A couple of properties in Toronto were recently listed for $1, however, it’s little more than a ploy and it won’t yield desired results, says a local real estate broker.
“I don’t believe it’s a good listing technique regardless of the market we’re in. A lot of sellers or realtors who use the technique do so because they know it might get some media attention, which it has in these cases, but at the end of the day I don’t think it helps sell a property for the maximum amount of money,” said Tom Storey.
CTV News reported listings at 16 Kenrae Rd. and 15 Rebecca St. are presently using the $1 strategy and that one of the lots is approved for two semi-detached homes, which would be difficult to reflect in a listing price.
“We’ve had a crazy six months. It’s been extremely volatile. Prices have fluctuated and asking prices and listing prices have not been reflective of a property’s value for quite a long time,” Paul Poliszot, the listing agent for 15 Rebecca St., told CTV.
“All we’re really striving to do [is] be innovators in the real estate investment space in Toronto and serve our clients as best as we can.”
Storey noted that, earlier this year, homes were listed below their eventual selling prices on offer nights, but that buyers appear to have grown weary of such strategies. And if they aren’t playing that game, fat chance they play the $1 game. He added that Toronto-area buyers have become demoralized, and where, on average, 10-15 people would show up on offer night, he’s noticed that only about two to five do now.
“If buyers aren’t willing to play the regular game of listing low, which is 15-20% below what you believe the value is, they’re not going to be willing to play the $1 game,” he said. “Not every buyer is willing to play these games anymore and we’re finding a lot of buyers don’t show up on offer night and the property is usually then relisted for the price the seller actually wants.”
There were 1.3 months of inventory in the GTA last month, according to the Toronto Regional Real Estate Board’s latest data, and that determines how Storey, who leads his own team, lists properties.
“We look at the micro-market of the specific pocket a property is located in for the last 30-60 days and check how many active listings are available and how many have sold,” he said. “Then we take the active listings divided by the number of sales and it will give us the months of inventory. If that number is below two, we typically list lower and hold an offer date, which means buyers will play the game and it will usually sell for higher, but if the months of inventory are three or higher then you list for whatever you want and there’s no offer date.”