Question:
“We listed our home for sale for $550,000 yesterday, but it’s not on the market yet. Now we’re thinking we should ask $580,000. Are we allowed to raise the price?”
Answer:
For all practical purposes, you are. I can’t imagine a broker telling you, “I don’t care. We have a contract and I’m going to force you to list your home for the price we agreed on.”
Now, I don’t know your particular situation. Perhaps you should raise the price.
But a word of caution: Watch out for price creep. It’s a dangerous emotional and psychological disorder (related to homallucination, which I’ll explain in a moment).
Here’s how price creep works:
You meet with your agent, review the market data, and agree that $550,000 is the optimum list price: not too high, not too low.
That night, the little devil on your shoulder starts whispering in your ear, “Why not ask more, you can always come down,” or “Gee, I’d like to get more for my home. Let’s just try for more. What will it hurt?”
Then in a cold sweat, after staring at your clock from 3am to 8am, you call your broker and blurt out, “You know, we (you and the devil on your shoulder) have been talking, and we think we want to raise the price to $X.”
The only problem is the market data hasn’t changed and you end up overpricing your home, losing the key initial rush, and selling for less several months later.
Not the result you wanted.
By the way, housing economist Christopher Thornberg coined the term homallucination (i.e. home hallucination) during the 2006–08 market freefall, to describe when someone believes all the other homes or neighborhoods fell in price except theirs.
