Monthly Archives: June 2009

By Evan Sage

There are many ways for a Toronto Real Estate Agent to develop the right price for a property and we use them all depending on the situation. There are many variables that need consideration because one variable could drastically alter the amount that you want to list your property at.

Why is it important to list at the right price? The best price to list your property at is the price that will be the closest to what it will actually sell for. I know that sounds obvious but we run in to a lot of clients who feel that their property is worth a lot more then it is and they want to “try” their higher price first.

Some Agents are tempted to let their clients do this because they have a fear that they won’t get the listing and some other agent will. Some clients might say that the real estate agent just wants to sell it at low price so it will be quick and they can move on. If that is the Agent’s attitude you will sense it in all of their work with you, not just the price. A good Realtor will actually stick to their pricing and not suggest that they can get more for you just so that they can get the listing.

First impression is the most important thing when selling a home. People search for real estate in select areas and tight price brackets. $325-$375K Loft Downtown, $400-$450K in Leslieville, $800-$900K in Summerhill, $1.3M- $1.5M in Lytton Park, $2.5M-$3M in South Rosedale, etc… They will typically look at houses that are listed for lower than the ceiling of their budget but serious buyers will never look at properties beyond their budget.

Your best market exposure is the first 21 days after you first expose the property to the open market. This is when you will get the most amount of money for your home and hopefully not leave anything on the table. The market experts will get their first glimpse of what you have to sell. The experts are all of the active Realtors in the market and their buyer clients. These people know everything about your market and what is going on in it. The Experts will see it in their daily updates and will be calling their specific clients who want to buy a property like yours. Neighbours will be calling their friends who have always talked about wanting to move into the area, and people who are looking in the papers, or online resources will be seeing it for the first time and will be contacting their Realtor.

Trying an unrealistic list price will result in you not reaching the right group of experts, they will simply be unimpressed with what you are offering at the inflated price. They are looking in their price bracket and they will not want to buy something that is not comparable to what else they are seeing in their price category. This will actually just help the other listed homes look like a better value.

If you waste that opportunity to make the best first impression you will never get it back. As soon as you have stopped getting showings and everyone realizes that the property is overpriced it will take at least a 10% price reduction to stir up some new interest.

Someone with a budget of $1.6M looking to buy a house on Alexandra in Lytton Park will not want to purchase a 25 foot wide property, un-renovated that the owner thinks is worth $1,595K when it really shouldn’t be higher than $1,400K. This will annoy the experts and they will talk poorly about wasting their time, which will give you further negative exposure, it will sit on the market becoming stale, it will get a stigma of something being wrong with it and most importantly it will miss reaching the realistic market of active clients looking to buy a house in Lytton Park for $1.3M-$1.450K.

One of the key things a good Realtor does each week is go and visit every new listing in our select market place. This helps us build an automatic sense of what the right price is, what is too high, or what is great value. That is a really good reason to hire an agent that works specifically in the area that you want to live in.

Evan Sage is a Sales Representative with Royal LePage R.E.S./Johnston & Daniel Division. Evan is also a regular contributor to the Muddy York Blog.  Evan’s web site is located at www.evansage.com.

By Evan Sage

Confusion is ramped in the Toronto real estate market and potential sellers are not getting all of the right information to make sound decisions.  Due to the same reasons why home buyers should be buying a Toronto home right now you should be selling your home right now.  It is time to expand your net worth and create some permanent wealth.

Toronto home owners are hesitant to sell because they don’t think they will get all of their money out of the investment. For a lot of sellers this really shouldn’t matter. Psychologically they don’t want to lose money. In reality it isn’t lost. It will just be transferred to a property or properties that will take advantage of the current market conditions.

Sellers can actually take advantage of the low interest rates, the buyers demand for good product, the lack of good product, and the current possibilities that exist to expand their net worth.

In a lot of cases I think a seller would be surprised at how well they can still do with selling today, even if they were taking the money and running. There has been a lot of media manipulation to have people think we in central core Toronto, are in a really bad market. It just isn’t true. The average price for March transactions was $362,052 – down less than five per cent from the same month last year, as reported by TREB.  The media has been manipulating the statistics to strengthen the story that they want to tell. They are using facts from certain areas in Canada that had big housing bubbles and making them look like they represent the whole country with big bold titles. I think that the media is doing this to increase their viewership stats so that they can simply sell more advertising space.

One benefit for someone wanting to list their Toronto home right now is the ability to leverage stagnant properties that have been on the market for a long time because the sellers aren’t being realistic with their prices. By pricing your property appropriately you can make you listing look like much better value.

These same unrealistic sellers existed in the busier markets but they just weren’t given much attention and they never should have listed the home for the price that they did in the first place. Now the media is using them to support their stories.  I could ask $11,000,000 for my personal home but it would not sell for even 10% of that asking price. This doesn’t mean that the market has come down 90%, it just means that I was very unreasonable with my initial price offering. These sellers exist in all markets but in better times they don’t get paid any attention.

Pricing your Toronto home is certainly the key to selling for top value in this market, there are a lot of agents who have only worked in the hyperactive real estate market that we have seen over the past 10 years. They never learned to price when you don’t have 10 offers to choose from. Try to tell a realtor that has 7 or 8 years of experience that they don’t know what they are doing and need to go back to the basics. Their egos just won’t accept that they need to change the way they work.

These Toronto real estate agents go on with their unfounded prices until the property becomes stigmatised and the evil “Price reduction” is necessary. Price reductions are extremely damaging because you need to make reductions in 10% increments in order to make them effective. Otherwise you just waste more days on market which is the key weapon for low ball offers. If aiming high and lowering the price over time is the strategy you want to use, you will end up selling for less than if you had made the initial price offering as close to reality as possible.

Sellers can take advantage and upgrade their home by selling now and buying something that is more expensive, something that would have been out of reach before. They can also take advantage by diversifying their holdings and buying an income property. Interest rates are at their lowest in decades so now is the time to expand your personal net worth.

Sellers can also take advantage of the surge in buyers and confusion among sellers by just listing. There is a lack of quality inventory on our market.  Good homes are selling well, it doesn’t have to be completely updated but buyers are more likely to buy something that is mostly finished than something that needs to be levelled.

I don’t have a crystal ball but this is the situation as I see it right now.

Evan Sage is a Sales Representative with Royal LePage R.E.S./Johnston & Daniel Division. Evan is also a regular contributor to the Muddy York Blog.  Evan’s web site is located at www.evansage.com.