Check sold comps from the last 6 months

Find 3-5 truly comparable closed transactions — same area, same type, same square footage, same exposure. Sources: MPAC, Geowarehouse, TRREB internal data. If the median sold comp is 15%+ above your purchase price, there’s real value. If your price already sits above sold comps, the ‘$300K below asking’ is just inflated asking.

Calculate cap rate (investor lens)

For rental property: cap rate = annual net rent ÷ purchase price. GTA’s current reasonable range is 3.5%-5%. If your cap rate at purchase is below 3%, rent won’t carry costs — the ‘$300K below asking’ won’t save you. For end-users, the equivalent is price-to-rent ratio — comparable monthly rent × 12 ÷ purchase price; below ~20 is healthy.

Stress-test holding cash flow

Assume rates climb 1%, the unit sits empty for 3 months, and HVAC suddenly costs $8K. Can you still hold? If mortgage + property tax + condo fees + maintenance exceed 35% of your pre-tax income, ‘$300K below asking’ is a trap, not a steal.

Pull the listing history

Geowarehouse or your agent’s MLS access shows every listing this property has had over 2 years. If it went $1.5M → $1.2M → $1.1M → accepted $0.95M, the seller has already been cutting price all along. Your ‘$300K discount’ is against asking, not against true market.

Understand why the seller priced it high

Sellers inflate asking for specific reasons: targeting a niche buyer, anchoring on 2022 comps, strategic high-list to invite negotiation. Knowing the motive tells you whether your ‘$300K concession’ represents distressed urgency or a routine pricing reset.

How is asking price set?

Three logics: (1) Comparable Market Analysis — fair pricing close to recent sold comps; (2) Strategic underpricing to invite multiple offers (GTA 2017-2021 era); (3) High pricing to leave negotiation room (common 2024-2026 as market cooled). Asking ≠ market value — always benchmark against sold.

Where do I find sold comps?

Public sources: MPAC (title + assessment), HouseSigma (some closed sales), Zolo. Complete actual sold prices are only in the TRREB MLS database — you need a licensed agent to pull comps for you.

Does the test differ for end-users vs. investors?

Partly. Investors focus on cap rate and cash flow; end-users on fit (school, commute, lifestyle) plus hold period. But neither should treat ‘how much below asking’ as the primary metric.

How do I tell if it’s a distress sale?

Signals: long days on market (60+), multiple price drops, vacant (already moved out), seller out of province/country, estate sale, power of sale. Negotiation room is largest here — but also verify there’s no underlying structural issue (many distress sales exist because of property problems).

What cap rate is acceptable?

GTA 2026 ranges: condo 3-4%, freehold rental 3.5-4.5%, commercial 5-7%. Below 3% almost certainly relies on appreciation to make money — and appreciation isn’t guaranteed.