The Best Deals Right Now Aren't Where Buyers Are Looking

Buyers keep asking me where the deals are in this market. They're looking for the answer in the aggregate numbers: average prices, months of inventory, sales counts. That's the wrong place to look.

The deals right now are not distributed evenly. What separates a good deal from a frustrating week-long negotiation usually has nothing to do with the house. It has to do with who owns it.

Two Sellers, Two Very Different Conversations:

We've been in a declining market in Ontario for more than four years now. One thing that has changed over that time is how far apart sellers are from each other in terms of motivation.

Some homes sell for far more than anyone expected. Others sell for far less. When my agents see a sale that makes no sense, we do the homework, because there's always a reason. Sometimes it's a defect that wasn't visible in the listing photos. But increasingly, the reason is simply that the seller was done.

Here's the part most buyers get backwards. The assumption is that the seller under financial pressure is the flexible one — the person who has to sell is the person who will take less.

In practice, it's often the opposite. A seller who bought in 2021 or 2022 and is looking at a loss has a number they cannot go below. Their mortgage, their next purchase, and their pride are all anchored to that number. You can negotiate with them for a week and get nowhere, because there is nowhere for them to go.

The seller who has owned the home for fifteen years is a completely different conversation. They have a large amount of equity. They've already decided to move on. And they are far less concerned about the extra fifty grand than you would think, especially if they've mentally left the house already.

I've seen this repeatedly with our own clients. I've had sellers receive an offer well below asking and say they'd take it on the spot. In one case I recommended the seller sign it back with a counter and she didn't want to, because she was worried the buyer would get spooked and walk. She wasn't wrong that it was a risk — some buyers won't negotiate at all. But that's how ready she was to be finished..

None of this is universal. Plenty of sellers are still anchored to what their neighbour got at the peak in early 2022 and won't move off it, even when the realistic price today is $200K lower. There's a lot of psychology in this. They anchor against the peak instead of against what they actually paid.

But there are fewer of those sellers than there were three years ago, when a lot of people were still waiting for rate cuts to rescue them. Most have now accepted the market they're in.

What Buyers Should Actually Do With This:

Look up how long the seller has owned the home. This is the single most useful piece of information you can have going into a negotiation, and it takes minutes to find. Long ownership and substantial equity mean flexibility is at least possible. A 2021 or 2022 purchase price means you're probably negotiating against a wall.

Make your agent call the listing agent and ask real questions. Not "is there any interest." Ask why they're selling, where they're going, whether timing matters to them, what's happened with the listing so far. Listing agents volunteer a surprising amount when someone actually asks. If your agent isn't doing this, you're paying them to send you links.

Understand that price isn't the only thing you're offering. Closing date flexibility matters a great deal to someone who has already bought their next place. Fewer conditions matter. In one case, a homeowner who had bought her house as a single woman was genuinely pleased that another young woman was buying it. You cannot manufacture that, but you can stop treating a negotiation as a pure number exchange when the person on the other side has lived in that home for two decades.

Don't be so afraid of insulting someone with a low offer. You’ll never know what a seller is willing to accept until you try.

The Bigger Picture:

I don't expect this market to turn quickly. Months of inventory for low-rise homes in the GTA was just over four in July. If more supply is absorbed and that figure drops to around 3, prices will stop falling. Until then, most buyers are still holding out to pay a little less than the house down the street sold for a few weeks ago, and that mindset keeps sales low.

Beyond the broader market trends, the individual opportunity is a different matter, and it's available to buyers who do enough homework to know which seller they're sitting across from.

John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).

Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn

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