What's the logic behind this?

[Dan the Man]

I've seen this a few times, but don't really understand the logic behind it - a house is put on the market, it sits unsold for a few weeks (or months), agent lowers the listing price, it sits unsold for a few more weeks (or months), agent then raises the price to an amount above the original price.

Is this some kind of attempt to generate interest in the property or is the agent just hoping some ignorant buyer comes along and pays the higher price? Perhaps someone with experience in marketing residential real estate can shed some light on this?

[cottonmather0]

I've seen this a few times, but don't really understand the logic behind it - a house is put on the market, it sits unsold for a few weeks (or months), agent lowers the listing price, it sits unsold for a few more weeks (or months), agent then raises the price to an amount above the original price.

Is this some kind of attempt to generate interest in the property or is the agent just hoping some ignorant buyer comes along and pays the higher price? Perhaps someone with experience in marketing residential real estate can shed some light on this?

For all I know you're talking about our house.

In our case we were getting feedback about some old flooring that people didn't like, so we lowered our price by a significant amount and STILL were getting the exact same feedback. So we eventually decided a couple of weeks ago that the implied value people were putting on the floors was much higher than the actual cost of replacing them and we went ahead and ripped them out and out something new in. Our higher price is by the amount of money we put into the new floors.

We're still not asking as much as we did at the beginning, but even with the new floors I think our current price is quite comparable to the listing prices for similar houses in the neighborhood. We'll see what happens -I have no idea how that's going to work out, but it's at least an explanation of what we did.

EDIT: edited for readability and drunk late night posting... yowch

Edited May 8, 2009 by cottonmather0

[westguy76]

Maybe they were trying to start a bidding war situation or a short sale by lowering the price below market value and getting multiple offers to escalate the value to what they wanted. If so, it obviously did not work.

[kylejack]

I've seen this a few times, but don't really understand the logic behind it - a house is put on the market, it sits unsold for a few weeks (or months), agent lowers the listing price, it sits unsold for a few more weeks (or months), agent then raises the price to an amount above the original price.

Is this some kind of attempt to generate interest in the property or is the agent just hoping some ignorant buyer comes along and pays the higher price? Perhaps someone with experience in marketing residential real estate can shed some light on this?

This happened on a unit I was trying to lease. It was going for $1300 when the agent showed it to me, I offered less since it had been on the market for 4 months or so, they didn't reply to my offer and raised the price on HAR to $1500 with a 3 month promo price of $1350. I'm still scratching my head about that one.

Edited May 8, 2009 by kylejack

[rbarz]

I've seen this a few times, but don't really understand the logic behind it - a house is put on the market, it sits unsold for a few weeks (or months), agent lowers the listing price, it sits unsold for a few more weeks (or months), agent then raises the price to an amount above the original price.

Is this some kind of attempt to generate interest in the property or is the agent just hoping some ignorant buyer comes along and pays the higher price? Perhaps someone with experience in marketing residential real estate can shed some light on this?

The ultimate example is 6040 Glencove... The listing agent was the owner and he would sometimes change the price daily. It varied between a sale price of $1.4M and $3M and a lease price of $5,800 and $65,000. I counted the number of times it was changed once and it was close to 70. Within a few months the price changes went like this: $1.895, $1.95, $3M, $2.95, $1.95, $1.895, $1.9. And that was only during the first half of 2004. I had a client offer $2M and he said something about how he needed to know the people? The house was up for sale and lease almost continuously from 2003, until David Mincberg bought it, wanted to tear it down, lost the election, and put it back up for sale for $2.695M.

I can only come up with one reason for the price changes on that home...