I pointed out a property to a client last week. She was just beginning to dip her toes into the market. It matched her brief perfectly. It was sold before she had opened her email to see the link.
I'm now amazed that a property is still available on offer night and I generally make it my business, once my clients are up to speed, to have them first in and best dressed. But last week's sale had me consider something else. While we're all aware that the Toronto market is incredibly competitive, and fully accept that reality, is there not something else going on here to induce this unprecedented rush?
I have a theory ... a likely unpopular one.
I don't think it is only heightened demand that is causing the incredible velocity of the Toronto market. I think the real estate profession itself has everything to do with the pace we're now experiencing and so in a way, I do blame the profession itself.
Take pricing, for example. It has been a trend for quite some time now to price a property for sale as more of a marketing move than a genuine reflection of what the buyer will accept. That became the new cultural norm years ago. The price tag of a property in Toronto is usually simply designed to entice. Period.
Now, I could see this being a potentially thoughtful and certainly a safe strategy when the sellers market is a new thing, or one day when it is perhaps more tentative. I also appreciate the certain peril of risking an overprice and how important it is to be on the side of a little under rather than anything over. But this robust seller's market isn't new nor questioned nor shaky. We're seeing unprecedented gains where detached properties over the million dollar mark have appreciated by $200,000 per year for the past two! So I wonder why this market still warrants such a conservative approach to pricing?
Many agents continue to play the 10% under market value price tag game, to then hold back offers , to then sell to the inevitable bully. Of course a bully is going to show up. The price has been perfectly set up for one. Proper market exposure never actually occurs. Proper consideration for the buyer usually doesn't either. How is this okay? At what pace are people no longer able to exercise reasonable consideration when buying a property? 6 hours? 30 minutes? When is this speed declared too fast for human involvement?
In that particular sale last week, the not even 24 hour bully paid market value for that property which was surprising. It's not as though the seller received more than they would would have after a week for the rush. I suspect they ended up with less. With even just one additional bidder on offer night, I reckon the house would have sold for more. So why was this the chosen strategy? Was it an ethical way to go for the seller's sake? Can listing agents be held accountable to the market at large when their approach is designed to entice it then shut it out on the same day? Did that agent simply perform her best in the heat of it all or is she responsible for having tossed some additional gasoline on the fire, unnecessarily intensifying the buyer burn? I think she did.
With the market as it is, this approach seems unnecessary and underhanded to me. It also shows me that with just a minor shift in approach with more confident pricing, we could do a great deal to make this market more reasonable and manageable for all involved while still getting the very best for the sellers. If it would ultimately benefit everyone, is it not worth it? It is so clear to me that despite all that we cannot control in the market, there is still plenty we can do to make it different and better. Anyone else with me on this?