Are you thinking about listing your home for sale in Toronto in the coming months? Are you feeling a little stressed out? I don’t blame you. The way the news is reporting things, you would think the bottom is falling out of the Toronto real estate market right now.
As frequently happens, things online and in print have been blown a little out of proportion and the jumbo 100-basis point increase in Bank of Canada interest rates (the highest since 1998!) is actually not a reason to panic.
In fact, the result of these interest rate hikes are actually likely going to soften the marketplace. Say it with me: things are softening. There is no reason to stress. Everything is nice and soft. Like a cozy pillow or one of those memory foam mattresses that get delivered in a tube.
Ok, now that we’ve got that out of the way, let’s talk about what else you can expect when selling your home in Toronto.
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When it comes to successfully selling your Toronto home, there are 5 main things we are currently coaching our clients on. A softening market is good news for buyers and it’s not all bad for sellers too. Here’s what you can expect.
1. It’s Going to Take a Little Bit Longer
After the craziness that the pandemic brought in, it was common to see homes sell in the blink of an eye. There was an intense sense of urgency throughout the city and sellers were absolutely expecting their homes to be listed and sold within one week max. Today, it’s a bit of a different story. Properties are going to take longer to sell.
Yes, we can still underlist the property and generate multiple offers for a quick sale, but that strategy is no longer the money-making endeavor that it once was. Multiple offers today are better suited for someone who wants to sell quickly rather than selling for the highest possible price.
What we’re finding now is that homes may get a few offers that the seller can then choose to leverage and negotiate on, but if your home is priced properly, you should be ready to wait somewhere between 30 and 45 days for it to sell.
Selling your Toronto home in a shifting market is easy peasy when you have the right real estate team on your side. Check out some of our other selling blogs to see what you can expect:
- What You Need to Know About Selling in a Shifting Market
- 3 Things Buyers are Swiping Left On
- 4 Reasons Why Your Home Isn’t Selling
2. Toronto Home Prices are Winding Down–Sort Of
Along with homes taking longer to sell, you can also expect to see them sell for less than they were at the market’s peak in February 2022. Since then, we’ve seen prices soften between 13-20% and many economists are predicting a further 3-4% decline in the coming months.
No one has a crystal ball telling them for sure, so we will have to wait and see. However, in order to move properties, we have to anticipate price drops and price your home ahead of the market. Totally not a big deal, but something you should absolutely discuss with your agent.
3. Where Are All the Showings?
One of the things we noticed during the peak of the market was that buyers were starting to get fatigued. Going to multiple showings, putting in multiple offers, only to get declined puts a lot of stress on a person, and eventually, they might just back out of the market altogether and wait to bide their time.
The same thing could be happening now, with some buyers wanting to wait a bit longer to see what the market will do. That being said, when prices are dropping, it’s a good idea to sell sooner rather than later and you should see between 3-5 showings booked on any given listing per week.
We typically say that 18-20 showings should result in at least one offer. So if your home is listed and not generating these kinds of numbers, you may need to revisit and improve your pricing strategy.
Wondering about firm offers? Read about why they might be a thing of the past here.
4. Now is Not the Time to Be a Shark
Last year or even earlier this year, sellers had a ton of leverage heading into a real estate deal. They could very easily dictate the price (high) and the terms and conditions (none) and expect to still get a ton of offers flooding their inboxes.
That is for sure not the case today. With a softening, more balanced market, this is not the time to expect buyers to submit offers with no conditions. This is the time to be flexible. We have to give a little to get a little and that is totally normal.
You likely won’t see a situation where you get everything you want. You may need to go back and forth a bit on negotiations before settling on a deal you are happy with. The truth is that it’s hard to generate offers when buyers are worried.
This is a convo you need to have early with your agent. Outline everything you want including the closing date, deposit, purchase price, and conditions, and make sure they know what you are willing to compromise on.
Hot Tip: One thing I recommend clients ask for when selling in this type of market is a bigger deposit. A bigger deposit when there are things like appraisals happening closer to the closing date will help account for any potential decrease in value and help ensure your deal goes off without a hitch.
5. Sell First, Buy Later
Whether to buy first or sell first in Toronto has been a hot topic for the past few years, and before the market hit its peak, I would have absolutely said to buy first. But in today’s market, you might be better off selling first.
Selling first allows you to negotiate from a stronger position. It’s less stressful, and you can control things like the closing date. You can even put a clause in the conditions to advance forward or extend your closing date if you’re having trouble finding a home to buy.
The main thing to remember is to always have a plan A, B, and even C. Maybe you have to live in a short-term rental for a bit? Maybe you have to stay with your parents for a while during your house hunt. Regardless, expect the best but plan for the worst, and in a balanced market like this one–sell first.
Still wondering when is the best time to buy or sell first? Read our blog about it here.
Bonus Tip: Don’t Worry!
In general, real estate is always a stable investment, and people will always be moving up or down the property ladder. If your home is priced correctly, it will likely sell. No one knows what the market will do with 100% certainty, but we can estimate and make educated guesses on how to prepare your home for a successful sale.
It’s about having an open and honest conversation with your agent about what to expect, and then managing those expectations based on what the market is doing.
If you’re thinking about buying or selling a home in Toronto in the coming months, I’d be happy to give you a rundown of what you can expect!