I never miss posting a blog, but once in a blue moon, I get to “mail one in.”
Today is one of those days.
I just got back from a weekend away, it’s 11:40pm, and I can’t think. My brain isn’t working.
So I’m letting myself off the hook by spending six minutes on this post, but, introducing you to the cynical and twisted spoof of the “Million Dollar Listing” series, called Bajillion Dollar Propertie$…
If you don’t know what “One Dollar, Bob” refers to, then you clearly were not a child of the 80’s.
Having said that, I associate watching The Price Is Right with being a kid watching morning television, but it is an adult show, after all!
Bidding $1 in “Contestant’s Row” might get you up on stage playing Plinko, but bidding $1 on a house in Toronto gets you nowhere. Even if the agent offers it as a “rare opportunity” in the media. Let’s talk about the house at 11 Edith Avenue…
A few weeks ago, I wrote a blog that featured a home backing onto the Go Train tracks, complete with a video of not one, but two trains passing by simultaneously.
We debated the pros and cons of buying a home that backs onto the tracks, but of course, the only “pro” is the discount you get.
Now what is that discount? We had absolutely no way of knowing. Until now…
Seriously, the timing here is amazing!
This undeniably answers the question, “What sort of a discount should you expect for the house backing onto a train?”
If you didn’t watch the video last month, here it is again:
And as though the real estate Gods were reading my blog, they provided us with a perfect example only weeks later.
Two houses came out last week, and sold this past week, that we can use to find the “discount” for a home backing onto the train tracks.
These two houses:
1) Are on the same street
2) Sold during the same week
3) Have an identical interior layout
There are some differences in lot size, style/upgrades, and of course – the train, but we can compare and contrast, and figure out what that train is “worth.”
Here’s the first home:
And here’s the second home:
So the house that does not back onto the train tracks sold for $215,000 more than the house that does back onto the train tracks.
Right there, you could call the difference $215,000.
These homes are identical in layout on the main and second level, to a “t.”
They are both 4-bedroom, 1-bathroom homes.
But there were a few differences that should be noted:
1) Lot Size
Without Train – 40.87 x 110 feet
With Train – 29.5 x 91 feet
The house without the train probably gets $75,000 for the larger lot.
You might suggest it’s more, but the houses themselves are the same size, so you’re not really getting any additional marginal utility.
The house without the train, that had the larger lot, didn’t really seem to have a larger backyard. In fact, it was only 40.87 at the very front of the lot, and it narrowed significantly at the back, and you could see all the neighbours.
The house with the train had more privacy, but of course, a train.
Without Train – “Finished”
With Train “Unfinished”
I’m using quotations there because “finished” and “unfinished” appear on MLS, but it’s quite misleading.
The house without the train claims a “finished” basement, but it’s poorly finished, and cheaply at that.
The house with the train does truly have a fully “unfinished” basement, but for some reason, there’s 8-foot ceiling height down there!
Do you know what it would cost to under-pin a basement? For a home like this, probably $50,000, maybe more.
So I’d rather have the house with the 8-foot, unfinished basement, than the house with the 6-foot, poorly-finished basement. And the “finished” basement in the home without the train, probably only cost $5,000 anyways, so there’s no added value there in my opinion.
Without Train – rated a C-
With Train – rated a B+
Both houses featured a lot of original character and charm, with gumwood trim, stained-glass window, and original hardwood flooring.
But the house with the train was in much better shape overall, with a fully-renovated kitchen, and fully-renovated bathroom.
Ignoring the basement once again, which warranted its own point above, I’d say the house with the train had about $30,000 in upgrades in the kitchen and baths.
So now let’s recap:
Sale Price Difference: $215,000 Lot Size: -$75,000 Basement: +$50,000 Condition: +$30,000 Discount For Train: $220,000
That’s a huge number!
But I followed both sales closely, and while the house without the train sold with a bully offer on the second day of the listing, the house with the train sold on offer night with only two offers.
It seemed as though everybody who walked into that house thought, “Love this place; can’t live with that train.”
So let me ask the question from last month’s blog video again: would you buy the house with the train for a $220,000 difference in price?
First off, let me say that this will never happen. At least not as long as the Federal Liberals are in charge.
But this topic is gathering momentum, and this week alone there were at least two stories about it in the media, with one article spawning almost 1,200 comments from readers, most of which are angry, and in favour of some sort of crackdown, ban, or restrictions on foreign ownership.
But who are the people writing scathing letters, and signing petitions? Where are they from? Let’s discuss, along with the merits of potential regulation…