Toronto: 72 offers on a home, sells at 195% of List Price?

From www.thestar.com

Hot Real Estate markets often bring out creative gimmicks.  In the Yonge and Lawrence area, a property expected to sell in the $1.1M range was listed for sale at $699,900.  72 offers were presented, with the successful bidder paying $1,366,000 or 195% of list price.  Obviously a good result for the Seller.

It goes without saying there were 71 unhappy buyers in this situation.  I suspect there would have been many offers close to the list price of $699,900. 

The unfortunate by-product of this particular bidding process are the poor buyers in the $700,000 price range who thought they had the chance of purchasing in a $1M+ neighbourhood.  The fact is, the house would never have sold below $1M so their participation in the bidding war simply fed the upward push of the eventual sale price.

We have experienced such situations before while acting for buyers.  In addition to the agony of defeat in the offer process, it often brings false expectations of similar properties becoming available or, worse, a new desire to purchase in a higher price range than possible.

At the end of the day, this Listing Agent here did his job for the seller and the result is indisputable.   Sadly, it angers many other consumers and does not shed a positive light on the Real Estate industry.