Remember when Britney went crazy?
Remember when she shaved her head and went insane with that umbrella for all the cameras?
The following story might not be head-shavingly-crazy, but it’s close…
At our last “family dinner,” my Dad explained that a colleague of his has been looking at houses with another agent.
He said, “You know, if he ends up buying through another agent, I’d be kind of upset that he didn’t use you!”
My Dad went on to explain that his colleague has looked at eighty houses in the last five years.
And I explained to my father, “That’s okay Dad – I wouldn’t work with him if that’s the case. I only work with buyers and sellers who actually want to buy and sell.”
A “buyer” who has been looking at houses for five years is not a buyer. He’s a tourist.
A “buyer” who has looked at EIGHTY houses is not a buyer. He’s a collector.
Every buyer works at his or her own speed, but somebody that has been looking for five years has moved through so many different ups and downs in the market, and areas and neighbourhoods have transitioned or completely changed in that time!
I’ve had buyers that took well over a year to buy, and I never blinked. But those buyers were serious and had a plan. They always intended to buy; it just took longer to find the “right” property, or to determine the area they wanted to live in.
But five years? That’s not a real buyer.
On the flip side, a seller has to actually want to sell, in my opinion.
Again, playing devil’s advocate with myself, I’ll say that some people have come to me and wanted to “test the market.” I have no problem with this, but I let them know in advance that they can’t expect miracles from the market, nor can they expect me to actively market and spend advertising dollars on a property that is priced at 115% of fair market value and likely won’t sell.
Last week, I witnessed the actions of a seller who was absolutely crazy.
Thankfully, this wasn’t my listing…
I marveled at the logic involved in his actions, because he’s got to be crazy to do what he did.
There’s no way that any rational, logical, well-informed person would have taken the steps that he did.
Here’s what happened…
In a very popular condominium at King & Bathurst that we’ll just call “The Lofts,” there were five units all for sale at the same time. Unlike last week’s post about the five units for sale at 160 Frederick Street, The Lofts is a two-year-old building that is very popular, very pricey, and has been selling very well.
But when the laws of supply and demand take hold, there often isn’t much you can do.
There is a unit at The Lofts that has been sitting on the market now for about six weeks at $399,000. It was actually listed at $424,000 six weeks ago, but the inactivity has forced the sellers to come down on their price.
There are also two identical units for sale (one is a single level up from the other, same layout, same #) at $369,000 and $389,000 which likely won’t sell anytime soon because the layouts are just awful. Imagine spending almost $400,000 and not having a closet in your bedroom? It makes no sense to me. But at least the seller priced at $369,000 is being realistic!
There is another unit priced at $389,000 that isn’t bad, isn’t great.
I took my clients to see all four of these units last week, in addition to a fifth unit.
The fifth unit was priced at $424,900, and it was the only unit that had an “offer date.”
The idea of having an “offer date” or holding-back offers for a condo that had FOUR directly competing units in the same building in the same price range didn’t make much sense to me, or my clients.
We looked at the unit, priced at $424,900, and determined that it wasn’t worth even close to that.
There was a slightly larger unit, priced at $399,000, which might not have had the “den” but did have a lot more size.
I chalked up the overpriced $424,900 unit to “just another out-of-touch seller,” and we moved on.
The listing agent for that unit called me on “offer day” and asked if my clients had any interest in the property. I told her that I thought $424,900 was a little high given the market and the competition in the building, and that of the five units currently for sale, it was priced completely out of whack on a per-square-foot basis.
I stopped short of asking her why the heck they were holding back offers when FOUR other units were listed, and none of them had a set offer date.
After all, it’s not like she or her client were expecting multiple offers…..were they?
Later that week, the property was taken off the market, and it made perfect sense. I assumed that perhaps the seller was just “testing the market” with his over-priced $424,900 listing. It just wasn’t worth it.
But low and behold, the same property was re-listed that day…..for $455,000!
And THAT is where the flawed logic kicks in!
What is that seller thinking?!?!
I simply cannot comprehend the logic behind his moves.
First, he prices his condo about $20,000 higher than fair market value.
Second, he establishes an “offer date” as if his condo is under-priced, and he’s going to get a windfall of offers.
Finally, he re-lists the condo $30,000 higher after not receiving a sniff of an offer at his already inflated price.
Does this make any sense to anybody else?
I just don’t follow.
What is the point of even having this property listed for sale?
It’s like hanging a banner outside of a restaurant that reads “OUR FOOD IS POISON” and expecting people to come inside in droves.
This condo at The Lofts is now about $50,000 over-priced relative to the other units available, and from my perspective, I wonder why the listing agent allowed this to happen. Who needs that headache?
I welcome any and all business, and I make my opinions known on this-here online public forum.
But I can openly state that if somebody came to me with the idea of pricing a property far above market value, and then re-listing it even higher a week later, I would pass on the business.
Don’t get me wrong – I would do my best to educate the seller about the current market conditions and instill a little bit of logic, but some people just can’t be taught. Some people go through life with blinders on, and they don’t listen to reason.
This $455,000 listing is wasting space on MLS.
It’s never going to sell.
If it didn’t sell at $424,900, then how the hell can it sell at $455,000?
The seller has GOT to be crazy to think this is a rational course of action…Back To Top Back To Comments
at 8:26 am
I think what’s happening is he’s trying to make it look like he got a “windfall of offers” that were all very good and he thinks he can get better, so he relists it at a higher price. Whether that’s happening or not, or whether it works, is up in the air. But that’s the most rationale I can make about it. Perception is everything right?
at 8:33 am
For the last 5 years my golf instructor has been trying to teach my to get my backswing in the same position Britney is demonstrating there. I’ve got to say i’m a little envious – Full shoulder turn, stable stance, feet shoulder-width apart, arms extended and away from the body, eyes on the target…
at 10:47 am
Some people just aren’t in touch with reality and seem to enjoy wasting everyone’s time.
As for real buyers and sellers, I agree. Recently, I made my mind up to sell my place and 3 days later I had it staged and ready to go. Three weeks after it sold, after having searched hundreds of MLS listings online, I wanted to book a showing for only ONE house in particular. The next day, on offer night, I bought it. Simple.
at 11:19 am
I always wondered what an agent would do in such cases where there is a lot of other comparable units for sale. I imagine the conversation is something like either you have to price it competitively compared to the others, or not list it at this time. I’m surprised people even take listings that they think won’t sell.
My building recently had 7 listings on MLS at the same time which I haven’t seen before. Usually there’s one going at at time, or nothing at all. Median price was 400K, and I noticed last week that all of the units priced higher than 400K (3 of them) are not on MLS anymore where as the under 400K units (4 of them) are still there. Don’t know what happened to them, but my guess is they got taken off the market because of the competition.
at 11:21 am
It’s a tough business – if you’re a Realtor who only does 4-5 deals per year and some seller wants you to list his or her condo at 115% of market value, you’ll take it, cross your fingers, pray, and then wait…
Edmonton Real Estate Web
at 11:52 am
I had a similar case where a clients spent 2 years looking for a house in Edmonton and completely missed out on some great properties. He ended up paying 50,000 more for a similar home he could have bought two years early.
at 12:00 pm
I actually think some agents, desperate for a listing, actually use this crazy Hail Mary strategy to try to get clients (i.e. unrealistic clients are the only ones they can land). They probably figure if by chance it sells, then great, if not oh well. Whenever i see outrageously priced listings, i suspect the agents are generally related to the sellers, part-timers, not from the area or only have the one outrageously priced listing and they aren’t doing any marketing of it.
at 1:17 pm
Could this be the “180/3” Lofts?
at 12:04 pm
I seen this happen in my building in recent months. When their unit didn’t sell, they relisted at $20,000 higher and wound up selling for $5,000 over the original asking. I guess they figured to ask for more with the intent of actually settling for much less. It worked that time, but makes the seller look ridiculous and probably scares off more buyers in the end.
I remember visiting that building in pre-construction and raising the issue of the non-existent closet in the bedroom. They said it was part of the “open concept” design, but could offer to “build one” for me at an additional cost of a few thousand dollars. At $323,000 they were dreaming.
at 8:26 pm
any chance they own multiple units? make one unit look really expensive. then the other unit will seem like a bargain in comparison.