Check out this great piece in the WSJ which approaches this problem from an interesting perspective: “In a bid to attract trophy hunters, some high-end sellers are taking a counterintuitive and risky step: raising the price”. Our friend in NYC, Jonathan Miller also opined on the tactic: ”I’m extremely skeptical,” says Jonathan Miller, of appraisal and research firm Miller Samuel. Brokers say raising the price could scare away buyers who were on the fence when the home was asking less.”
Click image for the slide show.
What do you think? Can this strategy be applied in other price ranges as well in a market where supply is 25% lower than last year?
Not the same situation but I lowered an offer to a seller while they were considering our first higher offer. It worked, they split the new difference!
It's a risky proposition. If buyers didn't jump at price A, the probability that they will respond favorably to price A+ is remote at best.
Chance in a million. Reminds me of sellers who think they can sell by appealing to one imaginary buyer who will fall in love and even though they are savvy enough to qualify, not smart enough to figure out the smart price to offer. I encounter very smart buyers. Anybody else?
I have seen it happen in Mount Vernon, Alexandria in the 1990s. By going into a higher price range, they found buyers who were more financially solid.
Thanks for the comments, everyone. You might find this piece on "Price Anchoring" of interest. http://www.marketplace.org/topics/your-money/psyc…
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