Real estate called where it’s at — Toronto example similar to what’s happening elsewhere

The following is an abridged version of an article reprinted with the permission of the Toronto Star, dealing with the intricacies of real estate transactions. While the scene is Toronto, it could happened anywhere in Canada, especially Winnipeg where multiple offers are not uncommon. What is shown is that dealing in real estate is not for the fainthearted and involves substantially more than putting up a lawn sign and hoping for the best. It also illustrates the value of using a professional REALTOR.

by Jennifer Wells

Toronto real estate remains defiantly buoyant, high on the loft of helium. So far, the real estate action remains singular in its upswing. The stock market does not boom. Real estate is where it’s at, baby.

In High Park, or more precisely Roncesvalles Village, we observe a case in point. A house pops up for sale on Grenadier, “between Ronces and Sunnyside,” which is how the locals check their bearings. Sort of like real estate GPS, where the western position of a home, vis-a-vis Roncesvalles, is mentally valued higher than one positioned to the east of the avenue.

This particular house — detached, blown up and out the rear in a major reno some years back — contains two full apartments. So it goes on the market in the highs sevens and sells for nine and change on the day of offer.

The sound around these streets, where the residents have become inured to real estate price escalation, is akin to the chattering of squirrels exclaiming over the discovery of a cache of nuts. Can you believe it? What happens when they eventually sell? Will they get their money back? Like, a million? Real estate, it seems, is all anyone wants to talk about. That, and the unavailability of contractors.

Some recall that bubble some time back. The one in 1989-90. After which it became not uncommon, if not exactly fashionable, to be negative equity. Have we gone mad? Again?

One block south of the blockbuster sale, a once stately home goes on the market. The seller — or more correctly sellers — have surveyed the market, searching for “comparables.” The buyer — or more correctly buyers — have been circling the neighbourhood for weeks, months, even years, strategizing, calculating. The drama, as is required, includes agents for both sides. There will be winners and, perforce, losers. Let the game begin.

Trish Brennan is dressed in black pants and a taupe trench coat, a serious uniform. She does not do glitz. Next month will mark Brennan’s 30th anniversary as a real estate agent. She has witnessed, she says, “The ups, the downs; the gruesome, the not so gruesome.”

Brennan schleps her Royal LePage sign to the sidewalk, trumpeting today’s open house, 2 to 4. She has short, sandy hair, pearl studs in her ears. Her manner is no-nonsense, but friendly. She defines her territory: Bloor Street to Lakeshore; Parkside to Sorauren. “That’s my farm,” she says, making air quotation marks around “farm.” Brennan lives in the neighbourhood and knows it well.

This particular property has presented a challenge. The owner, who purchased the home in 1960 — for $13,000 — is ailing, and moved out in February. His children (three daughters and a son) have been grappling with what to do with the property, not always amicably.

Brennan has distributed 3,000 flyers throughout the neighbourhood advertising the open house. 

Brennan steps into the entranceway of the house, and right away, you understand the enormity of the task at hand. The house is dank, and the cool, sunless day does not help. The place has been excavated, a process, one of the sellers will later say, that involved filling 10 large dumpsters. Ceilings sag, leaded windows, wow, slats are exposed here and there. There’s extensive water damage in the upper rooms. 

In the basement, a hose weaves its 

way into the backyard via a hole punched in a windowpane. A particularly distressed bathroom suggests decades-long resistance to cleaning products, to say nothing of the collapsed plaster and makeshift plumbing. A bucket sits in the bathtub, and one wonders if it is used for bathing.

Scraps of paper remain stubbornly stuck to floors. The weight of expunged paper has been assessed at 35,000 pounds.

The place hasn’t been heated for years. There’s a cracked radiator on the main floor. Tadeusz, the owner, took to spending the winter days in the upper rooms, warmed by electric heaters.

Running from the hot water tank in the basement, up and through the banister to the second floor, across the riser of the top step, then drilled through a door and fed to the back of the bathtub, are two half-inch copper pipes. Brennan has stuck signs here and there: “Be careful!!! Watch out for exposed plumbing on the stairs.” The pipes are duct-taped to the wall.

Brennan is not without a sense of comic flare. When one walk-through queries this oddness, she dryly replies, “They’re trying to highlight the fact that they’re copper.”

On the third floor, a sign on one doorway advises that the occupant is sleeping. “Please do not disturb!” One potential buyer says this twist raises the house’s “creep factor.”

There are no fluffing opportunities here. Still, for anyone with the vision to really “see” the home, there is great potential. The carved mantle in the living room, the pocket door to the dining room, the stained glass. Cara Thomson and Peter Wong, who live nearby on Indian Road, are headed out of the second-floor parlour, with its arts and crafts oak fireplace topped with little cupboards. “We’re looking for something that’s unique,” says Cara, “so we can put our own mark on it.” This could be that sort of place.

As Brennan sees it, there are three types of potential buyers. One: The young couple who desires, but cannot afford, the big High Park house, and who sees the property as a long-term work in progress. Two: the couple/family who can afford to throw a lot of money at it right away. And three: the contractor looking for a fix and flip. In Brennan’s mind, the last option is the least likely. She thinks the house will sell at too high a price for a contractor to make much of a return.

Brennan tidies her spec sheets in the foyer. She keeps her coat on. She will greet 63 sets of people on this day and will return tomorrow for a repeat performance. She has her lines. To the question “Are you the agent?” she replies, “I am indeed. Are you the buyer?”

The Royal LePage office at Bloor and Windermere in Bloor West Village has a clinical air, running to antiseptically gold-framed Group of Seven prints.

Brennan seems anxious. Gathered this evening are two of Tadeusz’s daughters, Grace and Alicia, and their husbands, Bernie and Andrew. They would prefer that surnames not be used, a dispensation granted out of respect for their father. Not uncharacteristic of a man of his time and place, Tadeusz in his later years squirreled his possessions around himself and fell into the habit of ferrying home items in poor repair that had been put to the curb by other homeowners. Brennan counted 14 broken trundle buggies.

For Grace and Alicia there are clear memories of the home when it was handsome, even beautiful. Their brother, who still lives in the home, is not part of the selling group tonight. He has made it known he would prefer that the house be kept in the family.

The siblings had additionally discussed fixing up the house themselves, then selling it. Bernie sighs heavily over the sheer exhaustion of simply emptying the place.

Eight offers have been registered. Four will be presented in person. Four have arrived by fax. Bernie, professionally dressed in a checked jacket more rust than brown, and fashionable specs that he keeps removing, is the alpha male of the group. He has researched the area thoroughly and frets that, at $435,000, the house has been significantly under-priced. A dilapidated house two blocks over had been cited by Brennan as the closest approximation to the property. Bernie is not satisfied. “Appraisers never go back two years when there are no comparables,” he says. “It’s a no-no. It’s a no-no.”

Chris Chopik from Bosley — cheery, fresh-faced, young — presents first, 

entering the small meeting room, standing at the head of the oval table, laying down his client’s offer. Brennan, her glasses slid low on her nose, reads the terms — certified cheque, conditions, closing time, inspection — leaving the nut, the offering price, to last. Chopik’s clients, a couple with a baby, live in Montreal. “My clients haven’t seen the house yet,” he says. No one reacts with alarm except, possibly, the reporter. The offer is 410.

The room is silent, all awaiting the sound of the proverbial putt dropping. The players maintain their game faces until Chopik is out of the room, the door closed.

“That’s so low,” says Bernie. “That’s nothing. Forget it.”

Alicia, stunning with her upswept blond hair, her blue eyeshadow, softly wonders aloud, “Maybe we should have listed it for what we wanted.”

The initial plan had been to set the price higher: 479. 485. Now the sibling-spouse collective fears a mistake has been made.

In Old Montreal, Amy and Erik Schaefer have been in serious house-hunting mode for about a month. Both have family in the Toronto area, and Erik, a management consultant with a large firm, has an opportunity to relocate here. They have an eight-month-old baby, Martha.

Having scoped out a couple of neighbourhoods, they have chosen Roncesvalles for its family-friendly feel and proximity to the park. Erik is dubious about the Toronto market. He has done his homework after a period of what he calls “linear pricing,” during which average prices in the city have approached, then breached, the $300,000 barrier, he has observed “funny jogs” in the market.

As luck would have it, the Schaefers find themselves trying to find a home at precisely the time when the Toronto market is recording its second-highest home sale record ever. To say nothing of this newfangled multiple-offering, bidding-war business.

Erik and Amy are wary. Their strategy: With a belief that there is little, if any, upside left, they have been hunting for a solid house that needs work. Erik calls it the “ugliest house on a nice street sort of strategy.”

Amy sent her brother-in-law through the property in advance of the offering date. On one hand, he was terrified by what he saw. On the other, both Erik and Amy could see from the photos he took a phenomenal opportunity. “It’s one of those beautiful old houses,” Erik says.

The Schaefers calculate that it will take a bare minimum of $90,000 to get the house to a livable state. They figure a similar house, move-in quality, would go for $550,000. Working backward from there, they decide to offer 410.

The Schaefers have set themselves clear guidelines. “This is what we’re comfortable with. This is what we feel the value of it is. This is what we’ll bid.”

Can they keep their cool?

Jose (Joe) Ganhao from HomeLife who has been in the business about as long as Brennan, has brought his son in now to work with him, and on behalf of his client takes an offer of $450,800. “They threw in the extra eight,” says Brennan, perhaps bemused by the quirky pricing. Even though the game being played is headed toward half a million dollars, a thousand bucks here and there can play tricks with the mind. “These people know what they’re doing,” says Joe, who is completely without artifice. “They’re not buying on emotion.”

Reza Afshar, young, smooth, handsome, dark hair, dimpled chin, Coldwell Banker, calmly makes his pitch. He represents a family of four: mom, dad, two boys. “This is not a contractor,” he says, knowing that in some of these cases the seller is as concerned about the buyer as they are about the price. Well, perhaps not quite. “What’s the price?” asks Bernie. Brennan points out that she hasn’t made it to the nut graph yet. She does soon enough. “We have a price of 505.”

The sellers are looking at a near $100,000 spread among the first three offers. No number has brought a sense of jubilation to the proceedings. Bernie is poring over papers. “Shoot,” he mutters. “We should have asked if they had been looking in the area.” Without knowing the first thing about the bidder, the seller is trying to determine how badly the bidder wants what he’s got.

If one were looking for a character in the real estate category in Roncesvalles Village, one would very likely come up with the name Chander Chaddah above all others. And, lo and behold, look who blows through the door.

Sandals. Backward facing poorboy cap. Graying beard. The man looks as though he has spent the past winter in Goa and has just been airlifted back to the land of Give Me Money.

Any thinking along these lines is hopelessly flawed, for Chaddah last year was the No. I buyer’s agent in WO1 —Bloor to the Lake; Dufferin to the Humber — and just about everybody knows him in these parts. Chaddah has been an associate broker for 19 years. He works through the Sutton Group.

Let us drive home the point that Chaddah is the antithesis of agents named Bunny or Sis or Pony who ply their trade buying and selling multi-million-dollar homes in multi-million-dollar neighbourhoods.

Before Brennan has a chance to read through the particulars, Chaddah primes his audience. “I have a good offer for you, but when you have eight offers you need a great offer. Mine might not be good enough.” The offering price? 483. From Andrew to Alicia to Grace to Bernie, Chaddah can scan four inscrutable faces. There is a feeling of elation, as if, having reached 505, the bids yet to come were headed on an escalator north. It’s sort of a drug-like experience, or possibly gambling.

“My clients like the house,” says Chaddah. “It’s only going to be about the money, let’s face it, right? Everything is going to get framed by the money.”

Bernie asks the seminal question: “How flexible are they?” To which Chaddah answers, “They’re not.” Brennan wants to know, “If we’re going back, are you interested?” Chaddah indicates he wants to be kept in the loop. He’s a chatty guy. “I thought I had seen everything before I saw those copper pipes running through the staircase.”

Brennan quickly runs through the four remaining faxed offers: 450; 450;435; 450, the last bidder represented by Brennan herself.

Alicia turns to Brennan. “So, what are your thoughts, Trish?”

“Obviously, we want to deal with the top two,” says Brennan. But you never know, one of the other bidders might be interested in coming back for a separate bite on the line. “I know my guy won’t go.”

Brennan hasn’t yet discounted the possibility that the sellers, disappointed by the offers, will reject all bids out of hand and go back to Plan A. That is, doing a reno themselves. Brennan appears pale at that thought, and without saying a word it is clear that getting the process this far has been about as much fun as cat herding.

It’s 8:14 p.m.

And there’s a hitch. A big one. There’s no insurance on the house. Never has been. There’s a monster oil tank in the basement and knob-and-tube wiring throughout. While the agents mill about the front office awaiting instructions, the sellers grapple with a clause amendment that clarifies the uninsured state of the property. Joe Ganhao of HomeLife figures the bidders must be in the same range, otherwise why would they all still be there? 

Brennan informs the group that Chaddah and Afshar have the highest bids. Ganhao wants to know when she’s presenting again. “Half an hour.” That’s not much time to figure out the insurance mess. Afshar turns to Brennan. “So what happens when the house burns down?”

“Litigation, I guess.”

8:50 p.m.

Afshar is inscrutable. Cool as a cucumber. “Most of these homes have difficulties. One way or another, it gets done.”

Chaddah is thinking out loud to his client: “Imagine putting your house up for sale and there’s no insurance? What if somebody trips over that stupid pipe?” Chaddah updates his clients: “There are two of us who are basically in the game and a couple who may do something.” Ever resourceful, he tries to track down a possible insurer.

Chris Chopik phones Amy Schaefer in Montreal and advises her that the top two bidders have been invited to come back. Are she and Erik interested in upping the ante and joining them? On a previous property, the Schaefers found themselves up against a competing prospective buyer who, first offer, went $30,000 over asking. Of course, they didn’t know that at the time. In hindsight, Erik Schaefer tried to fathom the rationality behind a $30,000 jump on a first-round bid. Now, they’re looking at a property that consists of floor joists, rafters, a bit of property (the lot is 125 feet deep) and no parking. Amy and Erik have a quick answer for Chopik: Forget it.

9 p.m. The Royal LePage 

receptionists depart

Chopik leaves.

Ganhao: “I’m out of here.”

Brennan turns, queryingly, to Afshar. Well? “We’re in,” he says.

Chaddah hasn’t heard back from his client, and he has two other offers to present tonight. He prods Afshar: “You wanna go show what you’ve got?” On this, Afshar is clear. No. He’ll wait to see if Chaddah is in or out.

Not more than two blocks to the east, across Roncesvalles at 32 Lynd, Gala Chan is talking on the phone to Chaddah. Chan and her husband, Lee Chiang, paid $232,000 for their home seven years earlier. They have two children.

In their years on Lynd, the couple has transformed what had been a claustrophobic house with punky rooms into a gracious and stylish residence. It is their first house and they love it and the experience has made them unafraid of taking on another renovation.

Why leave it?

Lee Chiang asks the same question. “I keep telling her, ‘We’re all done here. What are you doing? Let’s enjoy this place.’”

A partial answer may lie in the $8,000 near-term loss Chan took on her mutual funds. You put money in. You lose it. What kind of strategy is that?

Investing in a larger home, trading up from a two-storey semi to a three-storey detached, holds investment appeal, if they can find the right house at the right price. They have no interest in a fixed-up $800,000 home. Nor, they say, are they in that bracket. Chaddah’s mission has been to find what Chan calls a “gutter  ... the real disgusting thing that no one wants.” He’s been on the case for close to two years. He has not been given a price point, but Chan has monitored home sales in the neighbourhood with a diligence that mothers normally reserve for newborns; $600,000, she has determined, is too much to pay for a “gutter.” Still, regardless of the amount of work required, Chan and Chiang estimate they’re looking at a minimum half-million-dollar investment.

Chaddah took Chiang and Chan through the property in advance of the open house. Their first reaction? They were not turned off at all. Chiang: “It’s all extraneous.” Chan: “It’s all cosmetics.” They were surprised that the house was listed at such a low asking price. A comparable home, they believed, would be listed at $500,000 minimum.

The strategy: Go in with “a strong first punch.” The couple told Chaddah that they were thinking of a $550,000 offer. But, then they found out that their much-loved contractor was unable to work on it for a year. Chan called Chaddah with the deflating news that she was much less interested but still wanted to play, putting in a “peace of mind” bid. If the house went for a song, she wouldn’t forgive herself.

Chan decided to put in an offer of $480,000, to which Chaddah replied, “That’s totally cool.” But Chaddah likes off numbers. The offering bid was bumped to $483,000. A low-ball bid in Chan’s view, but still nearly $50,000 over asking.

Chaddah calls Chan with the surprising news that the peace-of-mind bid has placed them in the top two.

Though she initially indicated she didn’t want to bid more, Chan finds herself now mentally engaged in a race for a house that’s comparatively cheap, though she does not know where the competition is. 

She totally wants to win. “It’s the competitive thing in me,” she says. Chan’s fast math: believing the house is worth $550,000, she wants to offer $510,000 and then, thinking of Chaddah and his odd lot numbers, she raises the ante: $511,000. “Is that it?” asks Chaddah.


Back at Royal LePage, Bernie is scribbling down numbers on a piece of paper, bets from the four on where Chaddah will come back at. 505. 500. 506. 513. Chaddah re-enters. “Trish says to come in and show you what I’ve got. There’s 511.” Afshar, who opened so strongly with the top bid, returns with 507, a mere $2,000 increase from the opening offer. Alicia asks: “Is that definitely the best?’


It is left to Brennan to state the obvious. “I would suggest that there’s no more money in the pot.”

It is 10 p.m. and Bernie is wondering aloud about the “negative halo” on his father-in-law’s house.

Visions of getting 580, maybe even 6 for the house drift silently away. 

Andrew, who has said very little, pipes up. “To me, we should have listed it at 540.”

What if a contractor had been hired. What if $100,000 had been poured into it. “Could we have flashed it up?’’ wonders Bernie. And, then maybe the house would have then fetched 670. And, then and then.

Brennan puts her spin on the outcome. “There will be gasps in the morning from agents I know.”

Over at 32 Lynd, Gala Chan and Lee Chiang address the task of putting their beautiful home on the market. They decide to list it at $429,900. Chander Chaddah posts an intricately detailed spec sheet on his Roncesvalles Village website, right down to the over-sized double casement windows and stainless steel gas stove. Gala’s friend Maggie advises her on staging the house. Pounds of clothes are hauled out of the closet. Gala is advised that hanging just a few pink items will show off the space to best effect.

In Montreal, Amy and Erik Schaefer are informed of the Lynd property by Chris Chopik, who goes through it with Amy’s brother-in-law. They’re interested but now overwhelmed by the process. “The difficulty with the multiple bidding situations is that it takes irrational behaviour by only one player to completely skew the market,” says Erik. The Schaefers are stunned by what Tadeusz’s house sold for.

On June 8, Gala Chan and Lee Chiang sell their home for $512,000, $82,000 over asking and $1,000 more than they paid for their new home.

This week the Schaefers move to Toronto with baby Martha. They have not, as yet, found a house.