Lawyer, author and speaker to the real estate industry, Mark Weisleder recently wrote a great article in the Toronto Star clarifying the mysterious $1.00 listings that occasionally pop up on the market. Most recently an Oakville home that was originally listed for over a million dollars, re-marketed the home with a price of $1.00.
Not only does this cause confusion for serious buyers but it can aggravate many people as it feels like ‘false advertising’. Many readers were angered and questioning the legality of listing a house at such a low price, even though the seller has no serious intention of accepting an offer anywhere near that low price. Mark clarifies throughout the article, however, that this is in fact a legal practice. When a seller lists their home, they are not obligated to accept any offer (even if it is exactly what they have asked for). A listing is ‘an invitation’ to receive offers, not a promise to accept.
Despite the legality of this practice, Mark does note that it is often counter-productive, as it angers potential buyers and most don’t take it seriously anyways. The tactic is intended to create a buzz around the property, although it doesn’t seem to have too much of an effect on selling a home. More importantly, practices like these demonstrate the importance of properly pricing a home so that you are able to attract the largest number of potential buyers.
Mark suggests pricing a home sharply, and not trying to ‘test the market’ by overpricing your home. This often only allows other agents to use the overpriced home as a platform to make their sharply priced homes seem much more attractive. Once you have to reduce your price in order to compete, potential buyers start to wonder if something is wrong with your home.
Price your home sharply and get opinions from more than one professional. Overpricing your home can have the same effect as a ploy like the $1.00 listing.
Source: Mark Weisleder: http://www.markweisleder.com/11torontostararticle1021.pdf
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