Just because you want it to be, doesn’t make it so.

If you’re a seller in the real estate market place, and you set a pre-determined date to review offers, that doesn’t automatically mean you’re going to get multiple offers.

If only selling real estate was that easy…

Sometimes, it is just that easy.

There are areas of the city that are so competitive, it seems you need only put up a “FOR SALE” sign, then sit in a lawn chair and drink beer until offer night!

But it only seems that way.  In reality, unless you price your $500,000 home at $399,000, there is simply no way to guarantee multiple offers.

Having been in SEVEN multiple offer situations last week alone, I consider myself an expert on the protocol, politics, and quite often – the likely outcome.

Not included in those seven situations last week was another offer my clients and I made on a house in the east end.  This house had set an offer date, and it didn’t sell.  We were marginally interested in the house if it sold for (well) over asking, so we let it slide.  I can’t say we were entirely surprised to see that it didn’t sell on “offer night,” but then again, it seems like even the crummy properties are selling like hot-cakes…

We decided to test the waters with a low-ish offer – the house was priced at $489,000, and we offered $470,000.

Personally, I can’t wait until the day when $470,000 on $489,000 isn’t immediately thrown back in your face as an “awful, miserable, insulting offer,” but we’ll cross that bridge when we come to it…

What do you think happened in this situation?

Do you read my blog often enough to already know the beginning, middle, and end of this story without even having read it?

If you guessed, “Something ridiculous happened,” then you are correct.

We received a sign-back of $520,000.

If it sounds like I’ve told this story before, it’s because I have – just not this exact story.  There is more than one moronic seller in the city of Toronto, and more than a couple idiotic Realtors as well.

I couldn’t wrap my head around the thinking on the part of the seller, so I tried to level with the listing agent.

She calmly explained to me, “Well, David, this house should have sold in multiples.”

She added, “We set an offer date and we fully expected over-asking.”

Okay.

And?

Is that it?

Is that your entire argument?

As luck would have it, she went on.  And she continued to bury herself in the process.

“You know, everything is selling in multiples, and everything is selling for over-asking.  Your clients shouldn’t be surprised to get a sign-back of $520,000.  It’s just par for the course.”

Yes – she buried herself.

I asked her, “So if everything is getting multiple offers, and everything is selling for over-asking, then what does it say about your house that it didn’t sell?”

She was stunned.  I honestly don’t think she thought that far ahead.

She stuttered a bit, but rather than let her firmly place that noose around her neck, I interjected, “Just because you set an offer date doesn’t mean you’re going to get multiple offers.”

And that is what many sellers fail to realize.

I always offer my sellers the following: Timing, Pricing, Staging, and Marketing.  Those are the four facets of my sales strategy, and many sellers don’t consider ANY of them!

Just because you list your property for sale and set an offer date doesn’t mean it’s going to sell for over-asking, more than market value, or in multiple offers.

If you under-price, you may get multiples.  You may not.

If you come out onto the market when there is no supply, you may get multiples.  You may not.

If you stage the hell out of the property and make it look better than it is, you may get multiples.  You may not.

And if you effectively market, promote, and advertise the property, you may get multiples.  (You may not…)

I keep saying “You may not,” because nothing is guaranteed.  Sellers just think it is, and often, the listing agent makes promises that are impossible to deliver.

So when you’re a seller and you list your $489,000 property at $489,000, refuse to stage it or clean it up at all, have no public open house, and list the property on a Friday afternoon, you’re asking a lot of the market to reward you with multiple offers the following Monday.

Many sellers will let the market determine what their house is worth.

As I always allude to – if you’re house is “worth” around $680,000, you can price it at $599,000, and know full well that you’re ridiculously under-priced, and that the market will likely respond favourably.  If you do everything else according to plan (marketing, staging, timing), then you’ll likely break $700,000 under our current market conditions.

That is allowing the market to determine what your house is worth, and in effect, you may as well be listing your house for $1.00.

So when I received a sign-back of $520,000 for that house listed at $489,000, we signed back at $470,000.

I wrote on the fax cover page, “What is more ridiculous – offering $19,000 under asking, or signing back at $31,000 OVER asking?”

How can you argue with that?

We came up to $480,000, and they walked away. 

In the end, the seller here was obviously nuts to begin with.  If you can’t work with an “awful, miserable” offer that is $9,000 less than asking, then what are you really hoping for?

Not everybody can be a lottery winner, and you can’t expect multiple offers just because you set an offer date.

Writing “Offers (if any) graciously reviewed on Monday, May 2nd, 2011,” on the MLS listing does not mean that you will receive ten, eight, six, or even two offers.  And as I said before, the agents are just as much to blame as the sellers.  Many agents don’t have the experience to understand what needs to be done to sell real estate for top dollar (or more) in this city, and they help create false expectations.

If you’re browsing MLS and you see a property that has been on the market for 48 days – there’s a reason!

Sellers who set an offer date, come up empty, and then raise their price will end up sitting on the market for months on end.

Despite what you read in the media about our red hot market, don’t fool yourself into thinking that there aren’t any houses out there that will never sell!

What kind of market have we created when getting 100% of the asking price isn’t enough?