It seems today in Toronto’s frenzied real estate market that Buyers have become ‘numb’ with the understanding that most houses, as well as some condos, will sell for above the listing price.

Years ago I used to describe to clients of mine that the list price of a property was simply an “asking” price: a place to start and to get qualified potential Buyers through the door. Depending on many factors, the final sale price could be lower or slightly higher than the asking price.

Today I am convinced that many real estate agents don’t have a bleeping clue on what the value range for property is. Before my email inbox starts getting filled with F.U. emails please note I say “many” not “all”.

This leads me to discuss the difference between paying “over list price” for a property and paying “over market value” for a property. There is a big difference between the two and based on many conversations with both consumers and first hand knowledge while representing Sellers on the listing side, not everybody fully understands this.

Lets start with the popular notion that in the past few years Buyers have had to overpay to get the desired home or condo that they have deemed to be the “one!”

One can argue that this is true in some cases and not so true in other cases. There is a lot of strategy that goes into pulling off what I call the perfect multiple offer scenario.

This is where:

• The goals of the seller are met (they can be varied and not entirely just financial)
• Adequate market exposure is had for the property
• Buyers have had ample time to make a sound and educated decision
• A final sale price that falls within or very close to actual market value of the property

Why these four points are crucial in obtaining the perfect multiple offer scenarios is that everyone should come out in the end happy. The Seller will be happy that they received market value and a qualified content Buyer ensures that come closing, things go off without a hitch. The financial lender is happy, as the property has sold within market value range. Both real estate Lawyers are happy. And with all of these parties happy, both Realtors will be thrilled!

Certainly a Win-Win for all! Sadly, today this is becoming less and less the norm.

Pricing a property both on the selling side and buying side is no easy task. But for real estate professionals who are committed, experienced and knowledgeable about the countless factors that make up a properties desirability and value, this is crucial.

Without dealing with someone who has a deep understanding of this often leads to a buyer paying an exorbitant purchase price.

We’ve all seen the headlines or heard the second hand stories of a property that has sold for $200,000, $250,000 or more above the list price. Some of these may fall within market value for the property, which is fine. For those that do not, often a consumers reaction will be something along the lines of “that’s nut’s” or “WTF?”

An experienced Realtors reaction will be “Good luck getting the property to appraise!”

In the end, all I can say is choose your representation carefully as Carpe Diem, “Let the Buyer beware” prevails in Ontario real estate law.

Michael Rapkoski is a licensed Realtor and sales representative of RE/MAX Hallmark Realty Ltd; in Toronto. REMAX Platinum Award winner for sales achievement 2006 thru 2014. Top 2% of TREB members for sales volume*

Michael Rapkoski is a licensed Realtor and sales representative of RE/MAX Hallmark Realty Ltd; in Toronto. REMAX Platinum Award winner for sales achievement 2006 thru 2014. Top 2% of TREB members for sales volume*

*IMS Stats Inc.