bid on seemed to make sense although looking back, it made no sense at all.  It was a charming 3 bedroom, 2 bathroom detached south of Queen in the Beach but it was not right for us.  There was no office space for my husband so we decided we would build him a ‘bunkie’ in the back yard.  Again, the uncertainty of planning permission loomed over the horizon.  Also, I had heard horror stories of frequent flooding to homes south of Queen during rain storms and was worried about being so close to the lake.  At $799,999 with no possibility of basement income, we decided to throw in an offer only if there were no other bidders.  We didn’t bother with a pre-inspection as we figured we would pull out if competition arose.  Of course, offers night came and three other offers were registered.  We didn’t have the usual mix of excitement and terror that accompanies offer night but numbly submitted an offer of $826,500 without conditions anyway.  Luckily for us, the house was snapped up by another family for $860,000.

 

Ditched at the Altar

We were finally snapped out of our emotional deep thaw by even a worse, nearly catastrophic decision.  Two weeks after our last failed offer, a house came on the market that rivaled our first love house.  Five bedrooms, 1 ½ bathrooms, detached, 140 ft lot, 1 parking pad and located in the Beach, our dream area.  It was listed at $849,000 and had no possibility of basement income but it was as close as we’d come to our wish list.  We decided to take a look despite the hefty price tag.  Maybe we had to drastically increase our budget to get what we wanted.  Offers were due the next day so it was possible there wouldn’t be time to drum up a hungry clan of bidders.  We toured the house and despite the attributes, we noticed a few troubling issues.  The unfinished basement smelled so damp and musty that the scent hung like a fog throughout the whole first floor.  The staircase to the third floor had separated from the wall by about two inches and we had no idea what that meant.  There was no time to bring in a home inspector and we soon found out we were up against one other offer so the best way to secure the house was to go in without conditions.  We decided we would offer $860,000, a hair over asking, and see what happened.  Offers were due at 7pm and our agent was fighting Friday rush hour traffic to get to our house for signatures.  My husband and I sat quietly picking at our dinner, both feeling the old familiar flood of nausea that plagued our Roncesvalles purchase.  I understood now how people get themselves so in over their heads with home purchases.  Don’t you always wonder who those people are who bid 100-150k over asking or who spend grossly more than they afford because they “have to”?  How did we ever come to a point where spending at least 100k more than we could afford and sending daily panicked emails to our mortgage broker was normal behaviour?  We decided to pull out at the very last minute and the house sold that night for asking price.

 

True love

We had now arrived at that moment every seasoned house hunter dreads.  Over the six months we had been searching and losing bidding wars, prices had climbed and what we wanted was getting increasingly out of reach.  In a hot market this is a common phenomenon and often leads to panicked buying due to an arguably irrational fear of missing the boat.  At this juncture we could have stopped our search and waited for prices to go down.  During our initial home search in 2006 we were advised by many to halt our search and wait for the market to cool.  However, had we done so the $355,000 we paid for our house in Spring 2006 would have been more like $425,000 in the deepest thaw of the market in Fall/Winter 2008 and $475,000 in our current market.  Although I understand that prices will slow at some point and possibly even drop, we as a family really needed to move and I didn’t think we could wait the extra year or longer for a theoretical price drop.  The beat goes on.  A few weeks later we received an out of character email from our busy agent.  A house was coming onto the market that was “perfect” for us.  At this point in the search she was not interested in unrealistically raising our hopes and she had probably given up on us to some extent.  Like the obsessed maniac I’d become, I did a drive-by of the property at 7am the next morning before the rest of the family was awake.  The Beach location was perfect and while not the most traditional of layouts, the house had everything we wanted – 3 levels with a wonderful top floor office for my husband, 3 bedrooms, 3 bathrooms, 2 parking spots, a basement suite with separate entrance and a partridge and a pear tree.  There was no mud room and the main floor space wasn’t as large as I’d ideally wanted.  However, the lot size was big enough for a family room extension down the line and it was much more space than we had now.  The list price was $749,000 and we buckled down for another bidding war.  Offers were due two days after the house went on the market and no open houses were scheduled. When houses don’t have a full week of market exposure there are often fewer potential offers as buyers have so little time to get organized.  We were ready to move quickly and a small optimistic part of me hoped we would be the only offer.  However, the house had sold in multiples for 70k over ask three years ago so the practical side of me knew other bidders would come out of the woodwork.  To our complete surprise, dreams can come true in the Toronto real estate market.  We were the only offer and managed to buy the house at asking conditional on home inspection.  After a successful inspection the next day, the house was ours.  Forever.

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5 Responses to “My Search: A Tale of Six Offers”


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  5. Awesome Story Says:

    Wow… sounds like your dream came true. Congrats… I hope you have many wonderful years and memories in your new house! 🙂

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