$2,000 Price Reduction: Strategic or Silly – The Sequel

A week or so ago, I posted about a home in San Anselmo, that thinly shaved $2,000 off its price – not really sure if it was an intentional move, expertly plotted and discussed well in advance or just an impulsive, not well thought out, silly manuveur.  Based on comments from readers – the final vote was that it was just plain silly.  Always wanting to give the benefit of the doubt to the owner and agent, I’ve been keeping my eye on this property, secretly hoping that someone left a zero out somewhere.

Sure enough, this week, the price was dropped to $711,000, from last week’s of $713,000 and from the original $715,000.  Yep – another $2,000 price cut.  I couldn’t believe my eyes at first.  No way, I thought would they pull this again.  Lo and behold, the facts were there, plain as day. 

Troubled, I tried to investigate.  The listing itself had provided no insight for these strange, non-sensical $2,000 reductions.  Alas, I found my answer from their listing on Craigslist – each week, the price gets reduced by $2,000 until sold.  So ok – now I get it.  But, my question still is left hanging…. is this a good strategy?

Running some quick numbers, the $2,000 weekly reduction is just not enough.  As some readers commented – 3% is not reduction that turns a lot of heads.  Ten percent and anything in the double digits will attract more attention.  With the chart below, at $2,000 a week – it will take almost 11 weeks to get to 3% off the original ask.  (That’s 9 more weeks, i.e. 2+ more months from now.)  And for anyone looking for that 10% disocunt, you’ll have to to wait just about 9 months from now.. i.e. see you in 2009.

 So – now that I know the strategy… I still think it’s still silly.  And bordering on somewhat stupid.  Why would one employ such a tactic?