Putting or listing the property on the open market is not child’s play. Some sellers and some realtors do the math first before putting the property on the open market. They actually put the property lower than its actual price. This is done to create the state of excitement and affordability among the buyers. This single activity generates so much response rate which real estate agents love. This leads to some record-breaking amount deposition in the record-breaking time.
Potential buyers who have worked hard over the years and saved their hard-earned money feel helpless as once the bidding wars begin, things become stressful for them. It doesn’t make much difference to the international buyers who have laundered the money to invest in the real estate. But local buyers face a lot of problems.
The competition begins among all kinds of buyers. There are first time buyers who can wait and take back their decision and there are buyers who are tired of receiving a NO for a property, these buyers offer the price higher than the actual value to close the deal. The offer made can be $30,000, $45,000, and $70,000 and sometimes it can cross $100,000 mark easily. The buyer who makes this strong deal is known as “The Right Buyer” in the real estate industry. Some Real Estate Agents, Brokers and Realtors love The Right Buyer. They know someone from the potential buyers would evolve and rise up as The Right Buyer.
Some Real Estate Agents, Brokers and Realtors wait for this buyer. Mostly two types of potential buyers reach this far; One is fed up with looking up the properties and losing many in the run and the second is the international investor. People are fed with the information that the listed property is sold for 1000s of dollars over the asked price. Note: They say over the asked price and not the actual price. Theirs is a difference between the two.
When property’s listing price greater than the market value – Sellers make up their mind and bring down the price while negotiating.
When property’s listing price is equal to the market price – Sellers deal straightforwardly with the buyer.
When property’s listing price is lesser than the Market Value – This leads to Bidding Wars.
So, what’s the fuss around the “Sold Over Asking” sign board in front of every second house on the list?
Consider a property’s market price is $825,000 and the price mentioned in the listing is $699,000. But, the seller or the real estate agent sells the property at $825,000. Now, can we call it sold over asking? Did the seller actually ask for $699,000 and the real estate agent managed to get $825,000? Absolutely No! But the general public is fed with this information every time. These sign boards elude other properties in the same listing. This malpractice is taking the real estate marketing industry by storm.
RECO should look into this matter and come forward to stop this. They should come up with the advertising guidelines that can secure real estate market’s future and best for the public interest.