I’ve been told that I’m a highly disciplined and extremely organized individual. This isn’t all that surprising given that my mother says I was a little soldier when I was a young boy. She used to put a watch on my wrist and tell me to be home when the big hand was here and the small hand was there and I would always come home on time. (We hadn’t reached the digital watch age yet, but we were well beyond sundials.) To this day (and minute), I’m still very punctual.

Discipline and organization are very helpful traits for Realtors. First, they help make sure we do a good job for our clients. And second, we Realtors don’t report to anyone. Our time is our own. If we don’t do what we’re supposed to do we don’t earn any money. It’s important to be disciplined and organized to get things done.

One of my Must Do’s is to check the MLS system first thing in the morning and numerous times during the day. I look for new listings, price changes, sales, conditional sales, etc. so I can tell my clients about them right away. Time can be an advantage in this business and I don’t want my clients to have to wait to receive this info via some automated software program.

A couple weeks ago I logged in to MLS and immediately noticed a new listing on Cranbrooke Avenue for $1,975,000 (not the real street). It caught my eye because when you’ve been in the business long enough and know your neighbourhoods well enough, you get a pretty good idea of what a home will be like just from its address and price. When I saw this listing I thought “New home on south side of Cranbrooke between Jedburgh and Greer. Need to look at listing details because Barb and Scott are looking for this type of home.”

I then went to the details. The first thing I wanted to look at was the photo to see if the home was Barb and Scott’s style. But the photo was of an older home and not the new home I expected. I wasn’t phased because sometimes this happens – when an up to date photo isn’t available the system uses an older photo until a new photo is taken. I thought that the older home in the photo was probably the home that was demolished to make way for the new home so I proceeded to look at the description of the home. It took me about 3 seconds to figure out that the older home in the photo, which was worth about $1,100,000, was indeed the home that was for sale. Except that it was listed for the same price as a new home. I reread the listing to make sure I wasn’t making a mistake, but my eyes weren’t deceiving me.

This was absurd, ridiculous and anything else you want to call it. Sellers are free to list their homes for as much or as little as they like, but adopting this strategy is counterproductive to the ultimate goal of obtaining the highest possible sale price. Buyers today are smart. They understand the market, have access to plenty of information and do their homework. The chances of finding a buyer who’s uneducated or desperate enough to pay such an inflated price is pretty much nil so why even try? Why put yourself through the inconvenience of preparing your home for market and having people come see it when it’s not going to sell? Not to mention that this failed attempt will be online for eternity so all future buyers will be able to see that you’re an unreasonable seller with whom they’d prefer not to deal when you finally do list your home for the correct price.

This type of listing provides a valuable lesson for buyers: Ignore the List Price. It’s irrelevant. It doesn’t matter if the seller sets a high list price or a low list price. All you should care about is the home’s fair market value and what you’re prepared to pay for it.

Let’s say a house is listed at $849,000 and is worth about $1,000,000. Some buyers will look at this and think “We’ll have to pay over $900,000 if we’re in multiples.” Others might think “If there are a lot of offers, we may have to go up to $950,000.” The smart, educated buyer will think “I can pay up to $1,000,000 and still not be overpaying for this home. If I can get it for $975,000, it’ll be a good deal.”

What about the home that’s listed for $1,000,000 and is only worth $849,000? This home is unlikely to attract multiple offers, but real estate is unpredictable. If you do find yourself in a multiple offer situation it could be that you’re offering $850,000 and your competition is offering $840,000. You won’t know what your competition is offering so let your opinion of fair market value guide you and don’t get fooled into offering over $1,000,000 just because that’s the list price.

You should also ignore the sellers’ expectations. I’m often asked by other Realtors “What are your sellers’ expectations regarding the sale price? I know their home is listed for $849,000, but what do they really want?” I think it’s safe to assume that all sellers want the same thing – as much as possible. As a buyer, that doesn’t matter to you. You care about yourself and not about the seller. Pay attention to fair market value and fair market value only. Base your price on the fair market value. (Unless your goal is to make the sellers happy and pay them as much as possible in which case you should open up your wallet and hope for the best.)

This is a hard market for buyers, but it doesn’t have to be as hard or emotional as some people make it out to be. There are things you can do to help yourself and this is one of them.

If you happen to know anyone that’s looking for the kind of real estate help that involves honest answers, straightforward advice, no pressure and being treated like family, please let me know the best way for me to connect with them because I’d like to offer them this kind of help. And as always, don’t be shy if you have any questions or comments about this post! Thanks for reading.