Negotiation in Toronto Real Estate
While Toronto's seller's market has limited negotiation opportunities, skilled negotiation still matters—especially for properties that aren't hot commodities. This guide shares strategies that work in various market conditions.
Understanding Market Dynamics
Seller's Market
When inventory is low and demand high:
- Limited negotiation room on price
- Focus on terms (conditions, closing date)
- Strongest offer usually wins
- Speed matters more than haggling
Buyer's Market
When inventory is high and demand lower:
- More room for price negotiation
- Can request repairs and credits
- Conditions less risky to include
- Patience often rewarded
Balanced Market
When supply and demand are roughly equal:
- Reasonable negotiation expected
- 3-5% off asking price often achievable
- Terms negotiable but within reason
Before You Negotiate: Preparation
Know the Market
Research is power:
- Recent comparable sales (not just listings)
- Days on market for similar properties
- Price reductions in the area
- Current inventory levels
Understand Seller Motivation
Why are they selling?
- Job relocation (often motivated, timeline matters)
- Divorce/estate sale (may need quick sale)
- Upgrading/downsizing (more flexible)
- Testing the market (less motivated)
Your agent can often discover motivation through listing agent conversations.
Know Your Limits
Before offering:
- Set your maximum price
- Decide which conditions are essential
- Know your walk-away point
Negotiation Strategies
The Opening Offer
Your first offer sets the tone:
- Hot properties: Offer at or above asking
- Fairly priced: 3-5% below asking
- Overpriced: 5-10% below asking (with justification)
- Stale listings: 10%+ below (if market supports)
Justifying Lower Offers
Always provide rationale for below-asking offers:
- Comparable sales data
- Property condition issues
- Market trend analysis
- Time on market
A low offer with logic is more likely to get a counter than an unexplained lowball.
The Counter-Offer Dance
When sellers counter:
- Don't respond immediately (creates urgency)
- Make smaller incremental moves than seller
- Introduce new terms if price stalls
- Know when you're close enough to split the difference
Beyond Price: Terms That Matter
Closing Date Flexibility
Accommodating seller's preferred timeline costs you nothing but can be valuable to them—especially if they're buying another property.
Deposit Size
Larger deposits show commitment. If price negotiation is tough, offer larger deposit as goodwill gesture.
Condition Flexibility
Waiving or shortening conditions makes your offer stronger without changing price.
Inclusions
Request items that have no value to seller (curtain rods, appliances) as 'wins' while conceding on price.
Negotiating Repairs
After home inspection, you may identify issues:
- Safety issues: Always negotiate
- Major systems: Reasonable to request credit
- Cosmetic issues: Generally your responsibility
Approaches
- Price reduction: Reduces mortgage, permanent savings
- Seller credit: Money back at closing for repairs
- Seller completes repairs: Often least desirable (quality concerns)
Common Mistakes to Avoid
- Lowballing hot properties: You'll be ignored
- Negotiating via email: Phone/in-person more effective
- Revealing desperation: Agents talk to each other
- Focusing only on price: Terms matter too
- Endless negotiating: Know when to close or walk
When Not to Negotiate
Sometimes, paying asking price (or more) is the right move:
- Property is fairly priced with competing interest
- You love the home and can afford it
- Negotiating would risk losing it
- Minor savings not worth relationship strain
The goal is getting the right home at a fair price—not 'winning' negotiations.
Working with Your Agent
A skilled buyer's agent:
- Knows current market dynamics intimately
- Has relationships with other agents
- Understands seller psychology
- Presents offers persuasively
- Keeps emotions out of negotiations
Ready to find your Toronto home with an expert negotiator in your corner? Contact us to start your search.
