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Each market responds differently to pricing...we would suggest that one reads the marketplace! A
Chrissi Chapman Topoleski
Pacific Palisades, CA
Kristen Correa, Broker
I find greater benefit in using precise numbers such as $237,000.
The $19.99 works for cushions on TV followed by "and there's more" but on a $250,000 house, not so much.
Now the gaming of the numbers regarding $199,999 and $200,000 is more about search tools than psychology.
Ryan Huggins - Thousan...
Thousand Oaks, CA
Kristen Correa, Broker
I go for 199,900
I have seen $1,234,567.89
sold for $1,188,888.88 people put a sense of humor into home price also.
Pacific Palisades, CA
I like round numbers - $175,000, $325,000
We walk a fine line. Each property and related selling motivations are not always the same, so the methods employed are not all the same. We realize most sellers know the market value based on recent sales, so it seems most sellers want to 'push' the pricing envelope and we adopt that stance.
I don't believe any of those techniques work.
I come out at market or slightly below and in some cases slightly above.
I try to get as close to market value as I can, then fiddle with the numbers a little. Like your $200K example, I think $199,900 looks better.
I hate those odd numbers on a listing....price it with a whole number... all zeros...no nines for units, tens or hundreds numbers in the series....
I see builders price their spec houses at weirdo numbers like your example of $237,425. Maybe their accountant pushed that number on them.
Resales usually end in zero or in nine. $237,000 or $236,900
It depends on the market, the property and timing.
Pricing is delicate. A pro understands several factors. Location is critical. One side of the street may not sell the same as across the street just because of what one backs to vs. the other. Watch what others like it have sold for. Get skilled on what adjustments to make for those differences. Watch days on market. Know if you're in a multiple offer market (rising market) because then you are not paying attention only to the past sales, but the direction the sales are going - forward. Like I said, it's delicate and takes some skill.
As far as psychology - the .99 has been around forever and a day. But think data driven and you will be on the even 00 because you catch the range 150-200 and you also populate into the 200-250 search, for example. So... if you're going to trick people go .99 and if you're going to benefit from data, go with even numbers.
I am not into tricks.
Depends on the local market and the price point
Yes and yes.
I personally like round numbers myself. Let's start negotiating.
I find 8's work great. $248K vs. $249K. An unusual number is never a bad idea, but the precise numbers like the one in your question are actually hard to remember so I personally don't think they would work.
Markets differ - in my area fancy techniques seldom sell a property
I go with even numbers 200 or 550 etc
I do not, I use all kinds of pricing
Stage it and offers will usually arrive at a much higher value.
Yes, some price points are psychological as well as knowing agent habits in search. They will search up to $200,000 but not $205,000 so don't price at $201,000.
Another part of the pricing but maybe worth mentioning:
If you add a bonus amount for the realtor bringing you the buyer you may get some of the realtors that look especially for this type of extra income.
Lots of different things employed that's for sure. I've so far tried everything 750's, 888's.
If you have to go under your competition in the MLS that's usually when the 750's kick in for me. I still do not round up like to 200,000. I'm not sure I buy it 100%. I know that the home will in a double search from a buyer but then there is the psychology of the 999.
Hell, even Walmart uses the 99.
Chrissi Chapman Topoleski No techniques, just pricing supported by comps and letting the client decide on the price.
I have not studied it at all, but I would be willing to bet that I am doing it without even knowing it, haha.
The "dollar under" method is common out here, but I find agents can be lazy. They are not going to look outside of the price range, like I do (5k in both directions) and you may miss that buyer with a 200k floor.
Knowing your market is the key..every market varies. I would however suggest never to price @$199,990, always a $200,000. Buyers search in $50,000 increments and if you price your listing at $199,900 your home doesn't get picked up from buyers searching from $200-$250,000. I use the law of the nines when its $159,900, $169,900, $179,900 and $189,900 never at $150,000 or $200,000.
Sounds interesting Chrissi, let me know when you write a post on this topic, I am sure that I could learn a lot from this.
I heard one instructor say that pricing at even numbers that match up with search parameters was the way to go such as $200,000 would get people searching $175,000 to $200,000 and those searching $200,000 to $225,000. Rarely do people type in $199,999 they go for even numbers and see what comes up. He said you could get double the lookers.