Once we hit the middle of December, things tend to slow down in the real estate world.  People switch their focus to family and holiday plans and are less keen on putting their home on the market or going hunting for real estate.  There are some deals that happen past the 15^th of December, but it is definitely the start of the slowest (number of sales) and lowest (average sale price) market in the GTA.

Despite the fact that people may have other things on the go, some sellers (and listing agents) throw conventional wisdom to the wind and list homes for sale.  Last year, we had 42 homes in the GTA that were listed for sale on December 24, 2020.  They ranged from a vacant lot in Georgina for $139,900 (terminated after 48 days on the market with no sale) to a detached home in Etobicoke that listed for $3,195,000 and sold for 92% of list price ($2.95M) after 15 days.

It is hard to picture the conversation between the listing agent and the seller that led to putting a home on the market on Christmas Eve.  Regardless of whether you celebrate the holidays, we know that lots of people do, and this is a time when agents and buyers will be less available.  Brokerages are closed on statutory holidays, making bookings harder, and lawyers sometimes have the audacity to shut down for a holiday break as well.

Today, December 24, 2021, we saw 12 properties hit the market in the GTA.  They range in price from a townhouse in Oshawa for sale for $499,999 (last sold for $77,500 back in 2005) to a detached home in Richmond Hill for sale at $2.799M that they have been unsuccessfully trying to sell since October, 2018.

While we can’t know for any property exactly why the decision was made to list on Christmas Eve, we can look at the approach they are taking and identify some ways in which they’re making it even harder to get the best price.  Here’s our take on what not to do if your listing your home over the holidays.

Don’t Set a Quick Offer Date

It is difficult to understand why on earth they would take this approach, but five of the listings that went up today are having a marketing period and holding back offers for less than a week.

Three properties that went up for sale today (December 24, 2021) are reviewing offers on December 29, 2021.  That’s only four full days from when it was listed and two of those days are statutory holidays.

The core principle in holding back offers is that you’re listing below market value to attract as many showings as possible in the hopes of having a number of offers on offer date that push the price beyond what you would get in a more rational market.

When you only allow five days for showings, you’re fundamentally limiting how many people will have the time to notice, book, see and consider your home.  One of the three homes that listed today and is reviewing offers on December 29^th has also stated that showings begin on December 26^th, which means that they lowered the four full days to three full days.  Actually, given offers are being reviewed at 5 PM, there is less than three full days.

If you must list your home for sale right before a major holiday, at least recognize that some people may be unavailable over the holidays and extend your marketing period accordingly.  It just makes sense to allow more potential buyers to see and possibly bid on the home.

Don’t Go to Market Unprepared

The Multiple Listing System that the vast majority of properties are listed upon in the GTA is publicly viewed through Realtor.ca and the data and photos is propagated to thousands of websites that buyers use to search for real estate.

Regardless of where the buyers find the home online, the source of the data that these sites use is the system for the real estate board.  When a home is listed, there are mandatory and optional fields in the listing sheet.

As a general principle, the more information you can provide for buyers to consider, the better the chance they will be interested in seeing the home, which increases the chance you get more offers on the home.

Fully half of the twelve listings that went on the market today have left the room measurements and description fields blank.  No one took the time to have floorplans done or measure the rooms and no one bothered to describe the room features.  Does the kitchen have a granite counter?  Does the master bedroom have walk in closets or an ensuite?  Buyers don’t know because the listing agent didn’t tell them.

A common saying that absolutely applies to real estate is “A picture is worth a thousand words”.  Some of the listing agents that went to market today clearly disagree.  We have the ability to put up to 40 photos on the listing and most took full advantage of that to add lots of pictures of the house.  A few only included one or two photos and one of the homes for sale doesn’t have a single photo of the home on the listing.

Looking to spend $1.25M in Burlington?  Here’s hoping you don’t want to know what it looks like.  Remarkably, the same listing agent has been trying to rent it since November and has 23 pictures on the (still up) rental listing.  When the photos are literally available, it is difficult to understand why it would be listed for sale without using the photos.

If you must list your home for sale over the holidays, there is obviously some pressing issue that doesn’t allow you to wait until a better time to list.  That being said, going to market with incomplete information means you are further decreasing the chance that prospective buyers will see and like your home online enough to book an appointment.  Fewer appointments mean fewer offers and a lower sale price.

Don’t Rush to Market Unless It’s a Short Closing

The final aspect worth noting on the listings that hit the market in the GTA today has to do with the possession date.  This is the day on which the sale would conclude and the new owners would receive the keys.

It is a mandatory field on the MLS system so every listing has a possession date that the seller would prefer.  It doesn’t mean that the buyer has to offer that closing date, but it does tell prospective buyers when the property could close.

Given the decision was made to list their home for sale on Christmas Eve, we assume there is a level of urgency and that the home needs to be sold quickly.  If that wasn’t the case, it would make a lot of sense to wait until past the holidays to list the home for sale, so that you can benefit from more availability of agents and potential buyers.

The vast majority of home sales close in a 45 to 60 day window from when the sale is agreed upon.  That would mean if you sold by the end of December, most buyers and sellers would end up with a closing in the middle to end of February.  It can be quicker, or slower, but if you’re looking to appeal to the majority of buyers, planning on a 45 to 60 day closing is reasonable.

When we look at the homes that went for sale today, three of them have listed January 31, 2022 as the possession date.  That’s a quick closing and if they need that closing for an urgent reason, then listing on Christmas Eve makes some sense.  The clock is ticking and the sooner it gets on the market, the sooner it can be sold, with a greater likelihood of a buyer being able to accommodate that desired closing date.

For the remainder of the listings, they have either listed dates that fall within the typical range or beyond, or they have said they are flexible.  While it is never recommended to list right before a holiday, it seems clear that most of the homes that listed today could have waited until December 27^th to list.  It still isn’t ideal, but a few days doesn’t make much of a difference if you’ve said you’re OK with a flexible closing date.

If you must list your home for sale on Christmas Eve, then make sure the poor timing is necessary due to a quick closing.    If you have some flexibility on closing, or even if you’re looking for a closing in a typical 45 to 60 day range, then it makes tremendous sense to wait until after the holidays.

While there are some circumstances that could make it necessary for a seller to list their home for sale on Christmas Eve, there are also some rules you should follow to mitigate any negative consequences of the timing of your listing.  Don’t set a very short marketing period, don’t list the home with incomplete information or missing photos and don’t do it unless you need a quick closing and you’re running out of time.

If you’re thinking about selling, then make sure you work with agents who understand your situation and the importance of timing and approach for your listing.  If that sounds appealing, don’t hesitate to get in touch.

According to the Ontario Real Estate Association (OREA), there are 82,000 real estate agents in Ontario, spread out across 37 real estate boards.

The largest board by far is the one we belong to, the Toronto Regional Real Estate Board (TRREB).  It is actually the largest real estate board in all of Canada and has a whopping 62,000 members.

With 62,000 members able to represent buyers and sellers, there are a lot of people conducting real estate transactions in the GTA.  Some do a lot of deals every year and some do very few.

We’re grateful to be amongst the agents who do a lot of deals (26 so far this year) and in the course of representing our clients, we work with lots of other real estate agents.  Some of these agents are experienced professionals and those deals go smoothly and are often a win-win for both sides.

Of course, not all of the agents we deal with are as experienced or capable as the best agents.  We’ve identified three key ways in which real estate agents lose their clients money.  Below are three real-life stories of deals we’ve participated in and the lesson we took from the experience.

Mistake #1 – Splitting the Difference

One of the biggest negotiating mistakes that people make is splitting the difference between what one party is offering and what the other party wants.  It is the hallmark of non-professional negotiators as it has the appearance of being fair.  In reality, it is far from it.

Here’s a story about why splitting the difference is a mistake.

We listed a home for sale and based on a number of factors, decided to list at the price we wanted rather than list below market value and set an offer date.  Our agents spent the time to value the property properly and we came to an agreement with our seller client on the value.

Our sellers were thrilled we could substantiate that high a value and we listed at a price that gave us a bit of wiggle room as we expected we would sell for around 2% below our list price.

When we received an offer, it came in pretty close to our list price with a financing condition.  Based on conversations with the buyer agent, it didn’t seem likely the financing would be an issue and they included it more for peace of mind.  In conversations with the buying agent, we had made it clear why our list price was a fair value and that is what resulted in an offer that was about 1.5% below our list price.

We spoke with our clients, and they asked for a bit of time to consider it.  While they did that, we went back to the buyer agent to discuss the offer again.  We talked about a few different aspects and raised the point as to whether the financing condition could be removed and whether they would be willing to increase their offer price.  This was just a conversation to determine answers to some questions our clients had asked and to work towards getting a deal done.  We had a binding offer that was in writing and there was no risk in asking these questions.

The impression we received in the conversation was that this buying agent wasn’t particularly experienced at negotiations, so we asked if the buyers would consider splitting the difference between what they had offered and our list price, effectively cutting in half the discount off the list price.    They agreed to discuss it further with their clients.

Within half an hour, we received a new offer from the buyer agent, with the financing condition removed and the offer price increased up by half of the original difference.  While our clients had considered the original offer, we turned it from a conditional offer into a firm offer and we increased the sale price.  It sold that day for more than 99% of list price and our clients got everything they wanted.

The mistake that was made was the buyer’s agent agreeing to split the difference.  Doing so appears “fair” but the gap between a list price and an offer price is variable and cutting a variable in half doesn’t mean it is fair to both parties.  If you were selling a house for $1M and someone offered you $200,000, there would be an $800K gap between the offer price and the list price.  Is it fair to split that difference and agree to a $600K sale price?

The lesson is simple – when negotiating remain focused on your goal price and not the gap between it and the other price.  Never split the difference.

Mistake #2 – Letting Time Pass

In real estate, time is often the enemy of success.  The longer it takes for a deal to come to completion, the greater the likelihood of it falling apart before it gets there.  Whether it is a buyer changing their mind during a long negotiation or other competition arriving and changing the end result, the longer deals stretch out, the great the chance of things not going to plan.

Here’s a story about why letting time pass is a mistake.

We listed a condo for sale and priced it at a price we determined was the highest we could substantiate based on recent sales.  It would set a new record for price per sf for the building and the unit showed amazing and we thought we could get very close to that list price.

After three days on the market, we had a number of showings and more booked into the evening and following morning.

We received an offer in the late afternoon with a short irrevocable period to 10:00 PM.  This means that the offer was only good for about five hours.  This was done to put pressure on our sellers to accept the offer before any more showings could take place and before any other buyer could come with another competing offer.

The buyer agent did her job well in applying that pressure and it was a good offer, just a bit below list price.  Our clients were inclined to accept it but we knew we had lots of interest and three more showings that evening, plus two more the next day.  We placed a call to the buying agent and asked for a longer irrevocable.  She should have said no and continued the pressure.  The likely result would have been a bit more negotiations but selling for close to the offer price.

Instead, she agreed to extend the irrevocable until 1:00 PM the following day.  We let all agents know that we had an offer and that we would be reviewing it and any others the next day at noon.  This gave the agents who were showing the property before then the time to consider an offer if their clients loved the home.

The next day we received three additional offers, two from showings the night before.  We ended up selling to one of those agents for 107% of list price, setting a much higher price per sf than we had expected that still holds in the building.

The mistake the first agent made was allowing time to pass and competition to show up.  She cost her clients the unit and if they had paid what the other offer ending up paying, it would have cost her clients $100K more than if she had kept the time pressure on.

The lesson is clear – the more time that passes, the greater the chance you have to pay more for a property.  In real estate, time can literally equal money.

Mistake #3 – Failing to Seize Opportunity

The final mistake that we often see in our dealings with inexperienced agents is not recognizing when there is an opportunity to push on price.

Here’s a story about missing out on an opportunity to do better for your client.

We listed a home in a in-demand neighbourhood and priced it below market value with a set offer date to allow us a week for marketing purposes.  We had many showings, with a few days where almost every available time slot was filled.

We were open to a pre-emptive offer but we felt it had to be considerable as we had deliberately listed below market value to the tune of about 10%.  The home showed extremely well, both in photos as well as in person, but it was a unique home in some aspects.  This made it quite difficult for buyer agents to find comparables.  There were different styles of homes in the area that sold in the low $1M range but also homes that sold in the high $1M range.  We were more in the middle and the lack of good comparable sales proved to be a real challenge.

On offer day, we received far fewer offers than expected.  We thought three or four were likely based on feedback but we ended up with only two agents saying they would submit.  At the last minute, one of those agents had their client change their mind and we only had a single offer.  It was not at a price we would accept, and the buyer did not have the budget to get there.

While disappointed, we knew that there were a number of agents who had buyers that were interested but had chosen to not submit due to fears of competition pushing it beyond their budget.  We made a plan to relist the next day at a new, higher price, with offers accepted anytime.  Our clients had given us permission to share that new list price with agents to see if any of them wanted to seize the opportunity before it hit the market with that new price the next day.

When a home is relisted after not selling on offer day, experienced agents understand that this new list price is based on what happened the day before.  If a home was listed for $1.1M and relists for $1.3M, they know that they did not receive any offers close to $1.3M the day before, otherwise they would have dealt with that offer and come to an agreement.  The new list price is almost always negotiable to some small extent.

We reached out to a number of agents and one was very interested in the fact that we did not sell and would be relisting.  They knew what our new list price would be and they wrote up an offer within a couple of hours.  The expectation was that it would be close, but not quite at the list price, and it might be conditional upon financing.

Instead of seizing the opportunity presented by an unexpected outcome on offer day, the agent submitted a firm offer of over our intended list price.  This was partially a result of how we framed the situation with the agent, but it was also a mistake on the part of the buyer agent.  They failed to realize there was an opportunity to push on the price and it cost their client money.

The lesson is a difficult one to consistently implement, but it is important  – always monitor and reassess the situation to make sure you’re not missing out on an opportunity due to a change in circumstances.

Real estate transactions are complex and the negotiations that take place are rife with ways in which an inexperienced agent can cost their clients money.  If you want to make sure nothing is left on the table and you get the best possible results, then don’t hesitate to get in touch.