Why do people RAISE the list price when their apt doesn't sell?

I've seen this happen w/ and w/o brokers. w/ brokers, it means there are at least 2 people who are clueless... with a FSBO, it means at a min 1 stupid clueless seller.

Long story short, stupid is stupid... w or w/o 6%

sometimes peopel might raise their prices if they get lowball offers. This way it makes it easier for them to accept an offer for 30% below asking.

Somebody might do something like that for 2 reasons:

1) It will be easier for them to accept an offer that is say 20% or 30% below asking

2) Once price raised they will move into a new price bracket on the MLS with fewer other homes therefore catching the attention of more brokers looking for apartments for their clients

ask geithner, he has done it, he should know.

"1) It will be easier for them to accept an offer that is say 20% or 30% below asking"

Yes. They get offers 20% below asking so they raise the asking thinking that they will still get offers 20% below asking, which will now be higher. Why do they do this? Perhaps because they see too many threads on SE where buyers ask "what percent below asking price should I offer?" without regard for the value of the unit (in other words, the sellers aren't the only idiots).

OTOH, I can relate a story which shows how funny things can be:

I don't remember what year is was, but it was somewhere mid 90's. We picked up a unit at 288 West Street which was the last sponsor unit which the sponsor was personally living in. We make a deal to let him stay in the unit and pay us rent for some amount of time while we sold it, but that's not really relevant. At that time, the location was a hard sell as not being seen a "really Tribeca". The unit was around 1800 Sf and had a mtc of like 1600 or 1700. I don't remember exactly what we originally priced it at, but I think it was $249,000 based on what we saw it selling for. The problem was it was sitting and not selling even though we thought it was correctly priced. After fielding calls from a large number of buyers, I noticed the trend that what was happening is that the unit was at the very lower end of the price scale for lofts that size, so the people who were calling were in general "reaching" at that asking price. So when they heard the mtc of $1700, they either immediately balked, or after seeing the unit and running the number figured out they couldn't afford it.

After having a HUGE to do with my partners on the unit about trying this, we raised the price substantially (I think from 249K to 299K). We ended up quickly getting multiple offers and sold it at or above the new asking price. Apparently I was correct in my assessment that we needed to get to a group of buyers who could get their hands around the financials of the transaction, and instead of getting calls from buyers who were dreaming of finding an 1800 Sf loft for under $250K, we got people who were looking for lofts in the $350K to $400K range and could deal with the "high" (funny, but no one would think that mtc was high today) in return for a discounted purchase price by $100,000.

Forward to today, look at any number of buildings (like 250 Mercer) where it used to be IMPOSSIBLE to sell because of high mtc when you could pick up units at $125k to $150K all day long, but when prices went up to $800,000 for those same units, they sold easily because at those levels, the buyers could afford that kind of mtc.

Wow. That's fascinating.