Score! All those buyers waiting for a deal – we found the place!

The details: detached house up in West Willowdale, brand-spanking new, 5 bedrooms, 5.5 bathrooms, parking for 6 cars, a huge lot and a pricetag to make you check your couch cushions for change.

That price? $1.00. Seriously. Here’s a screenshot:

 The best part? They aren’t holding back for offers. Now the same agent did list it in March for $1,888,000 where it sat for 200 days on the market. So, clearly that was too high of a price and now they are going the other way. But without holding an offer date (which would hint that they’ve purposely underpriced the property) this tactic certainly causes some questions. Will the seller accept an offer with no conditions for the full asking price? Betcha a dollar they won’t.

There are a number of reasons why this strategy usually doesn’t work. Say a buyer is looking for a 5 bedroom home that is new, in a specific area and they have set a price range of $1-1.5M that is fitting for their desired house in their area. Well, those buyers and their agents aren’t going to sift through every listing from $1 up to their maximum price to see if there are any gems that fit what they are looking for at say $200,000. There aren’t. The one-off, random, extremely miss-priced home doesn’t happen very often.

So, the exposure to potential buyers is not going to come from agents doing their regular search for their regular clients. Where will the exposure come from? Likely the media. There was that house in Oakville last fall that tried this approach. There were lots of news pieces, articles and blogs about it but in the end the multiple offers they were hoping for didn’t produce an acceptable price for the seller. They relisted it closer to market value and sold it that way.

Buyers are tired of bidding wars. We are tired of explaining to excited buyers that the price they saw on a listing isn’t actually remotely close to what market value is and they likely won’t be able to compete (or, alternatively, get it for a steal). What’s the point? Is this just for the listing agent to gain lots of exposure? How is that serving the best interest of their client?

One might ask if there are rules around this. Why yes, there are! The Real Estate and Business Brokers Act, 2002 (REBBA 2002) is what we would turn to. Under Part IV, Conduct and Offences, it reads:

False advertising
37. No registrant shall make false, misleading or deceptive statements in any advertisement, circular, pamphlet or material published by any means relating to trading in real estate. 2002, c. 30, Sched. C, s. 37.

Seller’s aren’t required to accept an offer, but one does wonder what sort of counsel they’ve received from their agent. And some people wonder why real estate agents have such a bad rep…

Don’t list your property for a price that you are completely unwilling to accept. Agents, don’t suggest it. Let’s raise the bar here. Please.