The average sales price last month for the GBA was $ 639,384. This is an impressive increase of 12 percent over the same period last year. Five years ago, the average price for all properties in the Toronto real estate market was approximately $ 450,000. With current averages in the range of $ 640,000 we are seeing an increase of almost 50 percent in just 60 months. This may prompt you to price your home too high since the market is actively growing.
However, you should take into account the following risks of overpricing your home:
When you put your home on the market, you want it to quickly spark fascination with a number of buyers, and you certainly want to sell it before the listing expires. Therefore, it should be appealing and at a price point similar or better to comparable homes in your town. If it is not, it can be ignored, or worse, noticed by customers and placed into a “wait and see” category.
Your home can be very clean and tidy. However, maintaining a house in showroom condition is a considerable amount of work, even for the cleanest people. You’re trying to set the price of your home to get the maximum amount of money that you can, but it must be in perfect condition to attract buyers.
Clean floors, carpets, windows, kitchen, bathrooms, no mess, landscaping - all these must be kept for your home to shine. This level of cleaning is feasible for most people for a month, or maybe even three. But can it go on for six months or a year?
3. Mortgage payments
Each month your home remains on the market, you are making mortgage payments. Every month it goes unsold, money is invested in the home that is not coming back. With a very high price, there is no negotiating up. If there are no takers month after month, you are giving money you should not have to give.
The perception of a particular home as a desirable product, or value, is important in real estate transactions. A change in the perception of buyers can cause serious headaches and lose you large amounts of money. The longer your home sits on the market, the more risk of a negative change in this perception - something we want to avoid, if possible.
Once your home first goes on the market, any number of buyers will consider it as long as the price resembles others and as long as your real estate agent markets it correctly. This may or might not be what everyone wants, but is at least perceived in a neutral way. The longer the home sits unsold, though, the more it is generally viewed negatively. It must be too expensive to take so long on the market, or maybe something is wrong with it.