BarrieToday welcomes letters to the editor at firstname.lastname@example.org. Please include your daytime phone number and address (for verification of authorship, not publication).
The transaction of selling or buying a house has been a silent auction for many years. It has always seemed to be the fairest way for both parties involved.
However, we are seeing more and more complaints of real estate agent abusing their position in the sale and illegally inflating the sale price. When making a offer on a home you assume you are putting a bid in a silent auction and at the end of the day if you placed the highest bid with the most compelling conditions the house would be yours.
That is how the system is supposed to work. But we are hearing on a regular basis of agents trying to get people to increase their bid, thus causing a bidding war. Some might say it's just a seller's market, but my concern is that we are rapidly closing in on a market collapse.
Within the past month, a small 1960s bungalow (approx. 1,500 square feet) sold on my street for $950,000. The same house sold three years previous for $380,000, mind you there was a large renovation done.
Now that all sounds fantastic until I noticed four or five lots down the street from that bungalow is a similar-sized building lot for sale for $150,000. That means for a similar value you could build an $800,000 custom home for the same price.
Now this makes it very clear that our real estate market has significantly over-valued homes. We need to make a change now to prevent what is going to be a very dark time ahead.
I do have a solution to our problem, but the simplicity of my solution might scare some people.
I feel we need to sell houses using the same fundamental rules that have been used in retail for hundreds of years, where the seller sets the price and the first person to give a condition free offer at their set price receives the product.
Now this will require the seller to be more informed on the state of the market and setting the correct price. That being said, we do have professionals that can assist including real estate agents and home appraisers. This will prevent agents from manipulating the sales and the market as a whole.
Making people set their price this way wont prevent greed, as you can still list your home for an astronomical amount.
Hopefully those houses would sit on the market as they should and need a price reduction down the road. Just as if it was a clearance of an item in any other industry.