Home Buying in Pelican>Question Details

J Keen, Home Buyer in 34949

Why would anyone in their "right mind" increase a price of a house that is already not selling ??

Asked by J Keen, 34949 Thu Oct 14, 2010

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16
Hi J. I'm with you. Who cares if it's a short sale or not? If it didn't sell at the lower price, why would an owner or a bank for that matter, increase the price? You're right, it makes -0- sense. Just more waste of time, energy and efforts in this game of Monopoly that the banksters are playing.

BPO or no BPO, the increased price is a pipe dream in someone's mind. It doesn't move at $200K, so let's bump it up to $250K, not a smart move at all.

Prices are still sliding. I've said it before and I'll say it again.

GOOD LUCK.

Scott Miller, Realty Associates, Boca Raton, FL
1 vote Thank Flag Link Thu Oct 14, 2010
Good question. The market tells you want a home is worth and if no one is buying at a lower price, it is unlikely that raising the price will work.

The only time raising the price might work is if home prices are rising quickly and inventory is dropping.

Steve Geving
Jones and Co Realty
239-573-1400
stevegeving@hotmail.com
swflhomeresource.com
0 votes Thank Flag Link Wed Nov 21, 2012
Hi there, in a market where price is the driver - and we all share that condition in varying degrees - there is no good reason to raise the price. It is interesting to read the results of some underpriced properties, but what I generally see in my market, is that properties priced under market do tend to draw attention and offers more quickly.

Today's buyer is so well educated and informed - largely because of the wealth of info online. This adds to the issue for overpriced properties - the sellers that understand this and price correctly out of the gate will sell more quickly and for more than those that don't.

Raising the price - rather than lowering it if the home doesn't sell - makes no sense at all.

The exceptions that the prior posters have mentioned - distressed sales, mispricing that has confused the buyer into thinking that the property is flawed are interesting exceptions. But even then I think raising the price is risky and may just as easily result in fewer visits/interested parties.

The other possibility is new construction - it is not uncommon for the price to increase as the home takes shape and nears completion.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Oct 15, 2010
Right now most of the price increases that we are seeing involve short sale listings that were priced below what the bank will accept. In most cases like this, the seller accepts an offer and submits it to the bank for approval...the bank comes back with a higher amount and the buyer walks. The seller then raises the price to the amount the bank was looking for.
0 votes Thank Flag Link Fri Oct 15, 2010
It could be the lender directed the price thru an appraisal or BPO. We know that they are NOT in their right mind to begin with ... if they were we would not have anything known as distressed properties.

Debbie Albert, PA
Web Reference: http://www.ronanddebbie.net
0 votes Thank Flag Link Fri Oct 15, 2010
Some sellers are crazy like a fox! Aside from the short sale scenario where the bank does a distressed BPO after the listing enters the market, there are sometimes situations where a price increase is merited or creates a stir in the active buyer pool. For example, a $10k price increase could be used as a way to get buyers to act before it goes into effect. new construction builders do that all the time, where they get people to sign before the price increase goes into effect. Or the scenario where the seller will say, "for you, we will honor the old price" and make the buyer sense they are getting terms than the rest of the buyers considering the house. Third scenario, a small decrease, or increase for that matter in list price makes the house show as Price change for one week and show up on the "hot sheet". Until an agent drills down, he doesnt know if it is a price increase or decrease. it might seem cheesey, but a $500 reduction or increase gets right next to new, reactivated listings.

If you like my answer, please select best answer!
0 votes Thank Flag Link Fri Oct 15, 2010
If it's a Short Sale, the bank may have come back and "approved" a higher price.

Also if it's a short sale flip where there is potential fraud, the insider investor may have finally gotten approval for the lowball price and now wants to FLIP it at full market value to ideally an ALL CASH buyer. Most lenders don't want to see a previous owner who has owned a property no more than a week so this is why they target ALL CASH buyers.
0 votes Thank Flag Link Fri Oct 15, 2010
Some times if the property is priced too low, buyers may think it's too good to be true and there may be something wrong with the property. I recently did this with a property I wanted to sell quickly but the agents thought the home was built on a hillside because of the price but it was built on a flat building pad. The agents would ask if the lot was flat and I would say there is a sloped hillside but there is an existing flat building pad and they would not even preview the property. After I raised the price, the activity and viewings was night and day.
0 votes Thank Flag Link Fri Oct 15, 2010
J,

There are really few reasons anyone would increase the price of their home that already has not sold.

First, if the home is a short sale. They may have been working on a potential deal for the house. the bank could have countered them and told them that this is the lowest amount of money they will accept. Thus, the agent is justified in raising his price on the home.

Second, they were told (or noticed) that comparable homes were selling for more money than theirs in this market. Even if that is the case, it is still a variable and not every house is going to show the same.

Third, is they found out they owe more on the house than they anticipated. if that is the case then they may not have the money to come up with to close on the house if they take less. so, they may be in no ther position that to raise the price of the home.

Last, is they may not want to sell...Or one of them may be having second thoughts and convinced the other to raise the price knowing that it probably will decrease the chances of them getting an offer on the home.

But in any case...the Realtor shoudl have in the comments section a reason why for the price adjustment. If the reason is one that makes sense and buyers can quantify.
Web Reference: http://www.davedicecco.com
0 votes Thank Flag Link Fri Oct 15, 2010
Your question is a good one....but some sellers feel justified in making a price increase after making a major home improvement such as a new roof, kitchen, bath room, HVAC etc.

Then there are those pricing increases that are made by people that "just don't get it!" This type of activity, as one would expect, does nothing to increast the home's marketability.....it only serves to prolong the experience.
0 votes Thank Flag Link Fri Oct 15, 2010
Just to take your question to another level,

This technique has been studied quite a bit as it pertains to emotional consumers shopping for products, in a retail shop for instance. The higher price creates a sense of value or worth/exclusivity....thats why we pay $200 for 'designer' jeans when cheaper one sell basically the same thing for $25 or Fiji water for $3 when Aquafina is $1.50.

There could actually be many reasons your home is not attracting people literally due to a low price.....if homes are priced much higher than yours it could appear to buyers its defective or something, or if its too low for an area it might not be showing up in searches properly.. if they are limited their search to higher priced homes, thinking thats the proper range for the area, this could be very true if your in a somewhat rural area and homes/comps are widely different.

I would say in general a higher price is likely not the real answer but its worth a real 'holistic' look at all the possible reasons.
0 votes Thank Flag Link Fri Oct 15, 2010
Why would anyone raise their price if their home isn't selling??

1. Well - you could be right - and they are not in their "right mind"

2. Or............they really don't want to sell, and someone - usually a neighbor - told them they didn't ask enough

(forget option #2 - I'd go with option #1)!
:

One other possiblity - perhaps they DID receive an offer close to full asking, and that made them think they hadn't priced it high enough, but that wold only apply if the home isn't on the market that long......who knows! Go back to option #1!
:)
0 votes Thank Flag Link Thu Oct 14, 2010
most likely a short sale....bank wanted more money.....improvements maybe......or....bad idea?


jessemcgreevy@gmail.com
239-898-5329
http://www.Bonita-Estero-RealEstate.com
0 votes Thank Flag Link Thu Oct 14, 2010
HI J. Most Home owner now know that Buyer want to see a house sit then come in with a low offer.. Our Sellers currently have there prices where they should be and still no bites so one of ours did increase their price and got an offer at what they orginally priced it at..

It's odd yes but due to the carefullness of buyers, Sellers are being just as careful.. It's a shame because there are so really good homes being passed by. Most Buyers are going for the short sales and foreclosures and so many of them are turning in nighmares...

All the Best

Dave & Lisa
Web Reference: http://www.urhomerealty.net
0 votes Thank Flag Link Thu Oct 14, 2010
Hmmm... I'm guessing that we're talking about a short sale maybe - and the bank did a BPO and came back with a higher price that they would agree to than the listing agent originally set it for. It's possible that there was an offer submitted to the bank, even if the status still said "Active". That's not "supposed to" happen, but I can tell you, it does, regularly, on the MLS. If that's the case, then, there may have been interest at the lower price, but the bank disagreed with the value, and the marketing starts all over again with a bank approved price. You'll probably notice a lot more of this going around as banks get more pro-active about setting a price early in the game, as in HAFA short sales.

But you're right - assuming it wasn't selling, and the seller raised the price, it would seem a little crazy. I'm thinking theres more to the story than meets the eye.
0 votes Thank Flag Link Thu Oct 14, 2010
What are the circumstances? Is it a short sale? How long has it been on the market? If its a short sale, the bank may have approved a price higher than it was listed for.
0 votes Thank Flag Link Thu Oct 14, 2010
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