The real estate market has changed from a seller’s to a buyer’s market. This is no longer news. But, the implications of this change are far-reaching. Many buyers and sellers have never seen a buyer’s market and need guidance on how their strategy needs to adapt to this new landscape.
Our top advice for this market is to hire a local real estate agent. Why? A strong seller’s market hides a multitude of mistakes. A lot can be forgiven when house prices rise month-over-month. A strong demand mitigates the harshest buyer’s regret. And sellers will readily forgive marketing mistakes when there are ten offers on their house. However, real estate agents become much more critical to their clients in a buyer’s market. Buyers need them to help navigate negotiations, and sellers need them because selling a house has gotten harder.
Earlier in the Pandemic, when the real estate market was on fire, and many people were moving to the country, Toronto had an influx of out-of-town real estate agents. These rural agents didn’t know the nuances of the market in the city, and their marketing and pricing strategy could have been better. However, the steady market often made up for these issues, and no one was hurt. However, out-of-area agents are a liability to their clients. To be fair to those rural agents, Toronto agents also often worked in the country.
Need more information about Toronto’s shifting market? Check out these posts from my blog.
- Why Does Toronto Have More Terminated Than Sold Listings?
- Stop Feeling Sorry For People Who Bought in February
- Is Toronto Real Estate Now a Buyer’s Market?
Why a local agent is valuable to a seller
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Pricing: Knowing the value of your home is crucial in this market. Your home is likely worth less than it was a few months ago. You need a real estate agent who knows your neighbourhood and is familiar with house values on a street-to-street level. For example, in Roncesvalles, one of the neighbourhoods that we know well, a house on Galley will sell for more than a house on Marion. A home Garden ave on the east side of roncey will sell for more than a house on the same street but on the west side of roncesvaes. These nuances are crucial to getting the value of your property correctly.
- Listing Strategy: Once you know your price, you also want to know your listing strategy. Each neighbourhood is different right now. Some areas still have enough buyers to handle generating a bidding war, and some do not. Your real estate agent should know how many buyers are currently looking for homes in your neighbourhood. Most houses in Toronto right now should be priced slightly below value because there aren’t enough buyers to generate a lot of interest. However, there are still some pockets and types of houses where you can stick to the old strategy of under-listing and getting a bidding war. In the west end of Toronto, the best approach is to price at value and take offers at any time.
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Relationships: A local real estate agent will have relationships with other local agents. If your house isn’t selling, your agent should be able to drum up some interest by calling all their colleagues and seeing if they can get a deal done. This is often better than simply reducing your price on MLS and waiting. Your agent can work with all the other players in your neighbourhood to get a negotiation started.
Why a local agent is valuable to a buyer
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Negotiations: In a seller’s market, buyers had little ability to negotiate for properties. Mostly, as a buyer, you just had to offer your highest price and cross your fingers that the seller would review your offer. Oh, how the tables have turned. Now, you have the opportunity to negotiate. But, to win a negotiation, you need an excellent real estate agent who knows the area. A local agent is especially valuable if the listing agent is from out of town. Your real estate agent will likely need to do some education with the seller’s agent about the area to negotiate for you successfully.
- Value: Your offer price is no longer just a question of “how high can you go?” You need an agent who can show you the value of a property and back it up with data. In this market, it is essential to know the actual value of the home you are buying on the day you’re offering (because it can change daily).
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Co-ordinating showings: There are a lot of houses on the market right now. Seeing them all and comparing them is a challenge. If you work with a local agent, they’ll be able to organize a good showing list for you and advise you on which houses you should and should not see.
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Neighbourhood red flags: A local agent will also be able to look out for common house issues in their area. If you’re buying in Leslieville or parts of Roncey, your agent will advise you on the likelihood of termites in your area, for example. In Roncesvalles and Parkdale, your agent should be able to tell you about the high probability of there being knob and tube wiring in your home. Every neighbourhood with old houses has its idiosyncrasies, and you want an agent who already knows what to look for.
It has always been beneficial to hire a local real estate agent. However, hiring a local agent is more important than ever in a buyer’s market.
As always, stay safe
Robyn VanderVennen
Robyn VanderVennen
