My First Bidding War in Toronto (But Not My Last)

Last week was a pretty intense week including a home inspection and my first bidding war in Toronto. But let me start from the beginning.

Two weeks ago my HB and I went on our third round of house hunting. It was on a weekday night and up until that point we hadn’t seen any houses that we wanted to put in an offer on. We were scheduled to see two houses that night, one semi-detached and one detached, and honestly they both blew us away. Here’s what the first house looked like.

bidding-war-toronto-1

It was in the east end of Toronto, close to transit and it was completely renovated. Although it was semi-detached, it felt pretty spacious and it helped that it had two floors plus a basement. That being said, my HB has his heart set on a detached house.

I’m a bit more flexible, but he really likes the idea of having a house that he can have a studio in so he can make as much noise as he wants. A semi-detached house would definitely limit his noise making abilities.

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Although we live with way more neighbours than a semi-detached house in our current apartment, we’re still pretty lucky. It’s made of concrete plus he’s set up his studio next to a wall that’s a machine room on the other side. We’ve been here almost two years now and we’ve never gotten a noise complaint.

This house was listed at $494,500. Although I really liked it, my HB just wasn’t feeling it. It ended up selling a week later for $576,000.

Part of the reason my HB wasn’t feeling the first house was because he totally fell in love with the next house we saw. Hell, so did I. It was this cute bungalow in the east end of Toronto, it was close to the subway and it was on a corner lot. It also had a finished basement my HB could easily convert into a studio or we could convert it into a bachelor suite we could rent out later on.

bidding-war-toronto-3

The offer day was less than a week away and our realtor figured it would go over asking but still within our budget. We didn’t want this place to slip through our fingers so we booked a home inspection for a few days later and crossed our fingers that we’d be homeowners sooner than we thought.

Let me explain something for any of you who are wondering why we got an inspection before putting in an offer. In a normal real estate market you would see a house, put in an offer (usually below asking or at asking price), but would have a contingency that your offer was only valid if the home inspection passed. Not in our case.

Toronto’s real estate market is aggressive. If you see a house and want to put in an offer, you usually only have a few days to get everything sorted. You also have to give a clean offer (without contingencies) otherwise the sellers will just ignore your bid. So, we shelled out $500 for a home inspection on a house we might not even get. Annoying and expensive, but that’s just how it is right now unfortunately.

Our home inspector was a pretty nice guy and walked through everything with us. It also helped that my HB and I have seen a ton of home reno and inspection shows so we knew what things to look for and what questions to ask.

Overall, he said the house was in good shape but there was a definite need for grating to prevent flooding in the basement. Grating isn’t cheap and it was a concern because the homeowners’ realtor let us know that the owners had had two floods in the basement in the last 4 years. Even knowing this, we wanted to go through with putting in an offer and would just budget for this to be fixed in the future.

On Tuesday night, we rushed to the sellers’ realtor’s office to put in our bid before 6 pm. Considering I got off work at 5 pm and the office was 30 minutes away, we were definitely freaking out in the car praying we wouldn’t be late.

Our realtor was going to be there on time nonetheless, but she told us that it always looks good when the buyers are there to make their offer that much more serious. We got there just a few minutes after 6 pm and waited in the car. And then continued to wait. I think we waited a good 30 minutes until we got any news. There were 3 other offers and ours was the lowest. I was pretty surprised because I thought our offer was pretty strong. Apparently not.

Nevertheless, the sellers’ realtor asked everyone to up their bids as they were are all relatively close to each other, and then they’d make their final decision. We went up a tiny bit, but I still knew it would be a miracle if we got it. I just couldn’t help but wonder what other people were bidding and how much would the house eventually go for?

Like I expected, we were told that we didn’t get it and the buyer who did win beat us by a long shot. The next day we found out exactly how much that was. The house was listed at $519,900 and it sold for $591,500. That’s over $70,000 over asking price! For a bungalow with possible flooding in the basement! I just couldn’t believe it.

There is no way that house is worth that much, but I guess it was to those buyers. In my mind they overpaid for that tiny house. But on the upside, once we heard the sold price, my HB and I were a little relieved. That number far exceeded our budget so it was obvious that this house was not the house we were meant to buy.

Just as there are other fish in the sea, there are other houses in Toronto and I’m sure we’ll find our house one day (but hopefully soon!).

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Showing 20 comments
  • Rob
    Reply

    Well Jess, as you say, the bungalow was a nice house but still had issues and eventually sold for higher than it was worth. I would never have bid on it. Why? Simply because of it’s history of flooding problems. That’s a red flag in my book. In fact I would not even look down in the area that you’re looking for that reason. Over the last number of years Toronto flooding has got worse. So much so that the city passed a bylaw mandating that all of Toronto home owners divert their eavestrough downspouts from going into the sewer system but instead out onto their properties, so as to relieve the water flow buildup going south, down where you guys are looking. Instead, I would look in the east end, close to TTC, but further up north. But that’s just my preference.

    One other suggestion: you might also wish to look for houses that are for sale by the owner, rather than being represented through their agent. You might save some $ that way. However, be advised, if you have signed any agreement with your agent then he still might charge you his commission even though he might not have found that house for you (but at least you might save on paying for the selling agent’s commission, as well as perhaps avoiding a bidding war).

    • Jessica Moorhouse
      Reply

      Ya, our realtor told us that flooding in lots of these homes is common because most of the time they don’t have proper grating or they’ve lowered the basement floor too low. It’s definitely something we’re keeping in the back of our minds. Thanks Rob!

  • Jordann
    Reply

    I’ve said it before, I’ll say it again: You’re made of stronger stuff than me to enter a bidding war in Toronto, that just sounds terrifying. I’m sorry you guys didn’t get the house you were hoping for, but it also sounds like it wasn’t meant to be.

    • Jessica Moorhouse
      Reply

      It’s not even a choice, it’s just how it is here unfortunately.

  • Taylor Lee
    Reply

    I saw an open house a couple weekends ago for a 1-bed listed for 400K. By the time I walked in the door the agent said there was already another offer in for 450K. Suffice it to say, we chose not to contribute to the imminent and awful bidding war that was happening there.

    • Jessica Moorhouse
      Reply

      Was it a house or condo? It’s pretty similar to our experience. Every time we see a place, not too soon after to we here about people interested in putting in an offer, or there are other people seeing the place when we are to stir up some competition.

  • Veronica
    Reply

    Hi, I was really stressed when we bought our house last summer. We luckily decided to move closer to my then fiancée’s family in Lindsay Ontario. But, what I learned about overpaying. Any amount that is over the amount the appraiser states is the value of the home must be paid up front along with whatever they had agreed to out down as a down payment. Our home was private sale and because of that the bank requested that we have an appraiser evaluate the home prior to issuing the mortgage, luckily he valued the home at a thousand dollars more than our offer. I wish you the best of luck and I hope that something comes up for you guys!

    • Jessica Moorhouse
      Reply

      That’s definitely an important thing to consider, which is why I won’t ever over pay on a place. Although people are paying over asking, the asking prices on almost all of the places we’ve seen are below market value. Still, lots of people are getting caught up in the bidding wars and end up paying well over the place’s market value.

  • Lisa Boo
    Reply

    I’ve been loving these house-hunting posts! My BF has been wanting to buy a house in Toronto for the past year or so. I’m going to refer him to your posts so he has a better idea of what to expect.

    Good luck to you and your husband! I hope you find the perfect place.

    • Jessica Moorhouse
      Reply

      Awesome and thanks so much Lisa! House hunting in Toronto is crazy, but hey, I know there’s a silver lining to this all. It will have all been worth it if we find a place of our own eventually.

  • Lauren
    Reply

    I’m only familiar with the Canadian real estate market from tv shows, but man, it sounds so intense! The prices for some of the houses is just bananas when compared to what you can get elsewhere. Hang in there- I’m sure the perfect place is going to come up eventually!

    • Jessica Moorhouse
      Reply

      It’s totally crazy here. It’s also crazy in Vancouver but there aren’t bidding wars, houses are just stupid expensive.

  • Aleksandra Sagan
    Reply

    The idea of a Toronto house bidding war terrifies me.

    When G and I were looking from Vancouver just to rent an apartment in Toronto starting last June, we got outbid on the first rental place we looked at. Outbid on a RENTAL. It was craziness.

    I can’t even imagine the stress of house hunting.

    Seems like you’re handling it pretty well so far! Good luck to you guys!

    • Jessica Moorhouse
      Reply

      Outbid on a rental? I guess the rental market is just as intense as the buying market.

  • Rob
    Reply

    Hi Jess. Just another small comment relating to house buying that you (and possibly your other Canadian blog readers) might benefit from, if you don’t know about it already. It concerns a First-Time Home Buyers’ Tax Credit.
    Here’s the link: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html

    • Jessica Moorhouse
      Reply

      Oh I’m well aware of that, the one big perk of being a new home buyer. Thanks for sharing Rob!

  • Reply

    We bought our house in the east end of Toronto in 2009. We saw the house before it went on the market and put in an offer during our one and only viewing. We had to raise our bid after another bidder joined. Luckily, we got the house! Before that, we had bid on and lost 2 houses. I found this hard because to put an offer on a house, you have to imagine yourself living there…it becomes very emotional! It can be a very difficult process, but hang in there, it will work out. It sounds like you guys are keeping calm and being confident in knowing your budget – I think this is the most important part. Good luck!

    • Jessica Moorhouse
      Reply

      Thanks! It is a way more emotional process than I thought though. Hopefully we’ll find something if we just keep at it.

  • Mo
    Reply

    I am trying to find something in Mississauga and I have been involved in bidding wars on two different properties. It seems that a lo of buyers are dumb and don’t understand the real value of money. Having a low interest rate does not mean you overbid on property by 30 thousand dollars!!! They don’t understand and don’t see it coming.

    • Jessica Moorhouse
      Reply

      Totally agree. It’s crazy the amount of money people are willing to throw at a house, when most likely they can’t really afford to pay that much and they’re just expecting housing prices to keep climbing forever. At some point, it will be a low market again and house prices will fall. Good luck with your house search though!

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