$100 Off

Price Reduced
Price Reduced

On a recent post one of our regular readers was lamenting about a Calgary real estate agent who reduced their listing by $100.00. He added that real estate agents will do all kinds of tricks to get clients. In fairness, I don’t know anything about the situation or the agent but of course I’ve got my 2 cents to throw in.

First of all I don’t know whether the $100 it was client directed or something the agent came up with. Having a lot of clients I can tell you they don’t all think the same or have the same strategies - the diversity in personalites is immense. I have had clients list their properties at $301,000 - a huge mistake in this day and age of internet search - but ultimately the decision is theirs. I too have had clients request weird amounts for price reductions (and even stranger amounts for counter offers, but that's a whole other topic). However, when you think about what the seller and agent did by reducing their price by $100.00, while annoying it is actually a little savvy depending on what they are trying to do.

For example, MLXchange (the REALTOR® interface with MLS® data in Edmonton and Calgary) will automatically email that property out to buyers who have searches set up by their agents (if the agents have selected the option to inform their clients of properties that are reduced in price). This is one of several options that agents have available to them when setting up their clients searches.

So if the property in question was getting lots of looks and activity but its starting to slow down (we track all the online activity of our properties on REALTOR.ca, www.EdmontonRealEstate.pro and countless othersites) then they may have wanted people to take another look who have recently seen the property. If on the other hand there is little to no activity on the property, and they want to get an offer on it, then they are probably pissing into the wind so to speak if their intention is to actually sell the property.

I do know that it's my job to do what I can for my clients, and that sometimes means thinking outside of the box. As long as its allowed, it I don’t see the problem with it, although in this case it's probably not what I would've recommended.

About 

Sheldon is very familiar with the ins and outs of real estate; he has been licensed to sell Real Estate in Alberta for over 20 years. Sheldon has served on the Real Estate Council of Alberta, the Real Estate Insurance Exchange and the REALTORS® Association of Edmonton. Find Sheldon on Twitter @edmontonsheldon.

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9 Responses to “$100 Off”

  1. @crazyfasteddyNo Gravatar 13. Mar, 2012 at 3:00 pm #

    I dunno about the dropping the $100 to put the “Price Reduced” sign up but I do know the new homes hacks are trying to sell you a new house on the premise of spray foam insulation and pot lights these days. What happened to the good ol’ days when people upgraded for either size or location or both?

    But in this day and era of printing money, does it matter? Reminds me of an analogy I recently read on a stock trader’s blog describing today’s markets… pretend you have a printing press in your basement where you print a billion dollar in crisp $100 bills. You go down to the local Qwik-E mart for a jug of milk only to find the clerk wants $2000 for it. “take it or leave it pal, that’s the price. It’s going for $3000 tomorrow.” Knowing full well you can print more money, you buy the milk, go home and tell all your friends and neighbors what a genius you are for buying a $3000 jug of milk for $2000; and shoulda paid $4000 as the container had spray foam insulation… call it what you will..low interest, QE, bond swaps..free money is free money. Homes like stocks will go UP forever so long as the presses are running! Cheers.

    • GMNo Gravatar 13. Mar, 2012 at 5:39 pm #

      Sounds good to me!

      I don’t care what the reason is – if the value of my home goes up then I am better off.
      If it is caused by inflation alone, then even better! That means that everything is going up, including wages eventually, which makes my mortgage seem like nothing in no time at all.

      I don’t see the down side of money printing if I am loaded with debts. Especially mortgage debts with locked in rates.

      • @crazyfasteddyNo Gravatar 14. Mar, 2012 at 1:03 pm #

        true…guess the only drawback with the inflation model is $100 tomatoes and $235 Big Macs…

    • JillNo Gravatar 15. Mar, 2012 at 5:53 pm #

      Hyperinflation is a debtor’s dream and a lender’s worst nightmare. There are only debtors and lenders in this world. Debtors would love to see their debts inflated away. Lenders despise seeing the money you are indebted to them, diminish in value. Lenders are in control of the printing presses by way of the central banks. Lenders only print enough to ensure the debtors are able to continue paying their debts and avoid defaulting.

      • wsnNo Gravatar 16. Mar, 2012 at 9:11 am #

        “Lenders are in control of the printing presses by way of the central banks.”

        False. Central banks are ultimately part of their central governments, which are always high in debt.

        • JillNo Gravatar 16. Mar, 2012 at 3:29 pm #

          That’s a common misconception wsn. This fellow explains well the most powerful central bank:
          link to seekingalpha.com
          “Most Americans believe that the Federal Reserve is part of the government. They are wrong. It is a privately held corporation owned by stockholders. The Federal Reserve System is owned by the largest banks in the United States. There are Class A, B, and C shareholders. The owner banks and their shares in the Federal Reserve are a secret. Why is this a secret? It is likely that the biggest banks in the country are the major shareholders.”

  2. birdladyNo Gravatar 14. Mar, 2012 at 11:27 am #

    Sheldon, for your opinion.

    A realtor we worked with many years ago said that he really didn’t like doing reduced listings. His reasons were that it sent one of two messages.

    1) That the property was over-priced initially and may still be overpriced and

    2) That it sent a message to potential buyers and other realtors that the owners may be getting desparate which would result in a lot of really crazy offers.

    I have seen a number of listings in my area which are all 500K on average priced homes, that list for one price and then a couple of weeks later the price is dropped. Sometimes the realtor advertises price reduced, sometimes they just quietly lower the price.

    • Sheldon JohnstonNo Gravatar 14. Mar, 2012 at 4:35 pm #

      I’m sorry blanket statements don’t work for me. practises may have been applicable or common at a certain time but things do change.
      1. In my experience if the price it brings it more in line with the current market value then there should be an increase in activity. Mostly I see the first price reduction as the sellers wanting to get the most from the best possible buyer if they exist and when they don’t see that materialize reality sets in.
      2. I don’t agree with your second point as discussed above. In most cases they are very optimistic at first and then that optimism changes. There are other things that signal desperation to me. The language used in the comments, offering the buyers agent a bonus and lately what the sellers of mere postings say to me the buyers agent.

  3. wsnNo Gravatar 16. Mar, 2012 at 9:14 am #

    I don’t see anything wrong with $100 reduction. It’s allowed by the rules, right?

    If it’s so bad, the Realtors association could set a higher minimum amount to trigger a price reduction flagging.

    If, as a buyer, you don’t like it, just walk away and look elsewhere.