Today, I’m in a beautiful Toronto Condo. It’s a two-bedroom at 15 Iceboat Terrace. This building is so new, you won’t even find it on Google Maps. I’d like to take a minute today to tell you about a problem that I see with realtors overpricing their listings.
You know, one of the worst mistakes you can make in the real estate game is overpricing your listing and today I’m going to give you five reasons just why it’s so bad.
Okay, my first reason why overpricing in Toronto real estate is such a terrible mistake is this: overpriced listings take a lot longer to sell. When you price your listing at market value, they sell substantially quicker. Why does that matter to you? I’m going to use this condo as an example. Let’s say a two-bedroom condo like this costs you monthly once you pay your maintenance, once you pay your mortgage, once you pay your insurance, possibly $2,000, maybe more. If your listing is overpriced, your going to have to cover all those costs while you wait for this to sell when you could be sitting in your new place. So my first reason is overpriced listings cost you more.
Okay, my second important why overpricing real estate is a terrible mistake is because of the inconvenience it causes in your life. If you ever tried to live in a place that was listed before while agents are showing it, you know what a pain in the ass it can be to keep the place in proper showing condition. That means you’ve got to keep it clean every time there’s a showing. You’ve got to clean your floors, put away your dirty dishes, basically disrupt your life so it’s available for showings. You know, after a few months of that, it gets tiring and I find most sellers tend to drop off on their responsibilities. They don’t clean it as well and it doesn’t look as nice. It’s not presented as well when agents show it, so there’s even less of a chance to sell it after it’s been on the market for awhile. My second reason why overpricing is a terrible idea is because it really does cause an inconvenience in your life by dragging out the time that it takes to sell your listing.
Okay, my third important reason why it’s such a bad mistake to overprice your real estate listing in Toronto is this: by overpricing, you’re exposing yourself to a much smaller segment of buyers. Let’s say your condo’s worth around $350,000, but you’d like to squeeze it for $360,000. Now a majority of people searching for a one-bedroom condo in the city of Toronto are searching between $300,000 and $350,000. For you trying to be greedy for your $10,000, you just missed that entire segment of the market and you’re going to be left dealing with people who are only looking for super-luxury one-bedrooms. Those people don’t get to be super-luxury buyers by being stupid. They’re going to talk you down in price and you’re going to get a lower price than you would have if you had priced it for the segment of the market that’s searching under $350,000.
Okay, so my fourth reason for why it’s such a terrible mistake to overprice your Toronto real estate listing has to do with real estate agent enthusiasm. You know, every morning when I go to the office and I sit down with my colleagues and we talk about the listings that came out that night. We see thousands of listings. Some of them are overpriced, some of them are priced at Toronto market value. When a listing comes up that’s overpriced, you know what we do? We say, “Nah, overpriced,” we throw it in the pile, and we wait to see what happens with the price. Maybe it will drop, maybe it will sell, no one’s really sure. When a listing comes in and it’s priced at market value, what does everybody do? They go, “Holy shit, look at this! What a great listing, priced correctly, I’m going to get on the phone and call my client right now,” because we don’t want to lose this one. So, by overpricing your listing, you’re not creating any hype or enthusiasm with real estate agents who are the ones that are going to sell your property in the long run. By pricing it at market value, you’re going to create some excitement and they’re going to get their clients out there right away.
Okay, the fifth, possibly most important reason why it’s so crucial not to overprice your listing is this: listings priced at market value attract higher offers from buyers. If buyers can see some value in there, they’re going to offer you asking price, sometimes over asking price. If your listing’s overpriced, they’re going to lowball you. They don’t see value in the listing and they want to create value, so they give you a lower offer. Your negotiations are going to be a lot tougher and you’re going to end up with a lot lower price.
Listen, there’s nothing wrong with wanting to get the most money out of your Toronto real estate investment, but buyers can smell greed from a mile away, so do yourself a favor. Don’t be greedy from the get go, use an agent who knows how to price property properly, and try to get the highest price you can by offering people value. My name’s Chris Borkowski, I’m a broker with Re/Max Hallmark here in the city of Toronto, I’m on the 27th floor of 15 Iceboat Terrace overlooking beautiful Lake Ontario.
If you have any questions about the Toronto condo market Toronto condo price, Toronto real estate investment, office space, or any other Toronto real estate services, call me at 416-486-5588 or email email@example.com.