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Underpricing Properties to Fuel Bidding Wars

www.remaxcondosplus.com Welcome to Inside the Real Estate Market. Hi there, I'm Jamie Johnston, Broker/Owner of RE/MAX Condos Plus. One of my biggest complaints is the list price set by real estate agents in today's market. I understand that given the rapid rise in real estate prices, properties can sell for $50,000 or $100,000 over the listing price, but some real estate agents have taken the practice to an extreme. It seems to be a badge of honor to go $300,000 or $500,000 over asking. These agents start by taking the market value of the property and then they list it at $200,000 or $300,000 below the market price. This attracts the attention of buyers who see the property as a great deal but then drives a bidding war frenzy. Underpricing a property does nothing for buyers and sellers. How would the same agent feel if they walked into a clothing store and saw a designer jacket for $99? They would jump on it! But then, the store manager says, "we're not selling it at that price, how much more over the posted price will you go?" My personal feeling is if you list a property and you get the full list price in the offer, with no conditions, and the closing date you want, you have a moral obligation to accept it. Just like the store manager who sells you the jacket at the posted price of $99.