This is a cautionary tale for anyone who is thinking of selling their GTA home this fall.
Back in April, we met with a potential seller to discuss listing their home for sale. It was a great house in an in-demand neighbourhood, and we valued it at $1.45 million. We were already seeing signs that the market was shifting and we recommended listing the house at market value, ASAP.
As sometimes happens in our business, the seller did not agree with our valuation and hired another agent, who told him his house was worth more.
In May, the house was listed for sale at $1.7 million.
It didn’t sell.
In June, it was re-listed with an asking price of $1.5 million.
The problem: It was still priced higher than what our evaluation indicated it was worth in April and by June, the market had declined. The house was overpriced in April and remained overpriced in June, despite a $200,000 price reduction.
In August, they relisted the home once again, this time for $1.4 million – $50,000 less than the number they weren’t prepared to consider in April.
And now it’s September, and it still hasn’t sold.
But the story doesn’t end there.
Between April and the end of August, house prices in this neighbourhood declined by 20.5%. If our valuation was right back in April, this home is now worth $1,160,000. If the seller’s valuation of $1.7 was right in April, it’s now worth $1.36 million.
And yet, the house remains listed for sale today, at $1.4 million.
This is a classic example of chasing the market down. While the seller made a bold price reduction after the first month, the new price still wasn’t in line with what similar homes in the neighbourhood were selling for at the time. And during the crucial months of July and August, as the market softened further, the seller didn’t adjust their price at all. If they are successful in selling this home this fall, it will quite literally be for hundreds of thousands of dollars less than what they could have gotten for it 4 months ago. And they could have avoided months of stress and showings.
It’s hard to share this story. I know the seller’s personal situation, and I’ve wanted nothing but the best for him from the start. But it’s a story that’s playing out on the MLS every day, in every community across the GTA – and it’s one you can learn from.
Price right from the start. And proactively react to changing market conditions.