The answer depends on whether you’re the seller, the listing agent, or of course – the parents of the seller, who think that you were under-priced to begin with!

Thirty days.

That’s my answer to the question above, in two words.  So if you want to skip the next 1,200 words, you’re more than happy to!

As a Realtor, one thing I don’t do is take over-priced listings.

At the risk of sounding brash, I’m not at the point in my career when I need to take that $340,000 listing at $399,000.  I’ll try my best to educate the seller on the fair market value of the property and the best way to achieve that price, but when push comes to shove, I’ll walk away from a listing.  I’ve done it before, and it’s not fun, but it is necessary.

I wouldn’t be doing the seller any good if I listed his or her property for far more than it’s worth, but unfortunately, many Realtors take listings because they need the business.  They figure, “An over-priced listing is better than no listing at all!”  I couldn’t disagree more.

I would ask those Realtors, “Do you value your time?  Do you like working for free?”  Because you’re not going to sell that $340,000 condo for $399,000, no matter how hard you close your eyes and H-O-P-E.

“Hope” is a four-letter word, like many other bad ones we know.

Many Realtors take over-priced listings and just hope that the market sells it for them!

Because there are so many over-priced listings in Toronto, it’s tough to use “days on market” as a metric when explaining the selling process to property-owners.  And because some properties are listed three times – once for 68 days, once for 22 days, and then once again for 13 days before finally being sold, the “days on market” statistics can be somewhat skewed.

I usually clean the data – using ALL listings for a given property once it’s sold, and putting together the actual days on market.  It helps the sellers to understand what the market is like in their neighbourhood or their condominium, and it allows me to set reasonable expectations.

Some areas of the city or some buildings allow for ridiculously fast sales – maybe there are ten listings averaging 12 days on the market!  And maybe some of these listings only lasted so long because there was a “hold back” on offers and they weren’t being reviewed until nine days after the initial listing.

And some neighbourhoods and buildings typically take longer to sell, for a variety of reasons.  Maybe your condominium just isn’t as popular as the one across the street, or down the road!

That’s why I need to know the average days on the market for a property in that building or area, in order to give the seller a reasonable expectation on how long it will take for the property to sell.  And this, of course, leads into the topic of discussion: when to reduce the price if the property has NOT sold.

If a property was listed at $499,000, then re-listed at $479,000, then reduced to $459,000, then finally sold after 122 total days on the market for $440,000, then I probably won’t rely on the statistics from that listing.  But I will, however, look at how many days that $459,000 listing was up before it sold for $440,000.

If a bundle of listings – say a dozen, in a given building will average forty days on the market, I usually cut that in half, not because I think I’m twice as good, but rather because of all the unqualified, inexperienced Realtors out there that think “PHOTO NOT AVAILABLE” belongs on an MLS listing.  I think most active, hard-working, reputable Realtors could probably cut the average days on market in half for the purpose of their own predictions when educating their seller-clients, even if it means setting the bar high.  Quite often, the days on market has less to do with the price, and more to do with the way the property (not) being sold.

Now let’s say that I tell the sellers, “We should sell this property in 20 days, give or take.”  At what point do we reduce the price if it hasn’t sold?

Again, I’m assuming that I’ve priced the property accurately, but that’s easier said than done as well!

Real estate has no fixed value, and you can’t simply check the price of your house like you can check the price of your stocks as they trade millions of shares each day on the TSX.  So if I tell a seller that his condo is worth $529,000 – $539,000, he might elect to go with the higher price.  I provide an approximate range, within 2%, and then along with the seller, we devise a pricing strategy.

But what if the strategy doesn’t work?

What if you “know” what the property is worth, and after marketing it effectively and working day and night to get it sold, it remains on the market?

Well unfortunately, there isn’t much you can change, other than the price, if you want to get the unit sold.

Most sellers will object, and look for people or things to blame, and frankly I don’t fault them.

They can blame the market, or the media, or the cheap vase that the stager used in the front hallway.  They can even blame me for not getting the property sold!  Hey, if you hire a coach, and he isn’t winning, who else do you blame?

But eventually, the topic of discussion moves back to, “Okay, what do we have to do to get this sold?”

And that’s when you have no choice but to address the price.

If you own a condo in Building-A, and the identical model sold last month for $440,000, it doesn’t necessarily mean that you will obtain the exact same price.  The sample size of ONE is simply too small.  As I said – if these were millions and millions of shares of stock, then you can apply that logic.  But If you own Unit #1701 and you’re priced at $440,000, and Unit #1801 sold last month for $440,000, it doesn’t mean you’re getting screwed if you can’t get the same price.

This is the toughest part to convey to sellers.

But the truth is, a seller has no right to obtain $440,000.  You’d be screwed if the best you could do, one month later, is, say, $401,000, but just because the same unit sold for $440,000 doesn’t mean you’re entitled to the same $440,000 price.

So my point is this: if you’ve seemingly done everything right, and if planetary forces have conspired against you and you’ve been unable to sell for $440,000, at what point do you drop the price?

That’s where we came into this.

I’d say 30 days.

When I see a listing on the market for 30 days, be it a house or a condo, I think “They’re going to drop the price soon – so there’s price flexibility there.”

Whether the property is in a hot area or a cold one, I still think you work within that 30-day timeline.

You don’t have much a choice.  Assuming you want to sell, which is something not all sellers truly want.  The seller that’s been on the market 168 days with no price reduction clearly doesn’t WANT to sell, nor does he NEED to, it seems.

But assuming you want to sell – because you’ve bought elsewhere, or you’re planning to buy, or you’re moving out of town – you can’t be on the market after 30 days without a price reduction.  It just doesn’t make sense.

All that will change if and when the market changes, but under current market conditions (and as blessed as we are!) the average property should sell in 30 days or less…