One of the most common areas of confusion for buyers and sellers is the different approaches to listing a home for sale.
- One involves listing a below-market price with a set offer date, on the hopes that a bidding war will take place on the offer date, and the home sell for significantly over the (underpriced) list price.
- The other is listing at a price the seller feels is fair and selling for that price, or typically a little bit below it after some negotiations.
We’ve previously talked about these two approaches and why and when it makes sense to do one over the other.
We know that it can be confusing, and we wanted to do an analysis of two areas and two different markets to see what is happening right now and what is working best right now.
We looked at what approach sellers are taking for detached homes in High Park and condo apartments in Mimico. Two very different markets with two very different approaches. Here’s our analysis of the data as well as the insights we gathered from reviewing it.
Detached Houses in High Park
In July 2021, we had 10 detached houses listed for sale in the High Park-Swansea MLS community.
What did they do?
60% of the listings set an offer date and were holding back on offers until that date. The remaining 40% were listed with offers being accepted anytime.
How did it work out?
For the six houses that had offer dates, four are now sold, one failed to sell on the offer date and is still for sale and one has the offer date set for early August. Two of the four that sold were bought by a buyer who submitted a pre-emptive bid before the offer date. The other two sold on the offer date.
For the four houses that were accepting offers anytime, one sold and the other three remain on the market.
What does it mean?
With only ten listings, it can be dangerous to assume too much causation or correlation, but there are some interesting lessons from our analysis.
- The majority of sellers in High Park are still holding back on offers and it is largely a successful strategy, with 67% of the listings selling either before or on offer date.
- In contrast, less than half of sellers in High Park are taking offers at any point and only 25% of those sellers have been successful in selling as of yet.
- If you’re looking to sell a typical family home in the area, listing below market value and holding back offers to a specific date is the recommended approach.
- If you’re looking to buy a typical family home in the area, expect that most listings will have an offer date and the eventual sale price is around 112% of the list price.
Every home has its own specific situation so if you’re considering selling, make sure your agent considers the attributes and market for your home.
Condo Apartments in Mimico
In July 2021, we had 169 condo apartments listed for sale in the Mimico MLS community.
What did they do?
23% of the listings set an offer date and were holding back on offers until that date. The remaining 77% were listed with offers being accepted anytime.
How did it work out?
For the 40 condo apartments that had offer dates, 16 failed to sell on their offer date, 15 did sell and 9 have their offer dates in early August. None of the units that sold were sold with a pre-emptive offer.
For the 129 condo apartments that were accepting offers anytime, 90 are still for sale, 9 are sold conditionally and 22 are sold firm. We also had 8 that terminated the listing.
What does it mean?
Given we have a decent sample size, we can reasonably assume some causation or correlation between the approach taken and the results. Here’s what we saw from our analysis.
- The majority of sellers in Mimico are not holding back on offers and are willing to take offers at anytime. Only 17% of the listings sold so far, with another 7% sold conditionally. For those units that did sell it happened within 11 days.
- The sellers who held back on offers didn’t see any buyers jump in with a pre-emptive offer but about half of the listings who had offer dates that have now passed saw the unit sell on offer day. That of course means the other half failed to sell on their set offer date and continue to list for sale.
- If you’re looking to sell a typical condo unit in the area, listing at market value and negotiating to get close to that price is the most common approach. If you do set an offer date, don’t expect to get a pre-emptive offer and you’ve got even odds that you won’t get an offer or a deal done on your offer date. Given that result, we would recommend listing at a fair price and having your agent work hard to get buyers in who want to pay that price.
- If you’re looking to buy a typical condo unit in the area, expect that most listings will be available for offers immediately and the list price you see (or a bit below it) is what they would take for the unit.
Just like with detached homes in High Park, every condo unit and building has its own specific situation so if you’re considering selling, make sure your agent considers the attributes and market for your home.
Deciphering what’s going on in a specific market and what you can expect as a seller or buyer is quite challenging. If you are looking to buy or sell, you need to work with agents who understand what’s happening in your market and what approach will get you the best possible results. If that sounds appealing, don’t hesitate to get in touch with us!
