Jeffrey I’m here again with Patrick Rocca who’s a real estate agent in the Toronto area. And Patrick, why don’t you introduce yourself and let us know whereabouts you work and what you specialize in?
Patrick Sure, good morning Jeff. Patrick Rocca with Bosley Real Estate. I predominantly work in the central core of Toronto specializing in the Leaside & Davisville markets. My office is right here in the community as well.
Jeffrey Perfect, and Patrick I know we’ve been talking for quite a while, a number of years now. And you’ve been doing this for, are you onto your 28th year here? Yeah, and I bet because the market over the past year has been, well even the past three, four or five years, it’s been a little bit crazy. I’m thinking back to one year ago around February 2020 when nobody could have predicted what was about to happene with the pandemic. Now we’ve been through the first phase lockdown in 2020, then the summer and into the fall and now we’re into 2021 where a lot of people were predicting, the market was going to decline. In fact, we’ve seen the opposite. Maybe you can tell us a little bit more about that.
Patrick Yeah, and you know, we have had several discussions, more specifically in the last year, with regards to the pandemic and its impact on the market. As I’ve said several times, my crystal ball is broken. Honestly the, the market just continues to defy all odds. When you think things are gonna slow down they just pick up and you know, I hate to sound like a broken record, but it’s truly been driven by lack of supply, and a ton of demand. There just literally is no inventory. I mean for example right now in Leaside, there are only eight houses for sale. In my opinion, I can’t even remember such a historic low. I’d never recalled single digits in terms of listings even over the Christmas season. And you’ve got a lot of buyers out there. I had a semi-detached last week, we listed it on a Thursday, over the following five days we had over 45 showings and we ended up with eight offers. We got substantially more than what we anticipated we were going to get.
Jeffrey Yeah, and one of the criteria of a healthy market is a good balance between buyers and sellers. And like you said, I think over the past 12 months, there’s been a real pent up demand among buyers who are maybe holding off because they weren’t sure of their economic situations. Or, they were not really comfortable with the way that properties are being shown. And one of the criteria that I’ve heard, is that real estate agents use the number of offers they get on a property. That’s not necessarily a measure of success, is it
Patrick Honestly, it really depends. It is a measure of the demand for sure. I know of another property in the Lawrence & Lesley area this weekend $2 million property and it had 17 offers prior to the offer date. Offers weren't till tomorrow. They ended up getting 17 offers on Saturday, in talking to the agent, within the first 24 hours there were over 50 showings. So it’s clearly an indication of demand. And again, supply seems to continue to get tighter and tighter. Even in the middle of the pandemic when numbers were coming down (thankfully they are back to going up), I was telling people if you can and if you're comfortable do so, it is a great time to sell. There are buyers out there and we’re using obviously very strict protocols around COVID and showings and all that sort of stuff. But there are many, many people looking to buy.
Jeffrey Yeah, and I think that that’s a key indicator of, you know, the strength of the market. It's not only in residential houses, but also in condos, which have staged a bit of a calm comeback. Can you let us know a little bit about what you’ve seen in that area?
Patrick Yeah, the condo market’s actually come back slightly. I started noticing it around mid-December, interestingly enough, because I had some clients that were actively looking, calling me in November and thinking, you know, let’s get into this in the new year. They thought that there were going to be some opportunities, maybe even some more price drops. Lo and behold, the market started coming back downtown. I mean, there’s still a lot of condos on the market, but condos that were sitting for 60 days, suddenly were selling. We had one buyer in particular, we took out two weeks ago tried to book seven showings and out of the seven, four of them had sold already.
Patrick And I think one or two we couldn’t get into. And then one of the other ones that we did see, that had been on the market for awhile, we ended up selling it. So I mean, there is a bit of a surge and a bit of a comeback in the condo market now as well. I think with the positive news about the vaccine and the anticipation that, you know, we could be maybe be turning the corner in terms of that later this year. So I think that that’s positive news and it’s sort of made investors say, okay, let’s, let’s do this. So I think there’s some positive there.
Jeffrey Yeah, and like we’ve been seeing, I think that people are still getting used to the way the market is, even in terms of having very strict protocols in terms of the showings. So as you’ve said, there were sometimes 50 showings over a weekend. Each agent has maybe a 15, 20 minute or half hour slot. If they miss their slot, I’ve heard of competition among those agents who's clients were a little bit late and maybe they go over and into the next slot. So it’s almost getting, you know, like you have to be exactly at the right time at the right place to get the showing.
Patrick Yeah, and most agents are respectful of the time allotments. I mean, with my listings, I’m not doing any double bookings and I’m only allowing 30 minutes showings. You do get the odd agent that, you know, will show up late and not announced. So that can be frustrating, but that’s, that’s par for the course anyways,
Jeffrey In terms of your advice for sellers now like you said that the vaccine will be here it’s being distributed right now. People I know are actually getting their first dose. So under that, what would your advice be for sellers who are looking to list in the spring market?
Patrick Well, we are in the spring market and I’ve said this before, my concern was is that we were going to get inundated with a bunch of listings in the new year, that did not happen. So what I’m saying to people now is if they have the stomach and if they're comfortable with the current situation, they should list sooner than later. I mean, again, there’s always that fear that, you know, come April or May when people really think it's the spring market, there could be more product? But it’s a catch 22 for a lot of sellers. I have sellers right now that are looking to buy out of the city or you know are looking for a specific property in the city and they can’t find it so they can’t sell. Or they don’t feel comfortable selling until they have purchased. So there’s that as well. If I could just find product for some of my clients, I would have listings. But I’m telling people if you can, and if you are comfortable doing so, it’s a great time to sell. There is nothing on the market and there’s a ton of buyers.
Jeffrey Yeah, and that’s great advice. Even putting aside what’s happening right now obviously you’re looking to sell what you can to get the most dollars forr your product. Again, a bit of a log jam. If you’re looking to stay in the market, you will then have to purchase something. But you know, if somebody says what are the number one things that I could do in selling my house in the next sort of four to six months, what would be some of the things you’d suggest
Patrick In terms of getting it ready for sale? I mean, that really has not changed. Four things have to be in place when you’re selling a house. Number one is it has to be properly priced. And it has to show well. So presentation is a real big factor marketing and timing. And I mean, you know, marketing has changed dramatically in the last year with, with the onset of COVID and how we expose homes to the open market. I’m listing quite a big home in the next 30 days, I'm going to be doing a virtual tour, MatterPort tour for plans, etc.. And even in this particular listing, we’re gonna to be doing a drone because it’s a nice piece of property. You have to really showcase the home properly to eliminate the non-serious buyers before they just showing up at the house. In order to do that, you have to have the right marketing materials for this situation.
Jeffrey And that’s a really great point. I don’t think we’ve talked about that enough. eliminating or limiting the amount of non interested buyers in, in this market. There are so many people who are shopping online and, you know, may be interested, but not committed to buying something. And so, like you said, having the right materials to kind of focus in on, maybe the right person or family who this product would be useful for.
Patrick Yeah, I mean, it’s very important from everybody’s standpoint for health reasons for us as agents, for the sellers and for the buyers. I mean, if you can eliminate as much contact as possible, I think it only benefit everybody
Jeffrey And going back to something you said about pricing, I’ve seen a bit of a trend come back and, you know, trying to generate multiple offers. So there’s a property in my neighborhood, which has priced quite a bit below what a lot of the comparables are priced at. It’s one of these sort of everything is priced around, say 1.3, 1.4 for the median round there for comparables, this one is priced below 1 million.
Patrick And as a matter of fact, yes, I noticed that when he came to market and it’s not an area agent but I mean, there’s a saying in our business that you can’t underprice something, the market will take care of itself. Buy you do get buyers call us about it and they actually think they can get it for under a million. Well, it’s not going to sell for one million, one million two or plus. I’m not a fan of underpricing. I’m a fan of pricing of property at the market. You know, I had the semi that I had a couple of weeks ago that I just sold. I mean, we listed it just under 1,200,000. It was on a busier street, and we suspected we were going to get multiple offers. We got way more than we expected. I mean, so under listing that would have been much like the one you’re discussing them under a million and sometimes that can backfire on you.
Jeffrey Yeah, and one way I’ve heard it backfires, if you do get 37 offers, then there are so many different permutations and if the property is going to sell potentially higher than the market and the bank would appraise it for, those buyers would then be, you know, responsible for that difference. Is that correct?
Patrick That’s a hundred percent correct. I had one last year where we kind of set a record for a specific property, and yet it had a hard time appraising. I mean, I was representing the seller. So the seller was happy, but yeah, it was interesting. And you can run into those situations, I’ve had a few of those last year where your concern is, while you’re getting all these offers and you’re getting crazy prices, will it appraise, you touch wood. I have not had a problem with not closing because it didn’t appraise, but there’s always that risk.
Jeffrey And the risk to the seller is that if it doesn’t close, then they either have to go down to the second or third offer. Or I think from real estate agent experience, when you see an offer, you try to understand how leverage or how well equipped the buyers would be if something like this would happen. And so if they need to pull additional capital to do that financing that is available, even if it might be a lower monetary offer.
Patrick Yeah. I had a situation a couple of years ago when we sort of peaked there in ‘17 where a property sold. And it did not close because the market then tanked after they brought in the foreign tax and we ended up putting it back on market. So the individual sold it privately to a neighbor, which is always a mistake. And it did not close because the market tanked, because it wasn’t worth what the buyer paid for it when it closed. So it decreased in value. And so then the seller called me and said, I got a problem. I have to put this on the market now. And I just was very direct with him, I said, you know, the number I gave you back a few months ago, well, it’s not that number any more and you’re going to get a lot less. And we did, we ended up getting a lot less and ended up in a lawsuit. And, you know, obviously the seller goes after the buyer for the differential. And that can take ages to settle. Right?
Jeffrey Yeah, and it’s one of those things that I know some sellers do think about it. They think about, well, if I’m going to be saving this commission, I’m going to sell privately, I’ll put that money in my pocket. But the downside is, you know, I’m not saying it always can go this way, but if you do end up with a situation like that, how much is that worth in terms of saving the commission to lose a couple of hundred thousand dollars and be embroiled in a lawsuit?
Patrick Well, and that’s it. And in this particular case, I had talked with the individuals and you know, they were very grateful of my advice. And when they called me and told me that they had sold it privately and told me what they got, I said, well, that’s what I told you. You were likely going to get so congratulations. And the only thing I said was, I hope you got a big deposit. And there was no comment. They didn’t really address that. But then I found out later when it didn’t close, they didn’t get a big deposit. So, you know, there was an issue there as well. So yeah, to save the commission isn’t always worth it. I very rarely see that as a win, especially in this market, I mean you know, if just an example, the one that I sold last week, we never expected to get that. And let’s say that they would have accepted less privately, you know, what they would have given up that opportunity on the open market to get more and more than covered the commission, right.
Jeffrey Yep, I agree. And it’s one of the things where I never say, would you do your own dental work or would you do your own medical work? If you’re not a specialist in the field, you don’t have time, you don’t have the experience. And it’s people think it’s super easy to sell a house, but actually, it’s not. It’s relationships, it’s the time in the industry, it’s pricing, it’s the understanding of the area which is all folded into how the house is presented and what it’s priced at
Patrick A hundred percent. I mean, it really comes back to the agent and their worth and their value. And I know interestingly enough, I’m just doing my monthly newsletter right now, if you look at my personal stats from last year, I consistently got my clients approximately a 105% of asking and my homes sold quicker than the average agent in the area. And there’s a lot of value in that.
Jeffrey And just to clarify, you work both for sellers and buyers?
Patrick A hundred percent. Yeah, you know, obviously listings are my specialty. I mean, they’re obviously two different sort of attacks. And I do have a buyer agent that works with me that works with a lot of my buyers, but yes, absolutely. I work with both
Jeffrey Well, that’s it’s been great to chat again. We always end by saying, you know, where do you see the market going in? You usually respond that your crystal ball is broken, but anyway.
Patrick I mean, it still is, and it’s even shattered. It’s not broken, it’s shattered! I think when we last talked prior to Christmas, I was concerned about the beginning of the year and now honestly, it’s a great time if you’re in the market to sell. If you're a buyer, it’s very stressful for buyers right now. And that’s not just in Toronto. I mean, you go outside the 905 is just a stupid. I mean stupid in a good way. I mean, there’s stuff selling like crazy. You know, I don’t see anything changing short-term. I mean, if you look at CMHC, they came up with some crazy stat a week or two ago that said the market could drop 50% this year. Well, I mean, they also said it was going to drop 19% last year and it went up 14. So, I mean, I don’t think they know what they’re talking about, but the reality is, it’s very healthy. It’s a good time and rates are low and there’s good opportunity.
Jeffrey Fantastic. As always Patrick, if people want to get ahold of you, what’s the best way for them to contact you?
Patrick They can call me through my office at Bosley at (416) 322-8000 – emails, always very efficient as well because I have my phone attached to my body. It’s mail@PatrickRocca.com . The website is www.patrickrocca.com
Jeffrey Fantastic. Thanks again, Patrick. Really appreciate the overview and I know we’ll be in touch in a few months and we’ll see what’s happening towards the, the end of the spring.
Patrick That’s great and lovely talking to you and happy new year.
Jeffrey Bye bye.