“North Vancouver condo sold for $500K below value in ‘double-ending’ sale” screams the headline. Once again we have material to talk about Vancouver real estate market. The case seems to be that of a condo unit estimated to be worth anywhere between 1.1 Million and 1.2 million was sold for $730,000 in one day.
Typically when listing a property, comparative price analysis is done on similar properties that recently sold and ones that are in the market so that the pricing can be just right and the interest of the buyer is safeguarded as well as the success of the listing is improved. When it comes to condos, there are many similar units in the same condo building and so the determining the listing price is simpler that detached homes.
When a condo unit is sold for almost half its price, it impacts many people. Firstly, those who bought a few weeks before the transaction feel that they over paid. Those that bought later at market price based on general knowledge of pricing in the building would get concerned that they probably do not know some negative information and over paid. Similarly all the other unit holders in the condo get apprehensive about the value of their own units and would need some explanation.
In this particular case, the news article says that the listing sales person was contacted in this regard and responded by saying that the buyer and seller knew each other and also that the buyer was a foreign buyer.
If as alleged, the buyer is foreign and the property has been sold for half the price, some questions arise:
a) What is the relation between the buyer and seller that the seller is willing to sacrifice almost half the value of the property. Almost half a million dollars? Is it lawful to do so?
c) Is it possible that half a million dollars paid out side of Canada to fulfil the value proposition? is it lawful to do so? Does this set a precedence for other sellers to follow this approach? How will this impact the Canadian market and property owners.
We would not have the answers until some investigation is done. One hopes that such investigation will happen very quickly so that a level of trust is retained in the real estate market in Vancouver.