Testing The Market

by Darrin DeRoches August 15 - 22, 2013

I have clients looking throughout the city at different types of homes – single family, new builds, commercial – and it seems there are a few properties listed way above market value. Some sellers are putting up their properties “just to see” if they can get the money they are asking. Some agents will list a property at any price just to get the listing and it seems to be happening a little more frequently. This week I took a client to a home that had just put up their sign and it was not even listed in the system yet. We knew that she wanted a certain area and we drove through it on the weekend and noticed the sign. The agent did not even have a lockbox on the house yet. First thing Monday morning we were the only people through the property. The client was excited about the house but I had misgivings.     The first problem was the price. This house sold two years ago for $190,000 dollars and now it was listed for $260,000. Maybe they did a total gut job and the house is worth every penny. The second red flag was that the seller was not going to accept offers until a week later. Agents do this to create a false sense of urgency and hope for a bidding war. If the property is worth it, this might work and they could get top dollar. This was an income property and the area and size of the property does warrant a price in the mid $200’s. We were the first ones in and if it was all renovated we would write up an offer for over asking and try to get the seller to agree before their so called offer date.     Bright and early Monday morning we got to the property. From the outside it looked exactly like the old pictures in the listing – maybe they did all the work to the interior. We opened the side door and there was newish laminate – maybe? We walked into the first room and with all certainty we realized it was a dump! The sellers did not spend one dollar on improvements. The old listing even stated the “new” laminate from two years ago. My client loved the area and the house still gave her a “good vibe” but I had to point out that it was overpriced by at least fifty thousand dollars. We agreed to sit and see if anyone would make an offer the following Monday and see if the seller would rethink their strategy.     The agent texted me for my feedback and I told him straight that it was fifty grand overpriced and that my client loved the area and would make a realistic offer in the low 200’s once the offer date comes and goes. His response was that his seller “wants to see the action”. It’s August which is slow and it’s overpriced by a mile so I would expect there will be little action. I will update you next week on what happened! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.