35 percent ask increase

This is something that I have seen happen around winter approaching spring. Very common for property thats been around for a while. Some properties will take themselves off the market and relist it with higher price in spring.

The more legitimate price increases are most often associated with renovations that have been done since the property was originally listed such as new kitchen/bath. The small fluctuations of say $10-20K may be to just push to property over or under a price point to have it show up on the radar of different prospective buyers' searches (e.g., $995K vs. $1,025,000 get the under and over $1M lookers). The latter is a form of gaming the system since changing the price also triggers properties to show up anew in many computerized search databases. Then there are cases where some brokers feel launching the place into a completely different realm will attract buyers who simply wouldn't consider less expensive properties regardless of what they are. That is, some buyers who want a $2.5-$3M apartment simply won't look at listings for $1.9M. Knock that up to $2.5M, and now they'll show up so the thinking goes. It's kind of specious, and the only place I've ever seen it work is at fairly top-end listings where the prices are more detached from easily found comparables. I'm talking Park Ave./5th Ave and trophy lofts/penthouses or the like. If bidding, I would bid off what I determined to be the fair market value, not the current asking price. That's an important concept to remember in any RE bidding situation.

Thanks. I figured it was to attract buyers looking in a different price point, since nothing material changed in the space and they actually seemed priced right the first time. Think it's ok to point out original ask when placing the bid, as opposed to simply relying on comps?

I believe that the more transparency you bring to negotiations, the better, so long as it doesn't hurt you. In other words, graciously give away that which you do not need because it increases your credibility and could add to the good will you develop. Here, there is no advantage you lose by sharing with the seller how you arrived at your bid. Absolutely explain the basis for your offer. All communications when bidding are a form of persuasion. Coughing out a number does little to pursuade a seller of anything. If instead you add to the raw # of the bid amount an explanation of how you arrived there, it could place it in context or begin a dialogue. For example, "Comparable units in the building have recently sold for $x per sq/ft which would result in a value of $Y for this unit. However, this is a lower floor with poorer views and light and as you know the kitchen and bath are in need of complete renovation, so the apartment's value is actually lower than $Y in my view. Even the initial offering price of $Z is above the fair market value of the apartment when viewed in light of these factors and current market conditions. Accordingly, I am offering $XX and am also providing you with a summary of my financials and a lender's pre-approval letter."