Like Attracts Like. Why This House Never Sold

Basic assumption Toronto Real Estate

As humans we are all attracted to those who share the same values, likes and dislikes.  This is a basis assumption and truly most of the time this tenet runs true.

This same basic assumption applies to real estate.  We all look for neighbourhoods where residents for the most part are very similar to ourselves.  Whether you cognitively or emotionally make the decision to dismiss the idea of  “like attract like” then be prepared to enter very unfamiliar territory.   If you take this gamble…then be prepared for the consequences.

There was a great property for sale which was about a kilometer directly east from Toronto’s Beaches neighbourhood.   It was an older home but what it had going for it was that it was almost two acres and it had a unobstructed view of Lake Ontario as it sat directly on the top of the Scarborough Bluffs. It sold for 2 million back in the spring of 2006 and it was the highest price ever in that neighbourhood.

bircliff bluffs real estate

For those of you unfamiliar with the Scarborough Bluffs there are strict building requirements due to the unstable nature of the bluffs.    So if the buyer was hoping to build townhouses, sever the property or construct a condominium it would never be approved.  All you were left with was to build a single family home and so that is what the developer decided to do.

However this was no ordinary build and the old house was demolished and a 10,000 sq ft home with a 3,000 ft garage took its place.   It was an ultra modern design with high in finishes and of course a great view of the lake.  In fall of 2008 the house was put on the market…for the price of only $5.5 million it could be all yours.

The builder had a serious disconnect and did not adhere to the basis assumption of “like attracts like” which would  ultimately financially cripple him.  So much so that he was forced to leave the country to escape the angry mob of creditors.

Don’t get me wrong,there are some fantastic homes on Scarborough bluffs. In 2008 a house on the bluffs was around a million with a great house maybe getting up to $1.5 million.   So thinking you would be able to attract a buyer willing to shell out $5.5 million was simply unrealistic.

A buyer who is considering a $5,00,000 plus home in 2008 would not be looking in the Scarborough bluffs.   For those with that type of cash in 2008 they would be contemplating  Forest Hill, Rosedale, Oakville, York Mills or a Bridle Path address.  `Like attracts like`so if you are shelling out over $5 million then your expectation would be your neighhours` homes to be in the same price range.

The house history goes like this:

  • The builder hired one Toronto`s high-end brokerages who is known for their ability to sell exclusive homes.
  • With no offers at $5.5 million the brokerage dropped the price to $4 million but still no buyers.
  • It is now spring 2009 and a new brokerage has been taken on and the house is listed at $3.7 million.
  • By the end of August still no deal even at at price of $3 million.
  • It is the fall of 2009 and the house is now under power of sale and a new brokerage hired with a new price of $2.9 million.
  • As 2009 came to an end it did not sell and never came back onto the market.

It is now the summer of 2014 so you must be curious what ever happened to this place?  Here’s some pictures of the house when I walked by yesterday.

birchcliff house

This house has never been lived in.    It sits abandoned by the creditors and even the security company hired to keep an  eye on it have ceased to come around.

The house will never sell as with the roof leaking and water in basement I suspect it has become a breeding ground for mold.  The only things living here are some birds and racoons who have made their way in.

This property has now become land value.  Any potential buyer would be definitely doing due diligence thought,  just  to wade through the myriad of liens past creditors have secured on this place will be a Herculean task.

There are always  basis assumptions in real estate and for those who disregard those tenets then be prepared for the consequences.