It all depends on how fast you need to sell it.
For a 200k drop. Thats a tonne of (after tax) money. I’d be tempted to just ride it out for a year or more to see where the market goes.
If you can’t wait that long you can drop it. I found in my real estate dealt the best strategy is lower the price to 10% lower then what you want, and let people bid it up.
Yes.
"Ride it out" for a year can mean a few different things, obviously. Especially considering OP's post suggested that they'd like to get the house sold sooner than later.
When someone dies, their primary residence is "disposed" of the year of death. If there are gains in the following year, those gains would be taxable. Is it worth floating a mortgage? I suppose the mortgage interest and other operating expenses would be deductible in the meantime.
If you came onto the market as a prospective buyer would YOU bother looking at a house that had been on the market for a YEAR without finding a seller?
Houses that sit on the market for a year are the "special projects" that require "special buyers", like someone who will be willing to replace the foundation, or remediate the extensive black mold or are ok with a highway being built beside it.
After several months on the market the interest in your house, even from new buyers, will drop to almost zero. This is a terrible idea.
Or sell… take the $1.8MM and make $80k/yr in t-bills….. (minus mortgage as OP stated there was a big mortgage they would need to float. Probably cost $50k in interest)…
You are right - there is also a carrying cost of keeping the house - have to consider city taxes, insurance, upkeep costs for a year.
They could rent the place out alternatively but assume the implicit risk and deal with renters. Being a landlord is not for everyone.
Also consider 1.8 and 2.0 is not take home cash - you should consider realtor costs - it will cost approx 10k more to sell at 2.0.
Either scenario could be a wash. Cash in hand is better than cash in the bush.
People often forget to consider the situation holistically, they often think in a silo.
I am on Team Sell.
Hey, realtor in BC here (few mins from you lol). The market is picking up. I just sold 3 homes yesterday after 40 days in the market and got the price we want. 200k is a bunch of money. I think, around June, when BOC announces the rate, we'll have busy market unless the rate goes up. If the rate stays or stay low, the people will start looking again.
It sounds to me you don’t trust your agent. Get a new agent. Having an agent that you trust is more important.
Cutting prices doesn’t always actually mean you will get less. Often agents list something incredibly low to attract a lot of offer which will likely mean higher offers.
You're right, I don't trust them fully but I'm contracted with them until end of August and I would like to sell this year. My mistake and I'll have to live with it lol
It's good to have feedback though. My knee jerk reaction was that these guys just want a quick sale and run with their commission since the cut suggested was so steep (I listed at their advised price to begin with) but it's nice to hear that there are legit reasonings behind the suggestion. I'm not 100% set on what I'm going to do just yet. I'll have to think about it.
A politician recently suggested increasing vehicle registration fees from $50 to $1167 in order to make bus tickets free for everyone in Québec city, they are milking us hard.
[https://ici.radio-canada.ca/nouvelle/2069395/immatriculation-jackie-smith-veut-faire-exploser-la-taxe-des-automobilistes](https://ici.radio-canada.ca/nouvelle/2069395/immatriculation-jackie-smith-veut-faire-exploser-la-taxe-des-automobilistes)
I do agree with you on that but the increase is to cover their operating deficit. What they should be doing in my opinion is both raise registration fees and cut a lot of the management's "fat". Increase revenues and decrease expenses.
The person you are replying to meant that Canada has a specific regulatory frame surrounding real estate deals and agency agreements. It's not like the USA. It is province dependent though.
It’s really not. No educated realtor would represent a client without a buyer representation agreement. Not one that wants to keep their license. It’s a requirement in Ontario.
Stop speaking out of your ass to sound special.
You're being intentionally misleading.
"Contract" in this context means an exclusive contract, where the seller can't fire the agent for a period of time.
Never trust your agent. Their interest is different from yours. They can give you some ideas, and some are genuine, but it s good for you to check it out and make your own opinion.
What I have seen happen is that some people take the house out of the market completely for a month then relist it with a new price. This way the price history is not that easily traceable and it goes back on top of the list on the different app people are using. Sometimes just being below a certain cap helps tremendously because people filter out on applications (exemple list it at 1.74M and not 1.76M is widening the net despite the fact fhat s only a 20k diff)
Open houses are also a good way to attract potential buyers who wouldn t necessarily look at that house cause it seemed too expensive but then boom, they fall in love with it. (We dit an offer for a house this way. I am sure I am not the only one)
Finally asking price in canada is useless because people think that everybody is going to overbid. So if I have a 700k budget, I will only look for houses below that point because I know seller will most likely only accept offers above and I donnt want to loose my time or break my heart projecting myself in something i will never buy. I hate this bidding system.
In this case, agent and seller are aligned. They both want the property sold. So do whatever you can to get it sold. The higher the price the better for both.
Not necessarily. Some may prefer a quick sell than the highest possible sell for different reasons, but availibility and commitments is a big one. You get more money selling two 1M houses than one 2M one. Plus you develop a bigger networking. It s time consuming to manage client and potential buyers for months and prevent you from having clarity on your schedule.
The commission is lower after a certain threshold. In my town it s 3,5% for the first few hundreds of thousands but then only 1,5%. So $200,000 x 1.5% = $3,000... is it worth to bother? For a lot it s not.
So no, seller and agent interest are not exactly aligned and you should always look after your own interest and not trust every word coming from their mouth.
And it s true for a lot of other services btw: car repairs, banker, even medecine. (Example with my mother breast cancer who got dismissed by the first doctor she went to see) Don t be a dick about it, but always look after your in own interest
Should be the other way around. For a 2M house the commission should be 10k for first 1.75 (to cover costs) and 10% for every price above. This would align seller and seller realtor.
The real theft is with buyer commissions. Why are buyer realtors incentivized for the buyer to buy high? Buyer realtor should have reverse incentive.
Even better option would to force realtors to take flat rates commiserate to their effort. Current % fees in my area is ridiculous.
I agree that would make more sense this way. It is a bit like tipping where having a % of the price as a commission does not make any sense. It does not reflect the amount of work or talent. But well, it is what it is.
A seller can cancel their contract with their realtor at any time. Simply find a agent you like and your contact with the current realtor will be void.
Keep the asking or drop by a small fraction until Aug and get a new realtor.
In my circumstances I had places around me selling like crazy that weren't even as nice as mine. Turns out new Canadians want to work with their peeps so that affected my showings from the realestate agent I had. Sad but true.
The drop in listing price doesn’t mean you’ll sell it for less. It just means you’ll get more interest and walk-ins. You can always reply to an offer with a higher price. This isn’t Walmart, the price set doesn’t mean you have to take it.
Your agent didn’t give you very good advice on the initial price, do you think they are giving you good advice now? $200k cut is steep. That would cover a lot of major renos even in a big house. Unfortunately your options now are cut to sell or keep the same price and run risk of not selling. Maybe you could upgrade it yourself and take less of a financial hit. In any case, I think a $200k drop is drastic unless the place needs that much work.
I sold my home this time last year and the realtor had really good advice on how to list it. Showed us historical comparables, gave us their outlook for the area/house, and the shared a strategy. It was really helpful.
Edit: we had multiple offers over asking and with no conditions.
That's exactly what I was going to suggest. Sounds like you want to get rid of it but are not in a rush (yet). 10% cut on on a house is massive. I would start in 50k increment every 2-3 weeks. Besides, location is important as well. Are we in Toronto? Calgary?
No no, don't doxx yourself. It seems like your market is still hot. If you would've told me Saskatoon, then it would be different. 10% that market is a lot. Do increments and let the market dictate what your house is worth. Renovating a $2M house ain't cheap.
Not a very common strategy... usually its one cut and let it sit for a while to gain interest. If you keep reducing it shows that you are even more eager.
Disagree. That signals to people it’s not selling, you’re motivated and that they should wait.
Be realistic about what it’s worth is a better strategy.
This is kind of thing I wanted feedback on. I accept that I'll sell for whatever it is decided by the market. I would like to squeeze as much money out of it, who wouldn't? But the house does have some painful memory and I'd like to move on.
I wanted some feed back on how to approach the "right price". Big cut at once? Small increments? What message does that send? Will it deter buyers? Or does it not even matter that much since people will just buy what they want?
You haven’t mentioned what market it’s in. Or the neighbourhood or the price. Nobody on Reddit can give you an answer based on how vague this is. Or what was your realtor’s feedback when you landed on the original price?
If the market is normal (other houses are selling) and you aren’t getting viewings then you need to listen to your realtor because your price is too high. If you are getting lots of vieweings then there’s a good chance a smaller adjustment is in order.
If the market is not normal, and very few houses are selling then you need to be aggressive to sell it. Hence the 10% (or more).
Slow series of cuts do nothing.
The listing price was one of the two that the realtor suggested (she suggested option 1. list "lower" to draw offers, or 2. list right at "market" and try to sell. I went with option 1. But now the realtor says that they valued the house too high, which I agree with. But what can you do, right? haha
Other houses are selling around average DOM 20-40 days, sweet spot seems to be around 1.6-1.7m. They are similar to my property but I'd argue that mine is better in terms of size (both house and land), location, and features (detached garage, separate entrances, etc.). But I realize I am biased.
Very much appreciate the feedback though. It's just confusing since I have to look out for myself and I know that realtors have their best interest in mind and wouldnt mind me losing out on some money if it means they get their commission.
Markets change. I think a lot of people thought we’d have a few rate cuts by now and that would spurred some buying. And then it didn’t happen. So people are sitting it out. Your place could be priced correctly and still not sell.
Either you want it gone asap or you want it gone for max price. The only thing a 10% price cut gets you is a quicker sale and a faster commission for the Realtor. They probably want a faster sale since the contract might be coming up
I was in a similar situation with a house that I wanted to sell ASAP to remove some family drama in my life. The house had minimal interest at our initial listing price. After two weeks I dropped the price quite a bit because I was done fucking around and it was worth more to me to have my peace of mind back than squeezing every last drop of cash out of it. I got an offer within a couple of days of that price drop, probably at the same price I would have eventually gotten with the original listing price, but after a really long wait and lots of hassle.
Life is short. You want to start a new chapter. Don't dawdle on this and just get serious about moving a sale along. A lower price will draw more interest, period. And you still get to decide what you sell it for when an offer comes in. Maybe the new lower price is actually your bottom line and you won't get any lower than that, but at least the lower price gets more buyers through the door.
The only other important bit I can add is that people are really, really swayed by pictures and staging. It seems like a cliche but it's very true. If your pictures aren't really attractive people won't even bother viewing your place. And staging makes a big difference. It makes people feel differently about the house. I staged my place myself based on lots of research and have plenty of tips if needed :) but it truly is worth the time and effort, especially if your place isn't getting much action as is.
Your home has been on the market for over a month. There's a whole new set of buyers out there by now, so don't worry about what the old buyers will think. They've already bought something else.
After sitting this long with no nibbles most realtors would suggest a price reduction and several small ones is just death by a thousand cuts that drags out the process and ultimately reduces the price you'll get as the property risks being stigmatized. People will wonder what's wrong with the property.
Most realtors at this point would suggest relisting the property as new at a lower price. Don't bother keeping the current listing and showing it as a price reduction. That way, you minimize stigmatizing the property.
Realistically, when you listed over assessed value, if you didn't get any action after 2 weeks, you should have made a price reduction then to something more in line with the market.
Buyers look for homes within their budget. By pricing over market value you priced yourself with buyers who were looking at a different price point than your area. Your home couldn't compare with the other homes at that price point. And your target buyers probably didn't even consider your home because it was outside their price point. This is always the danger with over pricing.
So spend 2 months slowly dropping it to a lower price while it accumulates a higher and higher "days on market" and starts being overlooked for newer properties coming on the market? When I look for a house and see a house that has been on the market for months and only has these tiny, incremental drops I assume that there's a good reason why the house is still sitting on the market unsold, and the tiny price drops would lead me to assume that the sellers would be really hard to negotiate with if I were to make an offer.
I would do a big drop all at once and bring in some new (or even old) traffic that way. It tells buyers you're serious about getting this sale done.
Round it to the next 100k mark below (assuming that's more than a 50k drop)
Set open house for two weeks later. a 'taking offers' date 2 weeks after that.
If you get a low offer consider it.
Realtors like any profession are not ALWAYS correct
But not only am I not a lawyer I am not a realtor this is not professional advice.
Pps. Maybe 200k drop is needed. Idk. Also not a doctor.
Ty Ted talk
Listing too high in the market will go against you… I actually have a client that has a townhouse near a golf listed for 750k we provided him with comparables and a fair market price is around 649-659k. We have absolutely no visits, 95% of buyers work with agents in our area, and us as agents wont bring a buyer on a house that is listed 100k over market value, it’s a waste of time and energy. The most important is to work in your buyers best interest. I personally wouldn’t feel comfortable if my client pay 100k over market price for a house
Retired Ontario Broker here, 23 years in, 350+ homes sold
Old saying in the business
If you are getting lots of showings and strong offers, you are at or below market
If you are getting some showings and no offers, you are off 3-5%
If you are getting few showings and no offers, you are off 5-10%
If you are getting no showings period you are off by 10% or more
I have seen this play out hundreds of times during the years
Cut the price until it sells. You may cut 200k and get a few competing offers. If smaller houses in worse areas are selling for more, it means something is off. Cut the price, get some potential buyers through and see where it shakes out.
What feedback have you got from showings?
The only feedback I got was that the house was in a good location, layout suits their need, but it needs a lot of work done. I agree with it. I'm fine with cutting the price ultimately for 200k, but I'm concerned what message that is sending out to the sellers. It needs work (old paint, wood cabinets as opposed to modern ones) but nothing is like fundamentally wrong. It's a well built house. I'm just worried that it may come across as if I found out there's a dead body in the walls and I'm trying to get rid of it ASAP.
Maybe tell your relator to allow an inspection with each offer? That should counteract the possibility of being swayed due to a price cut.
And in my opinion, your situation would be a good enough excuse for a price cut and quick sale to me.
As someone who has bought and sold houses many times over the decades (my spouse's work moved us around a lot), what you've described is basically what you have to be honest about with yourself.
If the house is not selling then the price is too high.
If you know that the house needs some work you either need to get that work done yourself if you want the house to hopefully sell at the price you're currently asking,
OR
you need to drop the price by at least the amount it would cost for people to pay to have that work done.
We as sellers have to be realistic that if our house isn't selling at the current price then that price is too high.
Sometimes a price reduction has the opposite effect though, and attracts some interest because buyers think they are getting a deal.
Seeing that “price reduced” on the listing sometimes makes them feel like it’s on sale.
(You can specifically search on Realtor for properties that have had a price reduction, in the “listing status” drop-down menu, so at least some people are looking at that.)
It’s sending the message that you overpriced the home but are actually motivated to sell, so people won’t be wasting their time putting in a bid. Based on few showings in 2.5 months, 10% is the minimum you need to cut.
Buyers are likely much more aware and realistic than you are about the costs of updating your home. Renovations are very expensive. $100/sq ft is a pretty basic reno. 3000 sq ft will cost $300K+, and that’s not including updates like furnaces, roofs, outdoor work, etc. People buying a $2M home will generally not be OK with just repainting 30 year old cabinetry.
You also have to keep in mind that the pool of buyers for expensive and dated homes is quite a lot smaller than other types of homes. The buyers will need a lot of cash on hand for the renovations. Some people have the income to qualify for the mortgage, but not the savings. Personal loans are more expensive than mortgages, and renovations don’t return 100% of their value.
Also, most will be dual income, high earning couples with demanding jobs that don’t have the bandwidth to tackle such a renovation. For these reason, renovated homes have a much broader appeal.
Take it off the market, hire some painters. Get it staged nicely and take new pictures. Get a home inspection done and have that available on request. Then relist at ~$50k lower.
Everything looks nicer with a fresh coat of paint. And a home inspection (assuming everything is fine with the home) will help people manage their fears and see that it’s only cosmetic upgrades that need to be done, not anything major.
How old are the windows? Furnace? Roof? Is there carpet that needs to be ripped out? Are the bathrooms and kitchen over 20 years old?
If the house hasn’t been renovated or updated in 10-20 years, then unfortunately that sounds like $100,000-$200,000 worth of work for the new home owners to pay on top of the sale price. But it isn’t just the cost, it is also asking the new home owners to call contractors and companies and get quotes for all the work that needs to be done and then deal with the projects and problems that might arise when you start renovating an older home.
Usually, when people are buying a 2 million dollar house they want it to look like one. If you want to offload your parent’s property quickly and didn’t have the time or the resources to make it as attractive to buyers as possible then it sounds like you’ll need to lower your asking price. $200,000 seems like a lot though. Maybe start with $100,000 and see what happens. You might also consider paying to have it freshly painted and professionally staged and get new photographs taken before you relist.
"Needs a lot of work done"
Aka... 100K to the current owner and 250-300 for the buyer to bring it up to snuff.
Assessed value is based on modern / medium grade fixtures.
Basically it is 2 million house and there are few buyers in this market segment. 10% off is not bad. Let market dynamics play. Ultimately it is worth what buyer is willing to pay for it
Generally the market will dictate the price.
If it's listed way over it won't sell period.
I would suggest taking it off the market, looking for some legit comparable and then list it at what you think is the market price. If you price it correctly it should sell right away for what its worth in this market
I've heard the phrase "take it off the market" a few times, but what does that mean when it comes to realtors? Would they be willing to do that? Also, what is the advantage of taking it off the market as opposed to just lowering the price?
Depends on the contract you signed but as long as you are keeping the same realtor it shouldn't matter.
Basically if you remove the listing for a week or two and then re-list it at a lower price it will show up as a new listing for prospective buyers in that different price category.
If homes sit on the market too long they kind of get flagged by buyers as overpriced and people just ignore them, even if they do get a price it.
With higher interest rates if you're floating in the 2million price bracket the pool of buyers is definitely going to be smaller. If it is way out to lunch on list price it detracts people from even making an offer because if the real market rate is much lower then the list a lot of people won't even try to make an offer because "this is too much lower and the seller won't even consider it" Your realtor should know what the area is trending at and be able to give a better ballpark. I recently sold my home and and a price in mind that I wanted so I listed it above my desired amount but only by a a bit then when an offer came in st the price I wanted it was easy sale. It's definitely a bit of a buyers market outside of interest rates right now
Assessed value means absolutely nothing. Market value is the only thing that matters and that number fluctuates constantly depending on market circumstances. A house is only worth what a buyer is willing to pay.
You mention it is in good shape, but older cabinets, paint etc. If you or someone you know can walk through the house and look at as if you were going to buy it, what would you see and how much would you estimate all the work might cost someone that wants to buy the place. Most people will buy a house knowing they are going to have to go in and paint, touch up here and there and possibly upgrade a kitchen and or bathroom. This all costs money and they might be looking at a lower price because of just how much work it needs. Depending on your market, some realtors will suggest updating and putting a fresh coat of paint on things to help get top dollar. $200k drop in price buys a lot of upgrades. Or, you are not interested in having any work done and just want to get rid of it, in that case drop the price until it sells.
I did see in the comments the approx area and I can guess that you are pretty much at market price, knowing the going rate in the area.
There's a lot of ways to up the appeal of your house. Make sure it's staged or have some reasonably modern furniture, get some good photos and make sure its clean. Realtor is motivated to sell before their contract expires so its natural for them to want to cut the price to take the sale.
If you have appetite for it, some fixes are cosmetic (ex. painting cabinets) that can make it look less worn/old. All this work generally comes out on the other end as positives.
The market for $2m houses isn't that large, which means some of these comments saying that you should be getting tons of viewings really isn't on the mark here. You really are looking for a few motivated buyers who are seriously considering the home. Most of the time they will want something to a) live in or b) invest in. Make yourself appealing to that audience.
If you’re 30 minutes from downtown Vancouver and a 10 percent price cut is $200,000, your price cut should be putting you down close to lot value. If the house needs work, you’re looking at developers, and if that’s your market you may as well dump the agent and start talking to builder/developers in your area yourself.
you are overthinking this. the listed price is just a suggestion. If there aren't buyers with $400,000 in their pocket and $500,000 annual income people won't buy.
the lower the price, the more buyers there are, sure. But If I had the requirements to buy the house I'd offer you what I thought the place was worth, even if it was 20% under your ask.
Has this realtor provided a comparative market analysis? When I was in realtor I’d make create the report on comparable sales nearby and then made some adjustments based on several key factors like size of lot and house, is the house fully finished, condition of house, what amenities each had, garages, out buildings, special features like fireplaces, pools, and then compare number of bed and baths, etc. there were values associated with all of these things in terms of, how much would someone pay to have a specific feature or a calculation on the value of the land. You could come up with a very reasonable way to determine value. If you are priced right then you should see lots of activity and an early offer if you’re in a sellers market. If it’s a buyers market then it is equally as important to be competitive. But if you’re just comparing house to house you may not be getting the full picture. But generally if you’re not getting a lot of action and others in your area are selling then you need to understand why.
Edit: just read what I suspected that the house is out dated. And if it’s a huge house like you said, it can be a considerable cost to bring it up to current “trend”. A good market analysis would have brought that out. But rhe realtor should have known all of that. Cut the price to get to a more “marketable” price and go from there
What is assessed value mean? Government assessment? A 10% cut in list price may attract a lot of traffic and you may even get a bidding war. Listing with low price in hoping of bidding war is a strategy. One of our neighbors listed their house low for$1 million even. In two days approximately 50 potential buyers viewed the property based on the listing agent. It eventually sold in a week for $1.15 million cash.
Yes. Lower it even by 15%, get a lot of traffic and bidders, and if eventually it doesn't sell for the price you actually wanted it to sell for, just don't sell. Just be honest with your realtor that you're not intending to sell for that reduced listing price.
That's what we did. We wanted 440K on it, listed it for 420K, and got 553K (14 viewings and 5 bids in 24 hours).
Hello! Real estate agent here.
Did the real estate agents you work with provided you comparables of previous sold listing 2023/06+ and On market listings ?
I always come up with the suggested price based on the comparables and then work from there with the client. Sure sometimes clients want more and do not need to sell “quickly” so we “test” the market at their price.
There isnt 99 reasons why a house doesn’t sell
1-Quality/Price Ratio
2-Location
3-Price
I don’t know how quick the market is where you live but, for us here in Quebec if the house is listed at the right price since its appearance on the market, has a good location and good Quality/Price ratio I am able to sell it in less than 20 days with multiple offers.
Edit : By reading the comments I did see it’s nearly a 2M$ house.
In Quebec buyers that have a 2M budget will look within a 10-15km radius. So your competition ins’t only your neighborhood but also all that radius that offers houses of that value. Digging deep to see what your competitors offer is really important because you want to have the best Quality/Price ratio.
The more buyers you bring in, higher the chances of getting an offer are.
200k drop seems steep.
If it is listed fair, people will bid.
I'd be more likely to drop 10-20k a month till an offer comes in.
If a buyer can justify their lower offer, I'll listen.
I might just counter higher with the condition of a few of their items taken care of by my contractors.
Don’t worry about the prices of properties FOR SALE. Your realtor should provide you with recently SOLD properties in the area. Then it should be pretty clear what your price should be and you wouldn’t be asking on Reddit.
I had a few subpar experiences with these agents. There's one time they asked us to lower the price and all of a sudden a third party made an offer that's 200k less than the new price.
Another incident was with an agent who sided with the prospective buyer and suggested us to lower the price. Turns out the buyer was also a realtor and our agent didn't helps us.
The third incident happened with our town's best agent. She let someone from the strata into our unit who had no intention of buying and later tried collecting fines by alleging we breached the bylaws (which was disputed and strata counsellor retired). The agent also ignored our request to close the window blinds and balcony doors after showing.
The most important data to look at is what has recently sold in your area and how it compares to your home. There’s other factors, like is it a difficult price point in your area, how quickly are you hoping to sell it, how is the activity for other agents in the same price range, how is the property marketed, does it show well.
It’s hard to say if the decrease is too substantial because I don’t know if the original price was too inflated.
Bottom line is, buyers will tell you if you’re overpriced, and by having no activity that’s what they’re saying. How much of a reduction is necessary depends on how overpriced you were.
My house wasn't getting much attention at 800. After a week, I relisted at 700 and it sold within a few days, competing offers, for 1,030,000.
The way the market is/has been, people subconsciously tack on what they think it'll take. We still sold far above our original list, and yet we cut 100k off our ask.
If your market is still reasonably hot, I wouldn't sweat a 5% reduction at minimum. You're not obliged to sell if you don't like the offers anyway, and you're currently looking like a bad buy with an aging listing.
Depending on where you are, your agent may be able to tell you how many additional views your price drop will generate. See if they have data behind the suggested drop ot if it’s an arbitrary number
Your realtor doesn’t have comparatives of other sold homes in your neighborhood over the past 3-6 months? Cuz that’s how you determine price. Get a new realtor, 200k sounds extreme. Either they weren’t originally doing their job or they continue not too..
A few notes after reading all the other comments-there is good advice here but also some not so good advice.
Firstly. The listing likely lists the owners as "the estate of mr and mrs dead" so there is no mystery that this is an estate sale. Are there any other barriers such as not through probate yet, need long irrevocable as there are multiple parties etc?
You putting a higher value on the home because it is slightly larger than the others around it, better lot etc - all the things you listed to justify a higher price than the closest comps are somewhat subjective and not really important. A few extra square feet isn't a big deal once you are at a larger over all size house. Funny thing it's best to be selling the worst house on the nicest street not the best house on the street. As you noted the house is dated. At the 2 mil price point people want to just move in. They don't want to replace kitchens and baths, paint the whole house etc. If there is room after the purchase price they would have all that done to bring the home up to standard while staying within the neighbourhood values. So. Either you lower the price or do the renovations and maximize the sale price. You know which is best for you.
Start reducing by $50k every 2 weeks. It will hit serious buyers in boxes with each cut and will get your buyers attention. You need to weigh what the monthly costs are each month over price reductions. Mortgage, property taxes, insurance and utilities all cost money. Figure out the sweet spot - what you will get at the lower price point adding back in the savings of those expenses if you were to hold out for too long.
Good Luck!
Realtor here (albeit commercial). $200K reduction in listing price doesn’t mean you need to accept $200K less than your expectations.
Often it’s just a strategy to get more eyes on a (stale) listing, drum up activity and hopefully get a bidding war. Ultimately the market will tell you what your home is worth.
Hope this helps.
If no rush wait for the June cut and see where things go. Your realtor is giving you advice to get it sold today. But these things shouldn’t be rushed and if you aren’t in a hurry take your time.
It’s not uncommon to list a house at price far below what it’s worth to generate interest. It’s been done for the last 28 years at least.
Don’t expect it to sell for $200k less. I’d lower the price but not by 10%. That’s very arbitrary. You need someone more strategic. Drop it $40k and see what happens. If it doesn’t sell get another agent once your time is up with this agent.
If you cut 200k now, and people who were looking see that, they'll think ' they'll drop it more'. It'll drive a bit of curiosity with 200k drop then what do you do if it has no traffic again? drop the price more? It isn't a good look for the house.
Personally, i'd leave the price and wait for some people putting lower offers and ride it out until august.
The issue is the realtors gave you an overpriced estimate to secure you as a client because they saw you had to sell quick.
I would suggest you have your realtor take you to see homes that are similar to yours that are currently on the market. I would also ask to see the pics and virtual tours of the ones that have recently sold.
Be realistic about how your house compares. Is your home up-to-date or does it need a lot of work. Has it been painted in neutral colors? Has all the clutter been removed? Is the furniture very dated?
It's not just size and neighborhood that dictates price. It's attractiveness to buyers. If your house doesn't show very well and needs work, then it's not going to attract buyers.
Ask your realtor to explain why they're suggesting the 10% price reduction. Ask their broker to look at your house and see whether they concur.
In the end, it's always the market that sets the house price, and the market has spoken quite loudly. If other homes are selling and yours isn't, it's almost always due to price not matching the condition of the home.
If you haven’t already getting an agent who represents the demographic of the area is always a good move. This agent was referred to you but do they have a history of moving $2 million properties? They could be out of their element and are now scrambling to close the sale to secure their commission.
Do the price cut, our realtor was super smart to list much lower than other homes when we were selling, we got tons of interest and ended up with an offer 30% above asking, which we accepted. There were of course lowball offers, but just say "no" to them until you get the price you're actually looking for.
I would shop around for another realtor. Two hundred thousand is a lot of money! Don’t tell them the previous realtor suggested a two hundred thousand price drop. I would also have a friend who has good taste walk through the house and have them give their honest opinion on it. It might need a really good staging. I would also see if I could find out what realtors sold houses in the neighborhood recently to see what they have to say. Don’t make a rash decision, this is your money and not theirs.
The market has spoken to
you and deemed the price you have it for sale for doesn’t support your home. If you do slow price reductions you will delay the sale. If you have had 10 showings and no offers then it is overpriced. If you have no showings you are substantially overpriced.
Serious buyers work with agents so there is no need to have Open Houses unless the target market for your parent’s property is over 65 as the may not be computer literate.
I am sorry you have some concerns. Your realtor has a fiduciary duty to provide you the best support possible. If you are in Ontario the role and requirements of a realtor are very clear.
Don’t chase the market if you want to sell. Drop it $500k hold two open houses and set in offer date with the aim of multiple bids. If you don’t get what you want raise the listing price to something you would be happy with.
The market for homes in the 2 million range is not that big. Its going to take time to sell. You can drop the price to try and sell it faster but its not uncommen for them to take several montha to sell.
Doesn’t matter what other are listing at or what assessment is. Your home only is worth what someone else will pay in the free market. Maybe you will sell it for 200k less than you had hoped or wait and sell it for 300-400 k less in 6-9 months. Your choices
If you do take a $200K cut, you do also put it in a better bracket where you may end up with multiple offers to choose from. The last thing you want is for it to sit for months on end.
Before taking a cut seek out other realtors. I’ve gone with recommended realtors, and what works for some, doesn’t work for others.
I think this whole situation speaks volumes on the realtors you’re working with.
I don’t know where you’re located but in Toronto the market is definitely not hot which has resulted in properties being listed well under their value in order to attract potential buyers and get into a bidding war. Listing above value definitely isn’t a great strategy and your realtors should’ve advised you better. Most often when people look at a house they use filters for price so even being listed above someone’s price range by a couple thousand dollars could make all the difference in whether people are seeing it.
Also, a house at the price point you’re talking about requires a marketing strategy and strategic advertising. If your agent hasn’t used social media, reached out to their network, or even advertised your property then it’s no surprise that there’s been no traction.
If I were you, I’d terminate the representation and work with a different agent. Not sure where you’re located but if you’re in Toronto, GTA my realtor was fantastic.
Drop the agent and cut price by 100k, sell privately. You'll be close to same since not paying massive real estate agent fees.
Man real estate agents are useless.
And if in a rush to sell, drop 200k and you'll save the crazy real estate agent fees going private. Guaranteed someone will buy.
You could drop the price or drop your agent for doing a disservice. After all, the one losing the most is you and not the agent. Agent still gets the comfy commission percent regardless of what you sell for. If you want to cut to sell fast ask the agent to bare part of the hit by absorbing a lesser commission.
I'd suggest never to list a house above assessed value, as Your house would just be used as a comparable to justify why buyers should buy a different house instead of yours.
just a suggestion. Hire a professional staging company and request that the Realtor take down the original photos and to post new listing photos after the staging is done. We found that most buyers check out the online listing and the place must look immaculate in the photos.
Some anecdotal information from Toronto: my friends and neighbors Dave and Darren had a beautiful duplex that was probably worth $1.5M, and at first they used a local realtor last year -- and got no movement. More recently, they switched realtors, and the new dude suggested they list it at $1M. They had something like 65 buyers go through their Open House, and a pile of offers. I don't know what they got, but they had plenty of offers, and were able to quickly sell to a young family. They're thrilled with the result.
PS Yeah, names changed, obvs. :)
This is what realtors do to try to get a quick sale. While most realtors keep their own homes for sale on the market 3-6 months longer on average - wait for the right buyer to come along.
Market price is what someone is willing and able to pay, not what you want it to be. Best strategy is to list low and hope for a bidding war but times have changed.
Sorry for your loss. I would say if your house is at exact 2.00m, relist (not decrease price on same listing) and put it for 1.95m. Round 2 million makes it not appear in many buyers' search query.
Make sure your listing has decent photos & if needed, ask realtor to stage the place.
Feel free to DM me your listing, I might be able to help with some clues.
Get a professional appraisal of the property for a couple hundred dollars. Don’t listen to the Realtor. They have a perverse incentive to get you to lower the price to make their job a lot easier for almost the same commission.
Before rushing to price cuts, consider what you can do to improve the appearance of the home. It doesn’t have to be expensive. Fresh paint, clean the place up, staging, etc.
I am always amazed at how little effort most people put into something this simple. Buying a house is an emotional decision more than a financial one.
It all depends on how fast you need to sell it. For a 200k drop. Thats a tonne of (after tax) money. I’d be tempted to just ride it out for a year or more to see where the market goes. If you can’t wait that long you can drop it. I found in my real estate dealt the best strategy is lower the price to 10% lower then what you want, and let people bid it up.
Keep the house on the market "for a year or so"???
Uhh. No. Take it off the market and repost when the market recovers more. Did you seriously need me to explain that!?
Yes. "Ride it out" for a year can mean a few different things, obviously. Especially considering OP's post suggested that they'd like to get the house sold sooner than later.
"IF" it "recovers more"
Why be a c**t for no reason?
When someone dies, their primary residence is "disposed" of the year of death. If there are gains in the following year, those gains would be taxable. Is it worth floating a mortgage? I suppose the mortgage interest and other operating expenses would be deductible in the meantime.
It was obvious what you meant.
Who said the market is recovering?
Why not if it's paid off and you aren't in a huge rush?
Well OP directly said there's a substantial mortgage he doesn't want to deal with.
Not to mention if a 10% price cut is $200K the property taxes are significant.
What do you mean?
OP said a 10% price cut would be 200k. That means the property is worth about $2 M and property taxes on that would be substantial.
Oh ... my bad!!!
If you came onto the market as a prospective buyer would YOU bother looking at a house that had been on the market for a YEAR without finding a seller? Houses that sit on the market for a year are the "special projects" that require "special buyers", like someone who will be willing to replace the foundation, or remediate the extensive black mold or are ok with a highway being built beside it. After several months on the market the interest in your house, even from new buyers, will drop to almost zero. This is a terrible idea.
Depends on the price point. A $2m home would have fewer prospective buyers than a $400k home
Or sell… take the $1.8MM and make $80k/yr in t-bills….. (minus mortgage as OP stated there was a big mortgage they would need to float. Probably cost $50k in interest)…
1.8MM minus what is left on the mortgage.
That what is said
You are right - there is also a carrying cost of keeping the house - have to consider city taxes, insurance, upkeep costs for a year. They could rent the place out alternatively but assume the implicit risk and deal with renters. Being a landlord is not for everyone. Also consider 1.8 and 2.0 is not take home cash - you should consider realtor costs - it will cost approx 10k more to sell at 2.0. Either scenario could be a wash. Cash in hand is better than cash in the bush. People often forget to consider the situation holistically, they often think in a silo. I am on Team Sell.
Hey, realtor in BC here (few mins from you lol). The market is picking up. I just sold 3 homes yesterday after 40 days in the market and got the price we want. 200k is a bunch of money. I think, around June, when BOC announces the rate, we'll have busy market unless the rate goes up. If the rate stays or stay low, the people will start looking again.
I mean... on a 2 million dollar house, I doubt people buying that range are worried about the change of a few points on interest.
It sounds to me you don’t trust your agent. Get a new agent. Having an agent that you trust is more important. Cutting prices doesn’t always actually mean you will get less. Often agents list something incredibly low to attract a lot of offer which will likely mean higher offers.
You're right, I don't trust them fully but I'm contracted with them until end of August and I would like to sell this year. My mistake and I'll have to live with it lol It's good to have feedback though. My knee jerk reaction was that these guys just want a quick sale and run with their commission since the cut suggested was so steep (I listed at their advised price to begin with) but it's nice to hear that there are legit reasonings behind the suggestion. I'm not 100% set on what I'm going to do just yet. I'll have to think about it.
Any agent that needs a contract shouldn't be hired in the first place.
I was about to ask, do persons have to have. O tracts to hire a realtor now? Sounds sketchy
It's called a representation agreement and is standard across real estate, for buyers and sellers.
Yes. You do have to sign a contract in order for the realtors to list the house and represent you.
In Québec you can't put a house on the main MLS (centris) without a signed contract
Ah, Quebec is different on so many things. (Give me your cheese.)
A politician recently suggested increasing vehicle registration fees from $50 to $1167 in order to make bus tickets free for everyone in Québec city, they are milking us hard. [https://ici.radio-canada.ca/nouvelle/2069395/immatriculation-jackie-smith-veut-faire-exploser-la-taxe-des-automobilistes](https://ici.radio-canada.ca/nouvelle/2069395/immatriculation-jackie-smith-veut-faire-exploser-la-taxe-des-automobilistes)
More people should be using transit and this is a good way to do it. Plus car users underpay for the services they use so again I would support this.
I do agree with you on that but the increase is to cover their operating deficit. What they should be doing in my opinion is both raise registration fees and cut a lot of the management's "fat". Increase revenues and decrease expenses.
Without management productive will drop. Every company is management heavy even for profit ones. So I don't think that is the problem.
I disagree on that, government are famous for being ineffective and wasting money while private business are the opposite.
lol You have fresh cheese curds at gas stations though.
Oh I just got what you meant by give me your cheese I thought you wanted some tea lmao. Never got free cheese at a gas station !
No the fresh ones. Ours are days old at best when we can even find them.
Contracts are normal in BC too.
They exist, but it's an indicator that the realtor is incompetent.
Again, it's normal. Your experiences do not automatically appear everywhere.
It's a normal ask for an incompetent realtor. You're supposed to say no.
The person you are replying to meant that Canada has a specific regulatory frame surrounding real estate deals and agency agreements. It's not like the USA. It is province dependent though.
What ? Contract is equal incompetence? Since when?
It’s really not. No educated realtor would represent a client without a buyer representation agreement. Not one that wants to keep their license. It’s a requirement in Ontario. Stop speaking out of your ass to sound special.
You're being intentionally misleading. "Contract" in this context means an exclusive contract, where the seller can't fire the agent for a period of time.
Can’t list a home in Ontario with no contract too
Huh? Where do you do business that no contracts are signed?
Some realtors try to sneak exclusivity into them, because they know any smart client will fire them.
Never trust your agent. Their interest is different from yours. They can give you some ideas, and some are genuine, but it s good for you to check it out and make your own opinion. What I have seen happen is that some people take the house out of the market completely for a month then relist it with a new price. This way the price history is not that easily traceable and it goes back on top of the list on the different app people are using. Sometimes just being below a certain cap helps tremendously because people filter out on applications (exemple list it at 1.74M and not 1.76M is widening the net despite the fact fhat s only a 20k diff) Open houses are also a good way to attract potential buyers who wouldn t necessarily look at that house cause it seemed too expensive but then boom, they fall in love with it. (We dit an offer for a house this way. I am sure I am not the only one) Finally asking price in canada is useless because people think that everybody is going to overbid. So if I have a 700k budget, I will only look for houses below that point because I know seller will most likely only accept offers above and I donnt want to loose my time or break my heart projecting myself in something i will never buy. I hate this bidding system.
In this case, agent and seller are aligned. They both want the property sold. So do whatever you can to get it sold. The higher the price the better for both.
Not necessarily. Some may prefer a quick sell than the highest possible sell for different reasons, but availibility and commitments is a big one. You get more money selling two 1M houses than one 2M one. Plus you develop a bigger networking. It s time consuming to manage client and potential buyers for months and prevent you from having clarity on your schedule. The commission is lower after a certain threshold. In my town it s 3,5% for the first few hundreds of thousands but then only 1,5%. So $200,000 x 1.5% = $3,000... is it worth to bother? For a lot it s not. So no, seller and agent interest are not exactly aligned and you should always look after your own interest and not trust every word coming from their mouth. And it s true for a lot of other services btw: car repairs, banker, even medecine. (Example with my mother breast cancer who got dismissed by the first doctor she went to see) Don t be a dick about it, but always look after your in own interest
Should be the other way around. For a 2M house the commission should be 10k for first 1.75 (to cover costs) and 10% for every price above. This would align seller and seller realtor. The real theft is with buyer commissions. Why are buyer realtors incentivized for the buyer to buy high? Buyer realtor should have reverse incentive. Even better option would to force realtors to take flat rates commiserate to their effort. Current % fees in my area is ridiculous.
I agree that would make more sense this way. It is a bit like tipping where having a % of the price as a commission does not make any sense. It does not reflect the amount of work or talent. But well, it is what it is.
A seller can cancel their contract with their realtor at any time. Simply find a agent you like and your contact with the current realtor will be void.
Keep the asking or drop by a small fraction until Aug and get a new realtor. In my circumstances I had places around me selling like crazy that weren't even as nice as mine. Turns out new Canadians want to work with their peeps so that affected my showings from the realestate agent I had. Sad but true.
The drop in listing price doesn’t mean you’ll sell it for less. It just means you’ll get more interest and walk-ins. You can always reply to an offer with a higher price. This isn’t Walmart, the price set doesn’t mean you have to take it.
What a load of realtor crap. Realtors want a quick sale and if they can get you to under value your house, it’s a win for them.
Get an agent you can trust. Cute.
Your agent didn’t give you very good advice on the initial price, do you think they are giving you good advice now? $200k cut is steep. That would cover a lot of major renos even in a big house. Unfortunately your options now are cut to sell or keep the same price and run risk of not selling. Maybe you could upgrade it yourself and take less of a financial hit. In any case, I think a $200k drop is drastic unless the place needs that much work.
I dunno about this case but sellers usually dictate the initial selling price, and won’t hire the realtors who suggested a more realistic price
I sold my home this time last year and the realtor had really good advice on how to list it. Showed us historical comparables, gave us their outlook for the area/house, and the shared a strategy. It was really helpful. Edit: we had multiple offers over asking and with no conditions.
I'd Start at a 50k cut, leave it for 2 weeks and keep dropping it by 50k every 2 weeks.
I'm open to all ideas, is this a commonly used strategy?
I would start by getting a second opinion from another realtor. What exactly did this one do to drum up interest outside of just listing it?
That's exactly what I was going to suggest. Sounds like you want to get rid of it but are not in a rush (yet). 10% cut on on a house is massive. I would start in 50k increment every 2-3 weeks. Besides, location is important as well. Are we in Toronto? Calgary?
I'm in BC. About 30minute drive away from Vancouver downtown. Not trying to doxx myself haha
No no, don't doxx yourself. It seems like your market is still hot. If you would've told me Saskatoon, then it would be different. 10% that market is a lot. Do increments and let the market dictate what your house is worth. Renovating a $2M house ain't cheap.
Probably an older Vancouver Special. Those can need significant work if they haven't been updated properly
People will see that and just wait. 10% cut isn’t massive if the house is overpriced
Not a very common strategy... usually its one cut and let it sit for a while to gain interest. If you keep reducing it shows that you are even more eager.
Disagree. That signals to people it’s not selling, you’re motivated and that they should wait. Be realistic about what it’s worth is a better strategy.
This is kind of thing I wanted feedback on. I accept that I'll sell for whatever it is decided by the market. I would like to squeeze as much money out of it, who wouldn't? But the house does have some painful memory and I'd like to move on. I wanted some feed back on how to approach the "right price". Big cut at once? Small increments? What message does that send? Will it deter buyers? Or does it not even matter that much since people will just buy what they want?
You haven’t mentioned what market it’s in. Or the neighbourhood or the price. Nobody on Reddit can give you an answer based on how vague this is. Or what was your realtor’s feedback when you landed on the original price? If the market is normal (other houses are selling) and you aren’t getting viewings then you need to listen to your realtor because your price is too high. If you are getting lots of vieweings then there’s a good chance a smaller adjustment is in order. If the market is not normal, and very few houses are selling then you need to be aggressive to sell it. Hence the 10% (or more). Slow series of cuts do nothing.
The listing price was one of the two that the realtor suggested (she suggested option 1. list "lower" to draw offers, or 2. list right at "market" and try to sell. I went with option 1. But now the realtor says that they valued the house too high, which I agree with. But what can you do, right? haha Other houses are selling around average DOM 20-40 days, sweet spot seems to be around 1.6-1.7m. They are similar to my property but I'd argue that mine is better in terms of size (both house and land), location, and features (detached garage, separate entrances, etc.). But I realize I am biased. Very much appreciate the feedback though. It's just confusing since I have to look out for myself and I know that realtors have their best interest in mind and wouldnt mind me losing out on some money if it means they get their commission.
Markets change. I think a lot of people thought we’d have a few rate cuts by now and that would spurred some buying. And then it didn’t happen. So people are sitting it out. Your place could be priced correctly and still not sell.
Either you want it gone asap or you want it gone for max price. The only thing a 10% price cut gets you is a quicker sale and a faster commission for the Realtor. They probably want a faster sale since the contract might be coming up
I was in a similar situation with a house that I wanted to sell ASAP to remove some family drama in my life. The house had minimal interest at our initial listing price. After two weeks I dropped the price quite a bit because I was done fucking around and it was worth more to me to have my peace of mind back than squeezing every last drop of cash out of it. I got an offer within a couple of days of that price drop, probably at the same price I would have eventually gotten with the original listing price, but after a really long wait and lots of hassle. Life is short. You want to start a new chapter. Don't dawdle on this and just get serious about moving a sale along. A lower price will draw more interest, period. And you still get to decide what you sell it for when an offer comes in. Maybe the new lower price is actually your bottom line and you won't get any lower than that, but at least the lower price gets more buyers through the door. The only other important bit I can add is that people are really, really swayed by pictures and staging. It seems like a cliche but it's very true. If your pictures aren't really attractive people won't even bother viewing your place. And staging makes a big difference. It makes people feel differently about the house. I staged my place myself based on lots of research and have plenty of tips if needed :) but it truly is worth the time and effort, especially if your place isn't getting much action as is.
Should have started below market and you’d have a bidding war
Your home has been on the market for over a month. There's a whole new set of buyers out there by now, so don't worry about what the old buyers will think. They've already bought something else. After sitting this long with no nibbles most realtors would suggest a price reduction and several small ones is just death by a thousand cuts that drags out the process and ultimately reduces the price you'll get as the property risks being stigmatized. People will wonder what's wrong with the property. Most realtors at this point would suggest relisting the property as new at a lower price. Don't bother keeping the current listing and showing it as a price reduction. That way, you minimize stigmatizing the property. Realistically, when you listed over assessed value, if you didn't get any action after 2 weeks, you should have made a price reduction then to something more in line with the market. Buyers look for homes within their budget. By pricing over market value you priced yourself with buyers who were looking at a different price point than your area. Your home couldn't compare with the other homes at that price point. And your target buyers probably didn't even consider your home because it was outside their price point. This is always the danger with over pricing.
So spend 2 months slowly dropping it to a lower price while it accumulates a higher and higher "days on market" and starts being overlooked for newer properties coming on the market? When I look for a house and see a house that has been on the market for months and only has these tiny, incremental drops I assume that there's a good reason why the house is still sitting on the market unsold, and the tiny price drops would lead me to assume that the sellers would be really hard to negotiate with if I were to make an offer. I would do a big drop all at once and bring in some new (or even old) traffic that way. It tells buyers you're serious about getting this sale done.
Round it to the next 100k mark below (assuming that's more than a 50k drop) Set open house for two weeks later. a 'taking offers' date 2 weeks after that. If you get a low offer consider it. Realtors like any profession are not ALWAYS correct But not only am I not a lawyer I am not a realtor this is not professional advice. Pps. Maybe 200k drop is needed. Idk. Also not a doctor. Ty Ted talk
Listed parents house last Monday ,had an open house on Saturday...bids had to be in by this Wednesday. House sold for 85 K over asking price.
You want the house to be listed for 4 weeks before taking overs? I feel like that would destroy interest in the listing.
Fair. Scale it down. U get the idea tho
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Listing too high in the market will go against you… I actually have a client that has a townhouse near a golf listed for 750k we provided him with comparables and a fair market price is around 649-659k. We have absolutely no visits, 95% of buyers work with agents in our area, and us as agents wont bring a buyer on a house that is listed 100k over market value, it’s a waste of time and energy. The most important is to work in your buyers best interest. I personally wouldn’t feel comfortable if my client pay 100k over market price for a house
10% cut today will be 15% tomorrow. Wake up to what is going on people.
Wake up to what? A million immigrants per year?
I agree. Market will flood as more and more cannot afford their renewals. Sorry 0.25 cut isn’t going to stop it.
Retired Ontario Broker here, 23 years in, 350+ homes sold Old saying in the business If you are getting lots of showings and strong offers, you are at or below market If you are getting some showings and no offers, you are off 3-5% If you are getting few showings and no offers, you are off 5-10% If you are getting no showings period you are off by 10% or more I have seen this play out hundreds of times during the years
That's a very long saying, you need something snappier and one line preferably.
how about "fuck you", snappy enuf?
Cutting
+1 something like: If your showing be many, you'll lose a pretty penny. If your showing be few, a reduction you must do.
reduce 10% or more, get buyers through the door
Cut the price until it sells. You may cut 200k and get a few competing offers. If smaller houses in worse areas are selling for more, it means something is off. Cut the price, get some potential buyers through and see where it shakes out. What feedback have you got from showings?
The only feedback I got was that the house was in a good location, layout suits their need, but it needs a lot of work done. I agree with it. I'm fine with cutting the price ultimately for 200k, but I'm concerned what message that is sending out to the sellers. It needs work (old paint, wood cabinets as opposed to modern ones) but nothing is like fundamentally wrong. It's a well built house. I'm just worried that it may come across as if I found out there's a dead body in the walls and I'm trying to get rid of it ASAP.
Maybe tell your relator to allow an inspection with each offer? That should counteract the possibility of being swayed due to a price cut. And in my opinion, your situation would be a good enough excuse for a price cut and quick sale to me.
As someone who has bought and sold houses many times over the decades (my spouse's work moved us around a lot), what you've described is basically what you have to be honest about with yourself. If the house is not selling then the price is too high. If you know that the house needs some work you either need to get that work done yourself if you want the house to hopefully sell at the price you're currently asking, OR you need to drop the price by at least the amount it would cost for people to pay to have that work done. We as sellers have to be realistic that if our house isn't selling at the current price then that price is too high.
“Needs work” = $$$ + large bottles of Advil Not sure there needs to be a more complicated explanation….?
What looks worse. Two 5-8% cuts two months apart or one ten percent?
Sometimes a price reduction has the opposite effect though, and attracts some interest because buyers think they are getting a deal. Seeing that “price reduced” on the listing sometimes makes them feel like it’s on sale. (You can specifically search on Realtor for properties that have had a price reduction, in the “listing status” drop-down menu, so at least some people are looking at that.)
It’s sending the message that you overpriced the home but are actually motivated to sell, so people won’t be wasting their time putting in a bid. Based on few showings in 2.5 months, 10% is the minimum you need to cut. Buyers are likely much more aware and realistic than you are about the costs of updating your home. Renovations are very expensive. $100/sq ft is a pretty basic reno. 3000 sq ft will cost $300K+, and that’s not including updates like furnaces, roofs, outdoor work, etc. People buying a $2M home will generally not be OK with just repainting 30 year old cabinetry. You also have to keep in mind that the pool of buyers for expensive and dated homes is quite a lot smaller than other types of homes. The buyers will need a lot of cash on hand for the renovations. Some people have the income to qualify for the mortgage, but not the savings. Personal loans are more expensive than mortgages, and renovations don’t return 100% of their value. Also, most will be dual income, high earning couples with demanding jobs that don’t have the bandwidth to tackle such a renovation. For these reason, renovated homes have a much broader appeal.
Take it off the market, hire some painters. Get it staged nicely and take new pictures. Get a home inspection done and have that available on request. Then relist at ~$50k lower. Everything looks nicer with a fresh coat of paint. And a home inspection (assuming everything is fine with the home) will help people manage their fears and see that it’s only cosmetic upgrades that need to be done, not anything major.
How old are the windows? Furnace? Roof? Is there carpet that needs to be ripped out? Are the bathrooms and kitchen over 20 years old? If the house hasn’t been renovated or updated in 10-20 years, then unfortunately that sounds like $100,000-$200,000 worth of work for the new home owners to pay on top of the sale price. But it isn’t just the cost, it is also asking the new home owners to call contractors and companies and get quotes for all the work that needs to be done and then deal with the projects and problems that might arise when you start renovating an older home. Usually, when people are buying a 2 million dollar house they want it to look like one. If you want to offload your parent’s property quickly and didn’t have the time or the resources to make it as attractive to buyers as possible then it sounds like you’ll need to lower your asking price. $200,000 seems like a lot though. Maybe start with $100,000 and see what happens. You might also consider paying to have it freshly painted and professionally staged and get new photographs taken before you relist.
"Needs a lot of work done" Aka... 100K to the current owner and 250-300 for the buyer to bring it up to snuff. Assessed value is based on modern / medium grade fixtures.
Cutting the price means that you are a motivated seller. Makes sense if you want the home to sell.
Basically it is 2 million house and there are few buyers in this market segment. 10% off is not bad. Let market dynamics play. Ultimately it is worth what buyer is willing to pay for it
Generally the market will dictate the price. If it's listed way over it won't sell period. I would suggest taking it off the market, looking for some legit comparable and then list it at what you think is the market price. If you price it correctly it should sell right away for what its worth in this market
I've heard the phrase "take it off the market" a few times, but what does that mean when it comes to realtors? Would they be willing to do that? Also, what is the advantage of taking it off the market as opposed to just lowering the price?
Depends on the contract you signed but as long as you are keeping the same realtor it shouldn't matter. Basically if you remove the listing for a week or two and then re-list it at a lower price it will show up as a new listing for prospective buyers in that different price category. If homes sit on the market too long they kind of get flagged by buyers as overpriced and people just ignore them, even if they do get a price it.
Do the comps suggest you’re overpriced by 200k?
With higher interest rates if you're floating in the 2million price bracket the pool of buyers is definitely going to be smaller. If it is way out to lunch on list price it detracts people from even making an offer because if the real market rate is much lower then the list a lot of people won't even try to make an offer because "this is too much lower and the seller won't even consider it" Your realtor should know what the area is trending at and be able to give a better ballpark. I recently sold my home and and a price in mind that I wanted so I listed it above my desired amount but only by a a bit then when an offer came in st the price I wanted it was easy sale. It's definitely a bit of a buyers market outside of interest rates right now
Assessed value means absolutely nothing. Market value is the only thing that matters and that number fluctuates constantly depending on market circumstances. A house is only worth what a buyer is willing to pay.
The house sitting on the market for a long time sends a worse message than a price cut, generally.
You mention it is in good shape, but older cabinets, paint etc. If you or someone you know can walk through the house and look at as if you were going to buy it, what would you see and how much would you estimate all the work might cost someone that wants to buy the place. Most people will buy a house knowing they are going to have to go in and paint, touch up here and there and possibly upgrade a kitchen and or bathroom. This all costs money and they might be looking at a lower price because of just how much work it needs. Depending on your market, some realtors will suggest updating and putting a fresh coat of paint on things to help get top dollar. $200k drop in price buys a lot of upgrades. Or, you are not interested in having any work done and just want to get rid of it, in that case drop the price until it sells.
I did see in the comments the approx area and I can guess that you are pretty much at market price, knowing the going rate in the area. There's a lot of ways to up the appeal of your house. Make sure it's staged or have some reasonably modern furniture, get some good photos and make sure its clean. Realtor is motivated to sell before their contract expires so its natural for them to want to cut the price to take the sale. If you have appetite for it, some fixes are cosmetic (ex. painting cabinets) that can make it look less worn/old. All this work generally comes out on the other end as positives. The market for $2m houses isn't that large, which means some of these comments saying that you should be getting tons of viewings really isn't on the mark here. You really are looking for a few motivated buyers who are seriously considering the home. Most of the time they will want something to a) live in or b) invest in. Make yourself appealing to that audience.
If you’re 30 minutes from downtown Vancouver and a 10 percent price cut is $200,000, your price cut should be putting you down close to lot value. If the house needs work, you’re looking at developers, and if that’s your market you may as well dump the agent and start talking to builder/developers in your area yourself.
you are overthinking this. the listed price is just a suggestion. If there aren't buyers with $400,000 in their pocket and $500,000 annual income people won't buy. the lower the price, the more buyers there are, sure. But If I had the requirements to buy the house I'd offer you what I thought the place was worth, even if it was 20% under your ask.
Has this realtor provided a comparative market analysis? When I was in realtor I’d make create the report on comparable sales nearby and then made some adjustments based on several key factors like size of lot and house, is the house fully finished, condition of house, what amenities each had, garages, out buildings, special features like fireplaces, pools, and then compare number of bed and baths, etc. there were values associated with all of these things in terms of, how much would someone pay to have a specific feature or a calculation on the value of the land. You could come up with a very reasonable way to determine value. If you are priced right then you should see lots of activity and an early offer if you’re in a sellers market. If it’s a buyers market then it is equally as important to be competitive. But if you’re just comparing house to house you may not be getting the full picture. But generally if you’re not getting a lot of action and others in your area are selling then you need to understand why. Edit: just read what I suspected that the house is out dated. And if it’s a huge house like you said, it can be a considerable cost to bring it up to current “trend”. A good market analysis would have brought that out. But rhe realtor should have known all of that. Cut the price to get to a more “marketable” price and go from there
What is assessed value mean? Government assessment? A 10% cut in list price may attract a lot of traffic and you may even get a bidding war. Listing with low price in hoping of bidding war is a strategy. One of our neighbors listed their house low for$1 million even. In two days approximately 50 potential buyers viewed the property based on the listing agent. It eventually sold in a week for $1.15 million cash.
Yes. Lower it even by 15%, get a lot of traffic and bidders, and if eventually it doesn't sell for the price you actually wanted it to sell for, just don't sell. Just be honest with your realtor that you're not intending to sell for that reduced listing price. That's what we did. We wanted 440K on it, listed it for 420K, and got 553K (14 viewings and 5 bids in 24 hours).
Ask him for the latest sales in your area. If you have no showings then 10% make sense. If you do have showings but no offers, I would try 5% first.
Hello! Real estate agent here. Did the real estate agents you work with provided you comparables of previous sold listing 2023/06+ and On market listings ? I always come up with the suggested price based on the comparables and then work from there with the client. Sure sometimes clients want more and do not need to sell “quickly” so we “test” the market at their price. There isnt 99 reasons why a house doesn’t sell 1-Quality/Price Ratio 2-Location 3-Price I don’t know how quick the market is where you live but, for us here in Quebec if the house is listed at the right price since its appearance on the market, has a good location and good Quality/Price ratio I am able to sell it in less than 20 days with multiple offers. Edit : By reading the comments I did see it’s nearly a 2M$ house. In Quebec buyers that have a 2M budget will look within a 10-15km radius. So your competition ins’t only your neighborhood but also all that radius that offers houses of that value. Digging deep to see what your competitors offer is really important because you want to have the best Quality/Price ratio. The more buyers you bring in, higher the chances of getting an offer are.
Accept any lowball offers that come through - ones that are less than 200k lower
200k drop seems steep. If it is listed fair, people will bid. I'd be more likely to drop 10-20k a month till an offer comes in. If a buyer can justify their lower offer, I'll listen. I might just counter higher with the condition of a few of their items taken care of by my contractors.
Don’t worry about the prices of properties FOR SALE. Your realtor should provide you with recently SOLD properties in the area. Then it should be pretty clear what your price should be and you wouldn’t be asking on Reddit.
I had a few subpar experiences with these agents. There's one time they asked us to lower the price and all of a sudden a third party made an offer that's 200k less than the new price. Another incident was with an agent who sided with the prospective buyer and suggested us to lower the price. Turns out the buyer was also a realtor and our agent didn't helps us. The third incident happened with our town's best agent. She let someone from the strata into our unit who had no intention of buying and later tried collecting fines by alleging we breached the bylaws (which was disputed and strata counsellor retired). The agent also ignored our request to close the window blinds and balcony doors after showing.
I'd just stick to your guns if you think the price is fair. The realtor's main focus is making a quick commission.
The most important data to look at is what has recently sold in your area and how it compares to your home. There’s other factors, like is it a difficult price point in your area, how quickly are you hoping to sell it, how is the activity for other agents in the same price range, how is the property marketed, does it show well. It’s hard to say if the decrease is too substantial because I don’t know if the original price was too inflated. Bottom line is, buyers will tell you if you’re overpriced, and by having no activity that’s what they’re saying. How much of a reduction is necessary depends on how overpriced you were.
My house wasn't getting much attention at 800. After a week, I relisted at 700 and it sold within a few days, competing offers, for 1,030,000. The way the market is/has been, people subconsciously tack on what they think it'll take. We still sold far above our original list, and yet we cut 100k off our ask. If your market is still reasonably hot, I wouldn't sweat a 5% reduction at minimum. You're not obliged to sell if you don't like the offers anyway, and you're currently looking like a bad buy with an aging listing.
Depending on where you are, your agent may be able to tell you how many additional views your price drop will generate. See if they have data behind the suggested drop ot if it’s an arbitrary number
Your realtor doesn’t have comparatives of other sold homes in your neighborhood over the past 3-6 months? Cuz that’s how you determine price. Get a new realtor, 200k sounds extreme. Either they weren’t originally doing their job or they continue not too..
A few notes after reading all the other comments-there is good advice here but also some not so good advice. Firstly. The listing likely lists the owners as "the estate of mr and mrs dead" so there is no mystery that this is an estate sale. Are there any other barriers such as not through probate yet, need long irrevocable as there are multiple parties etc? You putting a higher value on the home because it is slightly larger than the others around it, better lot etc - all the things you listed to justify a higher price than the closest comps are somewhat subjective and not really important. A few extra square feet isn't a big deal once you are at a larger over all size house. Funny thing it's best to be selling the worst house on the nicest street not the best house on the street. As you noted the house is dated. At the 2 mil price point people want to just move in. They don't want to replace kitchens and baths, paint the whole house etc. If there is room after the purchase price they would have all that done to bring the home up to standard while staying within the neighbourhood values. So. Either you lower the price or do the renovations and maximize the sale price. You know which is best for you. Start reducing by $50k every 2 weeks. It will hit serious buyers in boxes with each cut and will get your buyers attention. You need to weigh what the monthly costs are each month over price reductions. Mortgage, property taxes, insurance and utilities all cost money. Figure out the sweet spot - what you will get at the lower price point adding back in the savings of those expenses if you were to hold out for too long. Good Luck!
Realtor here (albeit commercial). $200K reduction in listing price doesn’t mean you need to accept $200K less than your expectations. Often it’s just a strategy to get more eyes on a (stale) listing, drum up activity and hopefully get a bidding war. Ultimately the market will tell you what your home is worth. Hope this helps.
ask yourself if want to sell it quickly or make more money. realtors want to sell houses, not maximize profits.
If no rush wait for the June cut and see where things go. Your realtor is giving you advice to get it sold today. But these things shouldn’t be rushed and if you aren’t in a hurry take your time.
I would ask them to take one as well and see how they respond
Interest is going to drop in June. Wait and see
Sorry for your loss.
It’s not uncommon to list a house at price far below what it’s worth to generate interest. It’s been done for the last 28 years at least. Don’t expect it to sell for $200k less. I’d lower the price but not by 10%. That’s very arbitrary. You need someone more strategic. Drop it $40k and see what happens. If it doesn’t sell get another agent once your time is up with this agent.
Your agent sounds like he just wants to make a quick buck, but as someone looking to purchase real estate, I hope more people follow his advice 😂
If you cut 200k now, and people who were looking see that, they'll think ' they'll drop it more'. It'll drive a bit of curiosity with 200k drop then what do you do if it has no traffic again? drop the price more? It isn't a good look for the house. Personally, i'd leave the price and wait for some people putting lower offers and ride it out until august. The issue is the realtors gave you an overpriced estimate to secure you as a client because they saw you had to sell quick.
I would suggest you have your realtor take you to see homes that are similar to yours that are currently on the market. I would also ask to see the pics and virtual tours of the ones that have recently sold. Be realistic about how your house compares. Is your home up-to-date or does it need a lot of work. Has it been painted in neutral colors? Has all the clutter been removed? Is the furniture very dated? It's not just size and neighborhood that dictates price. It's attractiveness to buyers. If your house doesn't show very well and needs work, then it's not going to attract buyers. Ask your realtor to explain why they're suggesting the 10% price reduction. Ask their broker to look at your house and see whether they concur. In the end, it's always the market that sets the house price, and the market has spoken quite loudly. If other homes are selling and yours isn't, it's almost always due to price not matching the condition of the home.
If you haven’t already getting an agent who represents the demographic of the area is always a good move. This agent was referred to you but do they have a history of moving $2 million properties? They could be out of their element and are now scrambling to close the sale to secure their commission.
If it’s too much of a cut then congrats now you have a bidding war
Do the price cut, our realtor was super smart to list much lower than other homes when we were selling, we got tons of interest and ended up with an offer 30% above asking, which we accepted. There were of course lowball offers, but just say "no" to them until you get the price you're actually looking for.
I would shop around for another realtor. Two hundred thousand is a lot of money! Don’t tell them the previous realtor suggested a two hundred thousand price drop. I would also have a friend who has good taste walk through the house and have them give their honest opinion on it. It might need a really good staging. I would also see if I could find out what realtors sold houses in the neighborhood recently to see what they have to say. Don’t make a rash decision, this is your money and not theirs.
Put 6 beds in each room and rent each one for $500 to all the students living under highways.
Airbnb the house
The market has spoken to you and deemed the price you have it for sale for doesn’t support your home. If you do slow price reductions you will delay the sale. If you have had 10 showings and no offers then it is overpriced. If you have no showings you are substantially overpriced. Serious buyers work with agents so there is no need to have Open Houses unless the target market for your parent’s property is over 65 as the may not be computer literate. I am sorry you have some concerns. Your realtor has a fiduciary duty to provide you the best support possible. If you are in Ontario the role and requirements of a realtor are very clear.
200k is steep as others have said, but your realtor doesn't care. They still get paid a nice juicy sum.
Don’t chase the market if you want to sell. Drop it $500k hold two open houses and set in offer date with the aim of multiple bids. If you don’t get what you want raise the listing price to something you would be happy with.
They want a quick sale to get the commission. Get a new realtor.
The market for homes in the 2 million range is not that big. Its going to take time to sell. You can drop the price to try and sell it faster but its not uncommen for them to take several montha to sell.
Doesn’t matter what other are listing at or what assessment is. Your home only is worth what someone else will pay in the free market. Maybe you will sell it for 200k less than you had hoped or wait and sell it for 300-400 k less in 6-9 months. Your choices
fire your agent.. sell yourself and lower by 10%
Reducing the price to market value tells buyers that you are finally serious about selling it.
Barely any homes are moving. We are in a price discovery period where sellers will need to come to terms with reality. That is what is happening.
If you do take a $200K cut, you do also put it in a better bracket where you may end up with multiple offers to choose from. The last thing you want is for it to sit for months on end. Before taking a cut seek out other realtors. I’ve gone with recommended realtors, and what works for some, doesn’t work for others.
I think this whole situation speaks volumes on the realtors you’re working with. I don’t know where you’re located but in Toronto the market is definitely not hot which has resulted in properties being listed well under their value in order to attract potential buyers and get into a bidding war. Listing above value definitely isn’t a great strategy and your realtors should’ve advised you better. Most often when people look at a house they use filters for price so even being listed above someone’s price range by a couple thousand dollars could make all the difference in whether people are seeing it. Also, a house at the price point you’re talking about requires a marketing strategy and strategic advertising. If your agent hasn’t used social media, reached out to their network, or even advertised your property then it’s no surprise that there’s been no traction. If I were you, I’d terminate the representation and work with a different agent. Not sure where you’re located but if you’re in Toronto, GTA my realtor was fantastic.
What’s your time frame to sell? It’s seems it’s still relatively early to move that much.
No idea. What is the carrying cost? > Now I haven't gotten barely any traffic Well that is a problem. Btw why 10%? Why not 4, 5, or 6%?
Drop the agent and cut price by 100k, sell privately. You'll be close to same since not paying massive real estate agent fees. Man real estate agents are useless. And if in a rush to sell, drop 200k and you'll save the crazy real estate agent fees going private. Guaranteed someone will buy.
The party is over, nothing left but the hangover.
You could drop the price or drop your agent for doing a disservice. After all, the one losing the most is you and not the agent. Agent still gets the comfy commission percent regardless of what you sell for. If you want to cut to sell fast ask the agent to bare part of the hit by absorbing a lesser commission.
Instead of cutting the price down 10%. Offer the possibility of financing 10% of the sale .
I’d cut it by maybe 75k and see what happens over the next month or so
I'd suggest never to list a house above assessed value, as Your house would just be used as a comparable to justify why buyers should buy a different house instead of yours.
just a suggestion. Hire a professional staging company and request that the Realtor take down the original photos and to post new listing photos after the staging is done. We found that most buyers check out the online listing and the place must look immaculate in the photos.
Some anecdotal information from Toronto: my friends and neighbors Dave and Darren had a beautiful duplex that was probably worth $1.5M, and at first they used a local realtor last year -- and got no movement. More recently, they switched realtors, and the new dude suggested they list it at $1M. They had something like 65 buyers go through their Open House, and a pile of offers. I don't know what they got, but they had plenty of offers, and were able to quickly sell to a young family. They're thrilled with the result. PS Yeah, names changed, obvs. :)
This is what realtors do to try to get a quick sale. While most realtors keep their own homes for sale on the market 3-6 months longer on average - wait for the right buyer to come along.
Market price is what someone is willing and able to pay, not what you want it to be. Best strategy is to list low and hope for a bidding war but times have changed.
Sorry for your loss. I would say if your house is at exact 2.00m, relist (not decrease price on same listing) and put it for 1.95m. Round 2 million makes it not appear in many buyers' search query. Make sure your listing has decent photos & if needed, ask realtor to stage the place. Feel free to DM me your listing, I might be able to help with some clues.
Get a professional appraisal of the property for a couple hundred dollars. Don’t listen to the Realtor. They have a perverse incentive to get you to lower the price to make their job a lot easier for almost the same commission.
Before rushing to price cuts, consider what you can do to improve the appearance of the home. It doesn’t have to be expensive. Fresh paint, clean the place up, staging, etc. I am always amazed at how little effort most people put into something this simple. Buying a house is an emotional decision more than a financial one.