In my honest opinion, property owners should only list their properties for sale if they actually want to sell.
All through our city there are properties that are sitting on the market, month after month, with no end in sight.
These properties are the real estate equivalent of rotting garbage…
Call me naive, lazy, or on the contrary – a sheer genius, as when I see a property that has been on the market for 128 days, I just assume there is something wrong with it.
And why shouldn’t I?
In a hot market, a luke-warm market, or a so-so market, properties don’t take 128 days to sell unless they are “complex” like a commercial property or multi-unit dwelling, or they are uber-expensive.
Your “typical” property certainly does not average 128 days on the market.
So whether I’m casually browsing MLS or actively searching for a specific property, I will assume there is a reason a property isn’t selling if it has been on the market that long.
And to date, I can’t think of a time when I’ve been proved wrong.
I can’t think of a time when thousands of active buyers and thousands of agents all happened to “miss” the same property and allowed it to sit on the market for six months. The market is just far too efficient for that to happen.
So can we then conclude, with absolute certainty, that any “typical” property on the market for 128 days has something wrong with it?
I think so.
Nine times out of ten, it has to do with price.
I laugh when I see a property on the market for 128 days without ever having undergone a price reduction.
Because unless that magical munchkin from outer space flies down in his spaceship made of gold and gives you 135% of fair market value, I think it’s fair to say that a price reduction is in order if you actually want to sell!
Case in point – there is a condo down in the St. Lawrence Market area that a client of mine has been eyeing for some time.
It came out on the market in October of 2009 at $599,000, and we felt it was over-priced.
It sat on the market for 117 days, but by the time the “DOM” (days on market for you non MLS junkies) hit around 45-50 on MLS, almost anybody viewing the property listing might say, “Cool, nice property…..but what’s wrong with it?”
The property was re-listed in May of 2010 for $579,000, but I think it’s fair to say that the price reduction was hardly substantial enough to warrant any extra attention.
If anybody was interested in the property for $579,000 when it was priced at $599,000, they certainly would have made an offer! I think it’s fair to say that if anybody was that close in price, a deal would have been done.
I look at this listing today, having been on the market for 125 days, and I wonder what the hell the seller is thinking.
I go back to my “magical munchkin” quote above and I wonder if that is really what some people think!
This condo is getting ZERO interest on the market at $579,000, and yet it continues to sit on the market like rotting garbage.
The days on market keep piling up! I went away to Africa and I was thinking, “Geez, it’s about to break a hundred days!” Now I look wonder if Christmas is really that far around the corner…
The first question I ask aloud is, “Why has there been no price reduction?” If your property hasn’t sold in 30 days, let alone 125, I can guarantee that it’s over-priced.
But I also question whether or not the owner actually wants to sell, or if the owner is just content to leave the property to rot on MLS for months at a time.
What could be the benefit?
How many showings are you getting each month? Three? Maybe two?
I would almost rather do without it.
And it’s not like with that level of action on your property, you’re going out of your way to make sure the place shows nicely and the toilet seat is always left down…
While price is usually the real reason why properties rot on the market, there is one other common reason and that is when there actually is something wrong with the property!
In the case of a house, there might be a hidden structural defect that buyer after buyer has found and used as a reason to walk away from a deal.
In the case of a condo, the reasons could be far more complex.
Financially, there could be a special assessment pending for unit-owners in the building, or there could be a lawsuit pending for or against the condominium corporation.
For example, properties at 80 Front Street had special assessments pending last year, and this meant that properties sat on the market for double or triple the average days on market.
180 Frederick Street was involved in lawsuits with the neighbouring building on George Street and with the City of Toronto over water consumption, and one unit sold conditonally twice in the space of six months with the deal falling through both times.
Aesthetically, there could be something wrong with the unit or with the building.
There’s a unit at 270 Wellington Street that has been on the market for close to 100 days because it’s missing flooring and a few walls. Yes, that’s right – it has no floor or walls! I suspect there was major water damage, as evidenced by the condition of the bedroom, and the owner either ran out of money trying to renovate the property, or just gave up and tried to sell it “as is.”
And there is a building in my area, which shall remain nameless, which has been said to have termites! I’ve heard through the hearsay, rumour-mill, grapevine that one particular unit sold three times and the sale fell through all three times as inspections revealed serious concerns over the condition of the hundred-year-old wooden beams.
Bottom line: I think that any property that has been on the market for 100 days or more has been so for good reason. Whether it is over-priced, or there is something wrong with the house/neighbourhood or condo/building, I don’t feel as if the market and its buyers could ignore such a “good thing”…