Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Price Adjustments Going Up? What Are They Thinking?

Price Adjustments Going Up? What Are They Thinking?

Price adjustments are very common in today's market. Would you agree that most price adjustments you see would be going in the down direction?  This morning, I was browsing the MLS and came across a very interesting listing. Price adjustments went up, and not just one, like happens sometimes, but FOUR!

Yes, this house has had four price adjustments UPWARD. It has been listed for 221 days. It listed on 11/14/2009 for $427,395.  On 2/1/2010, the price went UP to $436,995. On 4/11, it went UP to $439,995. On 5/7, it went UP to $474,995... but I guess they thought that number wasn't good enough because on the same day, it went UP even further to $489,995.

I've seen list prices go up on properties when they're originally listed at one price, then the home owner decides to do some repairs or upgrades and wants to recoup some of the money, but to go up so many times, and so drastically? I don't see anything in the listing warranting this behavior.

I wonder who is controlling this listing, the seller or the listing agent... I always try to work as a team with my sellers, and part of that teamwork is consulting. I can't imagine there ever being a situation where I advise my sellers to continuously increase their asking price when it hasn't sold at the price we were already trying to get.

**Are You Packed Yet?** 

donna harris Realtor Austin TX blog

Donna Harris, REALTOR®
RE/MAX Austin Skyline
www.DonnaHomes.com
Donna@DonnaHomes.com

Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way. 

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Copyright© 2010 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
* Price Adjustments Going Up? What Are They Thinking? * was first published on donnahomesblog.com

Comment balloon 33 commentsDonna Harris • June 23 2010 04:07PM

Comments

Donna, Is the list a short sale? We have seen some listing on our MLS going through the same thing.  I call the listing agent and they told me the bank had set the approved price.  As for the multiple times, we’ll have in the list contract a range where we can move the price up or down.  On our MLS it shows up on the dashboard and keeps the listing in front of everyone… 

 

Posted by Richard & Janet OBrian, Listing Specialist Palmdale, Lancaster CA (Home Based Realty) almost 8 years ago

Maybe the sellers or listing agents read the same report I read this morning, Texas is one of the number one places people are now moving to? Who knows why the prices are moving upward, it just doesn't see right though, does it?

Posted by Terrie Leighton, Reno Real Estate Agent ~ Selling Homes in Reno (Ferrari-Lund Real Estate ) almost 8 years ago

But will it be appraised at the upper amount? It is barbaric!

Posted by Paul S. Henderson, REALTOR®,CRS,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) almost 8 years ago

From a marketing standpoint, there is something to be said for doing this. Based on the way you presented this, the amount of price increases seems to be the primary reason you looked more closely at this listing. It captured your attention for a few minutes. Would you have looked at this property after 221 days if the price changes had not caught your attention?

 

I thought so.

 

So you can't justify the increases. But if you had a potential buyer with some degree of interest, you might just use the "I don't see how the increase is justified" angle and make a lower priced offer. That offer would likely be near the original listing price. If and when that happens, the listing agent has achieved the desired result of an offer concurrent with the original listing price.

 

This tells me that the agent representing that property is doing his/her job. That is a good angle to draw attention to a listing after such a long time. I'll take that over the number of listing advertisements I see all the time from around the country where the agent spent about 10 seconds on the advertisement one time and then forgets about it. It shows.

 

I would tell you that the few minutes you spent trying to justify the price increases were a darn good marketing lesson for you and your future clients.

 

 

Posted by Dave Kohl, Real Estate Advertising & Marketing Expert (First In Promotions) almost 8 years ago

Hi Donna.  Lol.

I have done it once.

One of my first, worst, and craziest listings...

Hope you are feeling great!

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 8 years ago

Have they been improving on the property and the seller thinks it warrants more $$$?

Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co.) almost 8 years ago

Well...this is certainly weird! I have seen new lower price signs and was thinking of writing a post on the subject but so far have not run into higher price adjustments. Does not make much sense!

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) almost 8 years ago

Maybe they haven't updated the photo's/description even though they have made those improvements? Pretty strange.

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) almost 8 years ago

Donna, I guess it depends on the ircumstances of the market and the neighborhood.

I have a builder listing that has had three increase in the last three months. I got a call from an agent today that a buyer that has been looking at it for two months is sending an offer in tomorrow.

Go figure.

Posted by Ted Tyndall, FL Homes for Sale-Palencia, World Golf Village,Nocatee,St. Augustine (Davidson Realty Inc.) almost 8 years ago

I had one bank raise the price of the house $10000.  Now the home is not being shown........but we have 90 days to wait for an offer.  I lost 3 offers because of this.

Posted by Kay Van Kampen, Realtor®, Springfield Mo Real Estate (RE/MAX Broker, RE/MAX Solutions) almost 8 years ago

Donna - I had a bank do this do me on a couple of my current listings.  You can try to reason with some people, but sometimes they just don't want to be reasoned with.  It's crazy!

Posted by Lina Robertson, REALTOR® Serving Springfield, Nixa and Ozark, MO (RE/MAX Solutions and RE/MAX House of Brokers) almost 8 years ago

Donna, that is more than just a little unusual.  This house is going to be on the market for a lot more than 221 days if they keep on going in this direction.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 8 years ago

Donna

In the long run the market tells us what a property is worth.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) almost 8 years ago

Donna - I see this in my market too.  Two months ago I showed a home with an outdated kitchen, but last week the seller changed out the kitchen cabinets and raised the price $40K.  I would be shockedif these cabinets cost more than $5K, it totally looks like a DIY project and not a good one.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) almost 8 years ago

Strange.  Maybe the seller wants out of the listing and keeps raising the price until the agent lets them go?

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 www.LizTour.com) almost 8 years ago

I've dropped a listing before because the seller wanted to raise the price.  Time is money.  Money is money too.

Posted by Jim Pirkle (Harvest Realty LLC) almost 8 years ago

You can always come down in price, but it is very hard to go up in price. If the house did not sell in it's first 6 months on the market, it's not going to sell at a higher price there after...It's common sense. Very rarely does a home sell for more money after an upward price change and it is usually a under priced short sale.

Posted by Roy & Gail Barnhart & McKay, Barnhart & McKay Home Selling Team (Barnhart & McKay Realty Advisors) almost 8 years ago

Donna, I just had a conversation with one of my sellers yesterday who wants to do the same thing!  The house is a higher priced listing for our area, and showings are scarce.  But, I warned her when we listed that it would take awhile to sell.  She is spending money on regular maintenance, etc, and wants to recoup her expenses... ugh... unfortunately that's not the way this works!

Posted by Amy Salisbury, West Virginia Realtor/Jefferson/Berkeley (Leading Edge Properties) almost 8 years ago

I have raised the price on short sales.  I also entered the price wrong one time and had to change it.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) almost 8 years ago

I market value, not price, don't you? The value is in the neighborhood, location and structure, isn't it?

A home in a neighborhood has comps for $600k, 3/2, 1,500sf with standard materials and fixtures, wooden fence and patio slab and average landscape.

Another home in the same neighborhood has 2,500sf, 3/3 with high quality materials and fixtures, block wall fencing, covered patio and superior landscaping and sprinklers and irrigation and many more upgrades, so how much more value should the 2,500sf house command?

The buyer of the $600k home would have to spend up to $200k to get the same value in today's construction market, so is asking $800k reasonable or ridiculous? So, if a seller begins to sell and discovers that his home has more value, why not increase the price? His agent is attracting attention in an over-saturated market where PRICE determines closings, yet when buyers compare value it's easy to justify price, yet, seller and agent are aware that closing will require more time.

When you know your client's value, price is secondary whether it's going up or down.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) almost 8 years ago

I heard a story from another agent  that he had listed a home that had been on the market for many months with little action..the minute he RAISED the price $50,000..just under the $500,000.mark..the home had several showings and one great offer that SOLD the home. Go Figure..as someone else said.

Posted by Linda George, Real Estate Broker/Owner, St Lucie County FL Real Estate,Waterfront, Acreage (Morningstar Properties) almost 8 years ago

Amazing ...

Posted by Tina Gleisner, Home Tips for Women (Home Tips for Women) almost 8 years ago

I had to do that with a short sale listing after the bank rejected 2 offers and wanted the price raised to what they would accept.  The property ended up going back to the bank(Fannie Mae) and it is now listed at more than $40K less than what the offers were for.  Don't tell me they didn't get that money from the government to make up for that stupidity in not accepting either of 2 great offers.

Posted by Kerry Jenkins (Prime Properties) almost 8 years ago

Donna, wow, I have noticed the same thing in our area!

Any major repairs and improvements should really be made prior to the home being put on the market, and a good Realtor would have covered this in their listing presentation.

I have yet to see these homes move any faster after increasing their listing price. Maybe they are in a panic because they are seeing other homes in their neighborhood being listed for more, and they want to catch the wave. Wrong! They have in effect
only shot themselves in the foot. Or can someone explain this to me? Haven't we learned from our previous mistakes? These homeowners are either not listening to their agents, or receiving bad advice .

Posted by Lisa Wiseman (Intero Real Estate Services, San Jose, Silicon Valley) almost 8 years ago

I have been seeing more and more of these - sometimes justified by seller making an improvement to the home or by finally getting an approval from the bank on a short sale.  Other times, it just looks like the agent who over priced the property is looking for an offer at the original price.  If it works, I can't knock it but only a seller knows how much pain he/she can endure.................chris

Posted by Christopher Pataki, Hockessin Delaware Real Estate (Keller Williams Realty) almost 8 years ago

R & J, No, it's not a short sale, and we don't do price ranging in my market.

Terrie, Texas has been a relocation meca for years, so nothing new...

Paul, Probably not.

Dave, I see your point, but I was mostly looking at it thinking, "This agent is an idiot!" I'm not sure I want others to think of me that way.

Ken, Multiple times on that same listing?

Loreena, It doesn't say, but it's a newer home, so I doubt it.

Russell, I agree!

Greg, It's a fairly new house, so not sure what they could change to add $50k.

Ted, My same question, if it didn't see at the lower price, how does the builder justify their negotiations when the buyer wants a lower price?

Kay & Lina, Short sales would be different, this is not, but I've seen many short sales do this to please the bank.

George, I agree.

Lou, Yes it does.

Michelle, That's funny!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 8 years ago

L & B, Possibly...

Jim, Exactly!

R & G, Makes sense.

Amy, Ridiculous!

Gene, I've seen the wrong price entered before. I always triple check that price because there's no going back once you submit the initial listing!

Kimo, What you're describing is not my market, so I have no idea how to respond.  A 3/2 at 1500 sqft would be well under $200k in the majority of Texas, much less Austin, Houston, and Dallas which are markets I'm familiar with. But, I do know that you can't compare apples to apples with 1500 vs 2500 sqft. Those are completely different buyers, so value would be very different.

Linda, Interesting...

Tina, Yep!

Amy Steele, Banks are idiots!

Lisa, Or the agent is newer and doesn't really know what he/she is doing...

Chris, Right...

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 8 years ago

There's only one thing I can think of - cannibus lunasus.  Someone's not thinking clearly.

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) almost 8 years ago

Even in Austins market this is beyond understanding.  Keep us abreast of the property and if/when it sells and for what price.

Posted by Gary Steuernagel ASSOC. BROKER, ABR, CRB (Keller Williams Southwest) almost 8 years ago

Very interesting.  I know that Texas is definitely faring better in the current market than we are in AZ - "WHAT AN UNDERSTATEMENT!"  BUT, I could never imagine price increases to that magnitude.  I've done the reverse when listing a short sale with the total debt being the first price, and then strategic price reductions which are signed off by the sellers, but the other way seems strange.  Be interesting to see what it sells for!

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) almost 8 years ago

Can't find a buyer, so raise the price? What a unique strategy. Maybe they think the buyers agent will not look at those details?

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) almost 8 years ago

Had it happen once or twice in the past, and the results didn't warrant the time. It wound up not selling in the end. Then they relisted with someone else, and it sold lower than the original list price.

Posted by Eugene Lew (RE/MAX equity group) almost 8 years ago

While I have nothing do pricing homes, I can tell you about a time when an REA bumped the price up from $200k to $225k... The reasoning: trying to develop showings for people looking in $225-$250k range instead of $200-$225k range where showings had petered out. At least, that was his claim.  I wound up Destaging when the home was leased.

My opinion: sounds like a last ditch effort of desperation...

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Posted by Michael Fontana, @ The Stage Coach (Round Rock Home Stager Austin Home Staging) almost 8 years ago

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