I'm heading to a seminar/meeting tonight at the Hard Rock…
Sold at $1 Million Over Asking Price
2 recent news stories in Toronto and Vancouver MLS regions really bring home the current state of real estate and real estate marketing now. The news stories both report sales of properties at $1 million above asking price. It’s mostly driven by a lack of new housing development. In Vancouver it’s a lack of land but in Toronto, it’s government policy.
“You know you have to go above asking in this market right now. I absolutely feel bad for buyers. Nowadays, all I can say, is it’s whatever people are willing to pay.” from a CBC news story.
In the UBER era, what is your realtor unique value proposition? The whole issue of getting your clients the best price may revolve around great internet marketing along with terminology and tone of voice. I’m sure if you included “over asking” in your slogan or at the top of your website homepage, you’d be in for criticism. Yet if “over asking” is normal shouldn’t your marketing strategy adjust to it?
If there’s one sure way, the one way if you had to choose to create a bidding war and enable an over asking price result, it would be a powerful online marketing strategy – via Google, Facebook, Twitter, and your emails to your vast sized prospect list. There are many times more buyers online right now than on your own list. And some of those buyers are from the Middle East, China, Hong Kong, USA, and even Russia.
Anyone selling a home in Toronto, Vancouver, San Diego, San Francisco, Boston or Los Angeles, who doesn’t consider an above asking price strategy is basically giving away money. As an investment, a seller’s goal is to get the best ROI as this money could get them out of debt, be their retirement fund, kids education fund, old age health fund, or bucket list fund. That extra money could help sellers revive their lives and get their health back. No more commuting!?
I feel sorry for sellers who sell their house in 3 days when a little 2 to 3 week strategy could build interest and focus buyer intention on one special 3 day period where buyers must make their offer. You’re a salesperson and should have extensive expertise in sales strategy. Below, you can see Hans Ohrstrom of Newmarket, ON is building a reputation as a guy who gets the right results. This is what you should be doing.
The Changing Mores of a Business Culture
There doesn’t seem to be any ethical absolutes in pursuing the best over asking price benefit for clients. If your broker/mls/realtor association has said anything to you on the matter, I’d like to hear about it. The old paradigm that the client’s best interest is a “normal price” that’s affordable for buyers has disappeared. More investors/buyers see houses and condos as real estate investments. They know they’ll be selling it and they want the market limit.
Bidding Wars in the Toronto Region
Hans Ohrstrom is a realtor in York region, just north of Toronto and he is dominating his local market. In his value proposition, he mentions his guarantee: buying the client’s home if he doesn’t sell it. Well, there’s not much chance a property won’t get sold right now so it’s not much of value proposition. With respect to that matter though, is there an ethical issue when you promise to buy the home? Doesn’t it generate a conflict of interest in a sale if you are willing to get financially involved at all in the buy/sell yourself?
Almost every real estate organization stipulates acting on the client’s best best interests. I’m not sure how you can reason that one out by getting involved in a client sale and come away looking squeaky clean. And then there’s the “over asking price” value proposition. Is this the next Gambit for aggressive marketing realtors? Given the number of rich buyers now, it’s pretty safe to offer it as a time limited selling proposition. And if you have big money yourself, it’s a limited risk that you’ll get hurt even if you lose on one or two deals.
Realtor.com on Over Asking Prices
Realtor.com‘s advice is nothing new to you:
“The most fruitful strategy.. is to aggressively price the property roughly 5% to 10% below the going market rate. This will always generate more traffic to the property and give buyers a chance to fall in love with the home, when a higher purchase price might have kept them away initially.”
Here’s a few more Over-Asking Price Tips:
- hold back and tell buyers there are other offers, even though their offers aren’t huge
- approach investors to look hard at the property
- get the seller to update the house to eliminate negatives and play up the main selling value proposition (in Vancouver it might be the views, or just the location (tear downs or flips). You may even decide to change the style of the home (brick facades, or Asian, or Arabic styling could really pay off). See what the most attractive styles in Kelowna BC are right now.
- be proactive, and like you’re in charge: do the landscaping or roof repair yourself and deduct that from your commission which preempts any attempt by the seller to cut your commission.
- do blitz real estate marketing with Google Adwords, remarketing, select outdoor ads, and play up the property to all your Linkedin, Facebook, and Twitter connections. If your site is ranking well on Google and you’re getting big traffic as well, you can actually create the bidding war climate. Timing is everything so think about how you can market strategically.
Isn’t it about time you got about your real estate career? Could you be one of the very smart ones and begin launching your own brokerage? We’re well into the Uber real estate era. The next real estate mogul will be a real estate digital marketer, just like Uber has no taxis and Airbnb owns no rooms themselves. This is a whole new ball game. Be smart about your future.
See Realtor.com’s post on which upgrades produce the best results, and which home styles sell well.
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