Is Raising the Price on Your House Ever a Good Strategy??

kellyfootaMay 21, 2011

Hey, all. We decided to raise the price on our home $15,000 honestly just to get some attention on it. I think it is probably quite a rare thing to do in this market, but I am sensing there are a lot of side-liner buyers just waiting for prices to drop and drop. We plan on offering it for rent starting June 1st, as well. (my husband has moved to Tampa for a job and we are eager to be with him and start our new lives down there. We currently live in NC.) I just felt that this was a way to bring attention to the fact that the home will soon be off the market as a rental. (we put this in the MLS notes, as well) Thoughts??? Has this worked for anyone in this crazy market?? About three weeks ago there seemed to be a surge of sales in our neighborhood and a few other local neighborhoods, but for the last few weeks things seem "dead in the water" again.

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I did it once about ten years ago when the market was very hot in our area. It sold quickly, for very close to the new asking price.

    Bookmark   May 21, 2011 at 7:49PM
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I'm in NY and notice a few people raising their prices. I'll be honest, most people following homes will be annoyed by a price increase, and speaking for myself immediately gave up the idea of offering on a house which raised their price.

I had been looking at a number of homes and was on the fence about one particular home when they raised their price. That made the decision for me. It needed some upgrading and didn't compare to similar homes at that price range. I immediately took it off my list.

I notice this house is now being offered for rent and seems there are no takers. Websites, such as Trulia, notify you of price changes. I don't think its a good idea as there are too many houses available. I don't think anyone is rushing to buy right now.

Just my opinion,

    Bookmark   May 21, 2011 at 11:33PM
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Very risky. Raising your price may make people lose interest - unless you end up in a different "price search" for online lookers, and they did not know you originally had a lower price. People do not react very well to "buy it now before I rent it" ultimatums either. Most people will just say "fine, rent it - I will look elsewhere". It's still a buyers' market, and people are still looking for bargains. Do not rent unless you absolutely have to - its always better to sell.

Good luck

    Bookmark   May 21, 2011 at 11:35PM
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We have been off the market for 2 years after no sale. We will be placing our house back on the market most likely next year. And we will be increasing our price. However, since we have taken it off the market we have installed top of the line Anderson tilt in windows, a new architectural GAF tiled roof, a new gas fireplace insert in a den fireplace, a 14kw wired-in/gas whole house generator, a remodelled main bathroom, updated LR/DR including newly tiled over brick fireplace in LR, new landscaping including in=ground sprinker system, and we will be installing solar panels on the roof this summer. We feel that all the changes we have made will be worth the increase in price.

    Bookmark   May 22, 2011 at 1:37PM
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You're kidding, right? If you're not getting offers, it's beause you are already too high for your market.

    Bookmark   May 22, 2011 at 3:34PM
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I would not raise the price unless like zoe52 I had made changes to the house that actually increase its value. If the house hasn't been attractive to buyers at $ then I seriously doubt it will be attractive at $+15. Some buyer new to the market could always love it and make an offer but then that buyer (and perhaps even more) would have offered at the lower price.

If I was looking at houses and the seller raised the price on the house without doing something new to increase value I would immediately cross it off my list. In my area, I've never bought a house at full price and always make some discount. I would assume that anyone raising their price was unrealistic and wouldn't respond to an offer with any reasonable counter offer.

    Bookmark   May 22, 2011 at 4:41PM
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The pricing history will be available to anybody using a realtor as well (info stays in the mls) so even if people are new to the market they'll still find out that it was priced lower at one point if they are using an agent.

Not sure raising it will do anything unless like somebody mentioned it puts you in a different search bracket where more people are looking.

    Bookmark   May 22, 2011 at 9:43PM
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I think people are just not buying because they can't sell their own houses and ten grand under or ten grand over or even twenty grand under is not going to make a difference. I get a lot of feedback because I'm a for-sale-by-owner. I can't tell you how many people have told me they love my house but their houses aren't sold yet and they hope mine's still available when they finally do sell. I dropped my price below the appraisal ten grand about a month ago and it didn't make a bit of a difference even though it put me in another search category. I still got lots of interested people but no one who could actually do anything about it. I've sold it once already and that person, the only one who didn't have to sell her own house to buy mine, because she was a first time home buyer, couldn't get a mortgage because the bank didn't like the color of my roses. Only kidding but it was almost as ridiculous. It looks like I sold it again but I don't know if this person will be able to get a mortgage either. Basically I think there just aren't enough ready buyers out there and unless we seriously drastically underprice our houses, it's just going to be a matter of luck that we get the one out of a hundred buyers who actually can perform.

    Bookmark   May 22, 2011 at 11:22PM
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All of your neighbor's homes went under contract in a fairly short time, and yours did not! It was not because these buyers thought you were underpriced. They went to your neighbors home instead because it offered more"value" than did your home.

    Bookmark   May 23, 2011 at 7:36AM
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Welcome to the post offices guide to pricing a house. If business is slow, just raise the price. That will bring in buyers, right?

    Bookmark   May 23, 2011 at 8:50AM
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Refresh my memory. Are you hung up on getting a certain price because you don't have any equity or is it because you made some upgrades and you think your house is worth more?

Real estate used to be location, location, location. Now it's price, price, price. At this point, you don't need to sell your house, you need to get rid of it. It's a fire sale situation and you need a fire sale price to get out of the mess.

I don't mean to be harsh. I was in your same situation two years ago. We would have saved ourselves a year of worry and expense if we had put a fire sale price on our home when we put it on the market two years ago.

    Bookmark   May 23, 2011 at 12:12PM
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Thank you all for your feedback. We have virtually no equity in our home as we did major renovations in 2007. It was like buying at the height of the market. My husband was laid off in 2009 and was underemployed until January of this year. We do not have $100,000s to take to the table, so renting it out so that our family can be together in FL appears to be our only option. We did actually receive an offer, but before we could negotiate another house came on the market that the buyers liked better. I would LOVE to fire-sale it and I "get" that buyers now can expect perfection for bargain prices. That being said, we have had enough interest, that I just wanted to make it clear to buyers who might be waiting for our price to drop, that it isn't going to happen. We will just rent it out for the next couple of years, until we can better financially afford a "fire sale," or miraculously, the market starts to stabilize. I thought there might be no better attention getter than a small price raise, as obviously price raises are quite rare these days.

    Bookmark   May 23, 2011 at 1:05PM
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We did that once -- Worked like a charm. Sold within the first week at very near the new (higher) listing price.

If your alternative is ??

    Bookmark   May 23, 2011 at 2:21PM
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Good luck with renting it out. Renting if you've never done it before comes with it's own headaches and draw backs.
We had dear friends who a few years ago built their dream home down south. They had a rental company looking after it so they thought they'd have no problems renting it while they finished up their last two years up north. We tried to tell them that renting it out was a bad idea. Well they learned the hard way. The list of repairs, wear and tear and out right damage was staggering.

    Bookmark   May 23, 2011 at 7:57PM
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Billl, that was hysterical because it's so true! I was just talking to my post office guy and he was crying about the hard time they're having and how they've had to lay so many people off. I said, "Well, what do you expect? Every time you raise the prices, I try to figure out something else I can do through e-mail instead of snail mail!" In the old days, I'd mail out bulk mail for my business and think nothing of it. Now, at almost a half a buck a pop, I don't do that anymore. Prediction--mail is going to go the way of horse and buggies except packages. Buy stock in UPS! lol

    Bookmark   May 23, 2011 at 11:13PM
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