Dropping and Raising a listing price – Good idea or Poor decision?
One of the most frustrating changes we receive each day involves small price drops. These price drops can be anywhere from $1 to $1,000. Making the change doesn’t frustrate me. I’m happy to make the change, the frustrating part is that many homeowners are hurting themselves by doing this. Somewhere along the way, people started believing that if you drop your price, your home goes “back to the top of the list” on the MLS. This simply isn’t true. The MLS is a constantly evolving database. Each Realtor(R) sets their own “hot sheet” to the search parameters that they farm specifically. The MLS isn’t one long list, such as “Craigslist”. The problem with dropping your price by a small amount is that many times you are doing nothing more than bleeding down your own price and the subdivision. When you make a price cut, you want to do so with a purpose. This purpose can be to drive traffic or generate an offer, etc… However, don’t drop your price just for the sake of dropping the price. You need to look at your specific situation, look at the comps around you, decide what is best for you…and then make a price cut with a purpose in mind. (if you decide to cut the price)
On the flip side, raising the price is a whole new issue. I’m a believer in pricing the property correctly from Day 1. In my experience, doing so nets the seller the most money possible 9 times out of 10 in the long run. Pricing the property incorrectly and then later raising the price creates confusion amongst buyers. Buyers have access to more information than ever before. They will be aware of any recent price increases that you have made. From my experience, I have found buyer’s reluctant to pay over a previous listing price except in the most rare of instances.