he Real Estate Board of Greater Vancouver’s MLS system has strict rules in place to prevent open auctions and intentionally underpriced homes. But with the market moving in an upward direction so quickly, the MLS auditors simply cannot keep up with the number of complaints - homes are selling before the infraction is even recognized!
The underpricing rules were originally put in place to guard sellers against dishonest agents underselling their properties. In today’s busy market, however, underpricing has turned into a dirty trick to try and dupe buyers into overpaying. At first glance, severely underpricing a home might seem like a cunning strategy to attract attention from more buyers. In fact, many agents have been accused of bullying legitimate buyers by padding the number of guests at an open house (and ultimately the number of bids coming in from underpricing).
The real problem with underpriced homes is that unscrupulous agents have been using this trick for far too long, and buyers are sick of it. In today’s market, an underpriced listing could actually scare off the very buyers they are trying to attract, since many buyers simply do not want to be part of the “grey” area of bidding wars and overbidding. These unofficial auctions leave buyers heartbroken, as there are no official rules of engagement when it comes to multiple offers.
Recently, a new trend in searching for homes is emerging; buyers who assign a maximum and minimum to their search in an attempt to weed out intentionally underpriced listings, and buyers who will only search for homes significantly below their budget to compensate for overbidding.
Wondering what’s happening in the market right now? Why not check out our automated home value reports and find out what properties are sold for - not just what they’ve been listed for!