Too cheap to sell

[barista]

In the world of ever dwindling prices, some genius sellers and agents come up with a tactic: jack up the prices and then may be the house will sell. I don't know what the thinking behind this is but I'd like to use this thread to catch all such instances to see where these houses land up eventually. Feel free to contribute any gems you find.

Here's one to begin with:
The price went down 30 K the same day of listing and then came back up 60K within 2 weeks.

http://www.redfin.com/WA/Kirkland/13203 ... e/12356892

Dec 04, 2008 Price Changed $699,000 -- NWMLS #28187777
Nov 19, 2008 Price Changed $639,000 -- NWMLS #28187777
Nov 19, 2008 Listed $670,000 -- NWMLS #28187777

[barista]

And one more:

http://www.redfin.com/WA/Sammamish/2275 ... ome/436371

On market for five months. After gradually dropping prices by 30 K, it went back up by 45 K. More expensive than it was originally listed in July 08!

Dec 04, 2008 Price Changed $714,000 -- NWMLS #28122357
Dec 03, 2008 Relisted -- -- NWMLS #28122357
Dec 01, 2008 Off Redfin -- -- NWMLS #28122357
Sep 10, 2008 Price Changed $669,000 -- NWMLS #28122357
Aug 11, 2008 Price Changed $679,000 -- NWMLS #28122357
Aug 05, 2008 Price Changed $689,000 -- NWMLS #28122357
Jul 15, 2008 Listed $699,000 -- NWMLS #28122357

[Ouch!]

This is a sales technique ala Harvard business advise. And studies have shown that in many cases, the more people pay, the more value they ascribe to their purchase. Money plays a funny role in the purchase process: it anchors perceived value. If you discount prices during adverse times, consumers may begin to question the original value.

However, it didn't do much to help the auto industry when they used this same method recently.

In regards to real estate, because even 80 year-old grandmas can access the internet and use sites to check sale prices, I don't think it will work to prop up a property's perceived value. When anyone can find out that the owner was ready, willing and able to sell it for less, the whole negotiation will be suspect. It will be interesting to see how many real estate professionals talk their clients into using this idea, however. Reeks of desperation to me.

[barista]

[perfectfire]

They're trying to create the buy-now-or-be-priced-out-forever panic that existed during the bubble. However, the two big differences are that during the bubble it was selling prices that were rising not asking prices and that during the bubble increasing prices were widespread versus just on the occasional house owned by a nutball.

While there are still plenty of dopes that think that now is a great time to buy, I bet that by now even a majority of those people realize that it isn't urgent that they buy right now rather than 6 months or a year from now. So they're probably willing to wait out any isolated price jumps.

[Charles Dean]

I think that it has to do with MLS listings. You jack up the price for a week, then drop the price a week or two later, then it shows back up on everyone's house searches.

It's sort of clutching at straws if you ask me.

[rose-colored-coolaid]

[Charles Dean]

That's also a good guess as well Rose, and something that I do see from time to time as well.

[jon]

The $500K -> $470K -> $499K strategy is interesting in a market where people will not make a quick decision. The $470K price will get the attention of buyers, and before they pull the trigger, the price is back up.

[barista]

Some more smarty pants using the technique

One in Issaquah:

And two in Sammamish



Each one jacking up their prices by ~20K after waiting for 2-3 months.

[sniglet]

[cheapseats]

I was wondering about these as well, isnt there some rule where you can change the MLS# to a new one if the price changes by a certain percent? Like 5 or 10.

That way if the price is jacked up to 700k if the drop it to 630 they could relist it?

[Charles Dean]

5% is the threshold cheapseats. They changed that about 2 years ago, because many agents were cancelling and re-listing. It's a big fine if you do that now without the 5% price adjust.

[tomtom]

Obviously no one is policing this as I see relists with minimal or no price change all the time.

This house is on it's third listing. Has the price dropped over 5% between each?

http://www.redfin.com/WA/Seattle/3616-N ... ome/315823

[Charles Dean]