Raising the list price of your home…a clever strategy or sales suicide?
January 6, 2008
Your home has been on the market for a month or so and it's not in contract yet, and you want to do something that will re-invigorate interest and raise the visibility of your house. Conventional wisdom tells you to do what — lower the list price, right? Not so fast…
Every so often, you'll see the seller actually increase the price of the home. That's right…increase the price. Why would you do this? Every situation is unique, but in general here's a few reasons why you might consider doing it:
- Market Conditions: You may anticipate that the market is going to strengthen and you want to take advantage of the increased demand.
- Create “virtual” demand. By raising the price, you can create an artificial sense of demand — “There must be something special about this house if they're raising the price – we better check it out before it sells!”
- Create negotiating space: If you really wanted a certain price, say $1M for a house, you might want to ask slightly above that price to allow for some wiggle room during negotiations. Raising the list price will certainly do this (but you have to wonder why it wasn't priced right in the first place.)
Regardless of the reasons, it's definitely an interesting and counter-intuitive strategy. After all, isn't one of the main reasons a house doesn't sell is that it's priced too high?
What's your opinion on this? Feel free to post a comment!