By Leslie Tokayer "Sold Over Asking" -- a phrase those watching the Toronto housing market hear quite frequently these days. This phenomenon has captured the attention of the news media, who have crafted such intoxicating headlines as "GTA house goes for $400,000 over asking: 'It was like a rock concert'" as seen in the Toronto Star, and "Toronto house sells for more than $1M over asking" as reported by Global News. Agents also cash in on the glamour, adding massive "Sold Over Asking" banners atop their sold signs. With homes regularly being "Sold Over Asking," what does the phrase really mean?

A "sold over asking" sign is on display on a house for sale in Toronto, Ont., Oct. 21, 2016. (Photo: Hyungwon Kang/Reuters) As reported by TheRedPin.com, out of a total of 17,862 homes sold in Toronto, 6,583 sold over asking, or 37 per cent. Markham had the second-highest numbers, Richmond Hill third. The report said the number of freehold homes, which include detached, semis and townhomes, that sold by at least 10 per cent over asking last year clocked in at 16,000 in the GTA -- up more than 160 per cent from 2015. That's 1 in 5 (22 per cent). Likewise the number of GTA freeholds that sold by at least 20 per cent over asking reached 4,800 or six per cent -- up more than 251 per cent from 2015. Traditionally priced homes in the GTA are becoming few and far between. In a market where inventory is low and demand is high, prospective buyers are bound to see higher than normal prices. The homes in the aforementioned news headlines both sold for market value. Sellers and listing agents are loving this flurry of fruitful activity. In many cases, realtors and their seller clients are strategically pricing their homes competitively and letting a property go to the open market to create a sense of affordability and desire. This makes the terms "asking price" and "listing price" irrelevant. Case in point: Some realtors are listing their properties at $1, so those will obviously sell over asking. Further, introducing terms such as "holding back" and "offer date" have become the new normal, creating an auction-like setting for prospective buyers, which leads to the coveted "Sold Over Asking" designation. On one hand, sellers and listing agents are loving this flurry of fruitful activity. They are obtaining record-setting prices for homes in record-setting times. Prospective homeowners hoping to buy, however, are faced with largely stressful, emotional experiences in which many end up empty-handed. When individuals are ready to submit an offer, there are many different types of buyers they might be competing against. There is the buyer who might have just begun looking, who submits an offer under asking. This unfortunately drives up the purchase price, as they appear to be competition. There are usually a couple of strong offers over asking, some with conditions and some without, and these are probably in and around the true market value of the home.