I have no problem agreeing that the price of a home in Toronto is expensive. It’s why I spend so much time going through so many houses; I’m looking for value for my buyers.
Your home will one day be part of your retirement plan (as much as my financial advisor likes to play down that it’s not).
All that being said, I came across a townhouse in my neighbourhood listed at $998,800.
It’s crazy to not bat an eye at any home listed at a million regardless if it’s a townhouse or a detached. But when I looked at the photos of the townhouse, I had to wonder why it was listed at that price, and here’s why.
Over the past three months, The average selling price of a townhouse in port union and west rouge to be more specific is just under $820,000.
Seeing as this townhouse is priced higher than the average selling price, I looked at the finishings to see if it was above average.
What I found was a house with basic interior doors, and cheap laminate floors on the main level.
The kitchen cabinets were off the shelf builder-grade, foil-wrapped cabinets, and arborite countertops.
The appliances didn’t match – a stainless steel oven, and a small white fridge and dishwasher. The kitchen also lacked backsplash and task lighting.
Leading upstairs, you’re greeted by faded, worn, and completely outdated blue carpeting on the stairs. The old carpeting continued throughout the bedrooms as well.
The main bedroom does have an ensuite washroom, but there is only a single sink and original builder light fixtures, and counter.
Also missing from the primary bedroom is a walk-in closet.
Again, I’m not saying the house is bad, I’m trying to find the premium price tag that it is listed at. In fact, the only upgrade I could find in this house was the 3-sided gas fireplace.
The laundry room down in the unfinished basement certainly isn’t premium and neither is a single-car garage located in the backyard.
Speaking of the backyard, it is reduced to half its size because the driveway runs beside it.
Finally, the house fronts to a very busy street.
So now that I’ve picked on everything that’s just average in this townhouse, why is it listed at such a high price?
I have a couple of theories on this.
First, it is listed by an agent from Brampton. Brampton is pretty far away from Port Union and I doubt the agent has gone through enough townhouses here in West Rouge to know the market value.
Second, a townhouse in the area recently sold for $983,000 and my guess is the agent, the owners, or both saw that selling price and assumed this house is worth the same.
You know what they say about assuming because the other townhouse was completely upgraded.
It had strip hardwood throughout all levels – including the finished, walkout basement.
The floating stairs were made of beautiful hardwood with thick spindles. There were pot lights, granite countertops and premium, matching stainless steel appliances in the kitchen.
Throughout the entire house, the light fixtures were upgraded.
The primary bedroom had a walk-in closet and a renovated ensuite washroom.
Even the garage was better placed in the front of the house, letting the entire backyard to be enjoyed.
I use a direct comparison approach to valuing homes all the time, but I always compare apples to apples.
What is the house worth?
Now that you know this townhouse has no upgrades except for the three-sided fireplace, that makes it an obviously average house.
It just so happens that another average looking 3 bedroom, 3 bathroom, 1 car garage townhouse not too far from our over-priced turkey, sold a few days ago for $900,000. The garage was built-in in the front of the house so it had a better backyard.
Also, a 3 bedroom, 3 bathroom, 2 car garage detached house in the area sold for $1,020,000. Yes, just $20,000 more than our lovely builder-grade basic subject townhouse.
You don’t have to be a mathematical wizard to know that a detached house selling for only $20,000 more than what the turkey is listed for and a direct comparable townhouse selling for $100,000 less than our turkey is not going to sell anywhere close to what the sellers are asking for.
If I were to take a buyer through this overpriced house, which I wouldn’t, I would point out the lack of upgrades and show them the recent sales in the neighbourhood so they could decide for themselves if the house was worth what the sellers are asking for.
That’s the difference between myself and most other agents who are only concerned with making a sale.