News

Room to negotiate
There is wiggle room to talk price when buying a home topping $1.5 million

Michael Prentice
The Ottawa Citizen

Saturday, June 07, 2008

Shirley Greenberg had a clear idea how much she wanted when putting her Rideau Canal townhome up for sale last October. And she got it -- even though the retired lawyer and philanthropist dropped the initial price by $290,000.

Welcome to the world of high-end real estate, where the difference between the asking and selling price can be more than the cost of the average home in Ottawa.

The modern house was one of 16 on the Ottawa Real Estate Board's multiple-listing service that sold in the past year for more than $1.5 million.

The red brick townhouse sits next to the canal, with spectacular inside spaces and an elevator linking the different levels.

It was listed for $2.35 million and sold for $2.06 million.

In setting the asking price, Ms. Greenberg knew exactly what she wanted, according to her real estate agent, Cindy Sezlik, of Prudential Town Centre Realty.

Asked whether her client did just that, Ms. Sezlik says: "Absolutely -- 100 per cent, and actually a bit more."

Ms. Greenberg, widow of Irving Greenberg who launched Minto Development in the '50s with his brothers, sold the townhome because she spends time in Barbados, enjoys travelling and wanted to simplify her life.

In all 16 cases, the buyers accepted lower prices, the average being about $164,000, or eight per cent.

"There is more room for bargaining at the high end," says Ms. Sezlik. "How much room depends how realistic the asking price is."

It should be possible to negotiate a discount on a very expensive home -- but only if the home was priced above what the market will bear, says the veteran real estate agent.

Brent McElheran, a sales representative with Royal LePage Team Realty, estimates that it's often possible to negotiate a price reduction of between seven and 10 per cent on sales of homes costing more than $1.5 million.

He contrasts that with what sometimes happens in sales of homes in the $700,000 to $850,000 price range in popular neighbourhoods, including the Glebe. In recent days, Mr. McElheran has watched several buyers compete to buy properties. Very recently, two properties sold for more than $50,000 over the original asking price, he says.

In the current tight market, says Mr. McElheran, an average-priced home usually fetches 97 or 98 per cent of the asking price.

More than 14,500 homes were sold in Ottawa on MLS last year at an average of $272,618. Thus, sales of homes over $1.5 million account for about one in 1,000 of all sales.

High-end homes take longer to sell. Those that sold for more than $1.5 million were on the market for an average of almost four months. The average for all MLS listings is about five weeks.

Closest to a blockbuster high-end sale in the past 12 months was a house at 480 Manor Ave. in Rockcliffe Park that sold for $3.3 million -- or $185,000 below asking price. According to the listing, this was "one of Ottawa's finest properties -- a grand, stone residence that was completely restored and enhanced in 2000."

The priciest home currently on the market belongs to Randi Shinder, an Ottawa woman who made a fortune in the cosmetics business.

Her Mayfair Avenue home is listed for $6 million. It is not on MLS, and is listed exclusively by high-end real estate agent Marilyn Wilson.

The price tag is more than three times its assessed value of $1,951,000. That value -- which determines property taxes -- is what assessors believe the house might have sold for in January 2005. Ms. Shinder is selling because she is moving her business to Toronto.

Highest price ever paid for a home in Ottawa was $8.25 million for the 15,000-square-foot mansion of technology entrepreneur Antoine Paquin in Rockcliffe Park.

"Gets it sold!"