In June of 2010, I received an email at my law office from a Mr. Brown. Brown as

Question

In June of 2010, I received an email at my law office from a Mr. Brown. Brown asked how much I would charge in legal fees to handle the purchase by him of a house in Grand Forks listed for sale by Greenberg Realty. Since I am also a real estate broker, I responded telling him if he bought the house through our agency, there would be very little cost to him since the seller paid most of the fees. I looked at the house, which was a new home, that was listed for $409,000. A few days later I received a check in the mail from Brown for $415,000!!. I could not figure out why he would send $6,000 more than the house was listed for, especially since usually a seller will accept an offer at least some less than the listing price. Also, the check was drawn on a Canadian bank in Toronto, and was a check from a Canadian real estate company. We contacted the Canadian real estate company and also checked them out on the web. They were a very large and legitimate company. The check was a real check, but it had originally been issued to one of their suppliers for only $200. I also talked to my local banker. He said the Canadian banking system allows a person to stop payment on a check for up to 60 days after it has been deposited. I send Brown a message and said I needed his address for the contract. The address he gave me turned out to be a vacant lot in Oklahoma City.

Explanation / Answer

It is completely understandable that no home buyer wants to pay over listed price for a home. Lets take an example, you go to a grocery store to buy a loaf of bread, you don't expect the grocery clerk to ring up a higher price than for that loaf of bread than amount shown on the packet. why should you pay more than for a loaf of bread?

Now suppose that there was a terrible flood. all of the roads in town are washed out. No body can go in or out and there was barely a one grocery store and there was only one loaf of bread on the shelves. There was a line of shoppers to buy that loaf of bread.

Now how much you would pay for that?

That is exactly what happens in seller's market and why he might have to pay over list price for that home.

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