The real estate market across Toronto has certainly cooled down recently after prices continued to skyrocket over the past few years. But over the past few months, things have somewhat slowed down, and prices aren't so quick to climb.
Sellers definitely had a field day with the surge in demand for homes across the city and surrounding areas, raking in huge profits after selling for well over asking in many cases. But today's market seems to be tilting more in favour of buyers as prices have simmered down a bit.
But that doesn't mean now isn't necessarily a bad time to sell. You can still realize a successful real estate transaction if you plan your strategy properly, and a huge part of that is coming up with a sound listing price.
The question is, how do you price your home in a buyer's market?
Understand the Fact That Real Estate Markets Are Local
Just because you may be able to sell a home for $900,000 in south Etobicoke doesn't mean you'll be able to command that same price for a similar home in North York. Housing markets are very local, which means that they're very different from one area to the next.
Demand for homes will change depending on the neighborhood. It's important for you to understand what a home like yours can go for in your particular area. Looking at what has sold in the adjacent area won't necessarily provide you with accurate information about what you should list your home at and what you can potentially sell for.
Look at trends in your particular neighbourhood, and pay close attention to the gap between the listing and actual sale price of homes. Your real estate agent will have all of the pertinent information in order to help you establish a sound listing price, particularly when demand has weakened somewhat.
Assess Other Buyers and Sellers in the Market
Who's your competition? What are other sellers doing right now that could influence how you list and market your property to stand out from the crowd? And who are the buyers looking in your area? Why exactly are they shopping for a new home?
Does your particular neighbourhood attract a lot of buyers? Is it growing? Or do you live in a community that's pretty stagnant and doesn't really attract many new residents?
The answers to these questions can help you get a clear sense of who the buyers and sellers are in your area, which can help you gauge where you should be at with your price point.
Find Out Exactly What Your Home is Worth
It's always essential to find out precisely how much your home is worth before you establish a listing price. Luckily, your real estate agent will be able to find this out with great certainty by pulling a comparative market analysis of other homes in the area that are similar to yours and have recently sold.
Considering how quickly the market changes in Toronto, it's crucial that the comparable homes being looked at sold no further back than three months. The more recent, the better. When looked at together, the information in this report will give you a solid idea of how much your home is currently worth, and you can price accordingly.
Having a strategy in place with how you price your home can help you get as much out of the sale of your home as possible. Your strategy will be dependent on what the current market is doing.
For instance, let's say prices in your neighbourhood are declining at a rate of 1% per month and you're looking to get your home off your hands in about a couple of months or so. In this case, you can shave 2% percent off of your price right away (1% per month for two months) in order to match what prices would be at by the time you sell.
The benefit of this type of strategy is that you'll have a competitive edge over your competitors who may otherwise have to lower their price every month to coincide with the market. Of course, the drawback to this strategy is that it can be tough to predict with great accuracy what exactly will happen in the near future, so you could be dropping your price lower than you need to.
This strategy should only be considered with the help of a seasoned real estate agent.
Coming up with the right listing price is one of the most important things that sellers can do to ensure a streamlined selling process and to find a buyer in a reasonable amount of time. Luckily, your real estate agent will have the expertise and the tools necessary to establish an ideal listing price to help you take the guesswork out of such an important task.