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If you want to sell your GTA home, you’re probably wondering: How long will it take?
Today’s blog looks at a common real estate statistic – Days on the Market – and delves into what it means to buyers and sellers.
All About ‘Days on Market’
Days on Market measures how long a property takes to sell, calculated from the day it’s listed for sale to the day an offer is accepted and conditions are waived.
BUT…and this is important…the Days on Market statistic that appears on the Toronto MLS and on realtor.ca actually represents the number of days since the current listing has been live on the MLS – it doesn’t account for when a home has been listed for sale multiple times. In Toronto, it’s not uncommon for sellers (and their agents) to terminate and re-list a property on the MLS to make it appear ‘new’. And that changes everything.
So far in 2024:
- The average listing was on the MLS for 23 days before selling.
- The total average time to sell (including all re-listings) was 34 days.
Of course, it’s important to remember that the DOM statistics vary depending on the neighbourhood and type of property. In Central Toronto, the total average time to sell currently ranges from 25 to 40 days, depending on the neighbourhood and type of property.
What Impacts How Long it Takes to Sell?
How long it takes a property to sell is impacted by:
1 – The Time of Year
You’ll see from the chart below that the length of time it takes a property to sell is greatly impacted by the time of year.
Days on Market in Toronto Real Estate
2 – How Well a Home ‘Shows’
It might seem silly, but how long it takes a property to sell is impacted by how clean it is, whether or not it’s staged and how flexible the owner is in allowing potential buyers to see it.
3 – How Well a Home is Marketed
The more exposure a home gets, the more likely you are to find the right buyer. More eyeballs = a faster sale (and more money too). Find out how the BREL team reaches more buyers here.
4 – How Well a Home is Priced
Overpriced homes take longer to sell; underpriced homes sell quickly (and often get multiple offers). The Toronto real estate market is smart, and buyers teach sellers about the price of their house, whether they intend to or not. If a home is on the market for longer than average, buyers are usually saying: “Your price is too high”.
Here are a few scenarios that illustrate how the law of supply and demand works and how it affects how long it takes a property to sell:
Scenario #1: Multiple Offers
Here’s a scenario we often see when a property receives multiple offers:
- A house is priced at $899K and the sellers set an ‘offer date’ in 7 days, in the hopes of getting multiple buyers to make offers at the same time.
- The seller receives six offers.
- One or two of those offers are usually below or at the asking price.
- One or two of the buyers REALLY want the house and offer a lot of $$ above the asking price.
- Everybody else usually ends up congregating around one or two numbers (usually the number supported by the recent sales in the neighbourhood). For the sake of my example, let’s say 2 offers are at or around $950K and another is around $960K.
- The house sells for $1,025,000K.
Here’s what the market did: There was low supply and high demand. While most buyers in this example felt the house was worth around $950K, the laws of the market drove that price higher and the seller was lucky to find a buyer willing to pay more. Good for the seller, bad for the buyers whose offers didn’t get accepted.
Scenario #2: The Overpriced Home
Here’s another common scenario:
- A condo is listed for $969K
- A few days later, the Seller receives an offer for $930K and turns it down.
- Two weeks later, they receive another offer – this time at $925K.
- A month later another offer is received at $935K.
If 3 buyers make offers around the same number, that’s likely how much the market thinks it’s worth. Motivated sellers will listen to what the buyers are saying and eventually accept a lower price, while some sellers will decide to take their home off the market and wait for prices to increase.
Here’s what the market did: There was low demand for the condo at $969K as buyers refused to meet the seller at their asking price. Only when the price is lowered to what buyers are prepared to pay, will this property sell.
What Are the Lessons for Buyers & Sellers?
- The faster a home sells, the higher the price. Homes that linger on the market send red signals to buyers – what’s wrong with this home? Why doesn’t anybody want it? In a fast-paced market, a ‘long time’ could be 3 or 4 weeks. Sellers who overprice their homes don’t end up selling for more money – they’re just on the market longer.
- Sellers: Price your home right from the start – and make sure you’re working with a brokerage that invests in the staging and marketing needed to sell your home fast.
- Buyers: If you’re looking for a deal, look for a home that’s been listed longer than average – there’ll be room to negotiate.
Selling Timeline
While deciding when to list your home for sale, start with the end goal in mind. When do you want to close? Make sure to consider:
- Home Prep Time – You need time to declutter, prep and stage your home. This could take days to weeks, depending on the condition of your home.
- Listing/Marketing Prep Time – Your agent needs time to perform their required due diligence and organize for photography, floor plans, videos, marketing copy and ads. (3-5 days)
- Time on Market – The amount of time your home is expected to be listed for sale, based on what’s happening in the market in your neighbourhood the type of property you own, and your overall strategy. If you plan to price aggressively for a quick sale, you’ll likely sell faster than the average. If you price at market value, it’ll likely take you the average DOM in your area. If you under-prepare, under-market and overprice, you can expect it to take longer than average.
- Closing Time – Most closings happen 30-90 days after the buyer and seller reach an agreement.
It’s never too early to involve your REALTOR – the sooner they’re on board, the sooner they can help you plan, strategize and prep for the sale.
