Psychology Behind Home Pricing: $399,900 or $400,000?
When it comes to items in the grocery store, pricing something at 99 cents is better than $1, but is the same thing true for pricing your house?
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Recently, I read an interesting article on the Florida Realtor's website about the psychology of home pricing based on information presented by Robert McTague.
This is a topic that's always fascinated me, so I wanted to share this with you and break down what it means.
WHAT ABOUT THOSE 9'S?
Sellers and agents love home prices that end in 9's - they think it will make their listing seem like more of a bargain than the ones listed at $100 more. But you need to be careful, because you might be losing potential buyers. Here's why: buyers tend to search online in $25,000 increments. If your house is priced at $350,000 - it will be included in searches up to or starting at $350,000. Homes priced at $349,900 won't be shown to buyers who set a minimum price of $350,000.
It may be beneficial to use the 9 strategy for properties priced in the middle of a $25,000 increment such as $310,000 going to $309,900. However, the article also pointed out that luxury brands tend to price items at round numbers like $1,500 - so as a seller, you should want your house to convey luxury rather than bargain basement.
ODD PRICES SEEM MORE LEGIT
What if you price your house at $354,000 or $357,000 - does that help? It actually might. McTague says that a precise price suggests that the seller did a full analysis of what their house is worth, and the buyer might view that listing as having less room for negotiation.
COMMAS AND DECIMALS
If you want to make your house seem more affordable, take out the commas and decimals from the price where you can. Buyers are more likely to see the price of $350000 as lower than $350,000.00.
On the flip side, when you're negotiating or have a price decrease - add in all those commas and decimals. For example, you can market "Home Reduced $15,000.00!" that makes it look like a bigger discount.
Hope you learned a few pricing strategies today! If you're looking to buy or sell a home in the Tampa Bay area - feel free to contact me.
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Melanie is a Tampa Bay area Realtor with Smith & Associates. She loves Tampa Bay area area, houses, and helping clients buy and sell real estate. She can be reached at 813-368-6084 or firstname.lastname@example.org
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