THE SLINGSHOT EFFECT
A personal encounter with the unbearable lightness of being the Toronto real estate market
I just coined a new business or marketing term for a real estate phenomenon my Buyer Clients experienced for the first time Tuesday night! (And I on far too many other occasions.) I call it “the slingshot effect“.
Here’s how it works:
- 1. Get a house listing FOR SALE.
- 2. Price it low…ridiculously below market value, but within a distant sight of where it should be priced. (And, if possible, within a price bracket where there is a lot of pent-up demand and hopelessness!)
- 3. Hold off on Offers until a specific date no more than a week out from the commencement of appointments.
- 4. Ethically and moralistically refuse to even consider “bully offers“.
- 5. Get so many Offers from desperate Buyers who are just willing enough to suspend their disbelief.
- 6. Pit all the Buyers/Buyers’ Reps against one another.
- 7. And on the day for Offers, sit back and wait until some one or several Buyers go temporarily insane…and BOOM: Your Sellers end up with a firm sale in the very high $800k’s on a list price of just under $600k or 146% of asking!
TORONTO REAL ESTATE IN THE NEWS THAT VERY SAME DAY:
“Toronto’s housing market is in for another red-hot year, the area’s real estate board said in a new forecast. The Toronto Real Estate Board predicted 110,000 resale homes would change hands in 2017 – the third consecutive year with sales greater than 100,000 – while average resale home prices would rise between 10 and 16 per cent to $825,000 in 2017.” – The Globe & Mail (31 Jan 17)
“TREB says the active listings at the end of December in the Greater Toronto Area were at their lowest level since before 2000. “It is unlikely that the shortage of listings will improve to any great degree over the course of the next year. This will put a ceiling on sales growth,” Jason Mercer, TREB’s director of market analysis, said in a statement.” – Global News (31 Jan 17)
““While changes to federal mortgage lending guidelines and higher borrowing costs may impact some would-be homebuyers, the big impediment will be the lack of inventory,” Jason Mercer, the board’s director of market analysis, said in a statement.” – Toronto Sun (31 Jan 17)