Pricing Psychology:101
I often wish I could place even-numbered prices on my listings.
It would be in keeping with my straightforward approach to real estate if I could list homes at price points like $150,000, $200,000, etc.
But research has shown that people react differently to prices beginning and ending in various numbers.
For example, pricing that $150,000 home at $149,999 stimulates people to think it’s a better deal than pricing it at an even $150,000.
You gotta be kidding, right?
Over a lousy $1?
But it’s true!
Further, sellers often shoot themselves in the foot by pricing their $200,000 home at $205,000 or $210,000.
Why?
Because buyers who are looking for a $200,000 home typically look at homes priced at $175,000 to $200,000.
That same $200,000 home would probably be likely to sell more quickly if priced at $199,900 because buyers place greater importance on the first number of the asking price.
Some research I have seen indicates that prices ending in an odd number indicate a greater value.
Hmmmm . . . . perhaps I should price my next listing at $187,721.13?
Personally, I think that’s getting a little too tricky and disingenuous.
The interesting thing about all of this is that, in the end, the property is going to sell for what it’s worth.
The objective is to price the home within range of it’s realistic value and attract offers.
The value of any property = the amount a willing seller will pay a willing buyer.
November 18th, 2009 Posted in Inside Real Estate, Seller Stuff
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