The house hasn’t sold and your agent is singing the same old tune to lower the price. But this time, she’s added more ammunition. She claims that by dropping the price just several thousand dollars, the property should have a new, stronger position in the pecking order in MLS (the multiple listing service.) Could this strategy really help the property sell?

Perhaps. It’s true that MLS listings are divided by price ranges in various thousand-dollar increments, i.e. ($220,000 to $229,999 or $200,000 to $249,000.) These categories depend on how a particular multiple listing service data base is configured as well as the type of property (i.e. residential versus commercial) and the number of potential listings in each category. For example, while listings under $500,000 might be divided into increments of tens of thousands, you might have one blanket category for listings over $1,000,000. If you’re working with a RealtorŪ who places listings online at www.realtor.com, there are $50,000 breaks in some categories, such as $200,000 and $250,000.

The agent requesting the change in price might want to kill two birds with one stone---lower the price and garner greater, renewed exposure for your home.

Here’s why her suggested repositioning strategy could work. Let’s say your home is listed for $250,000 in a category of homes between $250,000 and $279,999. Since potential buyers are often financially qualified in round numbers (i.e. they can afford a home up to $250,000 given the size of their down payment and closing costs required) they might be hesitant to search too far into the higher price category; and instead, look for bargains in the lower-priced listings where excess down payment money could pay for home improvements instead.

By dropping the price even a minor amount, say to $247,000, the property would then be packaged with lesser properties that could have trouble competing in square footage, amenities, etc. to yours. In essence, buyers could see the added value in purchasing your home.

Just as an overpriced home will stall on the market, an under-priced home will send up similar red flags including that something is wrong with the property (thus the drastically discounted price.) As always suggested before making any changes (up or down) to the listed price, make sure the agent prepares a new CMA (comparative market analysis) showing the prices that similar homes have sold in the past several months. It’s important to note that in a heated seller’s market, the agent should call on the most recent sales information to determine market value since the fever pitch of the summer buying market could strength values upward much more rapidly than in winter doldrums or off-season markets. Repositioning the property in MLS doesn’t have to mean lowering the price. Raising the price can reposition it as well. This can often be justified by using off-setting incentives for buyers like agreeing to pay extra discount points to enable the buyer to use a 2/1 buy down in a loan, lowering the interest rate two percent the first year and one percent the second (often assisting the buyer to qualify, depending on the loan program.)

Selling success is often less about your home than it is its competition to others. That’s why it’s important to listen and evaluate each marketing suggestion your agent presents you. It could mean the difference between a house that sells and one that doesn’t.