Some of you might be confused by this because of the gloom and doom that is the Toronto real estate market as reported in the news. Except all who know me (and still listen when I have to vent), will have heard me say many times, “they” are comparing apples to oranges when comparing year over year market statistics. Last year was an anomaly. What’s important is what’s happening now, which might quite possibly get us into the same mess that we were in last year.
As an agent condo shopping with buyers in the current Toronto market, I have a lot to say.
Can I just ask why Toronto Realtors aren’t listing homes at market value anymore? It’s frustrating to watch my buyer clients get discouraged time and time again by new listings that fall within their price range, only to discover they’re listed $200,000 under market value; in other words, not within their budget.
On the other hand, listing at or above market value and holding offers …talk about confusing. I’m guessing that the listing agent in this case chose to hold offers in order to get more exposure or time on market; a good idea in theory, but not in practice. I get that it’s a seller’s market, demand exceeds supply, yadda, yadda, yadda; but, these poor buyers, now used to listings being undervalued in order to entice multiple offers, are being told to wait to offer on a property that’s worth less than the list price?
A lot can happen in a week. Being left to mull over whether to offer on a property that’s holding offers can be both good and bad. For both the buyer and the seller.
First of all, a lot of other “better” listings can come up during the week that you’re waiting for offer day. Let’s say this new “better” prospect (option B) isn’t holding offers. As the seller of option A (the original one holding offers), you’ve lost a potential buyer. As the seller of option A, listing well under market value has also not attracted the right buyers. The buyers who can truly afford your property aren’t even looking at it.
Over a week, with time to think, a buyer can also change their minds. They can decide that they don’t want to compete anymore. It’s emotionally draining.
So let’s get back to basics. List a house at or around market value and negotiate with the first buyer that comes to the table. Maybe you get multiple offers anyway. Maybe not. Either way, you get market value for your property, the buyer pays fair market value, and everyone is happy. Some things are better done the good old fashioned way. Otherwise we may as well list everything for a dollar and hold public auctions like they do in my home away from home, Australia.