Alright home sellers,
There’s good news and bad news.
The bad news is that I have some cold, hard truths to share with you about selling your home in Toronto right now.
Prices have changed. Buyers know this. And the real estate agent who gives you an early-2017 market value estimate for your home probably doesn’t have your best interests in mind.
The good news? Market patterns don’t have to be a secret. And I’m going to lay out these secrets, cold-hard-truth-style, so you can be completely up-to-date on Toronto’s market.
Cold truth #1. Your house isn’t worth what it was a few months ago.
There’s a unique sort of almost-seller in Toronto. These are sellers who considered listing their homes during the housing frenzy that lasted from 2014 to early 2017, and went as far as getting a real estate agent or an appraisal on their home.
But many of them didn’t end up selling – and now they’re in for a shock.
These would-be sellers have found that their homes have decreased in value by about 5% (for detached homes) over the same time last year (November 2016). There’s been a slightly larger drop for houses outside of the downtown core or in the 905.
This doesn’t mean you should wait to sell your home – but you might want to, since the price you could have gotten in April is now significantly different for December.
Cold truth #2: What you want for your home might not be realistic.
In direct relation to number one, most sellers’ price goals probably aren’t on-mark. If you had hopes that your Etobicoke bungalow might go for more than $900,000, that may have been true in March. But it’s just not the same anymore.
This is something I’ve been seeing a lot of. And some unscrupulous agents might fan the flames of sellers’ hopes by telling them they can get pre-2017 prices on their home.
How do you tell? Avoid hiring the real estate agent that estimates the highest price.
Instead, you can test an agent’s knowledge and intentions by asking what they think you may have been able to sell for at the beginning of 2017 in comparison to late-2017. An honest agent will quote you about $50,000 lower, which is about a 5% decrease on a $1 Million home.
Cold truth #3: You need to sell your home first before buying.
The prevailing wisdom of the last few years has been to buy a home before selling – which made perfect sense. Buying a home could require multiple offers over a good chunk of time to finally snag something in a competitive budget.
Not so much right now. Selling a house, especially if you’re dependent on a certain sale price, is what’s taking people the most time in two-sided real estate journeys.
It also might have a drastic difference on your buying power. Many of those who buy then sell aren’t totally aware of how much their home will sell for, and relying on a certain sale price having already purchased a home may leave you in the lurch for the difference you weren’t aware of.
Cold truth #4: Your selling price and your retirement fund have nothing to do with each other.
Yes, some people sell their homes in order to retire. No, selling your home for your retirement fund does not guarantee you a certain amount of money. In fact, while these two numbers matter to you, they have very little to do with each other.
If you’re worried about your retirement fund, talk to a financial counsellor. Then, talk to a real estate agent separately (or multiple agents) to get their take on your home’s worth. Getting your house fairly appraised means you can use an accurate number to make your retirement calculations – and adjust accordingly.
Cold truth #5: Buyers probably know the price of your home better than you do.
What do buyers have that you don’t? They’ve done a thorough competitive analysis.
Potential buyers are looking at houses in your neighbourhood in the same budget, in similar styles.
They’re getting a direct comparison of price-to-value for your home and your competitors’. They know exactly how much more they could get for the same price a few doors over.
Chances are that they know when your home is overpriced, and so does their real estate representative.
Your best bet? Go look at houses for sale in your neighbourhood – especially ones in the same price range. How does your home stack up in comparison? What do those homes have that you don’t? How might that affect how buyers see your home? Is your home competitively positioned?
Cold truth #6: You get what you pay for when it comes to real estate agents.
This is a tough one – it’s hard to try to convince someone to consider paying more for their real estate agent when you’re a real estate agent. But there’s something I want to say: you get what you pay for.
Real estate agents are marketers. They create flyers, run online ads, buy billboards, call contacts, and work connections. They spin their commission dollars into marketing dollars, which works to your benefit. (I actually give a thorough breakdown of my fees to clients, showing how a good chunk goes straight into marketing their home).
When you hire an agent with low commission but no marketing strategy, a difficult market will hurt you in the end. Without local awareness, an online presence, top-notch photography, or strong word-of-mouth marketing, you won’t net the highest price.
Cold truth #7: You need to hire a full-time agent.
Please, if you do anything after reading this article…hire a full-time real estate agent.
Some people have asked me: Agents aren’t all full-time?
No. Not even close.
According to the Real Estate Council of Ontario, there are just under 80,000 licensed Realtors® in Ontario. More than half of those are in Toronto – there are 48,000 Realtors® on the Toronto Real Estate Board.
The Toronto Real Estate Board shares their data, showing that most agents don’t sell that many homes in a year. About one-fifth don’t do a single deal in a year. More than 50% do fewer than six deals.
What are these agents doing during the days? They’re teaching classes, working behind bars, putting themselves through school, and many more commendable activities. There’s nothing wrong with working multiple jobs to make ends meet.
Except when I’m trying to get in contact with that agent and they’re nowhere to be found.
If you can’t reach your Realtor® during the day, how do you think other agents feel? If we can’t ask questions about a home or put in an offer, well, we simply move onto the next house. Which means you might be losing out when you list with a part-time agent.
Please, hire a full-time agent.
Want more cold, hard truths? Leave a comment below or message me to grab a coffee!