When is a Price Increase Really a Drop?

Normally, you don’t raise your price when your home doesn’t sell.

However, every rule has its exceptions.

The best example of a legitimate price increase is when the homeowner has invested substantial money to correct a defect — for example, putting up a two-car garage where there had only been a one-car garage previously.

Even then, it’s smart not to bump the price by the full retail value of the improvement.

That’s because it’s seldom the case that homes fail to sell because of one, specific issue; typically, it’s multiple issues, including a too-high asking price.

So, to go back to the home with the new, two-car garage: bumping the price, say, $5k is really a price drop, because $5k is less than the value of the improvement.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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