Saturday 10 October 2015
Nice house, and it's listed for.... $1.00??
Not often, but you bet it does. But of course the seller does not intend to sell their house for that price. It's basically a marketing gimmick, trying to gather attention through a radically different tactic. It also leaves the field wide open if a bidding war starts.
It's not been something we see in this area, but there is one listing that has just come up in the REALTORS® Association of Hamilton-Burlington jurisdiction listed for sale at $1.00. You could probably find it easily enough if you go looking, but I refuse to identify the property because I don't want to contribute to any hype benefit of this approach.
Unfortunately, the hot local real estate market has brought in some listing tactics mostly only seen in the Greater Toronto Area before. One other example is deferred offers to increase the chances of multiple offer bidding wars, with wording like "no offers until such and such a date at such and such a time" becoming pretty common. Now this one has made its way here, like it or not.
And there are at least a couple reasons why I don't like it. First of all, I think it is just plain cheesy and gimmicky. But that is a personal and subjective objection. On a more professional point, this kind of listing could skew statistics, especially the list-to-sale-price ratio. That is something I have to look into. It also makes it very difficult for a buyer to judge an appropriate starting point for an offer. And there is a question of how effective it is, as it could easily be missed by buyers searching with a low end minimum to avoid the fixer-uppers.
But as a more relevant question that the public is more likely to care about, "is this legal?" Yes, it is. As real estate lawyer Mark Weisleder explains in [an old Hamilton Spectator article] from 2011, a seller can list their house for sale and is under no obligation to accept an offer even if it is full price. There are lots of other terms in the offer, and circumstances change. On that basis, a seller listed at $1.00 is not at all obligated to accept your offer if you decide to put in a bid at $1.00. Or even "double list price" at $2.00.
Since the seller is obviously making no indication of what they feel is the right price, or the price range they are looking for, it becomes especially important for a buyer to be working with an experienced real estate professional who can give you comparable sales information and some competent advice on values. If a bidding war starts, you still might have to pay a premium if you really want the property, but without the advice of a good agent it will be hard to make an informed opinion on what the proper value of the property is.