A booming housing market in Edmonton has led a prominent agent in the city to be “disruptive” by using list price as a marketing strategy — similar to what agents in Toronto and Vancouver did during their hot markets.
“We’ve been disruptive and changed buyer behavior,” states Taylor Hack, a realtor and team leader of Hack & Co. and Re/Max River City in Edmonton.
Works in hot markets because ‘buyers are predominantly afraid of two things’
Hack explains that the strategy involves pricing houses below comparable properties to attract attention and generate multiple offers, ultimately selling above the list price of comparable listings.
In hot markets, Hack notes, “It works because buyers are predominantly afraid of two things: missing out or overpaying.”
Sales prices exceed comparables by $15-25k and about 16% above list price
Hack, with 10 years of experience and a team ranked in the top 2.0% globally for Re/Max, has seen sales prices surpass comparables by $15,000 to $25,000 and an average of 16% above list price.
This strategy works best when inventory is low and prices are on the rise, with some areas in Edmonton experiencing monthly price increases of 2.0 to 3.0% and inventory at a two-month level.
The stats speak for themselves
The Realtors Association of Edmonton reported that the July inventory in the Greater Edmonton area was 15.1% lower than in July 2023, with total residential average prices increasing by 9.1% in August 2024 compared to the previous year.
Specifically ‘for a market rising out of the comparables, where each property selling is going to benchmark upward’
Hack mentions that the strategy may not be suitable for all areas of the housing market, such as condos or luxury homes, and works best in markets where properties are selling above comparables.
For a recent sale where comparables were around $365,000, Hack priced the property at $335,000, resulting in over 80 weekend showings, 18 offers, and a final sale price exceeding $380,000.
Teaching top agents throughout Canada a strategy clients are excited about
Hack has shared his strategy with agents in Toronto and Vancouver, leveraging a well-defined playbook in a market where many agents are not as prepared.
Clients are enthusiastic about the strategy, as it is easy to demonstrate its effectiveness and benefits.
Toronto: Buyers ‘no longer willing to play the game’ except in select areas
In Toronto, Tom Storey, a realtor with The Storey Team and Royal LePage Signature, has used similar strategies in previous years when market conditions were favorable.
Buyers are more cautious now, especially in the condominium market, but the strategy can still be effective in high-demand areas with limited supply.
In softer markets, pricing is crucial, especially for properties without unique selling points, as buyers seek better-priced options.
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