Selling a loft quickly, for market value or higher, requires a solid pricing strategy. Pricing is perhaps the most important part of the market mix. Yet pricing Toronto lofts goes wrong all too often. Scroll through MLS listings for Toronto lofts for sale and you’re bound to see examples that are clearly under-listed in hopes of driving a bidding war alongside lofts for sale Toronto listed well above market value, revealing an outrageously optimistic or, as is the case all too often, an uninformed market outlook.
The market for Toronto lofts remains incredibly strong, even through the cold winter months, but a seller’s market doesn’t mean a solid selling strategy isn’t as critical as ever. Beyond the obvious factors of property features, condition, improvements, age, location, maintenance fees etc., there are a number of things to consider when pricing a loft for sale. And while there’s no one pricing strategy that fits in all situations, there are general guidelines that apply to most cases.
You may think that this is obvious but it’s incredible how often we see a Toronto loft for sale priced far below or far above comparable, recent sales in the same neighbourhood let alone in the same building. Comparable sales are critical in valuing your property because a) they’re objective in a way that other factors are not and b) buyers and their agents are going to use those same comps to justify their bid.
Now, you may feel that your loft is worth considerably more than the competition and this is certainly the case in some situations. But recent comps are a reality that you can’t escape and you can’t afford to ignore. Beyond the maximum price per square foot of recent comps, you’re speculating as to how much more the market will bear.
We can’t even count the number of media reports we’ve seen in recent years on seemingly incredulous “wins” in bidding wars. And we’ve all seen realtor postcards in our mailboxes for outstanding seller gains in multiple bidding situations of five, ten, even twenty or more bidders. What people don’t hear about is how often that final sales price is near or even bang on actual market value. Sold for 114% of list! Well, yes. Except that it was under-listed by 14% to start with.
It’s something we see happen more with Toronto houses for sale but it is happening in the loft market as well. And it’s all about creating fanfare for the agent. It’s not about helping you sell your loft. The reality is that that price likely would’ve been achieved anyway with more reputable marketing tactics without the added risk and stress to the seller and without infuriating dozens of potential buyers who never stood a chance at winning the bid.
This is also almost always the case for sales tactics like traditional media advertising (e.g. newspaper ads) and open houses. They seem like benefits to you as the seller but they almost always serve the agent, not the client.
The public also seldom hears about how often the tactic of under-listing backfires. This can result in the agent pulling and re-listing your loft a few days later closer to true market value. The problem with this is not just the weeks wasted, the problem is that other agents and their clients see the previous listing. Toronto MLS is like a museum for property listings – everything is preserved. And so your unit gets a stigma for being “un-sellable” and you as the seller can be seen as unreasonable to prospective buyers, even if the under-listing tactic wasn’t your idea in the first place.
We’ve seen many Toronto homes remain unsold at their “bargain” under-listed price only to be re-listed shortly after at tens of thousands more. It’s just common sense to realize what message this sends to buyers. If your home didn’t sell for substantially less, it’s nearly impossible to now justify that it’s worth substantially more.
In short, be wary of agents who push a low list strategy with promises of pots of gold. Also be wary of agents who set high prices dramatically above recent comps just to secure your business. There are agents who will tell you what you want to hear just to secure your business upfront and worry about the consequences later when your loft hasn’t sold.
Perspective is everything in this business. You have to view your loft like buyers will but that can be hard. We get that. We’re homeowners and loft owners too and we all have emotional attachment to our own homes. That’s why having an unbiased realtor that you trust set the price, working with you, is so critical. We have the objectivity that pricing strategy requires.
While there’s a lot of objectivity, data and trends involved in price setting, qualitative factors do come into play. There is emotional value in the eyes (and hearts) of buyers that can work in your favour as the seller. The challenge is that it’s hard to account for subjectivity in pricing strategy.
That said, there are tools that we use here at MrLOFT and features that we highlight in listings because we know that they’ll pull at a buyer’s heart strings and add to the price tag of your loft. These include excellent photography and staging and playing up historic character features that loft buyers crave.
I’m sure you’re familiar with how the search function works on realtor.ca and the Toronto MLS listings app. They’re set to round numbers which is great because it gives you flexibility. For example, an $800,000 loft will appear in the same searches as a $799,000 loft as the buyer would be setting a max search at $800K or higher.
That said, there is a very real perceptual difference between $799,000 and $800,000. To appeal to the broadest range of buyers possible, it’s best to set your price slightly under IF your target sales price is skirting the top of one range and the bottom of another. But generally we don’t recommend dropping more than $10,000 on a loft or you run the risks associated with the under-listing strategies covered earlier.
We’ve discussed some general guidelines in pricing your Toronto loft for sale but every home is unique as is every client. When interviewing prospective realtors, make sure you review their past listings, the promotional platforms they use and the quality of their marketing as well as what their pricing strategy has been on past lofts for sale. It’s best if you can’t perceive any discernable pattern in their pricing which likely means they’re pricing to market value. Think long and hard about signing with a realtor who consistently over or under lists.
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