There are many “wrongs” in real estate and they get a lot more attention than the “rights.”
One of the biggest mistakes I think that a seller (and the listing agent!) can make in any market is refusing to sell for the asking price, and then re-listing the property at a higher price.
Doesn’t it sound ridiculous? Allow me to explain…
David Caruso isn’t the worst actor in the world, but he is definitely the most annoying. His only talent is his uncanny ability to crouch down over a “clue” and then put on his sunglasses as he makes a terrible play on words – right as we go to commercial…
While searching for “Kiss of Death” images on Google, I was reminded of a terrible movie that David Caruso and Nicholas Cage did in the late 1990’s. As terrible as that movie was, it’s not nearly as bad as the decision the seller made in the following story…
A property hit the market in my neck of the woods on Adelaide Street East at $299,000 about two weeks ago.
This was a 700 square foot, 1-bedroom-plus-den, 1-bathroom unit with no parking and no locker, but more importantly, it had no outdoor space! No terrace, no balcony, not even a Juliet! Your only clean-air option was to stick your head out the bedroom window.
It was on the second floor, and it overlooked the busy street below. At the time of the listing, I wondered how in the world the sellers expected to get $299,000 for the unit. The price per square foot wasn’t bad, but the lack of parking and outdoor space immediately eliminated it from contention for all my buyer-clients, and I wondered who it might actually appeal to.
The seller and his agents were holding back offers for eight days, and last week, they sat down at the kitchen table on offer night and waited for the windfall that would make them rich!
During those eight days, there were forty-eight showings! So just how big would this windfall be?
Well by 8PM on offer night there was only one offer. “Only” one offer….geez, remember when people were happy to sell their condo after eight days? I digress…
The listing agent worked the cooperating agent up to the asking price, but it took some time before that actually happened. Apparently, the cooperating agent figured that if he had the only offer, he may as well offer $290,000 on this $299,000 property!
I probably would have done the same.
Eventually, the cooperating agent came back with $299,000, so the seller got his asking price.
He got what he asked for.
And then, he turned it down.
The seller set an asking price of $299,000, received an offer for $299,000, and then rejected it.
What are we to make of this?
This was a case of a pricing tactic gone bad, as the seller decided to “under-price” his condo to try and attract multiple offers. Clearly he was expecting more, but the market did not respond. I never thought the condo was even worth the $299,000 asking price in the first place, but that’s a different story…
The seller told the cooperating agent and his buyer that he wouldn’t sell for a penny less than $322,000. I always find these numbers amusing – $322,000. You can tell that somebody picks a number out of thin air when it’s a strange number like that. Had he said $320,000, I might have believed that this was his bottom line all along. But when somebody says, “My number is $447,000,” I kind of assume that they just thought of that ten seconds ago.
So the seller essentially told the only buyer for his condo to “get lost,” and all the parties went their separate ways. I wonder how the seller slept that night?
The next day, the property came back out on the market at its new price: $322,000.
Think of the logic involved here; although I guess that’s somewhat misleading because there’s really no logic involved.
A seller offers his condo for sale on the open market at $299,000, and when the city of Toronto produces exactly ONE buyer who is willing to pay that price, he re-lists it $23,000 HIGHER!
Even a child couldn’t be fooled by this logic!
“Hey kid, I’ll sell you this chocolate bar for five dollars.”
“No thanks,” says the kid.
“Okay….well….then…..how about eight dollars?”
I just don’t see it happening!
Re-listing your property at a higher price than you had previously listed is the real estate kiss of death.
You’re absolutely finished in this market place, and the new listing is just a manifestation of your own ego.
There are no buyers for your property at MORE than a price which you couldn’t previously attain, and your subsequent attempts to sell at the new price are absolutely pointless.
Add this to the fact that all Realtors have access to the MLS system and will surely find the previous listing at the lower price, and now you look like an unreasonable seller who has visions of sugar-plums dancing in his head…
I’d hate to agree with rhetoric, but quite often, the first offer you get is the best offer.
The Toronto real estate market is red-hot right now, and the entry-level condos are leading the way.
I have to think that if the market didn’t respond to this condo priced at $299,000, then that ought to tell the seller something.
This is a hot building, in a hot neighborhood, and the property in question is within the hottest price-point.
So if buyers aren’t lined up to pay over the asking price, then maybe there is a reason.
Maybe, just maybe, the market is efficient enough to recognize an overpriced property. Because Lord knows – there are agents out there that can recognize this seller as irrational, and I doubt if the “new and improved price” is going to result in any showings.
Until the end of time, sellers will continue to play “I know best” with their properties.
But I assure you this: re-listing your property at a higher price is, and always will be, the real estate kiss of death…