Nicki Skinner

A Kingdom for your Horse?

19 May 2017
Nicki Skinner

In honour of Mothers’ Day just past, I’d thought I’d share some wisdom from my mum, who sold real estate in a different era. This was a ‘conversation’ often repeated: “I need 10 acres for my horse.” “Do you own a horse?” “No, but I might some day.”

I love working with clients who dream big – I’m one of them myself (my own farm will have lavender and goats for all the soap I’m going to make. Some day). And both Buyers and Sellers often have, shall we say, great expectations?

Continuing on the horse theme, if wishes were horses, then beggars would ride.

This is particularly true at the moment, as we watch the Toronto market change from week to week. Many sellers are still expecting 20-30% above their artificially low listing price, but buyers are suddenly thinking they can pay at or below asking. How can these two very different markets exist at the same time?

Because that’s how fast the market is changing. And just to clarify, prices have not dropped – but they are not increasing on a weekly /daily/hourly basis the way they were in February and March.

Sellers who started planning their listing a few weeks ago based their pricing and strategy on conditions that have changed. But buyers who have been looking for several weeks have noticed the change right away. And what has caused this shift? The same factors that always do: supply and demand. The provincial powers that be suggest changes, the media runs sky is falling headlines, and there are more listings simply because people list in the spring. Combine these 3 factors and perception affects change as much as actual legislation. But the bottom line is that there are more listings on the market than there were last month so buyers have an opportunity to take a little more time in their choices. Supply and Demand. Again, prices are not falling – your property is still worth at least 25-35% more than it was a year ago. But how you market it has changed quite a bit. And if you are convinced 10 buyers are going to offer you hundreds of thousands above your listing price 5 days after you go on the market, you are in for a bit of a shock.

Many listings are getting only 1 or two offers if any on the ‘hold back’ date. And then the next day they relist at a new price, either higher to reflect what they actually expect, or lower if they think they can create more interest and multiple offers.

And buyers are waiting to see what those seller expectations are. This may sound crazy, but buyers and sellers can now negotiate a price. Old school for sure. And all the more reason to make sure your Realtor has done their homework. Buyers and Sellers need to understand what a property is worth right now based on comparable properties and current market conditions.

The best strategy right now? Price your home realistically, don’t expect to sell in a week (although you still might), and let your Realtor negotiate a great deal. And as a Buyer, make sure your Realtor has all the info to help you decide on a realistic offer price. This is called a balanced market, and it’s the best situation for both sides.

Let’s hope we get to enjoy the balance for a bit, because next week it could be a horse of a different colour.