There is a joke between realtors when it comes to a home that is listed for sale dramatically higher than it’s market value. We joke that is must have “gold nails.” Even in a market when most of what is listed for sale is selling there is always that one home, and we ran into one over the past few weeks.

We have a Buyer, (actually had, as they have just purchased a home) who was looking for a home in the $900,000 – 950,000 range. We ended up bidding on 4 homes with the forth being the magic one that they will soon call home. One home in particular is worth discussing.

The home has been on the market 4 times since fall 2023 and her is the history of that particular property.

• Listed for $1,250,000 for 18 days before being taken off the market in Dec/23.
• Listed for $1,200,000 for 16 days before being taken off the market in Dec/23
• Listed for $900,000 for 14 days before being taken off the market in June/24
• Listed for $800,000 and the price increased to $1,100,000 after holding offers in an attempt to cause a bidding contest. Property is still on the market.

We reviewed homes with similar features and size that were sold on the same street and in the neighbouring community to get a sense of market value and found several that would give a market value range. One of the comparable homes sold in Nov/23 for $910,000 and a second sold the same month for $850,000. A third similar home was sold Feb/24 for $910,000. The home we were interested in was upgraded so it appeared the market value range with somewhere between $900,000 and $950,000. We offered a firm offer midway between these prices. What happened next was a bit shocking. Our offer was the only one presented to the Seller and it was signed back to us for $300,000 above the asking price.

Looking at how things went sideways (once I recovered from the shock) the first thing I did was to review our numbers to see if we made an error on the value of the home. The first step was to determine what percentage over or under the asking price the average home had sold for. The average home that sold in the community for the month of June sold for 4% over asking. This means that the averages would indicate that a home listed for $900,000 should be worth somewhere in the range of $936,000 if the home followed the average selling statistics. It was easy to identify that this particular home was one that had “golden nails.”

This example explains why so many of the Buyers who are in the market today are confused. The asking price for this home has been as low as $800,000 and as high as $1,250,000. That is a $450,000 spread between prices. Heck, that confuses me, and I am in the business.

Honestly, the home will not sell until the price reflects market value. For the Buyers we had interest in it, they understood the math and were shocked but quickly moved on to find a home that was listed at $800,000 that they purchased for $912,000. You may think our math is off as this home sold for 14% over asking price however the homes sold in the area suggested a selling range of $920,000 – $950,000.

What caused these Buyers to understand the difference between market value and asking prices was that we helped educate them on market trends by doing a Real Estate Review on each home they were interested in. After seeing what homes were listed for and eventually sold for over a few months of looking, they understood how the process worked in today’s market.

Buying or selling a home is never an exact science. You have many variables to consider – location, size, upgrades, features along with the motivation of the Seller or Buyer and the strategy used by the agent to market the property. However, with Sellers and Buyers who are well versed on the market, they can “read between the lines” to make informed decisions and investments.

These Buyers are thrilled with their purchase and can’t wait to move in and have a dance party on the epoxy floor in the massive garage.

If you are interested in learning more about the nuances of buying or selling, I can be reached at lindsay@soldbylindsay.com or 905-431-5744

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