How Do You Price A Property In This Market?


10 minute read

March 9, 2022

On Sunday afternoon, it was 14-degrees outside and I went for my first 12 KM run of 2022.

To my running friends on TRB, let me say: I’m well, well behind schedule.

I set an aggressive goal of 1,000 KM for this year, which would mean averaging 83.33 KM per month.

I ran only 25 KM in January and only 46 KM in February, but I’m sorry, it was just too damn cold some days (and I usually run at night after work, when it’s coldest…), and I can’t run in piles of snow or ice.  I’m too fragile and I injure easily.

But if I round into form, running three times per week, 6, 8, and 16 KM, that’s 120 KM per four-week cycle, maybe from April through October?  I could use those months to play catch-up.

It’s not impossible.  Right?

As glorious as Sunday was, we saw snow on Monday.

How can that be?

On Sunday, we’re outside in t-shirts, getting ready for spring!

On Monday, we’re brushing snow off our cars.


Winter isn’t over yet, folks.  There will be sporadic bursts of beautiful sunshine and days when we feel that summer is just around the corner, but today is still only March 9th.  And the next day is March 10th, the day after is March 11th, and there’s no way to avoid that.

Having said that, despite it only being March 9th, I’m already thinking about my “Top Five: Real Estate Stories Of 2022.”

I never think about year-end this early.  Not even close.

But based on the blogs I’ve written so far in 2022 and where my head’s been at, I have to think that one of the stories of the year, by the end of the year, will be about agents in this market, specifically buyer agents, as I’ve written about now at least three times.

Last week’s Friday Rant was asking the question: “who’s fault is it?”

Who’s fault is it that buyers and buyer agents in this market have no idea how to price a home?

Is it the fault of listing agents for under-pricing and letting the market determine value?

Or is it the fault of buyer agents, many of whom have been in the business for less than two years, many of whom are part time, and many of whom do 0-2 sales per year?

You know where I stand on that…

So today, I want to continue the conversation about pricing, and show you how even a below-average agent should be able to solve the Rubix Cube of real estate pricing.

Let’s say I have a condo for sale.

1-bed, den, 1-bath, 635 square feet, with parking.

Let’s say I’ve priced this condo at $549,900.

You’re a buyer agent and you’re the type that calls me on a Saturday night at 10:15pm to ask, “What do you think this property is going to sell for?”

What can that buyer agent do instead?

First, go to and type in the address of this property.

The website shows that the average price per square foot in the building, through the last 365 days, is $1,060.

Multiply that by the 635 square feet and you get a value of $673,100.

So far, this is easy, right?  This merely requires knowledge of the existence of a website with publicly-available information?

Well, how about we go onto MLS and look at sales then?

A 685 square foot model, with a terrace and an exceptional south-facing water view of the lake, sold in January of $782,000.

That’s $1,125 per square foot.

Now let’s subtract $30,000 for that terrace and another $25,000 for the view.  Both are highly subjective but it’s better than calling the listing agent and asking, “What’s this property going to sell for?”

With those adjustments, we’re at $1,046 per square foot.

This unit was tenanted, and tenanted units don’t sell well.  It didn’t show well.  It was also listed high as opposed to being under-listed with an offer date, so factor that into the sale price.

We can look at another sale, then another one after that, and they will all point us in the right direction.

If we don’t know the square footage of a given condo, we can search on Google.  There are lots of resources out there to find floor plans.  Many are agent websites, some are property management companies, and interestingly enough, the now-defunct Urbancorp still has an active website with their floor plans dating back to 2012.  So if you’re willing to spend ten minutes or an hour searching Google, you can find the square footage of any condo listed on MLS, many of which do not detail the square footage.

Failing that, an agent can always pay $5.00 through MPAC for the Residential Floor Area Report to obtain the square footage of any condo.  I probably buy 500 of these reports every year.  It’s just the cost of doing business.

So, in conclusion, do we know approximately what this condo is worth?

Listed for $549,900, with an offer date, that must tell agents that we’re looking for over the list price.  While I recognize that none of this is taught at Humber College (all the learning is adherence to government regulations, with zero practical knowledge), this should be common sense.

So if I sell the condo for $715,000, with seven offers, then why does one person offer $551,000?  Could that agent not have found the average price per square foot on and realized he was off by over six-figures?

More to the point, why does somebody offer $565,000?  The same agent who called me six times between 5pm and 6pm on Saturday night…

If we’re going to answer the question, “Who’s fault is it anyways?” with respect to dummy offers being submitted on properties all over the city, we have set at least a very basic standard for buyers and buyer agents, and in this case, that standard wasn’t met.

When there are seven offers on a condo, listed for $549,900, to offer $1,100 over the list price is to believe, “Six other buyers will be below the list price,” otherwise, it’s a fool’s errand.

Another fool’s errand is to shoot yourself in the foot before you’ve even stepped outside for a walk on an otherwise beautiful day, and that’s to include two conditions in your offer.

This happened last night, and the agent, who told me she’s a huge fan of Toronto Realty Blog, explained that her buyer-client is “by the book.”  I asked which book that was, and suggested it’s the book of, “I will never buy a condo in this market.”  Tough love, choice words, but not untrue.

The agent told me, “This is the thirteenth conditional offer I have lost for her.”

Folks, that’s not logical.  That’s not rational.

When you lose with your second conditional offer on an “offer night,” amid furious competition, and are told by the listing agent, “We can’t work with a conditional offer in this market,” then you’re going to understand.  By the third and then the fourth loss, that point is driven home.  But by the time you lose for the thirteenth time, it’s no longer about trying to buy a condo.  It’s about something else.  It’s about taking a stand against the way real estate is sold, whether it’s done unconsciously or on purpose, because no rational, logical person would submit thirteen conditional offers on properties, in competition, lose thirteen times, and then continue to repeat his or her actions while believing the attempts not to be in vain.

Now, let’s move on to a more difficult pricing exercise.

I was called in last week to look at an extremely unique home on the west side; think Little Italy, Trinity Bellwoods, Brockton Village, Christie, Pits, Seaton Village, et al.

This property is on a 50 x 25 foot lot, which is really, really odd.

The frontage is 50-feet, which makes this house look massive!  But the lot basically ends about ten paces down the adjacent alleyway.  Behind the lot is a garage belonging to a property running perpendicular.

The house itself is an estate sale and it’s not in good shape.  There’s a tenant on the top floor who has been there for ten years, and the main floor and basement are one unit, with a basement kitchen that’s under the front porch, and has 5’9 ceiling height, and there’s no bathroom on the main floor.  It feels as though, from the existing floor plan, that the living and bedroom were on the main floor, the dining was in the basement next to the kitchen, and there’s a 4-piece bathroom in the basement as well.

So how in the world do you price a 50 x 25 foot lot?

I went into MLS and did a radius search to include this neighbourhood and the two adjacent ones.

I looked as far back as last June, which I don’t ordinarily do, but I wanted to have more data.

I went through 146 listings and looked at the photos of every single house.

The only properties that interested me were ones that needed a “gut.”  Primarily other estate sales, run-down duplexes and triplexes, and user-owned homes that were in awful shape.

Nobody wants to hear that this is how you set about pricing their home, but the idea of looking for “finished” houses and working backwards based on the cost of renovation is simply an incorrect path to pricing based on an attempt to be nice.

I selected fourteen properties and put the data into my spreadsheet.

Now, I wanted to get a sense of what the lots themselves were worth.

How do you compare a 50 x 25 foot lot to a 20 x 120?

Well, the first thing I did was flip this property around.  It’s a 50-foot frontage, yes.  But to call this a 50-foot frontage and compare it to 20 x 120 foot lots would skew the data so hard that it would overprice this property by $300,000.  So I called this a 25 x 50 foot lot, which it essentially is, since the house is built sideways, and moved on to adjustments.

All adjustments are subjective in nature, so really, truly, you can make numbers say anything you want.

But I used $10,000 per front foot in my adjustments, and thus a house on a 20-foot frontage was worth $50,000 less than the subject property and a house on a 28-foot frontage was worth $30,000 more.

Then I went to the lot depth and adjusted by $2,000 per back foot.  I will often use as little as $1,000 per back foot, depending on the property.

But in this case, based on this extremely rare lot size, I felt the buyers would substantially discount the property because of this lot.

So a 25 x 120 is worth $140,000 more than the subject property, as the lot frontage is the same at 25, but the lot depth is 70 feet longer, and thus $2,000 per back foot brings us to $140,000.

I think that’s fair, all things considered, and thus the adjustments worked.

Several of these houses were semi-detached, and while I much preferred to only work with detached comparable sales, I still wanted to cast the net as wide as possible.  I made a $150,000 adjustment for semi-detached versus detached, which will sound low to those of you that own detached houses, but based on the price point I had in mind for this property, was just shy of 10%, and that’s what I believe the premium for detached is in this market.

Several of these houses were 2 1/2 storey so I added $75,000 for the half-storey, not only because of the additional space but because it’s easier to extend a half-storey a full-storey than to add a full story on a 2-bedroom house.

And I continued to make adjustments for every property based on how they differed from the subject property.

Adjustments were also made for:

-number of bedrooms
-number of bathrooms
-type of driveway (private, mutual, right of way, parking pad, lane)
-type of garage (built-in, detached, attached, carport, none)
-exterior architecture of the home (these are all interior gut-jobs, so let’s look at “curb appeal”)
-specific location of each property (busier/quieter streets, access to transit)
-public school district

Last, but certainly not least, I looked at appreciation in the market since every one of these properties had sold.

Which price point do we use?

1) GTA average home price
2) 416 average home price
4) 416 HPI

I decided to use the GTA average home price since I think it more accurately reflects what’s happening in the market in the past three months, whereas the HPI is too slow and too round, and the 416 average home price looks volatile.

Again, it’s quite subjective.

But in the end, the average of the fourteen adjusted properties came out to $1,230,506.

While all the properties, when adjusted, came out between $1,050,000 and $1,250,000, there was one absurd outlier that came in at $1,425,000, so I chose not to include that one.  That reduced the average of the now thirteen properties to $1,208,896.

My “gut feeling” on this property, from the start, was $1,200,000 as a floor.

The data supported my gut feeling, and while I recognize that not all real estate agents possess the experience to rely on a “gut,” especially if this property were on the market for $899,900 (which is likely where I would list it, if it comes to market), an exercise in pricing comparable sales and making adjustments would ultimately lead a buyer agent to that price point.

Having said this, I do believe that based on the market conditions out there, this property would sell for $1,300,000.

I don’t believe it’s intrinsically worth $1,300,000, but I do believe that’s where the sale price would land.

So, if I were on the other side of this equation, and I were representing a buyer, how would I advise them?  I’d probably say, “This house is worth somewhere around $1.2M, maybe $1.25M, but you’d likely have to pay $1.3M to get it.”  Then I would weight the pros and cons of paying more than a very subjective market analysis tells us the house is “worth.”  Some buyers might say, “Let’s go for it,” and others might say, “Let’s look at other options.”

But I would know that I did my job in pricing.  I would know that based on my gut feeling from experience, as well as a comparative market analysis, I effectively advised my client of the value of the house, the market for the house, and the market conditions that would lead to a series of potential sale prices.

The process does not feel that difficult.

It relies on subjectivity, and that subjectivity is based on experience, but as I noted in last week’s Friday Rant, most buyer agents aren’t even trying anymore.  Some don’t possess the skill, some won’t allocate the time, and others simply lack the desire.  So, they call the listing agent and then I rant about tit.

And that’s where we are in this market.

But I think we need to go back to basics.

All too often, a buyer or a buyer agent, or both, will view a listing online and simply add $300,000 to the list price in a nano-second to “determine” value.

“New listing in the Beaches for $1,499,900, eh?  Well, that looks like a $1,800,000 house to me!”

But what if it’s not?

What if it’s $2,200,000 and just stupidly under-priced?

Or what if it’s actually only worth $1,499,900, but the listing agent and the seller are strategizing, banking on buyers and buyer agents to simply assume it’s worth $200,000 or $300,000 more than the list price, based on what’s happening in the market?

When I see a new listing of interest, I have a process that’s automatic; my fingers literally just start, and I watch.

First, I click on the address history to see if the property was listed previously and is now on a re-list.  This happens a lot in our market, as you know, and often we see a “new listing” but don’t realize that this was up for sale last week at a lower price, with an offer date, or last fall at a different price.  I also want to see when the owner bought it.

Then, I open a custom spreadsheet that I’ve been updating every month since 2004 (and have since included 2002 and 2003), with every piece of TRREB data I can get.  In here, I search for the month in which that property last sold, and note the average GTA sale price, average 416 sale price, GTA HPI, and 416 HPI.  Then I find the same price for each of those four figures in the most recent month, and determine the respective appreciation since the property last sold.  Multiply each of those four rates by the price paid, and we’ll have four potential valuations for the home.

But then, I’ll open two MLS windows: one to search for sales only on this particular street, and one to map-search the area and only look for sales with identical specs, ie. semi-detached, 3-bed, 2-bath, or detached 4-bed, 5-bath.  I’ll perform the exercise that we did above (the 25 x 50 foot lot example) for both the sales on the street and the sales in the area.

On a good day, with coffee buzzing, this might take me all of fifteen minutes.

So for the moment, I would have an idea of what that house is worth, either based on their previous listing, their purchase price and relative appreciation, or a comparative market analysis by street or neighbourhood.

But then we actually have to see the house in person, and that’s where an experienced agent can hone in on the value of the property even further.  Many agents, however, are calling the listing agent before they’ve ever shown the property to ask about price.  Let’s just start with fifteen minutes of market analysis, shall we?

Isn’t this what everybody else does?

Or do I want to know the answer to that question?

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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  1. Bob

    at 7:05 am

    Speaking from a buyer’s perspective isn’t it better that there are awful offers being bid? If everyone was super savvy and on point then this could really drive up the final sell price no? How would you handle things for your buyer if the listing agent came back and said there are 12 ultra competitive offers please re-submit instead of just two or three?

    1. JL

      at 9:24 am

      Could be, but through past discussions here the awful offers also tend to have the opposite effect: “There’s 20 offers? Oh no, I have to bid really high because so many people want this property” (when in reality its only 3-4 that are actually competitive)
      I think “fixing” the bad offers would mean that a lot or most of them just disappear altogether (with the exception perhaps of those which could drop unnecessary conditions), rather then improve and become competitive (because its unlikely you would be willing to pay competitive prices if you’re currently bidding at way below selling price). Having only the legit offers in play from the start would cut the noise from the process, which is probably a net benefit to buyers.

      1. Bob

        at 11:43 am

        Totally see your point. I guess it depends on which way to view it. I’d like to know what has more influence in driving up the final price. Is it the number of offers registered by the deadline or the number of offers picked out by the listing agent and sent back to the buyers. If it’s the latter then that’s where I’m thinking if every buyer agent knows what they’re doing then there might be even more craziness

        1. Bob

          at 11:48 am

          To clarify further let’s say you had 20 David Flemings out there and they all did their due diligence calculations and came up with 20 very competitive prices all +/- 20K within each other. Then what happens when you’re all sent back?

          1. JL

            at 4:53 pm

            Then it’s worse for sure, but only if we assume that those 15 failed bids are a result of misinformed underbidding (i.e. bidding less than they can or otherwise would if only they had better agent guidance), rather than people bidding low because of hopeful thinking and budget limitations (in which case I expect David would bluntly hit them with reality and have them sit on the sidelines) .

  2. Appraiser

    at 8:23 am

    Excellent primer on the sales comparison approach and the theories and reasoning behind hedonic regression and the application of heuristic reasoning in determining value.

  3. Bryan

    at 11:44 am

    In a world with as much tech as the one we currently find ourselves, does this not seem like more work than it needs to be? I don’t necessarily think an algorithm could predict a price quite as accurately as David (or some agent of equally exceptional talent), but surely we can do better than “hire someone fantastic at pricing” for buyers who are looking through auto-generated listings sent by their agents, or perusing realtor. ca to find their next home. What happens when a buyer, early in their search, wants to understand which of 50 properties/neighborhoods scattered across the city they can actually afford? Does the buyer agent spend 15 minutes 50 times for them?….I ask rhetorically as we all know the answer is no.

    A commenter on a previous article suggested something like a “recommended starting bid” field for all listings. I am not sure I agree this would help much, but surely if TRREB used the mountains of data they have to create something akin to House Sigma’s “estimated price” field (except in a way that is actually somewhat accurate), that would be exceptionally helpful to prospective buyers (and perhaps the market as a whole).

    Equipping buyers with this extra information could go a long way towards eliminating the 40% of garbage offers in bidding wars (and the associated price inflation), decreasing the level of buyer discontent caused by bidding on properties they never had any hope of “winning” (when the asking price made them think they did), reducing the time it takes for good buyer agents to figure out bids on properties…. and it would completely eliminate these calls from agents saying “what do you think it will sell for?”.

    1. Jennifer

      at 12:45 pm


  4. Sirgruper

    at 12:24 pm


    Absolutely, an agent that can’t figure out a commodity item like a 600 sq. ft. condo in a large building should decide why they are in this business and realize that success rarely comes from ignorance coupled with laziness. But the west side weird lot, requires an analysis that is far beyond the pay grade of most agents and you forget how much experience and reviews of appraisals you must have. That is Appraiser’s bailiwick and a true skill set.

    As for the runs, don’t overdo especially at the start and if you truly want to get in the extra mileage to hit a goal, start adding (when you are in shape) a very easy weekly 5k recovery run. It should be slow and should be done the day after your long run. I did 12k too on Sunday and uphill into the wind was wild.

  5. Another guy named Dave

    at 11:58 pm

    Good post.

    A modest suggestion: I feel your life could be just a little easier if you learned to use Excel functionalities a little better. For example, for the 50×25 property you described, rather than making a bunch of adjustments, you could run a multivariate regression, calculate the coefficients, and… voila, you are done! I promise you could learn this with an hour long Excel tutorial, after which this exercise would take under a minute. There are also ways to make your big Excel file from 2002 work faster (eg just use a calculator on a different tab that runs a Vlookup for the acquisition date, etc.).

    The old Latin maxim, “in Excel, Veritas” is true. Good luck!!!

    1. David Fleming

      at 10:21 am

      @ Another guy named Dave

      I’m going to date myself with this, but here goes…

      I went to McMaster University in 1998. I enrolled in the Bachelor of Commerce program. In first year, there was a course, the name of which escapes me. Funny, since I remember everything. But this course was learning Microsoft Word, then Microsoft Excel, then Microsoft Access.

      THAT was the course!

      Was the Michael DeGroote School of Business sponsored by Microsoft?!?!

      In 1998, we were still on dial-up internet. In fact, I’ve infamously noted that I took a course that year called, “Business & The Internet.”

      But imagine taking a university course that teaches you the BOLD and UNDERLINE functions on MS Word?

      I loved Excel right away. It was the perfect complement to my OCD. Perfection from a perfectonist.

      During my now-infamous internship at Celestica in 2001-2002, I saw how Excel was actually used in the real world. So many VLOOKUPs!

      You’re probably right about there being a simpler way, but you can’t underestimate how much subjectivity goes into pricing real estate.

      Somebody mentioned the “apps” out there and how there are value estimators, etc. I can’t tell you how incorrect these are most of the time. That app doesn’t know if the subject property is next door to an old hydro house. The app doesn’t factor in the busy street. The app doesn’t know that house values plummet on the east side of Pape because it’s in Blake Jones PS catchment, but on the west side, it’s in Withrow PS catchment. The app doesn’t know the difference between a $12,000 WOLF gas range and a $900 Amana electric stove.

      Personally, I’m waiting for robots to replace us…

  6. Condodweller

    at 3:48 am

    Wow, and they call me neurotic. When all the selling agent has to do is get it in the ballpark and then perhaps finetune it a bit by figuring out how much to under-list by, this seems like excessive work to price a house. OTOH the buying agent should do something like this to arrive at the price but generally, they just tack on a differential they feel will secure the place.

    Regarding offers, I don’t have a problem with them. You never know when it’s going to be accepted. Offers are “free”, might as well make the agent work for his money. This may not be popular with a buyer agent but he/she works for me and if they don’t like it they’re welcome to find another client.

    What I do have an issue with and I definitely disklike that contributes to unnecessary price increases is this idea of prorating previous prices to today. Just because someone overpays for a property, that shouldn’t automatically determine the trajectory of prices.

    Also, some of those low offers are teaching tools. I know some agents do a low bid for a client to prove to them that they’re wasting their time and get them to accept the idea of having to pay a huge premium if they want to secure a place. One can be forgiven for not simply taking their word for it when it comes to these huge premiums.

    On the running front, I would highly recommend Polar’s flow program which is free with the purchase of any of their hardware (HRM/watch). They have a complete training program for anything up to a full marathon. It will guide the user and warn them if they’re over/under doing it. David, I’m sure you’ll love all the numeric analysis. Personally, I don’t get what drives people to run endless distances regularly but it’s not for me to judge. The key thing about exercise for me is to do it regularly and set realistic, achievable goals and not worry about kms. Unless you’re a professional athlete.

  7. Appraiser

    at 10:08 am

    As a fiduciary of the seller, the listing agent is prohibited from revealing confidential client information (ie. acceptable sale price) to another party without the consent of the homeowner.

    Since it is improper to answer the question posed by these buyer agents, perhaps it’s time for RECO to outlaw the act of asking the question in the first place.

Pick5 is a weekly series comparing and analyzing five residential properties based on price, style, location, and neighbourhood.

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