Baby, we got a bubble!?

[BobBob]

That's not news. The selling price is not unusual. What's extraordinary is the low listing price, from which the rest of this "story" stems.

If they had listed it at one hundred dollars, it would have gone $600,000 over asking!

 

[dlam]

That's not news. The selling price is not unusual. What's extraordinary is the low listing price, from which the rest of this "story" stems.

If they had listed it at one hundred dollars, it would have gone $600,000 over asking!

Agreed, just another newspaper sensational headline.

 

[radioheadmike]

Agreed, just another newspaper sensational headline.

What I get from this article is that freehold homes in Toronto will never sell below $500,000 as it would trigger bidding wars.

 

[urbandreamer]

Never say never.

re: precon pricing. I believe $PSF must fall below resale to be attractive to investors again. Perhaps 25% less than resale. $450PSF area perhaps?

Have any of you realtor types noticed a sudden drop in interest in precon? Literally in the past 2 week's Canadian real estate website Alexa rankings have suddenly fallen off a cliff....

 

[RZ12]

Never say never.

re: precon pricing. I believe $PSF must fall below resale to be attractive to investors again. Perhaps 25% less than resale. $450PSF area perhaps?

Have any of you realtor types noticed a sudden drop in interest in precon? Literally in the past 2 week's Canadian real estate website Alexa rankings have suddenly fallen off a cliff....

Definitely agree, $600 PSF is just way to high at this time for pre con prices.

 

[Kenny]

Probably an anomaly, but still...

http://www.thestar.com/business/rea..._and_sells_for_almost_200000_over_asking.html

Nah, it sold about what it was worth. Houses on that area are valued at around $800K.

Here's the only similar listing I could find: http://www.realtor.ca/propertyDetails.aspx?propertyId=12684032&PidKey=-891545021

 

[cdr108]

Definitely agree, $600 PSF is just way to high at this time for pre con prices.

college street condos near kensington market sold by Tribute is asking for $700 psf !?! * crazy *

 

[James]

Agreed with all the comments here about the sale of that Junction Triangle fixer-upper. Everyone gets hung up on how much properties sell over asking but neglect to analyze what the actual sale price is or was. That house should've listed for higher and likely would've sold for around the same price anyway except now the media is all in a tizzy about a house selling for almost $200,000 over asking!

 

[cdr108]

Agreed with all the comments here about the sale of that Junction Triangle fixer-upper. Everyone gets hung up on how much properties sell over asking but neglect to analyze what the actual sale price is or was. That house should've listed for higher and likely would've sold for around the same price anyway except now the media is all in a tizzy about a house selling for almost $200,000 over asking!

but wouldn't that be partly the responsibly of the realtor and seller who listed so much under market ?!?

 

[drewp]

Underpricing a property seems to be the easy way to sell a house, where the Agent can say look at how much I got you!

In realty the public will set that price. Who is to say that house couldn't sell for more, I think it could of. Holding offers on an house doesn't necessarily mean you get the highest price. It is the easiest way for a Realtor who has no idea on how to price a house to conduct a quick sale and move on.

 

[Ric]

Underpricing a property seems to be the easy way to sell a house, where the Agent can say look at how much I got you!

In realty the public will set that price. Who is to say that house couldn't sell for more, I think it could of. Holding offers on an house doesn't necessarily mean you get the highest price. It is the easiest way for a Realtor who has no idea on how to price a house to conduct a quick sale and move on.

I saw the property and think it is worth $650,000. If he had priced it at $649,000 it would have sold for full asking. Seller lost in my opinion. I think under pricing in the hope of a bidding war is done mainly to stimulate hype, which I don't agree with. I'm tired of this game.

 

[interested]

^^^
I don't know if it is true but if the vendor just said price it very low and lets get as many people in to look because it is really a mess and by that we should get the best bid from the widest audience, I think I can understand the logic. However, I agree with RIC that under normal circumstances and by this I mean a reasonably well kept home it is just stupid to price a point where it will never be sold/bought as it wastes everyone's time.

 

[PinkLucy]

On the flip side, here's a house that sold for under asking. It was priced for the market, no crazy bidding wars, seller and buyer are both happy. Not headline news but perhaps a more reasoned approach? http://www.torontolife.com/daily/in...a36&utm_source=Newsletters&utm_term=READ MORE

 

[James]

The extreme underpricing strategy is actually frowned upon by the majority of real estate salespeople and brokers, believe it or not. There are always going to be agents (and brokerages) who firmly believe in this strategy. I don't believe for a second that the sellers ultimately decided on that listing price. They would've had a discussion with the listing agent and perhaps agreed to price it lower than market value to draw more interest in a short period of time but I believe the actual figure would've been determined by the agent.

Listing lower than market value is fairly routine but we're normally talking about maybe 10% max, and keeping it under each $50,000 increment. One major issue is actually the buyers and their agents, in my opinion. If you see a house that's worth say $500,000 and it's listed at $300,000 and you know there are 20 offers already. Why bother putting in a figure of $320,000 or dare i say it even $400,000? That extra bid is only going to drive up further offers. Buyer's agents need to know when to tell their client that their offer is not only a shot in the dark but counter-productive for the future buyers. The most valuable piece of information is simply knowing how much that property is actually worth and aligning that with how much one is willing to pay for it. Excessively low listing prices are skewing the sold numbers because buyers are hoping to score a sought-after property at a price that is otherwise unrealistic.

 

[ISYM]

I wholeheartedly agree and will add that even underpricing by 10% is unnecessary.

Serious buyers going after underpriced properties, that is ,those who recognize the market value is considerably higher as opposed to those who hope to steal it for less and their representatives, have yet to understand that they should not be bidding aganst the total number of offers but rather the number of offers that would be reflective of other serious buyers - 30% at best.

The extreme underpricing strategy is actually frowned upon by the majority of real estate salespeople and brokers, believe it or not. There are always going to be agents (and brokerages) who firmly believe in this strategy. I don't believe for a second that the sellers ultimately decided on that listing price. They would've had a discussion with the listing agent and perhaps agreed to price it lower than market value to draw more interest in a short period of time but I believe the actual figure would've been determined by the agent.

Listing lower than market value is fairly routine but we're normally talking about maybe 10% max, and keeping it under each $50,000 increment. One major issue is actually the buyers and their agents, in my opinion. If you see a house that's worth say $500,000 and it's listed at $300,000 and you know there are 20 offers already. Why bother putting in a figure of $320,000 or dare i say it even $400,000? That extra bid is only going to drive up further offers. Buyer's agents need to know when to tell their client that their offer is not only a shot in the dark but counter-productive for the future buyers. The most valuable piece of information is simply knowing how much that property is actually worth and aligning that with how much one is willing to pay for it. Excessively low listing prices are skewing the sold numbers because buyers are hoping to score a sought-after property at a price that is otherwise unrealistic.