TORONTO -- A detached home located in Toronto is selling for only $160,000 but because of legal reasons won't go for a cent over asking.

The home, located on a decent-sized lot at 4 Channel Avenue on Ward Island, can only be purchased by one of 500 people on the Toronto Islands Residential Community Trust Purchasers' List. 

This is because the homes on Toronto Islands are sold through a regulated system, introduced through legislation in 1993, that fixes the price of houses and prevents island property owners from making massive profits.

The homes sit on public land that has been leased from the province until December 2092. Buyers hold the title of their home until then but never the land it sits on.

Bids for the home start with the first person on the Purchasers' List and move down. Once they reach someone who wants to bid and financing is complete, the house is considered sold.

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Lorraine Filyer, the trust chair for the Toronto Islands Residential Community Trust Corp, told CTV News Toronto on Wednesday that despite this house being in "pretty rough shape" they have already received multiple bids for it.

They are now in the process of finalizing the deal but if financing falls through they will move to the next offer, she said. 

How do you get on the Purchasers' List?

There can only be 500 people on the Purchasers' List at one time. According to Filyer, in order to stay on the list members must pay a $45 fee each year to renew their spot. 

When people do not renew their spot or purchase a home they are removed from the list, creating space for new members. 

Filyer said when there are 25 vacancies, the trust will advertise the availability and then will randomly chose from the applicants who gets the spot. Spots are not reserved for any specific demographic. 

New members are placed at the end of the bidding list and only move up as people ahead of them either purchase a home or stop paying their member dues. 

There have been 66 homes sold on the Toronto Islands since the start of establishing the Purchasers' List in the 90s. According to information available on the trust's website, the buyer is usually found within the first 100 names but properties have been bought by people as far down at 196. 

"Not everybody bids," Filyer said. "Because unlike buying a house in the city, where you decide you want a house, these houses come up randomly so not everybody is in a position when a house comes up to purchase it."

How is the home price determined? 

Filyer said one of the core principles of the trust is to ensure the owners of the island homes can't make "windfall profits" from property on public land. 

The value of the house is established through a "regulated appraisal and inspection process" that is based solely on the construction costs of the house. Lot size and location are not a factor in determining the value of a house.

The buyers must also pay a one-time lease fee and "equality allowance for the seller," which Filyer said it calculated using a formula. 

For example, this home’s appraised value is $82,000. The lease price is $59,000 and the equality allowance for the seller is $19,000. 

According to the trust, the average house is sold in the $150,000 to $400,000 range, not including the one-time lease cost.