This is the most interesting scenario I’ve seen in quite a while.

Two units are for sale in the same building at 188 Redpath Avenue.

What makes this so interesting?  The units are exactly the same, and are priced $100,000 apart…

I have always admired 188 Redpath Avenue, ever since the first time I walked inside.

About two full years ago, I was out on inspections in the Yonge & Eglinton area and I happened upon a “small” 2-bedroom unit on the top floor of this building.  The was fully stocked with gorgeous features and finishes, including an open concept kitchen with a functional centre island (dishwasher, granite prep counter, wine racks, stools, breakfast bar) and a 300 square foot terrace.

I’m not sure if I fell in love with the area, the building, the terrace, or something else……okay fine, it was the terrace!

Ever since, I’ve always enjoyed going back to this building where the maintenance fees are lower per square foot than virtually any building in the city and about HALF that of their neighboring buildings.

About a month ago, I took my client, Mark, to see a 1-bedroom-plus-den, 2-bathroom unit at 188 Redpath Ave for $399,000.  Mark and I have been looking in the Yonge & Eglinton area for a while, and we targeted 188 Redpath Ave as a building that was high on our list.

We had seen about 5-6 units in this building over the last half-year, and up until then we thought we had seen every layout possible.  But when a 1-bedroom-plus-den came onto the market for $399,000, we assumed that the “large one-bedroom” model did exist!  For some people, a 2-bedroom is useless space, and they’d rather have that space in the living or dining rooms—this is where the “large one-bedroom” comes into play.

Mark and I went on a Sunday afternoon towards the tail-end of the open house, and we were astonished to find…..a small one-bedroom unit.  Actually, this was even smaller than some other units we had seen for substantially less!

DON’T TOUCH THE GRAND PIANO!

Sorry, I still have that stuck in my head.  You see, a massive, $40,000 grand piano was situated in the middle of what should have been the living/dining room, and a sign clearly stated what we were not allowed to do.  In addition, the listing agent said, “Hello, how are you, great, good, please don’t touch the piano!”  (did you ever read Rabbit’s New Rug when you were a child?  You should…)

Mark and I made our way through the evidently-small unit, and shot eachother looks of “what the heck?”  We thanked the agent, left, and then got in the elevator.

“Fifty?” I asked Mark.  “Sixty?”

Mark asked what I was talking about and I replied, “I’m asking by how many thousands you think that unit is overpriced.”

We agreed that the unit had to be at least $50,000 overpriced, and we went on our way.

Fast forward to this past Tuesday when a unit at 188 Redpath Avenue came onto the market for $299,000.  There was one difference, however: they were holding back on offers until August 12th.

The typical “holding back on offers” seems to have slowed down a bit.  Most houses still hold back, but condos are starting to accept offers any time.  Only in the hottest of hot markets do you find all properties utilizing the holdback strategy, and over the course of the last couple years, condominium listings joined their freehold-brethren and the holdback became common place.

I told Mark we had to inspect this unit ASAP, and so we made plans to view it on Thursday.

However, upon checking the new listings this morning, I saw that the unit we viewed a month ago at $399,000 had been relisted at $349,000.

(pat, pat, pat)

That’s the sound of Mark and I patting ourselves on the back since we knew exactly how much it was overpriced by.

So on Thursday afternoon, we went to see both the new unit priced at $299,000, and the old unit now priced at $349,000.

And you know what?  It’s the exact same unit!

So what can we conclude?  Well, before we conclude, let’s analyze, shall we?

This all boils down to strategy and timing.  There is nothing worse than trying to sell your property and having a neighbor steal all your thunder by listing theirs at the same time, and clearly this is no coincidence.

By underpricing their unit, the owner of the $299,000 condo is trying to make theirs look like a steal when compared to the same unit priced at $399,000.  But what they didn’t count on was the owner of the $399,000 unit firing back with a $50,000 price reduction the very next day!

Next week, offers on the $299,000 unit will be reviewed, and one will subsequently be accepted.  What should we expect to happen?  Well, since I believe this unit is worth around $330,000, I would expect the unit to fetch multiple offers, and sell for around that price.

But what if it doesn’t?

What if the owner shot himself in the foot by underpricing to the extent that he did?

What if he got three offers and the highest one was for $317,000?  Well, he doesn’t have to sell his condo if he doesn’t want to, but he doeshave to relist it at a higher price than the one he turned down, ie. $317,001.

What does all this mean to the owner of the $349,000 unit?  Well, he will simply wait and see what happens with the $299,000 unit, and act accordingly.

The silver lining here is that if somebody loses the $299,000 unit in multiple offers, that person has a second chance waiting upstairs.  But if the $299,000 unit sells for $330,000, will the owner of the $349,000 unit accept a similar offer a day later?

Imagine this scenario:
Owner A lists at $299,000 and sells for $330,000
Owner B lists at $349,000 and sells for $330,000

Is this insanity?

No, it’s the same unit sold twice with different strategies.

I personally feel that the first listing at $399,000 was just pathetic, and the listing agent was either incompetent or was “buying the listing” by promising something she could never deliver.

But the owner who underpriced his unit at $299,000 is taking a huge risk that a few buyers will come to the table and pay over-asking in what is typically a very slow month in real estate.

Personally, I’m eagerly awaiting August 12th so I can see how this whole thing plays out.

Any predictions?

Come on, don’t be shy….