BlogTo recently wrote an article that terrified many. The headline was “Here’s the One True Sign that the Market Might Be in Trouble” https://www.blogto.com/real-
Terminated listings are listings that the seller cancels before they sell. Often, the seller cancels these listings so that they can bring their house back on the market as a new listing with a new price. Tracking terminated listings alongside new listings is crucial because new listings can often duplicate the terminated list. The market has changed, and we are in a buyer’s market. Therefore, we expect an uptick in terminated listings as there is more supply than demand. However, the sellers’ and agents’ pricing strategy is the main driver behind the terminated listings. Many sellers and listing agents are listing houses like it’s still February. Then, when those listings don’t sell, they get terminated and re-listed because they were priced inappropriately.
So, why are there so many terminated listings right now?
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Sellers still want higher prices: Sellers are often still hoping to sell at the height of the market. No one can blame them for this. However, it is dangerous to list your house as though it is still February 2022. Buyers will likely not try to negotiate for your house. They’ll carry on to the next more reasonably priced property. Once it becomes clear that overpricing the home doesn’t work, sellers terminate the listing and re-list at a reasonable price.
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Agents are still underpricing their listings: Artificially underpricing properties to get a bidding war was a winning strategy in a seller’s market. However, in this buyer’s market, it is a losing strategy. Buyers are calling the shots now, and bidding wars are not in their best interest. Therefore, many buyers will actively avoid listings that have offer dates. When a house doesn’t sell on the offer night and it was listed artificially low, the next step is to terminate the listing and bring it back out at a higher price.
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Agents are “buying” listings: This is an insight into the more unsavoury part of this business, but here we go. We’re in a buyers market, so real estate agents are looking for more buyer clients. One way to get buyer clients is to have listings that prospective buyers call you on. Some agents are getting listings by telling the sellers that the house will sell for more than market value, so they can pick up new buyer clients when they call on the listing. The longer the listing is on the market, the more buyer calls they get. This certainly isn’t the norm, but it has been happening more lately than before.
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Out-of-town agents: Many real estate agents listing in Toronto are from out of town. This trend started when many Torontonians bought houses out of the city and used those rural agents to sell their Toronto homes. It isn’t easy to price a house correctly if you are not familiar with the idiosyncrasies of value in that particular neighbourhood. This often results in accidentally over-priced homes.
➤ Want to learn more about the current Toronto real estate market?
- Stop Feeling Sorry For People Who Bought in February
- Is the Toronto Real Estate Market Now a Buyer’s Market?
- The Market Has Changed. Your Selling Strategy Should Too.
The market has changed, so your listing strategy needs to change. List homes just slightly under market value and accept offers any time. If you use this strategy, you will not need to terminate and re-list your home. The huge number of terminated listings is just a sign that sellers and real estate agents are not changing their listing strategy to meet the current market realities.
Robyn VanderVennen
The Kim Kehoe Team
