When you’ve been looking at that dream house that you’ve visited a few times, suddenly you see the price go up in a matter of weeks or months. Wonder why? There are many reasons, some more understandable than others.
Price up, debt down
One of the first and most likely possibilities is that the listing agent has discovered how much the seller owes on the property and will advise him to increase the price of the listing in order to pay off existing loans and the costs of selling the property.
The owner’s view
Another possibility is that the owner’s opinion of the value of his property has increased; more valuable than he had originally thought, even if the offering price does not match the current fair market value.
Market conditions may have changed in recent months. For example, if a new school opened, or if several other houses in the same area were sold recently then the property will become more valuable and the price will increase.
As with many commodities, the higher the demand, the more money the seller will be able to ask for the property. Many sellers have no qualms about letting buyers enter a bidding war for the listing.
Upgrade, price up
Many times the owner will decide to upgrade his home if he’s struggling to find a buyer or if he believes new additions will make the property more lucrative. For example: adding a new fence around the house, repairing a back deck, or installing a new kitchen. These additions are expensive; they will allow him to raise the offering price.
Homeowners are constantly looking for ways to increase the value of their property both before and after they have decided to list it so seeing price increases comes as no big surprise.