Anyone here understand why sellers chose to INCREASE price if a property is not getting sold? Below has been on the market for over 3 weeks and they just increased it by $225K. Looking at comps (not that it matters right now), it was overpriced to begin with, at $3.5M
You should ask the listing agents of the property this question
Listing Provided Courtesy of: Andy Tse, Intero Real Estate Services, DRE #01345580
Jeni Moon, Intero Real Estate Services, DRE #01930991
Why is this an issue? Can seller not choose to raise price?
Listing agent’s strategy to signal to the outside world that they’re getting lots of offers and a lot higher than asking. The goal is to generate FOMO among the buyers. IMO, in some of the cases the agent might be faking it, i.e. in reality the property might not be getting many offers at the price the sellers are expecting.
Here is one that looks like might have worked.(can be verified once the sales price is available)
Here is one that looks like did NOT work and the Listing Agent/owners gave up pretty fast.
Very true. I mean if they had the right price offer, it would be off the market and no need for agent to do extra work.
Unfortunately, the discovery of market prices is only possible based on what the last few properties in that area sold for, so it’s not a fixed and keeps on changing. Price has been on a sharp rise in the last few months. So, in some cases last week’s market price seems cheap compared to this week’s and that’s what the play is here from the sellers side.
It is high-time and buyers should be judicious in deciding what is the right value and don’t make an offer if it is not worth the price. I see that the FOMO is slowly shifting to sellers and also see some greedy sellers, quick flips who bought recently & trying to get 1M more without doing anything, etc., These are not healthy signs for the market. Example:
A repeat player in the market (listing agent) has extremely little to gain from faking it. Their reputation/livelihood is at stake. It’s probably just the real asking price. Bids didn’t hit their number, but bids went over the initial ask.?
The listing agent’s name is familiar, so take it at face value.
Price discovery is not a science, it’s an art. So, people wrongly pricing it can get away either way i.e. whether pricing it higher or lower.
Raising price after the house has been sitting for a while usually means the new price is the real price. That is, seller has been expecting a bidding war but that did not materialize. They may have gotten some bids but not at their expected price level. So instead of playing the guessing game sellers are revealing their true expectation.
Don’t see the logic though: if bidding did not materialize & they didn’t get the “real” price they wanted to sell for, why would anyone offer this (or higher) after seeing the hands?
I have seen it played out in sellers’ favor before. Not always.
I think one reason it may work is that the initial price was too high. Listing agents usually list low to encourage bidding wars. Buyers automatically tag on an X% to any price they see to calculate the “real” price. So if sellers’ initial price was too high, after that X% add-on, it becomes unrealistic, and no buyers come forward.
By now revealing their real price, and have listing agents tell everyone it’s the real price, not the initial bait-and-switch price, buyers don’t tag on that extra X% and a sale can happen.
If other houses in the area keep on selling higher in the next few months, the houses in question will sell at asking or higher.
which brings me to my next question…Why do RE agents charge 4.5%-6% for a RE transaction?
In my view justice department did a good thing by the following decision.
Thanks @manch. Can see it working if buyers backed off assuming X% over asking, and if there are no good options available.
@Roy321 What you are essentially saying is that “it depends on how the market pans out in the next few weeks”. General sentiment seems that a slow down is coming and this is the reason that these properties are sitting in the market. Don’t see that sentiment changing quickly and see more sellers coming out thinking not to miss the huge jump 2021 has seen.
There are no more strategies left in the seller’s agent’s control except hoping for that.
One thing agents try is to remove the history that is the price history from zillow, redfin etc.(I don’t know how they do it and why they’re allowed to do that). So, what happens is the house is re listed later and presented to a new buyer and he/she doesn’t know what happened in the past.
MLS database can’t be updated as easily. So buyer agent with MLS access should have all price history. At least for the past couple of decades
Is that something you’re saying based on your own experience, or what you’ve been told?
Based on recent experience
That’s good. Because I’ve observed zillow/redfin history being changed many times.
Probably seller doesn’t want to sell below this price? Seller always has an option to delist the property.