The importance of property pricing
A very interesting real estate sale happened last week in Toronto, illustrating the importance of pricing property within reasonable limits.
A renovated home on a rather busy street in east part of Toronto was listed in mid-April for almost $450,000. This was not a reasonable price, and, typically for today's real estate reality, Realtors were reluctant to show and buyers were reluctant to come up with an offer.
After two weeks of no action, the seller, on his Realtor's advice, agreed to a price reduction. This is normal, and should be expected in such situation. What was extraordinary, though, was the amount by which the price was reduced. That amount was $150,000, or one-third of the asking price. It turned out to have been a brilliant move on their part.
They held-up offers for a week, and, in the end, sold the house, with multiple offers, for $95,000 over the asking price. It is just left for us to wonder whether a more realistic original listing price would have produced a better selling price - possibly not.
I have observed this year very aggressive real estate listing prices, resulting in multiple bids and selling prices well over asking. In prime Riverdale, for instance, the average sale-to-list price ratio in April was 105%. Out of the 32 homes reported sold, 22 were sold above asking, and the highest sale-to-list price ratio was 145%. The remaining homes were sold at an average 96.6% of asking. It took, on average, 12 days to sell a home, and it would have taken less were it not for holding back offers.
A renovated home on a rather busy street in east part of Toronto was listed in mid-April for almost $450,000. This was not a reasonable price, and, typically for today's real estate reality, Realtors were reluctant to show and buyers were reluctant to come up with an offer.
After two weeks of no action, the seller, on his Realtor's advice, agreed to a price reduction. This is normal, and should be expected in such situation. What was extraordinary, though, was the amount by which the price was reduced. That amount was $150,000, or one-third of the asking price. It turned out to have been a brilliant move on their part.
They held-up offers for a week, and, in the end, sold the house, with multiple offers, for $95,000 over the asking price. It is just left for us to wonder whether a more realistic original listing price would have produced a better selling price - possibly not.
I have observed this year very aggressive real estate listing prices, resulting in multiple bids and selling prices well over asking. In prime Riverdale, for instance, the average sale-to-list price ratio in April was 105%. Out of the 32 homes reported sold, 22 were sold above asking, and the highest sale-to-list price ratio was 145%. The remaining homes were sold at an average 96.6% of asking. It took, on average, 12 days to sell a home, and it would have taken less were it not for holding back offers.
