Did you know that in Canada, you can find a home listed for 1 dollar? Confused, shocked, or both?
Yes, it’s true. In a country like Canada, you will often see “for sale” signboards on properties with 1$ written all over them.
What exactly is a 1$ listed home? Different people have different perceptions about it. Some call it a strategy to lure investors, while others think it is just a ridiculous PR stunt.
On a positive note, it can prove to be a successful strategy when the market is cool. Mostly, in this stage the rates are very low and realtors don’t make much money.
Let’s dive in deeper and understand the reasons and advantages of a home listed for 1$ in Canada.
Reasons for Home Listed for 1 Dollar
Whenever we look at the price tag, what is the first thing that catches our attention? The price is written on it. An item worth $10 is written as $9.99.
This is exactly the logic behind a home listed for 1 dollar in Canada. In malls, we can usually ignore the price tag and think that some cents won’t hamper our purchase. But in the case of properties, these cents are worth hundreds of dollars.
There is no denying that it is a prince-charming strategy. Nonetheless, there are many other reasons why a property is listed for $1. Here are some of them:
1. To Bring in More Business
The first thing that comes to mind, when you see the $1 home for sale is that it’s a ploy. Well, it can be. How can a home with 3 bedrooms, bathrooms, garage, garden, kitchen, and a beautiful attic come for just 1$?
But what if your agent says that it does? Won’t you be attracted to it? Obviously, you will plan a visit to that place. And that is what the realtors want. Such a strategy is often used as a ploy to expand the business.
It doesn’t matter how many of them finally reach the stage of a qualified buyer. The main motto is to get into more business.
2. A Call to the Investors
Another possible reason to list a home for 1$ is to make a call to the investors. When a property is in completion, sellers want more and more potential buyers to come and see it.
They cannot define the price then. So, they list those homes for a dollar. Moreover, the criteria of MLS states that no property can be listed for $0. Hence, this is the only feasible option for them.
3. It can be for 1$ in Reality
Do you believe that a burnt house is worth a single penny? Or will a house where some crime was committed will ever be sold? Such properties are nothing but lumber or a pile of waste.
To get rid of such properties, owners might sell them at losses. Although it won’t be for a dollar. But it will be a tactic to invite anyone to buy such a piece of wasteland.
In the words of David Reiss, professor of law at Brooklyn Law School with a major in Real Estate and Development-
“When a house is being sold for a dollar, it means that the local real estate market has cratered.”
Why is Home Listed for 1 Dollar a Successful Strategy in Canada?
Have you thought why a home listed for 1 dollar is such hype in Canada? Moreover, what is the benefit derived to the realtors and sellers from such a strategy? If not, then here is why:
- Sellers can use it to make a valid sale– When you wish to give a home to your mom, dad, son, or spouse. Because the tax implications will literally drain you. Hence, the most logical option will be to put a 1$ listing because it makes a valid consideration. You can save a lot of tax money and justify the sale.
- Sellers can use it for Property under Development– A home listed for $1 is proven to be a successful strategy when the home is under construction. Buyers will come to see it and instead of giving them the wrong price, a $1 listing is the best option. This way you can ensure that they will come back once the house is completed.
- Time Taking Yet Rewarding– You will come across various advertisements and auction results that will show a property listed for a dollar not being sold. It is true, but what they hide is that such properties go for an even higher price. Hence, worth the wait.
- Buyers can decide- If we look from buyers perspective then they cannot immediately decide to buy. They need some time. A home listed for a dollar gives them a mental piece, that no other potential buyer will snatch the property from them. Losing a house you like is extremely painful. Thus, the price better be undisclosed.
Home Listed for 1 Dollar : What is the truth?
Any home listed for 1 Dollar will be buzz-worthy, despite where it is. But who would have thought that in a developed country like Canada, realtors use such a tactic.
You will find many properties both- residential and commercial listed for a mere 1$. Is it actually good? It depends on the POV of a person. Media will always make a blunder of it, while people will be in awe. Sellers on the other hand will wait for the outcome.
Now don’t be confused when you see 1$ written on a home. You know why! Have you ever encountered such a house? If yes, share your views.