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Too cheap to sell

baristabarista
edited January 2009 in Seattle Real Estate
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

28187777_2.jpg

Comments

  • baristabarista
    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

    28122357_6.jpg
  • Ouch!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. http://discussionleader.hbsp.com/stibel/2008/08/in-a-downturn-discounts-can-be.html

    However, it didn't do much to help the auto industry when they used this same method recently.http://www.autoobserver.com/2008/06/when-sales-sag----raise-the-price.html

    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.
  • baristabarista
    This guy seems to be the master of this technique.

    The price went to 669K for a short term and it now back up to 699K.

    I don't think it's working though.

    Jan 0 3, 2009 Price Changed $699,000 -- NWMLS #28122357
    Dec 28, 2008 Price Changed $669,000 -- NWMLS #28122357
    Dec 04, 2008 Price Changed $714,000 -- NWMLS #28122357

    barista wrote:
    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

    28122357_6.jpg
  • perfectfireperfectfire
    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 DeanCharles 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-coolaidrose-colored-coolaid
    Charles Dean wrote:
    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.

    My problem with this guess is that it contradicts the pricing patters you tend to see. If bumps were meant to put you back on the price reduced list you'd see a history like $500K -> $510K -> $499K. Instead, I tend to see $500K -> $470K -> $499K.

    I think what's happening is closer to seller's remorse (before the actual sale). I Want $500K, finally my agent convinces me we might sell at $470K, but a day after lowering the price it's driving me crazy and I demand a higher price again...just my guess though.
  • Charles DeanCharles Dean
    That's also a good guess as well Rose, and something that I do see from time to time as well.
  • jonjon
    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.
  • baristabarista
    Some more smarty pants using the technique

    One in Issaquah: http://www.redfin.com/WA/Issaquah/4738-245th-Ln-SE-98029/home/17464233

    And two in Sammamish
    http://www.redfin.com/WA/Sammamish/23328-NE-7th-Ct-98074/home/17487462
    http://www.redfin.com/WA/Sammamish/23348-NE-7th-Ct-98074/home/17487459

    Each one jacking up their prices by ~20K after waiting for 2-3 months.
  • snigletsniglet
    rose-colored-coolaid wrote:
    I think what's happening is closer to seller's remorse (before the actual sale). I Want $500K, finally my agent convinces me we might sell at $470K, but a day after lowering the price it's driving me crazy and I demand a higher price again...just my guess though.

    Another possibility is that in some of these cases the personal financial situation of the sellers may have changed for some reason. Perhaps they had several homes listed for sale and finally managed to sell one of them. At that point their situation may have changed for the better, emboldening them to hold out for more on their remaining properties. There are lots of reasons an individual seller may have decided to raise their price, and unless we know the details of the seller's finances in each of these cases we are unlikely to know the truth.
  • cheapseatscheapseats
    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 DeanCharles 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.
  • tomtomtomtom
    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 DeanCharles Dean
    tomtom wrote:
    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

    Price changes happen all the time. In order to cancel and re-list with a new MLS number it needs to be at least a 5% price change, unless you're changing listing agents.
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