As this article is posted, we’re a couple of days into Spring 2024.

In our work with buyer and seller clients we often encounter properties that have been on the market for a long time.  When we say a long time, we don’t mean days, or weeks or even months – but seasons!

As of March 22, 2024, there are 609 homes for sale in the GTA that have been listed for more than a season.  That’s once we exclude vacant land and farm, which always takes longer to sell.

We thought we’d share a glimpse into the type of properties that are being sold for seasons rather than days, and the three things such properties often have in common.

A new real estate term, Seasons On Market!

While we doubt it will catch on, we came up with a more efficient way to describe properties that sit and sit on the market, Seasons On Market.  While Days On Market (DOM) is appropriate for most listings, when we’re talking more than three months of being for sale, SOM feels like a better short-hand!

If you asked us today to only show you properties that have been for sale for more than one season, we’d have 609 freehold properties in the GTA that fit that criteria.  That means they were listed in the Fall of 2023, sat unsold during Winter 2023 and we’re now in the Spring of 2024.

If you wanted to push the envelope a bit and see properties that had been for sale for more than two seasons (which means they were listed in Summer 2023), we’re down to 93 options.  This tells us that about 78% of all properties that qualify for a Seasons on Market designation have been for sale for over one season, but not two seasons.

Here’s the specific break down.

• 476 properties (78%) have been for sale since Fall 2023
• 93 properties (15%) have been for sale since Summer 2023
• 30 properties (5%) have been for sale since Spring 2023
• 10 properties (2%) have been for sale since Winter 2022

The fact that about four-fifths of these SOM properties have been there for just over one season leads us to look at the 15% that have now been for sale for more than two seasons, or since the summer of 2023.

What sort of properties go unsold for a couple of seasons?

It’s unfair for us to kick a seller when they’re down (and if you’ve been for sale for seasons, you are definitely feeling down) so we don’t share specific properties or criticize certain brokerages or agents.  When we look at the stats for these properties, however, a few things pop out.

• The two geographies that have the most of these type of SOM properties are York, followed closely by Toronto.
• Most of the homes are detached but there are a surprising number of townhouses and semis that also stick on the market.
• The average price for such homes is $4.2M and they range from $379K to almost $20 Million

Does this mean that if you have a detached home in York worth about $4M you need to settle in for a long listing period?  Not necessarily.

The higher the price point, the more a longer listing time makes sense.  Not many people can afford a $20M newly built luxury home on 1.8 acres of waterfront in Mississauga, so 219 days on market (more than two seasons) makes some sense.

At the low end of the price range, we have some properties that are more likely to attract a larger pool of buyers, yet they remain unsold.  Why would a semi-detached house in Brampton (Fletcher’s Creek to be specific) that’s listed at $815,000 still be for sale after 207 days?

Given the variety of price points, location and to a certain extent, home type, what causes a property to sit unsold for seasons?

Here’s the short answer from our review.

1. They hire a “listing only” brokerage where for a flat fee the property goes up on MLS but the seller gets no advice, assistance or help from professional Realtors who do this for a living.
2. They offer a low commission to the buyer’s agent.
3. They ping pong the listing price up and down.

Here’s the long (but not really, really long) answer.

Hiring a Listing Only Brokerage

For a number of years now, sellers have had the option of paying a flat fee to a listing only brokerage to publish what is called a “mere listing” on MLS.  For a low fee, the seller has their listing put onto the MLS system with notes that say for any questions, contact the seller directly.  The listing brokerage isn’t offering the same suite of services to the seller that is typical of a “normal” MLS listing and they don’t advise on the price, commission, marketing, or anything to do with the listing.  They put it up and that’s it.

We see a number of listings with the dubious distinction of multiple seasons on market that are with such a “listing only” brokerage.  We know this for sure due to required legal wording on the brokerage portion of the MLS, so when we say we see a number of listings like this in our search results, we aren’t guessing based on other factors.

In general, such brokerages do exactly what is promised – they put up that listing.  We say that to make it clear that we’re not criticizing the listing brokerage for the length of time a property has been on the market.  When you hire a listing only brokerage, their job is not to get the property sold, it’s to put up the listing using the information the seller provided.

This means a list price the seller thinks is fair, regardless of whether the market thinks otherwise.  It also means no professional marketing in most cases, with photos provided by the seller and in almost all cases, no staging or preparation of the home to let it show its best.

Offering a Low Commission

The next aspect we commonly see on such listings that sit on the market is some sort of reduced commission to the co-operating brokerage.  There is no requirement for a seller to offer buyer’s agents the same as their competing sellers and a seller is free to instruct their listing agent or brokerage to offer whatever commission they feel is appropriate.

This is true in the same way that a seller is also free to set whatever list price they feel is fair – it’s up to the seller and it can have consequences on whether it’s sold.  One of our most popular articles (fine, the most popular article) is on the average real estate commission in Ontario, and you’re welcome to read it here if you want a more in-depth discussion of commissions.

For our purposes today, we will simply point out that most buyers have signed a Buyer Representation Agreement with their agent that says they will be responsible for any “shortfall” in the commission offered by the seller below whatever is on the Buyer Representation Agreement paperwork.

If a buyer agent has such signed documentation at 2.5% commission from the seller and a seller offers 1.5% commission, the buyer makes up that 1% difference.  In other words, the seller saves 1% and the buyer is charged an additional 1%.  Many buyers decide against a property where they have to pay a fee to their agent, which means fewer showings, offers and a longer sale time.

We often see a lower than typical (whatever is the norm in the area) buyer brokerage commission when the listing is one of the “mere” listings we discussed above.  The most common commission offered in those cases is $1.  Yes, one dollar.

Now to be fair, whenever a listing shows a commission like that, it means that the listing brokerage hasn’t been authorized to offer a typical commission (commonly 2% to 2.5% depending on the part of the GTA) to the purchaser’s agent.  It doesn’t mean that the seller won’t offer a commission greater than the amount listed, which in this case is that $1 amount.  Agents will need to call and have that discussion with the seller.  We’ve done it before and sometimes sellers offer a flat amount, sometimes they offer a pretty standard commission and sometimes they don’t want to pay a commission at all.

Regardless of whether it is paired with a “mere” listing, offering a lower commission to the buyer’s agent than your competition is often followed by a longer listing time and an eventual lower sale price than could otherwise be obtained.

The final common element to properties that sit for seasons is the list price.  Actually, the list prices.

Pricing it high (or low, or high, then low, then lower, then higher, then really high)

The other aspect that definitely affects how long a property stays on the market is the listing price.  A property that is listed above market value will sit on the market longer as it will have fewer showings.  Keller Williams did research into this and found that you have up to 80% fewer potential buyers look at your property if you price the property more than 15% above market value.

The simple rule we tell our seller clients is that we have one opportunity to make a first impression on the market.  Whenever a new listing goes up, there are a glut of potential buyers, just waiting for new properties.  If we price too high, the market largely ignores the property and in most cases, the property sits without offers.

When we look at the properties that sit for seasons in the GTA, they often have had significant changes to their list price.  After all, if a property was well-priced and a willing buyer came to the table, it would be a matter of days on market, not seasons on market.

There is no one consistent approach to list price with the 609 properties that have sat for seasons in the GTA as of today, but a common one is listing at a price that was clearly too high for the market, before dropping their price by too small an amount.  When a property is priced too high for the market, you can’t do a minor price drop and expect the market to react.  You need to grab their attention by doing a sizeable price drop or it will be ignored.  In many of the properties we’re discussing now, they did exactly the wrong thing.

In other cases, as time passed and new market headlines appeared each month, the price jumped around.  While it seems illogical that the right response to no one being willing to pay your asking price is to increase it, emotion is more often in control at this point.  A frustrated seller who hasn’t seen the result they expected can interpret new market averages to mean the reason it hasn’t sold is their price was wrong – not too high, but too low.  This rarely is the case, so looking at the history of a home that has been on the market for seasons often shows ping ponging list prices up and down as the seller and their agent struggle to find the right price to get it sold.

We hope you enjoyed hearing about such Seasons On Market listings and what commonly leads to such circumstances.  We would say that the key aspect in all such listings is the lack of a seasoned real estate agent providing the right information and advice to the seller.  While market shifts can lead to a sudden spike in such SOM listings, there are rarely the level we’re seeing right now.  We attribute that largely to the influx of new and inexperienced agents who don’t know how to react to market conditions and properly advise their seller clients.

If you’re thinking about selling and want to be one of the Days On Market sellers rather than Seasons On Market sellers, get in touch and we’ll help make sure that is the case!