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What’s the point of pricing low?

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Real Estate Professional | 29 Oct 2014, 09:10 AM Agree 0
We all know how frustrating it is when we find a property for a client and then find out that the house is going to sell for much more than the listing. It frustrates the client, wastes time and is arguably misleading – but some agents say it’s a legitimate (and highly effective) tactic.
  • | 29 Oct 2014, 01:05 PM Agree 0
    I believe that pricing low tactics to achieve multiple offers should be banned outright!
  • Don | 29 Oct 2014, 01:20 PM Agree 0
    Hardly in your clients best interst tho is it.? Perhaps commission rather than client oriented.?
  • My Two Cents | 29 Oct 2014, 01:27 PM Agree 1
    It can be an effective tool with the right type of property. This is especially true with distressed sales. If a house needs a tonne of work it is not going to get much traffic unless it's priced attractively. We all know that ultimately a house is worth what someone is willing to pay and what someone is willing to sell for... in some cases setting a low reserve (by pricing it low) and then holding offers for a few days will simply allow the market to decide what it's worth.
  • Hypocrital one... | 29 Oct 2014, 03:41 PM Agree 0
    It wastes buyer's time and it devalues us as professionals.

    Any idiot can under price by a couple hundred grand and then do the basic math on offer date: I think $750k is more than $740k. The buyer typically pays a high market price; not necessarily over paying, but generally paying top dollar, and has a very limited opportunity for any form of due diligence. Since the seller has destroyed any goodwill in the transaction, if there is a problem with the property before or at closing there will be repercussions.

    What if comfree started to coach their sellers on how to do this? How would we, as professionals, react?
  • | 29 Oct 2014, 06:27 PM Agree 1
    "The buyer typically pays a high market price; not necessarily over paying, but generally paying top dollar,"
    KIND OF SAYS IT ALL. A no-price strategy for a desirable property makes the buyer agent do what they're being paid to do; figure out what the property is worth.
  • Gord | 29 Oct 2014, 07:11 PM Agree 1
    Let's not forget that hot markets come and go. Right now the seller is king. Let's also not forget that if the buyer doesn't like the underpricing strategy of the seller nobody is making them buy the house. Buyers are allowed to place low ball offers when the market is bad so why can't sellers take advantage when the market is good. It's simple free enterprise, so if your clients don't like it, don't play.
  • Judy | 31 Oct 2014, 02:51 PM Agree 1
    This reminds me of the story of Goldilocks and the 3 Bears. It doesn't matter how hot, cold, big or small the market is....there's always somebody whining!
  • Michael F | 02 Nov 2014, 03:25 PM Agree 0
    CMHC has done it in our market - turns out to be a very effective way of "getting it gone".
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