I recently completed a sale where the seller and his agent put forth a rather interesting strategy.

It wasn’t anything new; it was just new to the area and the type of property.

In the end, the result was so-so, as the seller did sell his condo, but not at the price he was looking for…

Jonathan first emailed me about a month ago and said that he was looking for an investment property in Toronto.

He lives in Red Deer, Alberta, but wants to retire in Toronto in about ten years.  However, he also sees the value in buying a property now as opposed to waiting a decade, and thus he enlisted my services.

His goal was to pay off 80% of his monthly mortgage payment with the rental income from the property, and he would foot the bill for the remaining 20% as well as the maintenance fees and taxes.

I told him that with his 25% downpayment on the property, he could carry 100% of the mortgage AND pay the monthly maintenance fees.

It was just the icing on the cake.

I sent Jonathan a few properties in the downtown core, but nothing seemed to strike his fancy in the $400,000 – $450,000 price range.

More to the point, he wouldn’t be hard-pressed to achieve the 1,200 square foot target that he had set along with his $450,000 price ceiling if he stayed in the downtown core.

He told me that “retiring” meant being away from the hustle and bustle of the downtown core, and he could definitely see living just outside the core, such as south Etobicoke or Mimico.

“Even better!” I said.  The prices are lower outside of the downtown core, and since we couldn’t find anything downtown, we turned our attention to the waterfront.  Jonathan said he would love a view of the lake.

We mulled over a few listings at the classic Palace Pier and looked at the usual suspects such as Voyager, Newport Beach, Waterford, and Marina Del Rey, but the buildings were too clustered together and too short to really get a great, pure lake view from a high floor.

Then Jonathan sent me a listing that had piqued his interest at 15 Windermere Avenue, a building that had appropriately been named “Windermere By The Lake.”

I could easily see his attraction to the property after viewing this photo:

Not a bad little sunset over the lake, wouldn’t you say?

The property was priced at $459,000, and was worth every penny in my estimation.

The same model unit had sold three times in the last 16 months for $459,000, $457,000, and $459,000 respectively.

Considering how the market has appreciated in the past year, I’d say the property is worth the asking price, at least.

But the owner had listed the property in the typically-slow month of December, and left it to rot over the Christmas break.  He had previously tried to sell privately at a whopping $495,000, and was obviously unsuccessful.

Jonathan was very interested in the unit, but before we could make a move, it was abruptly taken off the market.

Before I had time to scratch my head like Shaggy from Scooby-Doo, the unit reappeared on the market at a discounted price of $449,000.  However, there was a catch: they were holding-back offers until January 27th.

The “hold-back” has long since been a favorite of sellers and listing agents alike in the downtown core, but I didn’t think a property at Windermere & Queensway justified this type of strategy.

In fact, I found it quite curious.

The listing agent was very candid with me and said, “My seller wants to move the unit, but only at his price.”  My follow-up question didn’t even need to be asked: “What is his price?”

Would you be surprised to hear that it was $459,000?

The seller had apparently turned down an offer of $455,000 back in December.  Imagine letting a deal fall apart for four-thousand dollars?

So, the seller decided to drop the price below that which he was willing to accept, and implement the time-tested technique of holding-back offers on the property.

I didn’t think it would work.

And why would it?

People are banging down doors for $269,000 condos in the downtown core, but what is the demand like for $459,000 condos by the lake right now?  The demand is there, but it’s not coming in droves like the properties that first-time-buyers dream of at night.

Offer night came, and Jonathan and I had an offer ready for the full asking price: $449,000.

All day, the listing agent told me that he was expecting other offers to surface, but none ever did.  There was interest, but not immediate interest.

Our offer was presented, and sure enough, the seller came back to us and said that he was expecting multiple offers and that he wouldn’t sell the condo for less than $455,000.

I didn’t need to check with Jonathan – I simply said, “Fine.  That’s too bad.”

And wouldn’t you know it – ten minutes later, the seller begrudgingly accepted.

Was he really going to let the deal fall through for $6,000?  I never took his “threat” seriously.

The market has shown that these units turn over at $459,000, but the seller was just a victim of poor timing.

And Jonathan paid about $10,000 less than what I perceived as market value, and “in confidence,” the listing agent agreed with me.

Just because a strategy works in one place doesn’t mean it’s going to work in another.

But at least the owner finally sold his condo, right?