How to Figure Out Toronto Real Estate Values and Get the Best Toronto Home for the Best Price
If you were to list the top 10 fears of any Toronto Home buyer today, overpaying for a home would be right at the top. And while my specialty is East end Toronto Homes, (mainly The Beaches, Riverdale, Leslieville and Danforth Village) the rules that govern Toronto Real Estate pricing apply pretty much everywhere.
How do you know what the 'right' price is? Well, an abbreviated definition of market value is "the most likely price a property would bring, in an open market, with a knowledgeable Buyer and Seller, who were not acting under duress, allowing a reasonable time on the market to effect a sale."
We could assume that putting a listing on the MLS system means it's on the open market and that the Seller is knowledgeable because he's done his homework and has a Realtor acting for him/her. But how does the Buyer become 'knowledgeable' and become an effective negotiator?
1. Get a 'Buyer Agent' to represent your interests. The Seller has an agent, why shouldn't you? Unless you're a Realtor, you'll never know as much about buying/pricing a home as the Agent you hire to represent you.
2. A good Buyer Agent will always show you a list of what's sold on the street in the last year or so - before you make an offer. If the sample of homes sold and for sale on the street isn't a good comparison to the house you want to buy, your Agent will search further, within the 'neighbourhood' boundaries, till you find an adequate sample of homes similar to yours.
3. For the last many years, the 'better' neighbourhoods, like Beaches, Riverdale, and more recently Leslieville and Danforth Village, have had regular bidding wars on offer night. Only an agent who works in the field full time can accurately assess what a winning bid would look like, based on local price trends and competitive offer strategy. Your agent can and will tell you if it looks like a property will sell well beyond market value. You can take a pass and find a better value home.
4. In an environment where Toronto Homes often sell in a bidding war, I always ask myself this question, "If my client bids the highest price to get this home today, could I sell it for the same price tomorrow?" If the answer is "Most likely, NO" then perhaps we should find a different home that makes better sense financially.
P.S. Check my archives to read the article on why you should never, ever, buy a home without 'Agency' representation.