In the real estate brokerage field, they’re often known as “setups” or “pinball” homes, and the 2021 improving conditions in some markets could be stimulating more of them.
A setup or pinball property
A setup or pinball property is a house listed with an unrealistically high asking price that pulls in lots of visits by agents and shoppers, but no offers. The problem is this: Real estate agents, including even the listing agent, are using the overpriced house as a negative example to sell similar homes in the area that carry lower asking prices.
Basically, It’s like a pinball machine, the “setup” is the foil — the house that agents show clients to make other, more realistically priced listings look better. Maybe the sellers — encouraged by reports of rising sales and low mortgage rates — insisted on the aggressive asking price and wouldn’t list for anything less. Or maybe the sellers’ agent, not wanting to lose the listing, didn’t fully brief them about what the house could command in today’s conditions.
Boston Real Estate and the Bottom Line
Whatever the specifics, such houses tend to see heavy foot traffic but go nowhere until the sellers drop the asking prices, usually by significant amounts. Before then, however, they may be used without the sellers’ knowledge to market other houses. Since no one seriously expects them to sell at their original asking price, agents are happy to exploit the overpricing to facilitate other sales.
Amazon does the same thing by showing “retail price” for items. It’s a psychological flaw humans have, placing too much value on bogus information, presented at the right time: http://en.wikipedia.org/wiki/Anchoring