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Can A Buyer Back Out Of A Real Estate Deal?

You’ve sold your home and are excited about the fact that you sold for well over your list price and in a short amount of time. You’ve popped the champagne and put the “SOLD” sign up, it’s now time to start thinking about your move to your new home. Your agent removes all of the staging furniture and other staging items and your house sits semi-empty until your move date as you put all of your furniture in storage in order to stage your home. You then receive a phone call from your agent a couple of weeks later to inform you that the buyers have decided to back out of the deal. Your heart starts to pound and your mind starts to race but you keep telling yourself that they can’t back out since you have a signed contract and a deposit. However, no matter how much you try to convince yourself that everything will be ok, the same question keeps popping up in your head: “can a buyer back out of a real estate deal?”

Read below to find out.

Can A Buyer Back Out Of A Real Estate Deal?

Even though the buyer has informed you that they don’t plan to move forward with closing the deal, the good news for you is that the real estate laws in Ontario do not include any type of cooling off period for resale real estate which would allow a buyer to back out of a deal within a certain period of time once the contract is firm and all conditions are fulfilled. If a buyer doesn’t close on a deal, they will typically face legal action if the seller decides to take that route. A buyer could be held accountable for any loss you as the seller incur should you need to re-list your home and you do not receive the same offer that they had originally made, including covering any legal fees, carrying costs and out-of-pocket expenses, among other expenses.

Keep in mind, a buyer still may choose to back out of a deal and incur legal expenses and potential settlement costs if they feel that it would be the financially wiser option for their particular circumstances as opposed to what they had otherwise committed to paying in order to close the deal.

Can A Buyer Back Out Of A Real Estate Deal?

With the market being as volatile as it has been due to rising interest rates, we have been seeing more deals not closing than we have seen in recent years. There are now more risks to consider when listing your home for sale than there has been over the last several years. In some cases, buyers may be using the threat of not closing as an opportunity to negotiate the price.

With each new interest rate hike announcement, buyers and their agents understand that sellers are likely under more stress and may be willing to negotiate on the price in order to get the deal done and move forward with their plans.

In addition to the above, we are seeing an increase in home appraisals required by lenders. If the buyer drastically over paid for your property and the appraised amount listed in the appraisal report comes in much lower, the buyer may be required by their lender to make up the difference out of pocket which could result in them attempting to negotiate the final sale price down from what they originally had offered. Should this happen, you will need to decide if you are willing to negotiate and by how much. If you decide to negotiate, your agent will negotiate on your behalf based on your instructions and if you and the buyer come to an agreement based on a reduced price, you will sign an amendment in order to lower the final sale price. If the parties are not able to come to an agreement, both the seller’s lawyer and buyer’s lawyer will get involved.

It is important to keep in mind that the legal process can take some time and can be costly if dragged out, so you will want to seriously consider your options before making a final decision as to how you want to proceed.

Can A Buyer Back Out Of A Real Estate Deal

The good news for you as a seller is that it’s more uncommon for a buyer to back out of a deal than it is for them to follow through and close on a deal. There are also laws that protect you and working with the right real estate agent and real estate lawyer will make the selling process a smoother one. By working with a reputable real estate agent and real estate lawyer, you will be in good hands should you run into the rare case of a buyer trying to back out of your real estate deal.

Can A Buyer Back Out Of A Real Estate Deal?

Have you been thinking of making a move? Whether you are selling or buying, feel free to contact me any time with your real estate questions. I’m always happy to help.

Top 10 ways to increase the value of your home

If you’ve had any thoughts of potentially selling your Toronto home now or in the near future, you may have wondered what you can do to increase the value of your home in order to ensure that your home sells for top dollar.

Over the last decade or so, Toronto real estate has been on fire with homes receiving multiple offers and selling for well over their list price within a few days (sometimes after only 1 day on the market). As I write this blog post in September 2022, things have drastically changed. With the introduction of increased interest rates and the potential of another rate hike announcement tomorrow (Sept 6, 2022), the market has cooled in regards to the number of buyers looking to buy. This is partly due to uncertainty, as well as buyers simply having less buying power. As I continue to check the local Toronto listings on a daily basis for my clients, I’m surprised by the homes that are not selling within a week and are often on the market longer than fifteen or twenty days, and in some cases, even longer. This amount of time on the market would have been unheard of a couple of years ago when buyers were fighting tooth and nail just to have their offers considered during a bidding war, let alone accepted.

Today, in this new market that we find ourselves in, it has never been more important to ensure that your home shows as best as possible. Buyers currently feel they have more negotiating power than they have had over the last several years. The last thing you want to do is to provide them with reasons to devalue your home during negotiations.

In order to help you sell for the highest price possible, I’ve included the top 10 ways to increase the value of your home below. Keep in mind, not all items on this list will apply to each home as some homes may require more (or less) upgrades to be in top listing/showing condition.

1) First impressions matter (enhance your curb appeal) 

The saying “you only get one chance to make a first impression” is true, so make sure you make the right impression from the start. The first thing buyers will see when they visit your property is the front of your home, including your landscaping. For this reason, it’s essential that you take the time and invest into making sure that the front of your home shows well. Below is a list of items to consider attending to prior to listing your home:

  • Prune your plants
  • Pull any weeds
  • Remove or replace dead shrubs
  • Replace dead grass
  • Cut overgrown grass
  • Plant colourful flowers to add some colour
  • Edge your garden beds
  • Add mulch to garden beds
  • Replace your dated front porch if it can’t be repaired
  • Re-paint your front porch if it’s looking worn out
  • Replace your dated front entrance door
  • Consider adding low voltage landscape lighting
  • Re-level your interlocking stone driveway or walkway
  • Pressure wash your interlocking stone driveway
  • Remove any garbage or debris from the front and side of your home

In addition to ensuring the front of your home makes a good first impression, it’s just as important that your back garden does the same. By applying the same options as above to the back of your home, you will be able to leave potential buyers with a positive first impression.

Top 10 ways to increase the value of your home

2) Kitchens can be deal killers

One of the rooms in a home that I often see clients look over in detail when visiting a home is the kitchen. Buyers often spend a lot of time looking over the kitchen and the appliances and take the time to visualize themselves making use of the space. Below is a list of items you may want to consider addressing prior to listing your Toronto home for sale:

  • Complete a full kitchen renovation
  • Paint cabinets (a light and neutral colour is ideal)
  • Add soft closing hardware to your cabinets and drawers
  • Replace cupboard handles with newer handles
  • Replace the light fixtures with newer more modern fixtures
  • Add additional lighting (a light and bright kitchen is typically desirable amongst buyers)
  • Replace outdated appliances with new appliances
  • Clean, clean, clean (the cleaner you make your kitchen, the better)

Top 10 ways to increase the value of your home

3) Beautiful bathrooms sell homes

Another top room of concern for buyers when viewing homes is the bathroom(s). If your bathroom is outdated, you will very likely receive offers at lower price points than if your bathroom is updated. Like kitchens, buyers tend to spend a lot of time considering the bathrooms in a home. It’s important to leave potential buyers with a positive impression and one that they will remember once they have left your home. Below are some items you may want to consider:

  • Keep the paint colours light (this provides a clean and bright feeling)
  • Make sure there is ample lighting
  • Consider replacing your tub with a glass shower
  • Install custom vanities and storage
  • Install heated flooring
  • Replace dated tiles with new neutral coloured tiles
  • Paint your existing cabinets and replace the counter
  • Update your sink and shower hardware

Top 10 ways to increase the value of your home

4) Add a fresh coat of paint 

Adding a fresh coat of paint can drastically improve the look of your home. If you decide to use the same colour as the existing colour on your walls, adding a fresh coat of paint will remove any scuff marks and will make the room feel newer. If you decide to change the colour, it is best to stick to light and neutral colours. I’ve included a list of both Farrow & Ball and Benjamin Moore colours that you may want to consider if you plan on painting your rooms with a new colour. I highly recommend using one of these two top brands when painting, if possible, as the quality of the paint is noticeable when compared to more cost effective paint brands. If these two brands are not within your budget, consider sticking to similar colours as the ones suggested below.

Farrow & Ball 

“All White” No. 2005

“Wevet” No. 273

“Strong White” No. 2001

“California Collection: Salt” CC5

“Wimborne White” No. 239

Benjamin Moore

“White Dove” OC-17

“Chantilly Lace” OC-65

“Cloud White” OC-130

“Classic Grey” OC-23

“Calm” OC-22

Top 10 ways to increase the value of your home

5) Update your lighting game 

Light fixtures don’t only provide light, they also make a statement when they are both on and off. It’s important that your light fixtures make the right statement and not a statement that leaves potential buyers with the impression that your home is dated or hasn’t been taken care of.  Below is a list of some prominent lighting stores where you can browse through many different light fixture options. My advice is to stick to a style that is timeless yet modern.

Union Lighting (best to view their products in person)

Hollis + Morris 

EQ3

Artemide

Top 10 ways to increase the value of your home

6) Replace your outdated flooring 

Whether you have a pet whose claws have scratched up your floors, kids or grandkids whose toys have left their mark or you have broadloom/carpeting, you may want to consider replacing your outdated or damaged floors. These days there are a wide range of both hardwood, engineered hardwood, laminate and tile products to choose from.

Top 10 ways to increase the value of your home

7) Make your home smarter with a smart home product

With new technology becoming more popular by the day and with society becoming accustomed to homes having cool features such as smart home systems, you may want to consider installing a smart home system in your home. Many smart home systems allow you to control various aspects of your home such as the temperature, lighting, alarm and more. The best part about these systems is that they are usually quite simple to install.

Top 10 ways to increase the value of your property

8) Cool down your home with an air conditioner

With the summers getting warmer and warmer, if your Toronto home doesn’t currently have air conditioning like many older homes in Toronto, you may want to consider installing an air conditioner. If you don’t have duct work already running throughout your home, don’t worry, there are many different styles and sizes of air conditioners these days. Speak to a licensed HVAC company about your air conditioning options as there will very likely be one that works for you and your home. If you’re selling your home any time between spring to late summer, buyers will definitely appreciate the fact that you have an air conditioner and will likely be willing to pay more for your home.

Top 10 ways to increase the value of your home

9) Upgrade your furnace 

If your furnace is coming to the end of its life, it may be worth considering replacing it with a new one. If there are any issues with your furnace and it isn’t working properly, buyers will likely use this as a negotiating tool to bring down the value of your home. In a red hot real estate market, you may not need to worry about this as much but when the market is cooler, this is definitely something to consider and not put off.

Top 10 ways to increase the value of your home

10) Transform your old wood-burning fireplace with a modern gas insert

Last November, I wrote a blog about the importance of checking the fireplace before submitting an offer  which discussed the fact that many of the older homes have outdated and unsafe wood-burning fireplaces and chimneys that are just as unsafe. A great way to increase the value of your home is by installing a gas insert fireplace into your old wood-burning fireplace opening.

Top 10 ways to increase the value of your home

Although this list may not be exhaustive of every single option available to increase the value of your home, I believe that these are the top 10 ways to increase the value of your home.

With over fifteen years of previous experience as the owner of a design and build firm prior to entering the word of Toronto real estate and as a full-time, award winning Toronto real estate agent, I have seen my fair share of homes throughout Toronto and the GTA and know what helps to sell a home for the most amount of money. If you are thinking about selling your home and have questions about how you can increase the value of your home or if you have any questions about the market, contact me any time – I’m always happy to help.

Top 10 communities with a go station

Whether it be the high Toronto real estate prices, the chaotic energy of the city or the need for a larger home with a yard, there are many reasons why some Toronto residents trade the convenience of living in the city with living in a smaller community, despite having to commute into the city for work. With Toronto home prices as high as they have been and with the introduction of higher interest rates bringing down the average sale price of many of the GTA communities that saw substantial gains during the pandemic, now could be a good time to consider making a move to one of the top 10 communities in the GTA with a GO station listed below. Purchasing a home in a community that has a GO station isn’t only beneficial to you if you work in Toronto and need to commute, it is also a selling feature that attracts potential buyers should you decide to sell in the future.

Below is a list of the top 10 communities in the GTA that have a GO station (in no particular order):

#1 Oakville

Oakville real estate

Oakville is one of the most desirable and affluent communities outside of the City of Toronto. It is home to many executives who commute into Toronto’s Financial District for work. Many professionals choose Oakville as their home due to its good schools, access to the waterfront and reasonable commute time to Toronto via the GO train.

Below are the average sale prices for all property types in Oakville at the time of this blog (August 2022)

Detached $2,035,091

Semi-detached $1,090,045

Townhomes $1,101,040

Condo apartments $938,359

Condo townhomes $829,093

#2 Port Credit

Top 10 communities in the GTA with GO stations

Port credit is known for its stunning waterfront which was rated as number one in the GTA. This family-friendly community consists of a wide range of demographics, including professionals who work in the Financial District and families who are looking for a quieter lifestyle versus living closer to downtown Toronto. Port Credit is home to the Port Credit Yacht club and is a lively spot during the summer months when the weather is nice. The Port Credit GO Train station makes it convenient for professionals to commute to and from work on a daily basis.

Below are the average sale prices for all property types in Mississauga which Port Credit is a part of. The pricing is based on prices at the time of this blog (August 2022)

Detached $1,589,123

Semi-detached $982,556

Townhomes $1,005,494

Condo apartments $628,116

Condo townhomes $798,552

#3 Unionville

Unionville real estate

Unionville, located in the City of Markham, is one of the most charming communities just north of Toronto. Unionville has a historical main street that consists of many different shops, cafes and restaurants just steps from Toogood Pond where many children and families skate during the winter months. Along with its large beautiful homes and one of the top golf courses in the GTA,  Unionville is a  popular community for those who are looking for a family friendly community not far from the city.

Below are the average sale prices for all property types in Unionville/City of Markham at the time of this blog (August 2022)

Detached $1,708,333

Semi-detached $1,182,644

Townhomes $1,155,546

Condo apartments $707,776

Condo townhomes $875,375

#4 Markham Village

Top 10 communities in the GTA with GO stations

Similarly to Unionville, Markham Village is the older area of the City of Markham and also includes its very own main street, which, like Unionville, includes many different shops, cafes, restaurants and bars. The area consists of large lots which has resulted in builders tearing down many of the older and dated homes and building new larger luxury homes. The Go station located on Main Street Markham makes it convenient for those who need to commute to Toronto for work. Markham Village is a great community for families who are looking for a place to live with a true small town community vibe.

Below are the average sale prices for all property types in Markham Village/City of Markham at the time of this blog (August 2022)

Detached $1,708,333

Semi-detached $1,182,644

Townhomes $1,155,546

Condo apartments $707,776

Condo townhome $875,375

#5 Vaughan

Top 10 communities in the GTA with GO stations

The City of Vaughan is one of the fastest growing communities in the GTA and includes several small communities within it such as Maple, Kleinburg and Woodbridge. The area consists of both residential homes as well as some newer low-rise and high-rise condo buildings. Vaughan is a desirable community among families and professionals who commute to work as there is easy access to highways such as the 407 (east & west) and 400 (north & south), and it also has its own GO station.

Below are the average sale prices for all property types in Vaughan at the time of this blog (August 2022)

Detached $1,697,375

Semi-detached $1,116,357

Townhomes $1,080,793

Condo apartments $690,996

Condo townhome $931,602

#6 Aurora 

Top 10 communities in the GTA with GO stations

Aurora was once a small town but has grown substantially over the years. Although the photo above highlights the beautiful farm land and landscape you will find in the surrounding areas of Aurora, the main area of Aurora where most residents live is made up of residential homes of all sizes. Aurora is also home to large estate size lots in communities with winding tree-lined streets that provide a a good amount of privacy. Aurora has become a popular community for those who commute to work and who appreciate living in a community filled with beautiful homes with spacious lots.

Below are the average sale prices for all property types in Aurora at the time of this blog (August 2022)

Detached $1,625,138

Semi-detached $908,000

Townhomes $987,375

Condo apartments $718,650

Condo townhome $1,116,500

#7 King City

Top 10 communities in the GTA with GO stations

King City is known for its small town vibe, historical homes, large lots and stylish new construction subdivisions. The area has a main street down Keele Street which includes a variety of local shops, restaurants and other businesses. The King City community consists of a variety home types including heritage homes around King Road and Keele Street, large lots with custom homes and bungalows as well as new construction subdivisions that cater to a range of home buyers including first time buyers. For those who are looking for a quieter lifestyle than living in the busy city and who are willing to commute to work, King City might be a good option to consider.

Below are the average sale prices for all property types in the King Township at the time of this blog (August 2022)

Detached $1,912,794

Townhomes $1,108,000

Condo apartments $632,500

#8 Stouffville

Top 10 communities in the GTA with GO stations

Once known for mostly farm land and an older community with a small main street, Stouffville has changed drastically over the last decade and a half. These days, you will find new construction subdivisions that are either brand new or approximately fifteen years old along with an older part of town with homes that have existed for quite some time. Main Street Stouffville has many different shops and businesses along with several restaurants. Although it has grown over the years, it still has a small town vibe to it. Many residents commute to Toronto for work via the GO Train.

Below are the average sale prices for all property types in Stouffville at the time of this blog (August 2022)

Detached $1,414,811

Semi-detached $988,375

Townhomes $956,669

Condo townhome $588,000

#9 Pickering

Top 10 communities in the GTA with GO stations

Twenty years ago you wouldn’t hear about professionals from the city flocking to Pickering. However, Pickering has drastically changed over the years and has a lot to offer those who are looking for a larger home with a larger lot in an area not too far from Toronto. These days you will find many executives who have chosen to call Pickering home. With its beautiful waterfront, sense of community and more, it’s a popular community for those who are looking for more of a suburban vibe while still being close to the city. The Go station and easy access to Highway 401 makes it convenient for those who commute into the city for work.

Below are the average sale prices for all property types in Pickering at the time of this blog (August 2022)

Detached $1,270,758

Semi-detached $902,714

Townhomes $859,336

Condo apartments $609,845

Condo townhome $727,042

#10 Whitby

Top 10 communities in the GTA with GO stations

Whitby is home to several large corporations such as BMW, Sony Canada and others which employ many of the local residents.  Like Pickering, Whitby has its own beautiful waterfront and also a historical main street with Heritage buildings. There are a variety of home styles in the area and the pricing is typically more affordable when compared to other communities in the east end of the GTA such as Picking and Markham.

Detached $1,100,690

Semi-detached $857,500

Townhomes $849,250

Condo apartments $681,667

Condo townhome $706,500

With so many great options in the GTA to consider, I’m confident that you will be able to find the right home for you. To assist you with your search, I’ve included the GO system map below which shows all of their stops in the GTA.

Top 10 communities in the GTA with GO stations

Credit: GO Transit

If you are thinking of making a move out of the city to one of these great communities or any other great community in the GTA and have questions about selling, buying or the market in general, feel free to contact me at any time as I am happy to answer your questions for you.

*All sale prices above are based on July 2022 stats which are released in August 2022.

 

 

How to win a bidding war in Toronto

With Toronto being one of the hottest real estate markets with a level of demand that the supply can’t seem to keep up with, there’s no surprise that buyers often end up in a bidding war against other buyers.

I often tell my buyer clients that buying a home in Toronto is a process, one that involves more than just one attempt at finding the right house for them and sometimes involves some disappointment when one gets away.

How to win a bidding war in Toronto

Unfortunately, the Toronto real estate market is heartless; it doesn’t care about your feelings or your dreams, and it most definitely doesn’t care about how many homes you’ve missed out on. Most of the time, the only thing that Toronto real estate cares about is how much money you will pay for it.

Although offer price is usually the driving force when it comes to selecting the winning bid in a multiple offer situation, there are other deciding factors that come into play and which can work in your favour when putting together your offer.

As a full time Toronto real estate agent, I’ve had plenty experience with assisting both seller and buyer clients over the years. This has allowed me to view the deal from both sides of the table and to pick up on tactics and strategies that have resulted in a winning bid. I’ve also had the opportunity to see what doesn’t work.

How to win a bidding war in Toronto

Below, I’ve provided some of the strategies that have worked for my clients in the past in order to hopefully help you if you’re ever involved with a bidding war in the future.

Strategies:

Submitting a “Bully Offer” – This strategy typically only works if you are willing to pay an amount well above the list price and possibly slightly higher than market value. You essentially should be submitting an offer that the seller would be foolish to refuse. This offer would need to be completely clean and not include any conditions and with a limited number of clauses. This offer should also include the seller’s desired closing date.

Submitting a personalized letter with a photo – Although some may disagree with this strategy, I have seen personal letters work for both my buyer clients as well as for buyers submitting offers on my listings. I’ve personally been in situations where my seller clients were ready to take a lower offer price for their home simply because they liked the offer with the letter from the buyers as it felt more personal. It probably wouldn’t have been the wisest financial decision to accept a lower offer price due to a nicely written letter but it does go to show you that a personalized letter has the potential to sway a seller’s decision as to which offer to accept.

Submitting an offer with the desired closing date – One small way to help increase the odds of your offer being accepted is by matching the seller’s desired closing date. This is a very minor thing and likely won’t be the only thing that makes or breaks the deal, but if you can match the desired losing date, you will be that much closer to having your offer accepted.

Submit a clean offer – If you are up against other offers, the last thing you want to do is submit an offer with a bunch of conditions, reps and warranties and clauses. I realize this can be scary and you must make a decision that you feel comfortable and confident with but you may need to remove any home inspection or financing conditions or clauses you were planning on including. Based on years of experience with dealing with bidding wars, I can guarantee that the odds of your conditional offer being accepted are extremely low. However, if you are considering removing any conditions, make sure you are in a financial position to deal with any unexpected surprises that you may run into down the road.

Make sure your i’s are dotted and t’s are crossed – I often receive incomplete offers with missing information, sometimes important information such as the names of the parties to the agreement along with other very important information. Make sure all sections of the offer are filled out fully and accurately. The last thing you want to be doing is submitting an incomplete offer in a bidding war as this will not only result in the sellers potentially feeling uneasy with your offer, it may even result in you missing out on the home.

Don’t expect more than one chance – For some reason, some buyers and agents think that they will be guaranteed a chance to improve their offer after it has been submitted. This is not always the case as the seller is not required to provide additional opportunities for buyers to improve their offers. Do not go into a bidding war expecting a second, third or fourth chance to improve your offer as you may not get it.

Make sure to check in with the listing agent – Many agents simply submit an offer on offer night and wait to receive a yes or no answer. If you are working with an experienced and reputable Toronto real estate agent, they won’t stop at simply submitting your offer. Once your agent has submitted your offer, they should be checking in with the listing agent in order to see how your offer is doing compared to the others and to see if there is any way that you can make your offer stronger, whether that be financially or otherwise.

At the end of the day, bidding wars are complex and each one is different from the other depending on the different parties involved, including the the sellers, buyers and agents. A good real estate agent will be able to guide you through the process and help ensure that your offer stands out from the competition as much as possible while protecting your rights and working in your best interest throughout the process.

Are you thinking about making a move or do you have questions about the current market?

Contact me any time with your real estate questions or to discuss your real estate plans. I’m happy to help and to answer any questions you may have.

What is a pre-list home inspection?

You may or may not have heard the term “pre-list home inspection” before and wondered what it is and what it’s used for if you don’t already know.

A pre-list home inspection is an inspection that the listing agent typically arranges for their seller client prior to the property being listed for sale on MLS. By completing a pre-list home inspection, listing agents are able to provide such inspections to potential buyers and their agent when an inquiry is made regarding the condition of the home.

Toronto real estate (home inspections)

As long as your home doesn’t have any major issues, a pre-list home inspection often adds comfort to buyers, especially when they are involved in a multiple offer situation and likely won’t be able to submit an offer with a home inspection condition included.

A home inspection typically includes important information regarding different aspects and areas of the home and often includes details regarding the condition of following below as well as other items:

  • Foundation (limited)
  • Roof (limited)
  • Chimney
  • Decks & landscaping
  • Windows
  • Doors
  • Electrical (limited)
  • Plumbing (limited)
  • Heating & cooling systems (limited)
  • Bylaw related / safety issues
  • Moisture damage (typically available at an additional cost)

It is important to know that home inspectors are somewhat limited in regards to how deep they can dig into each section of the home. They mostly base their report on what is visible to the naked eye when looking over the different areas of your home.

It is also important to know that it’s extremely rare to receive a report that is squeaky clean without any issues at all, even in a newer home. Many sellers get nervous when they see a report that says there are issues with their home, even if they are minor issues. By completing a pre-list home inspection, you will have the opportunity to address the issues prior to listing your home for sale if you should wish to. Once the issues have been addressed, the home inspector will usually provide you with an updated report which reflects the repairs being completed. Over the years that I have been working in the real estate industry, I haven’t once seen a report completely free from any issues.

What is a pre list home inspection

Now that you know what a pre-list home inspection is, make sure you speak to your agent about this option prior to listing your home for sale.

If you aren’t currently working with another agent and have questions about the market or selling your home, contact me any time. I’m always happy to answer your questions and concerns and to assist you with achieving your specific real estate objectives.

Why Isn't My House Selling? (Toronto real estate)

So you’ve gone through the process of hiring a Toronto real estate agent, decluttered and staged your property to ensure that it’s in top showing condition, the “For Sale” sign goes in the lawn and the listing goes live on MLS, you are excited to see how many showings and offers you receive, but you don’t receive any interest and you’re now wondering, “how could this be happening?” You’ve hired a professional Toronto real estate agent, completed all of the prep work to ensure your property shows well and you’ve heard that other properties have sold with multiple offers in only one week or sometimes less. You’re now asking yourself “Why isn’t my home selling?”

There are a variety of factors that could be getting in the way of your home selling but in most cases it comes down to expectations. Below are the top 5 reasons why a home may not sell.

1) Market Shifts

We have been spoiled over the last decade or so with Toronto home prices skyrocketing year after year. Prior to the pandemic and interest rate hikes, you could put almost any home on the market (even complete gut jobs) and they would sell for well over their list price with multiple offers. Unfortunately, things have changed and the market is no longer what it was back then (the good old days – depending on who you ask). Since the introduction of rate hikes (which we haven’t seen in a very long time), the market has continued to shift. As rates continue to go up, the buying power among buyers continues to shrink and the uncertainty continues to grow among buyers, sellers and the public in general. In one recent study completed by Hanley Mortgage Group, buyers had approximately $120,000 less buying power this past July 2022 vs July 2021; that is a substantial hit for buyers looking to buy in one of the most expensive cities both here in Canada and around the globe.

Toronto real estate market

So what does this have to do with your house not selling?

It has to do with expectations.

The market has been changing weekly, sometimes daily and as previously mentioned, it’s not what it was in the past in regards to the average sale price or number of offers. Toronto hit a record high for the average sale price in February 2022 at $1,334,544 which, at that time, made Toronto the most expensive city in Canada. Since then, we have seen multiple rate increases with potentially more on the horizon. This has caused the average sale price to continuously decline month over month from $1,334,544 in February all the way down to $1,074,754 last month (July 2022). If you listed your Toronto home this summer hoping to sell for this past winter’s sale prices, your expectations are likely not in line with the current market. While interest rates increase and the buying power of buyers continues to decrease, sale prices will also continue to adjust accordingly.

In addition to the market shifting as a result of interest rate hikes, historically, we typically see seasonal shifts in the market with August typically being one of the slowest months of the year. This is due to many buyers taking vacation and travelling during this month. Unfortunately, due to the pandemic and travel restrictions being lifted, there are even more potential buyers who are looking to get away for the vacation they have been craving over the last couple of years. The amount of demand for travel  is evident when considering the extremely high pricing for both flights and vacation packages when you complete a quick online inquiry for travel options.

What can you do about these market shifts in order to sell your home?

Well, this depends on your specific situation.

If you must sell now, you and your agent should discuss your options based on the current market and current comparable sales in your area. In addition to your agent providing you with statistical data based on the current market, you may also need to adjust your expectations and come to the understanding that you simply may not be able to achieve the sale price you originally had in mind when you originally listed your home for sale. Keep in mind, depending on where you are looking to move to (buy) and the rate you have locked in at, you may make up some of the loss on the buy side with the right negotiations.

If you don’t have to sell immediately, you should discuss with your agent the option of potentially re-listing your property once the market has bounced back to the level of pricing you were expecting when you originally decided to list. However, keep in mind that if you decide to take this route, be prepared that you may not be as happy with the purchase price of your next property depending on what market it’s located in as prices may have bounced back and be more than what they are today.

2) Improper Staging

Let’s be honest, not all staging is equal.  It’s important that your home is professionally staged and staged in a way that makes your property stand out from the competition. Anyone can place a throw blanket on a sofa but true high quality staging requires a lot of thought and planning. Professional staging often requires the removal of all existing furniture from the property and new furniture brought in which enhances the space and makes the home feel brighter, cleaner and more airy. If your property isn’t properly staged you could potentially be turning off potential buyers. Staging was important when the real estate market was hot, it is now even more essential in this new market.

Toronto real estate

3) Poor Quality Photos 

Just like any other product, the quality and type of photos used to market a product can make or break the successful sale of that product; it is no different when selling a home. Having professional photos that showcase your property in the best light possible will drastically increase your odds of selling for the most amount of money in the least amount of time. Doing otherwise will likely leave your home sitting on the market for quite some time. Your realtor should be using a professional photographer for the photos that will be shared in both online and print marketing materials.

Toronto real estate

4) A Dirty Home

The last thing you want is for potential buyers to be turned off by how dirty your home may be. When viewing homes, there’s almost nothing worse than walking into a home and wanting to leave your shoes on because the home not clean, this is definitely not the first impression you want to be making to potential buyers. Before hiring an agent, make sure the agent you decide to work with provides complimentary professional cleaning services as a part of their pre-listing services. If your home isn’t thoroughly clean, you may find yourself waiting a long time for the right buyer to come along and you will very likely receive less money for your home.

Toronto real estate

5) Incomplete Repairs or Renovations

Sellers sometimes think that buyers will be willing to complete repairs that are needed or that have been started but not fully completed, but this couldn’t be further from the truth. As a Toronto real estate agent who helps both sellers and buyers, I’ve seen the look of disappointment in the eyes of my buyer clients when they come across areas in need of repair or partially finished work. Their minds automatically go to the thought of “how much is this going to cost to fix?” and “how much should we knock off the offer price due to this?” Before listing your home for sale, complete as many needed repairs that you can and finish any partially finished projects that you may not have completed. You will likely save yourself thousands of dollars when it comes to negotiating a final sale price for your home by doing this. It is also crucial that you use a licensed professional when completing projects that require licensed trades such as electrical work, plumbing and structural work that may require an engineer.

Toronto real estate

These are just some of the many reasons why your home may not be selling. Ensuring that all of these items are addressed properly will increase the odds of your home selling for the most amount of money in the least amount of time.

If you aren’t currently working with another agent and have questions about the market or selling your home, contact me any time. I’m always happy to answer your questions and concerns and to assist you with achieving your specific real estate objectives.

*This is not intended to solicit individuals currently under contract with another real estate agent or real estate brokerage.

 

Toronto real estate market (July 2022)

For the fourth consecutive month the Toronto and area resale housing market produced declining sales and lower average sale prices. The housing market peaked in February for average sale prices, in March for monthly reported sales. In February the average sale price for the greater Toronto area came in at an incredible (and unsustainable) $1,334,000. Sales in March hit 10,881, which was not a record. The record for March sales was achieved in 2021 when an unbelievable 15,627 homes of all types were reported sold.

In July the average sale price came in at $1,074,754, a 19 percent decline compared to February’s peak. It should be noted that July’s average sale price was still 1.2 percent higher than July 2021’s average sale price of $1,061,724. Sales in July were more than 47 percent lower than a year ago. There were 4,912 properties reported sold throughout the greater Toronto region. Last year 9,339 homes were sold. Compared to the 10,881 properties reported sold in March, sales in July have declined by almost 55 percent.

There is no mystery as to why the market has changed so dramatically in such a very short time period. The housing market, not only in Toronto and surrounding areas, but universally in North America, was supercharged by pandemic forces (the need for space and safety and the ability to work remotely) and historically cheap money. Money is no longer cheap and with society returning to a form of normalcy, the housing landscape is, compared to February and March and all of 2021, unrecognizable. The Bank of Canada’s benchmark rate is currently 2.5 percent. In March it was only 0.25 percent. In only four months it has increased by 900 percent! Mortgage interest rates have correspondingly also increased (although not as dramatically) from approximately 2 percent in March to close to 6 percent today. With the inflation rate in Canada at about 8 percent, it is anticipated that when the Bank of Canada meets in September, another rate hike is expected.

Toronto real estate market (July 2022)

Contrary to the commonly accepted view, the declining average sale prices that the market is experiencing are not making housing in the greater Toronto area any more affordable. In fact, rising financing costs are making buying a home in Toronto less affordable. A recent Ratehub study has indicated that with the stress tests and the higher borrowing costs, a buyer in Canada needs $18,000.00 more in household income per year to buy the average priced house than they would have required in February when the average sale price was $1,334,000. That number is even higher in cities like Toronto and Vancouver.

Two market sectors in the City of Toronto are, to some degree, operating contrary to overall market conditions. Firstly, condominium apartments. Notwithstanding declining average sale prices, condominium apartments continue to sell for strong prices. Overall condominium apartment prices were 7 percent higher than last July – 12 percent higher in the 905 region and 4.3 percent in the City of Toronto. The explanation is obvious. In an increasingly unaffordable housing market, condominium apartments remain the most affordable housing type. In July the average sale price of all condominium apartments sold was $719,000, somewhat higher at $744,000 in the City of Toronto.

Secondly, the City of Toronto’s eastern districts. In July all properties in Toronto’s eastern districts sold in only 15 days and for 102 percent of their asking price. The overall market saw properties selling at 99 percent of their asking price. Also, all eastern district properties sold after only 15 days on the market. This compares very favorably with the 20 days it took properties to sell in the overall Toronto and region marketplace. The explanation for this market phenomenon is less clear. It isn’t price. The average price for all properties sold came in at $1,014,000, marginally less than the overall average sale price of $1,019,000 for all City of Toronto properties reported sold. It would appear that the eastern districts, particularly Riverdale, Leslieville, and the Beaches, are viewed as more desirable than other parts of the City by buyers.

Looking forward we should anticipate that this cycle of declines in sales and average sale prices to continue, however not as dramatically as the declines we have experienced since February and March. Until inflation stabilizes and the Bank of Canada stops increasing its benchmark rate the prevailing housing landscape will remain unchanged.

Have questions about the market, selling or buying?

Contact me any time. I’m happy to answer any questions you may have.

Prepared by Chris Kapches, LLB, President and CEO, Broker, Chestnut Park® Real Estate Limited, Brokerage.

Why didn't I get any offers?

You put in a lot of work to declutter your home and prepare it for showings, you hired a realtor, your realtor staged your place and put together some great marketing materials and you had a week of showings, offer night comes along and you are excited to see how many offers you receive, but, you don’t receive any offers on offer night. You are probably scratching your head wondering how this could have happened.

Although the strategy of listing a property for below market value and holding off offers for a week until your set offer date arrives typically works very well, there are several reasons why it may not work. Below are 5 reasons why you may not have received any offers on your offer night.

1) Priced Incorrectly 

Once you have decided to work with a licensed, full-time, Toronto real estate agent, your agent should spend the time to look into the recent sales that have taken place in your neighbourhood. This will allow them to determine certain trends such as the average sale price for your area, average number of days on market along with other valuable market statistics that will assist with selling your home for the most amount of money in the least amount of time. If your real estate agent determines that homes in your area are listing for lower than their market value and are setting offer dates to review any and all offers, they may suggest doing the same with your property. Should you and your real estate agent come to an agreement to use this approach, it is crucial that your property is listed at the right price. By listing your property too high or too low, you may scare off potential buyers. If your agent is experienced, they should be able to determine the appropriate list price that isn’t too low or too high.

Toronto property values

 

2) Timing 

Historically speaking, some months such as December, January and August are some of the slowest months in real estate. If you are listing your home during one of these months, the odds of you not receiving any offers is increased. Buyers are typically busy with the seasonal holidays or vacationing during these months which means there are less eyes that will see your property once it hits MLS. In addition to this, even during other months, you need to keep in mind the statutory holidays and long weekends as you will want to work around these in order to ensure that you get as many potential buyers though your home as possible. Unless your local market it extremely hot, just like Toronto was a couple of years ago when properties sold any time of year for well over their list price, most properties don’t show as well as during the cold grey winter months as they do during the spring/early summer and early fall months. This can play a part in a buyer’s decision to put an offer on your home or not.

 

Toronto real estate market

3) Needed Repairs

Whether it be a list of needed repairs in your pre-list home inspection that is provided to potential buyers, or it’s visible needed repairs that potential buyers see during their showing, depending on the buyers, any needed repairs that aren’t already addressed may scare off potential buyers. It’s important to address as many issues with your home as feasibly possible prior to listing your home for sale.

Selling Toronto real estate

4) New Competition

Even if your home is in top showing condition and you have done everything necessary to ensure your home attracts as many buyers as possible, if a comparable home comes to market which is perceived to be more desirable at a similar price with the same offer date, you may miss out on receiving offers on your offer date. Should this scenario happen, you may want to discuss your options with your agent, including the possibility of changing your offer date.

 

Why didn't I get any offers?

5) Announcements

As we have all witnessed over the last couple of months, announcements such as interest rate hikes can play a large part in dictating the amount of demand there is. Announcements such as rate hikes and government announcements relating to new policies that affect the market can create uncertainty and make buyers second guess making a purchase. Should there be a big announcement soon after you list your home for sale, there is a good chance that the amount of demand may be put on pause until there is more certainty.

Toronto real estate market news

Above are just some of the reasons why you may not receive an offer on your offer night. With the help of an experienced Toronto real estate agent, you should be able to come up with a solution to this hurdle and sell your home.

If you aren’t currently working with an agent and have questions about the market, selling your home or any other real estate questions, contact me any time. I’m always happy to answer your questions and concerns and to assist you with achieving your specific real estate objectives.

*This is not intended to solicit individuals currently under contract with another real estate agent or real estate brokerage.

Toronto real estate market (June 2022)

Not unexpectedly June produced a substantial negative variance when compared to the numbers that the Toronto and Region residential resale market produced in June of 2021. Rising mortgage interest rates have over the last three months caused sales to drop fairly precipitously, and although sales prices are off from their high of February of this year, they remain higher than average sale prices achieved last June.

In June 6,474 properties were reported sold, a 41 percent decline from the 11,053 properties reported sold last June. The average sale price came in at $1,146,254, more than 5 percent higher than the average sale price of $1,088,991 achieved last June. Having said that, a review of what’s been happening since February, both as to sales and average sale price, gives a more accurate description of where the Toronto and Region residential sales market is going.

In February 9,044 properties were reported sold achieving an eye-popping sale price of $1,334,142. One could safely say that February was the height of the pandemic, liquidity-induced resale market. March produced more sales (10,902) but could not sustain the unprecedented average price. March’s average sale price dropped to $1,299,468. Higher mortgage interest rates kicked in April and since then both sales and average sales prices have declined dramatically.

Toronto real estate market (June 2022)

As the above-noted chart indicates, since February the average sale price has declined by $185,000, or 14 percent, and since March, sales have declined by more than 40 percent. These declines can be charted in direct relationship to the increase in mortgage interest rates. Although declines in both sales and average sale prices will continue as the Bank of Canada raises its benchmark rate in its effort to fight inflation, those declines will be more moderate going forward, unless the Bank of Canada raises rates so high that it tips the Canadian economy into recession.

Interestingly, June’s numbers continue to demonstrate that the demand in the Toronto and Region resale market has not dissipated with rising mortgage interest rates. In June, all properties (on average) sold in just 15 days, only 2 days more than the 13 days it took last year. (This number may not be entirely accurate since it does not reflect properties that were listed and cancelled, then re-listed at a lower price). Also, all properties reported across the region sold for 100 percent of their asking (also not an entirely accurate number) and in the City of Toronto at 101 percent of their asking price.

Regardless of the precise accuracy of these numbers they clearly demonstrate that there are many buyers in the marketplace searching to buy homes. As more immigrants settle in the greater Toronto area the demand will continue to grow and create the same market pressures that manifested themselves before and during the pandemic. They won’t be fully apparent until the Bank of Canada has inflation under some control and mortgage interests rates stop rising.

It should be noted that whereas during the pandemic (not that it is no longer with us) properties in Toronto’s 905 region sold faster and at higher prices than homes in the City of Toronto. That pattern has been reserved. As health and travel restrictions have eased, buyers are no longer looking for the space and safety that ground-level properties in the 905 offered. In June every housing type in the City of Toronto – detached, semi-detached, townhouse, and condominium apartments – achieved average sale prices substantially higher than corresponding counterparts in the 905 regions. Secondary markets – markets within 200 kilometers from Toronto – are similarly experiencing downturns both in average sale prices and sales.

The number of new listings coming to market will also have a substantial impact on both sales and average sale prices. In June 16,347 new listings came to market. This compares favourably with the 16,193 that came to market last year. However, due to declining sales, we enter July with 16,093 properties available to buyers, 42.5 percent more than June last year. If this continues buyers will have more choice, sale prices will be negotiated in the buyers’ favour, and more properties will languish on the market until they are sold or the listings cancelled.

Early indications in July are that the slide in sales and average sale prices will continue. Buyers are waiting to see how high the Bank of Canada will raise rates, and as a result how much lower prices will drop.

Have questions about the market, selling or buying?

Contact me any time. I’m happy to answer any questions you may have.

Prepared by Chris Kapches, LLB, President and CEO, Broker, Chestnut Park® Real Estate Limited, Brokerage.

Should I allow open houses?

Some common thoughts that may go through your head once you’ve decided to list your home for sale and have considered holding an open house are:

  • Do I really want strangers walking through my home?
  • Are people going to make a mess of my home?
  • Will my belongings be safe?
  • Should I even have an open house?

These are all common and valid concerns, I mean, who really likes the idea of random people walking through their home and looking at all of their belongings.

Unfortunately, the reality is, if you want to sell your home for the most amount of money in the least amount of time, your home will require as much exposure as possible. Allowing open houses ensures that you have covered every base when it comes to marketing your home for sale, even if doing so makes you feel a little uneasy. By allowing open houses, you are not only allowing potential buyers through your home but you are also allowing word of mouth marketing to take place among people who have visited your home and their friends and network.

Should I allow open houses?

Now, as much as the thought of allowing open houses may be stressful, your realtor should take several steps to make the process as comfortable and successful for you as possible. An experienced realtor will often take the following steps below when conducting an open house at your home to ensure your home is secure, tidy and well marketed:

Massive open house signage in your surrounding area 

We all see open house signs while driving around the city on the weekend, but how many signs should your realtor put out? The answer is as many as possible. In order to ensure your home receives the attention it deserves and requires to sell, you need to make sure your home stands out from the competition. Putting out more signs than the average open house does just that.

Open house online & print marketing 

An experienced agent will go above and beyond simply setting up open house signs to market your open house event. It’s important that you spread the word about your open house far and wide and to as many potential buyers as possible. There are a variety of ways of achieving this with the use of online and print marketing methods such as open house invites, flyers, online social media ads, evites  and other creative advertising methods.

“Please remove shoes” signage and requests 

A good agent will set up a “Please remove shoes” sign at the front entrance of your home and request all visitors to remove their shoes upon entering. This helps with reducing any potential mess or damage to your floors.

Sanitizing station 

As I write this blog, we are still dealing with the affects of covid19 and people are much more attentive to their hand hygiene than they were prior to the pandemic. Your realtor will likely set up a sanitization station near the front entrance of your home and ask visitors to sanitize their hands prior to viewing your home.

Limit Touching 

As mentioned above, due to covid19, many sellers don’t like the idea of random people coming into their home and touching everything. With that being said, buyers will want to view as much of your home as possible. How else will they know if they can fit their attire into your primary bedroom closet? Your agent will likely ask visitors to limit the touching of surfaces while in the home and will assist by opening doors and closets for visitors as needed.

Keep an eye on visitors 

During all open houses, your agent will ask visitors to sign in to keep track of who visits your home and will also keep an eye on visitors during their visit. Keep in mind that there may be times when your agent won’t be able to watch each and every visitor at the same time as they view different areas of your home. It is important to remove and or store any valuable items prior to allowing open houses or showings.

I’ve personally seen some agents install wireless wifi security cameras throughout the interior of the home while showing properties to my clients. Although this may be tempting to do, it often distracts potential buyers from focusing on your home’s beautiful features as they are too busy with the thought of being watched and listened to. Remember, you want to make visitors feel as comfortable while they are in your home and help them visualize themselves living there, you want them to feel at home.

Prepare the home before doors open 

Your agent will come to your home prior to your open house beginning to ensure that all of the lights are turned on and that the rest of your home is in perfect showing condition. It’s important to make sure you put away all dirty dishes, laundry, pet toys and food as well as any other clutter prior to the open house.

Should I have open houses?

Although the thought of having an open house may be a little intimidating, with the help of an experienced realtor, the process should really be quite straight forward. By not holding open houses, you are limiting your exposure to potential buyers could very likely limit your final sale price and possibly extend the number of days that your home has to be listed for.

Are you thinking about listing your home or do you have questions about the current market?

Contact me any time with your real estate questions or to request a free home evaluation to find out how much your home may be worth. I’m happy to help and to answer any real estate questions you may have.

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