A large majority of Ontarians – three out of four – planning to buy a home in the next two years say that the listing price has a big impact on whether they want to see more of a home, shows new research from the Ontario Real Estate Association (OREA).
Pat Verge, president of OREA, explained that “setting the sales price is one of the most difficult and critical steps in the home-selling process. If you set your price too high, many prospective buyers won’t even look at the property. If you set it too low, you could miss out on thousands of dollars. The objective, then, is to choose a price that is neither too low nor too high.”
Realtors use a process known as Comparative Market Analysis to determine a home’s market value. That is, they compare a property to similar homes that have sold recently or are currently on the market. Realtors also take into account other factors, such as the mood of the market, the market’s current strength or weakness, rising or dropping interest rates, employment rates, buyer confidence and competition with other homes to arrive at a realistic asking price.
“The first few weeks of the listing are the most important. The average time on market varies from area to area. However, regardless of the area, the first few weeks of any listing are important for establishing a good first impression and drawing interest. For eager buyers in a market with tight inventory levels, new listings are highly anticipated, and you can be sure that they will be paying attention to the price among other factors,” explained Verge.
The research, conducted by Ipsos Reid and commissioned by OREA for its Ontario Home Ownership Index, a semi-annual province-wide research study, also found that the features on the listing sheet (56%) and interior photos (55%) have a big impact on a buyer’s decision to want to see more of a home. Aspects like the average household income of the neighbourhood (22%), the age distribution of the neighbourhood (23%) and proximity to a highway (29%) had the least impact.
The Ipsos Reid poll was conducted earlier this year on behalf of the Ontario Real Estate Association. A sample of 1,000 Ontarians from Ipsos’ Canadian online panel was interviewed.