Desmond Brown

Deception in Pricing

18 October 2019
Desmond Brown

Since returning to selling real estate eleven years ago, I've had to reluctantly adjust to the new strategies and tactics that are common in my industry and sometimes leave me feeling very bitter. 

The one thing that stands out is the common practice of drastically underpricing an asking price in an attempt to generate many offers and a bidding war. I admit I've priced some homes a touch under what I feel is the fair market value in hopes of getting more than one offer resulting in sales over the asking price. This is what the public has become accustomed to and accepted in this busy Toronto real estate market. However, I've seen some instances this Fall that have gone just a bit too far.

  • A house in Playter Estates in the Danforth and Broadview area was listed for $2.350,000 and sold for $3,520,000. That's a whopping $1.2 million over asking!!
  • A bungalow at Coxwell and Dundas was listed at $699,000. Eleven potential buyers offered on it and it sold for $920,000.
  • A renovated semi-detached in Leslieville was listed for $799,000. I had a client who was interested, but even before offers were reviewed, the listing agent told me that the house would be selling for more than $950,000. As it turns out, it had 18 offers and sold for $461,000 over asking at $1,261,000!

As I mentioned, strategies to get more than one offer on a property are common. Let me repeat and be clear. I'm not against pricing a property a bit lower than market value to attract more than one offer, but how many offers do we need? Certainly not 18! When agents deliberately price properties between 30-50% under the current value, it deceives many potential buyers into believing they have a chance to purchase, only to find out they've been used to jack up the final selling price. This just wastes everyone's time.

I love my industry, but we as real estate professionals not only have to represent our clients and get the best possible price, we also have to be fair to the general public.

Want to talk about real estate? Send me an email or give me a call anytime. 

Cheers, 
Des

Direct: 416 568 1242 (call or text)
Email: des@royallepage.ca