Anyone who plans to sell their GTA home this fall should take note of this cautionary tale.
In August, we had a meeting with a prospective seller to talk about listing their house for sale. We valued the home at $1.45 million because it was excellent and in a desirable area. We advised listing the home at market value as soon as possible because we were already noticing indications that the market was changing.
As is common in our line of work, the seller disagreed with our assessment and hired a different agent, who informed him that his home was worth more.
The home had a $1.7 million price tag when it was put up for sale in September.
It didn't sell.
With an asking price of $1.5 million, it was relisted for sale in October.
The issue: As of September, the market had declined and it was still priced higher than what our August valuation suggested it should be worth. Despite a $200,000 price cut, the house was overpriced in August and was still overpriced in October.
They listed the house once more in December, this time for $1.4 million, $50,000 less than the asking price they weren't willing to consider in August.
And now that February has arrived, nothing has changed.
However, there is more to the story.
The price of homes in this area decreased by between August and the end of December. This house is now worth $1,260,000 if our August valuation was accurate. If the seller had valued the property at $1.7 as they claimed in August, it would now be worth $1.36 million.
Even so, the house is still up for sale today, with a $1.4 million asking price.
This is a prime example of chasing the market down. Even though the seller boldly reduced the price after the first month, the new price was still above what comparable homes in the area were selling for at the time. Additionally, the seller made no price adjustments in the crucial months of October and November as the market continued to weaken.
If they are successful in selling this house this fall, it will figuratively be for hundreds of thousands of dollars less than what they could have gotten for it four months ago. Additionally, they could have avoided the stress and demonstrations that lasted for months.
Sharing this story is challenging. I am aware of the seller's circumstances, and I have always wanted the best for them. You can learn from this story because it is one that is being told on the MLS every day in every community in the GTA.
Price correctly from the outset. and proactively respond to shifting market circumstances.
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