Lately it’s been a challenge bringing buyers and sellers together to create a meeting of the minds when negotiating a real estate transaction. As the bidding wars diminish buyers are wanting to negotiate with sellers yet, after years of increasing property values, sellers are reluctant to let go of their properties for anything less than their own prescribed value regardless of whether it’s a realistic list price or not.
I was recently in a situation where, on the day of offers, my buyers were effectively the only ones willing to submit a bid. This spooked them. Why was no one else interested in the house? It turns out there wasn’t a lack of interest. It was simply that none of the buyers wanted to go into competition and spike up the price into the land of Crazy. I understand this, especially as the media headlines are touting a transitioning market.
By the time my buyers submitted their offer below the $699,000 list price, the Seller had decided she had listed her house too low and, despite the lack of offers, wanted more money. My buyers were disappointed the Seller didn’t want to negotiate, especially as they had submitted a reasonable offer that was worthy of a counter-bid. Instead, we were verbally advised that $720,000 would take the property. My buyers walked.
In Ontario, a seller can list her property at any price and is not obliged to accept any offer. In this circumstance she re-listed her property at $729,000. Within the week it was sold firm for $712,000.
It appears that the days of listing low to create competition are diminishing, with the better strategy being to list a little higher and leave some room to negotiate. Welcome back to the early 90s! Perhaps along with the ability to negotiate on real estate Whitney will find her voice, scrunchies and lycra will make a comeback, 90210 will….hey! it is back, and Hammer Time will remix his hit in the link below!