When advising our clients on current market conditions, we used to say things like “This ain’t 2004 anymore.”

Now it seems like that gap has shortened and we’re saying, “This isn’t two months ago…”

The market has changed, is changing, and will continue to change as we move forward.  If anything – it’s become even more difficult to predict…

A colleague of mine remarked last week, “It seems like this market has changed every three months for the past two years!”

I can’t help but agree.

We’ve seen such short up and down cycles in the last couple years, and it makes all those hindsight-enthusiasts twice as right!

I think it’s only natural in any market to have short up and down cycles, but I guess most real estate participants have come to expect a smoother curve on the graph.

I guess what really bothers me about our current market is agents, buyers, and sellers who refuse to participate as if it’s October of 2010.  A lot has changed in a very short time, and maybe it will turn back around in an even shorter period.  But that doesn’t mean you can act as if it’s October of 2009, or October of 2011…

Last week, an agent in my office told me a rather frustrating story that I refuse to believe is an isolated incident.

She took her clients to see a house that was listed at $799,000, and informed them that offers were being reviewed exactly one week later.

Her clients decided to proceed with an offer, and as luck would have it, they were the only buyer for the property!

What would they have paid for the house if there were one, two, or eight other offers?  I don’t know.  Who cares?  What does that matter – because there weren’t any other offers.

They signed an offer for the full asking price of $799,000, and my colleague went to present the offer to the sellers.

What can you expect if you’re the buyer of a property and you offer $799,000 on a house listed at $799,000?  Is it fair to assume that there is a “standard” outcome?

My colleague was told by the listing agent that the sellers “needed to talk it over, and decide on a course of action.”  Then she was told that the sellers would be signing-back.

What would they sign back?  Did they not like the closing date?  Did they want a slightly higher deposit?  Or did they want to keep their favourite set of curtain-rods from the basement rec-room?

Those are all fair questions, but it seems that the sellers simply wanted an extra HUNDRED THOUSAND DOLLARS.

Yeah, it’s all good.

No big deal, they just signed back for a modest $899,000.

Right.

The house was listed at $799,000, the sellers got one offer for full asking, and then promptly signed it back for $899,000.

With that kind of distance between the buyer and the seller, clearly the offer fell apart.  But how could any buyer want to stay and “negotiate” with a seller who possesses that kind of ego and that kind of illusions about the market?

You simply have to accept current market conditions, and you can’t look forward or back.

Every seller wishes that he or she had sold on May 27th, 2010 – the peak of the market, but we just don’t get the luxury of making nine-month’s-ago’s decision, today!

I took a client to see a small 1-bedroom condo in the St. Lawrence Market area last Monday, and the seller and the agent are holding back offers for a week.  I don’t really see why – it’s priced at $299,000 which is right on the money.

On a personal level, I love this building and I love this unit, but I don’t think this is the kind of property to garner multiple offers.

I looked in the “Remarks For Brokerages” – those special little notes on the MLS listings that are saved for people as cool as me, and it read:

“Please See MLS# C1234567 – Same Unit Sold For $315,000”

Okay, I’ve done that before, many times.

If you wan’t to show other agents how you think your listing should be valued, you can always insert a little note with the sale of the house next door or the identical condo unit one floor below.

But this was something altogether different.

This was just an insult to buyers and buyer-agents alike.

Do you know when that condo sold?  That “same unit” that sold for $315,000?

Any ideas?

Sep-freaking-tember, 2009!

Yes, the “same unit” sold thirteen months ago in a completely different era for real estate.  Thirteen months in real estate is an eternity, especially for condominium sales where unit trade hands much more frequently than with houses, and where there are identical units.

So this seller, or this agent, decides to list at $299,000 and hold back offers – and then cite a comparable sale from thirteen months ago as evidence of why the buyer should ante up another $16K?

Here is my question: Why not just list at $315,000?

Isn’t that easier?

Or to the seller of the $799,000 house in the story above – why not just list at $899,000?

We all know that holding-back offers is a time-tested strategy with proven results, but only in a certain market.  At other times, it can backfire!  Do you think the sellers of that now-$899K house are going to have a lot of traffic through the property now that buyers know they’re unreasonable?

In the condominium example above, if the “same unit” had sold in May of 2010, I would still laugh at the notion of including this in the broker’s remarks because the sale is so out-dated.  But to use a sale from last Fall is just ridiculous.

I honestly don’t know if there’s any difference between listing this condo at $299,000 and holding back offers or listing it at $315,000 and not.

The client I showed the condo to last Monday ended up buying a different property yesterday afternoon.  She wanted to see what happened on offer-day, but in the interim, she found something she deemed to be better.

By holding back offers for a week, in search of multiples and prices from September of 2009, the seller and the listing agent have lost at least one potential offer from the buyer pool.

In the end, it’s up to the seller to set forth a pricing strategy that he or she feels comfortable with.

But if I had a dollar for every time I heard a story that started, “Why didn’t we take the offer…”

….well, I’d have more than a few dollars anyways…