{"id":139277,"date":"2025-03-17T09:28:00","date_gmt":"2025-03-17T09:28:00","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/real-estate\/listing-homes-for-1-doesnt-work-never-has-never-will\/"},"modified":"2025-03-17T09:28:00","modified_gmt":"2025-03-17T09:28:00","slug":"listing-homes-for-1-doesnt-work-never-has-never-will","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=139277","title":{"rendered":"Listing Homes For $1 Doesn’t Work; Never Has, Never Will!"},"content":{"rendered":"


\n<\/p>\n

\n

I can\u2019t believe we\u2019re talking about this again.<\/p>\n

Apologies to those who were looking for something\u00a0innovative<\/em> this morning, but right now, I feel like a Hollywood studio\u2026<\/p>\n

Remember when\u00a0Batman<\/em> came out in 1989?<\/p>\n

Starring Michael Keaton as the most unlikely Batman ever, and Jack Nicholson as The Joker, the film represents the \u201cstart\u201d of the Batman series for most of us.<\/p>\n

Amazingly, Jack Nicholson was not nominated for Best Actor (or Best Supporting<\/em> Actor\u2026) for his performance, whereas both Heath Ledger (2008)\u00a0and<\/em> Joaquin Phoenix (2019) were not only nominated for their portrayals of The Joker, but they\u00a0both<\/em> won!<\/p>\n

But the 1989 version of Batman was\u00a0not\u00a0<\/em>the first movie in the series.\u00a0 In fact Batman (1943), Batman and Robin (1949), and Batman (1966) all preceded the 1989 classic.<\/p>\n

We all saw Batman Returns (1992) with Michael Keaton, which was a good sequel, annd then Batman Forever (1995) with Val Kilmer as Batman, which was good if you were a child but awful if you were a self-respecting adult.\u00a0 Batman & Robin (1997), with George Clooney as Batman, was atrocious.<\/p>\n

That should have been the end of it there, right?<\/p>\n

But the series was re-started in 2005 with Christian Bale as Batman in \u201cBatman Begins.\u201d<\/p>\n

Amazing movie!\u00a0 And \u201cThe Dark Knight Rises,\u201d even though it was about five hours, was good.<\/p>\n

But then came Robert Pattinson as Batman.<\/p>\n

After that, it was Ben Affleck as Batman.<\/p>\n

Who\u2019s next?<\/p>\n

I thought the same thing about\u00a0Spiderman<\/em>, to be honest.\u00a0 Hollywood made a trilogy with Tobey Maguire (2002, 2004, 2007), but then they immediately re-made their re-makes with Andrew Garfield as Spiderman (2012, 2014), before re-making the remake of the remake with Tom Holland as Spiderman (2017, 2019, 2021, 2026).<\/p>\n

For the record, I\u2019m not a film fan, and I don\u2019t watch any\u00a0fantasy<\/em>.<\/p>\n

I just like statistics and looking things up on Wikipedia\u2026<\/p>\n

My point to all this is simply that originality is lacking everwhere you look in life, and Hollywood has always been the biggest and brightest example of that.<\/p>\n

So am I being unoriginal for writing about \u201clisting for one dollar\u201d yet again?<\/p>\n

Folks, we\u2019ve tackled this topic way, way too many times over the years.<\/p>\n

Here are a few examples:<\/p>\n

May 5th, 2010: \u201cListing Price: $1.00\u201d<\/a><\/p>\n

May 7th, 2010: \u201cListing Price: $1.00\u201d (pt2)<\/a><\/p>\n

May 25th, 2021: \u201cDoes Listing For $1.00 Actually Work?\u201d<\/a><\/p>\n

September 12th, 2024: \u201cListing For $1.00: A Strategy Destined For Failure\u201d<\/a><\/p>\n

The last time we discussed this was a mere six months ago!<\/p>\n

But alas, the topic has come up yet again, thanks to a familiar foe of ours known as\u00a0BlogTO<\/em>.<\/p>\n

Yes, from the authors of articles about food, music, culture, and arts comes an obviously affiliated topic:\u00a0real estate<\/em>.<\/p>\n

And for a change, they have it wrong:<\/p>\n

\"\"<\/p>\n

A bidding war?<\/p>\n

Guys, come on!<\/p>\n

I don\u2019t tell\u00a0you<\/em> how to complain about the cost of living while holding a fresh store-bought coffee, nor do I opine the best ways to find a \u201csafe space\u201d when you\u2019re in dire need.<\/p>\n

So tell\u00a0me<\/em> that this house is going to spur a bidding war?<\/p>\n

Geez.<\/p>\n

If I didn\u2019t know any better, I\u2019d say the folks writing these articles know less about real estate than I know about participation ribbons\u2026<\/p>\n

Suffice it to say, this house is\u00a0not<\/em> going to produce a bidding war.<\/p>\n

But you merely need to read the article to see the problem:<\/p>\n

\n

\u201cThis three-bedroom, three-bathroom home in West Lansing has been on and off the market four times since 2023 without selling.\u201d<\/p>\n<\/blockquote>\n

Right.\u00a0 So the sellers want too much money and they won\u2019t accept fair market value.<\/p>\n

Easy-peasey.<\/p>\n

Except the folks who wrote the article think it\u2019s a great idea:<\/p>\n

\n

\u201cIn this\u00a0slow real estate market, some realtors are thinking outside the box to get their house to sell.\u201d<\/p>\n<\/blockquote>\n

No, this isn\u2019t outside-the-box thinking at all.\u00a0 It\u2019s pure lunacy, is what is.<\/p>\n

And the end result will be another terminated listing because there\u2019s no chance this property, listed at $1.00, will sell.<\/p>\n

In fact,\u00a0almost\u00a0no<\/em> properties listed for $1.00 end up selling.<\/p>\n

As much as I want to deny the lack of originality by revisiting this topic today, I want to put one final nail in the coffin before<\/p>\n

I\u2019ve written previous blogs about this, but I\u2019ve never provided you with data<\/em> to demonstrate why this \u201cstrategy\u201d of listing for $1.00 doesn\u2019t work.<\/p>\n

So today, I\u2019m going to do that.<\/p>\n

This past weekend, I left my wife and children at home and checked into a Motel 8 by the airport armed with nothing but a case of Red Bull, a bag of Cheetos, my laptop, and an infatuation with data!<\/p>\n

Here was my mission:<\/p>\n

\n

Download the data of\u00a0all<\/em> properties listed for $1 over the last ten years in each of Toronto, York, Durham, Halton, and Peel, break them down by category, and finally come up with a realistic percentage chance that a $1 listing sells.<\/p>\n<\/blockquote>\n

Mission accomplished.<\/p>\n

So first and foremost let me say this: there\u00a0are\u00a0<\/em>examples of this \u201cstrategy\u201d working.<\/p>\n

Here\u2019s one from 2015:<\/p>\n

\"\"<\/p>\n

Yes,\u00a0one.<\/em><\/p>\n

And there are others, no doubt about it.<\/p>\n

But when I say this strategy \u201cnever has worked and never will,\u201d I\u2019m not talking about isolated incidents.\u00a0 I\u2019m talking about as a matter of standard practice.<\/p>\n

In the\u00a0commercial<\/em> real estate world, properties are listed for $1.00 all the time.<\/p>\n

But again, that\u2019s a common, often\u00a0standard<\/em> practice in the industry.\u00a0 It\u2019s called an \u201cunpriced offering\u201d and it\u2019s essentially putting the property up for bid.<\/p>\n

In commercial real estate, it\u2019s up to the buyers to determine value.<\/p>\n

I mean, that\u2019s how it works in all\u00a0markets<\/em>, in theory anyways.\u00a0 But in commercial real estate, the seller need not price the offering.\u00a0 They just need to post it for sale and whether it\u2019s two weeks or two months later, interested parties can submit letters of intent or offers.<\/p>\n

In commercial real estate, the bids can have a much larger spread based on the property type, use, and what the buyer intends to do with it.<\/p>\n

If an apartment building was posted for sale for $1.00, the bids would likely fall into a smaller range because the buyer pool would be made up of investors, real estate investment trusts, pension funds, et al, and they would be using similar evaluation criteria.<\/p>\n

But if a parcel of raw land was posted for sale for $1.00, the bids could differ dramatically based on what the buyer believes they could do with the site.\u00a0 What could they build?\u00a0 How long would it take?\u00a0 What is their cost?\u00a0 Who would they partner with?\u00a0 How complicated is the process to get from A to B, ie. rezoning, greasing politicians, etc.<\/p>\n

In the world of\u00a0residential\u00a0<\/em>real estate, the buyer pool just isn\u2019t as savvy.<\/p>\n

Theoretically, the buyer pool could use existing pricing data to figure out what the property is \u201cworth,\u201d but as we\u2019ve discussed on this blog time and time again, many buyers use emotion, hope, faith, naivety, and inexperience as the driving factors in their ability to price properties, and that\u2019s why we often see \u201cdummy offers\u201d on offer night.<\/p>\n

Think of a 3-bedroom, 2-bathroom, semi-detached house that\u2019s listed for $999,000 with a scheduled offer date.<\/p>\n

Now consider\u00a0five<\/em> similar homes all selling in a two-block radius during the last two months for between $1,200,0000 and $1,300,000, with four of those houses\u00a0also<\/em> being listed for $999,000 with an offer date.<\/p>\n

So when offer date comes on the subject property, who\u2019s submitting an offer for $1,010,000 with two conditions?<\/p>\n

And\u00a0why<\/em>?<\/p>\n

That doesn\u2019t happen in the world of commercial real estate when properties are priced at $1.00.<\/p>\n

But if a\u00a0residential<\/em> home were priced at $1.00, what would happen?<\/p>\n

First and foremost, let me offer the following:<\/p>\n

\n

I\u2019m of the mindset that the buyer pool in the residential real estate market doesn\u2019t like $1.00 listings.\u00a0 They already don\u2019t like pricing a $1,300,000 house for $999,000\u00a0with an offer date<\/em>, so they sure as heck aren\u2019t going to like $1.00 listings.<\/p>\n<\/blockquote>\n

What\u2019s worse than a\u00a0gimmick<\/em><\/p>\n

An even larger gimmick.<\/p>\n

Not only that, I wonder if the $1.00 listing \u201ccheapens\u201d the offering in the mind of the buyer.<\/p>\n

Secondly, I will offer the following:<\/p>\n

How is the buyer pool going to find a property listed for $1.00?\u00a0 Who\u2019s searching with that criteria?<\/p>\n

Not only that, if and when they\u00a0do<\/em> find the listing, won\u2019t most of them think:<\/p>\n

a) This is a typo.
b) This is too good to be true.
c) There\u2019s something wrong with this property.<\/p>\n

Again, the\u00a0gimmick<\/em> factor is going to work against the listing far more often than not.<\/p>\n

Alright, so with all that preamble, and a tangential analogy about Batman, let me get to the data.<\/p>\n

I looked from 2015 through 2024 in the five major TRREB regions: Toronto, Durham, Halton, Peel, and York.<\/p>\n

I looked specifically at freehold listings.<\/p>\n

Here\u2019s what the data shows:<\/p>\n

\"\"<\/p>\n

First and foremost, 573 listings over a decade isn\u2019t a lot.<\/p>\n

But secondly, a success rate of 12.7%<\/strong> isn\u2019t a lot either.<\/p>\n

Now, here\u2019s where many of you say, \u201cDavid, hang on \u2013 you said \u2018never will work\u2019 and it clearly does to the tune of 12.7%!\u201d<\/p>\n

But this is\u00a0all<\/em> freehold listings.<\/p>\n

That includes\u00a0vacant land<\/em>, which shouldn\u2019t really fall into the same category as Becky and Tim\u2019s rowhouse in Leslieville.<\/p>\n

For example:<\/p>\n

\"\"<\/p>\n

But vacant land isn\u2019t the only property \u201ctype\u201d included within the freehold category of MLS that shouldn\u2019t fall under the BlogTo headline of \u201cLook At This Genius Seller For Listing His Roncesvalles Home For A Dollar!\u201d<\/p>\n

In fact, there are four such types which I feel don\u2019t belong:<\/p>\n

    \n
  • Vacant land<\/li>\n
  • Rural<\/li>\n
  • Farm<\/li>\n
  • Other<\/li>\n<\/ul>\n

    I mean, when you\u2019re selling a property and it\u2019s categorized under \u201cother,\u201d I think it\u2019s safe to say that this isn\u2019t Todd\u2019s cool-guy loft in Queen West.<\/p>\n

    Here\u2019s an example of \u201cother,\u201d and keep in mind that this is listed as a\u00a0freehold<\/em>:<\/p>\n

    \"\"<\/p>\n

    Other.<\/p>\n

    It\u2019s a detached bungalow from the photo, it looks like vacant land to me.<\/p>\n

    This isn\u2019t Skylar\u2019s condo at Theatre Park<\/em>, listed for $1.00 because she wants to trick the market and solicit twenty-six offers and have the price bid up past fair market value.<\/p>\n

    This is basically commercial land.<\/p>\n

    Oh, wait, if you look at the listing you\u2019ll see\u00a0that it actually is:<\/em><\/p>\n

    \"\"<\/p>\n

    Alright, so what happens if we exclude vacant land, farms, rural, and properties with the \u201cother\u201d designation?<\/p>\n

    Well, the data set changes substantially!<\/p>\n

    As a result, the success rate changes as well:<\/p>\n

    \"\"<\/p>\n

    We went from a success rate of\u00a012.7%<\/strong> with\u00a0all\u00a0<\/em>freehold listings down to only\u00a06.6%<\/strong> when we remove vacant land, farm, rural, and \u201cother.\u201d<\/p>\n

    But we need not merely stop there!<\/p>\n

    In fact, if we looked at every single one of these sales, we would see that most aren\u2019t really \u201chomes.\u201d<\/p>\n

    And even those that\u00a0are<\/em> actual homes usually have some sort of asterisk, like this one:<\/p>\n

    \"\"<\/p>\n

    Yes, it\u2019s a\u00a0house<\/em>.<\/p>\n

    But it\u2019s a power of sale and this simply isn\u2019t the same thing as some \u201crevolutionary, outside-the-box thinking real estate agent\u201d who\u2019s being lauded on BlogTo or a similar symbol of journalistic excellence.<\/p>\n

    In the end, when you strip out the freehold properties that aren\u2019t actually\u00a0houses<\/em>, and you remove power of sales and other specialty situations, your success rate is closer to\u00a01.0%.<\/strong><\/p>\n

    Who\u2019s going to take that on?<\/p>\n

    You\u2019ve got to be really desperate or really naive to put your eggs in a basket with a 1% success rate.<\/p>\n

    Success\u00a0can<\/em> happen.\u00a0 I won\u2019t say it\u2019s impossible.<\/p>\n

    Here\u2019s an example:<\/p>\n

    \"\"<\/p>\n

    But again, this is in the extreme minority.<\/p>\n

    Not only that, this was the\u00a0first and only time\u00a0<\/em>the house was listed for sale.<\/p>\n

    In the case of the house featured in the BlogTO article, it was being listed for $1.00\u00a0only\u00a0<\/em>because they were previously listed three times, without success.<\/p>\n

    So when I say, \u201cnever going to work, never has,\u201d I mean that if you are:<\/p>\n

    a) Lost on pricing
    b) Unwilling to accept fair market value
    c) Into your third, fourth, or fifth listing
    d) All out of bright ideas<\/p>\n

    If you\u2019re all those things, and you want to list at $1.00, well good luck.<\/p>\n

    Because that\u00a01.0%<\/strong> chance I reserved above isn\u2019t for properties and sellers who meet the preceding criteria.<\/p>\n

    A gimmick is designed to be an \u201cattention grabber.\u201d<\/p>\n

    Well these listings certainly grab attention; just not from active buyers looking to transact in the real estate market\u2026<\/p>\n