Pricing on the 9s....WHY???

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Real Estate Agent with Broker/Owner, Keller Williams 100000008

 

When you go to the grocery store, you see prices for your daily consumables, usually ending in $.99.  Same thing with cars...this late model peach is $19,999!  Under $20k!  Today only!  It is obviously a psychological strategy, and I am certain it has its place.  Just not in real estate.  Let me tell explain:

You probably know that over 90% of home buyers start their search on the internet.  That's how business is done in 2014.  Consumers have access to EVERYTHING!  Every listing on the market is easily found, and on thousands of websites (a side note here...it irks me when I hear of a buyer saying "I don't know what I hired an agent for...I found the house!".  The odds these days are that you WILL find the house since we are all looking at the same data, but I digress).  So the consumer has a lot of power to shop for their new place, at any hour of the day, on a laptop or mobile device.  The info is in their hands.  

Now, let's say Realtor A comes over to your house and determines that your home is worth $300,000.  However, he recommends that you price it at $299,000 because that is how he prices his listings.  He will talk you into it by saying "well, it is under $300,000 which is a hard number that is good to be under".  You might agree because you are conditioned into this whole pricing on the 9s strategy...after all, you see it everywhere else, why wouldn't it work on your house?  

Realtor B (B for Ben) now comes over to your house.  I also agree the home is worth $300,000.  However, I am going to very firmly suggest that we list your house RIGHT AT $300,000.  You might hesitate.  You might say, "why would I do that?  I was told by Realtor A that I should price at $299,000.  It sounds like a better deal, and it is under that big scary $300,000 number!"   

Here is why I am going to try and get you to price right at that big, scary number.  Remember how we said that over 90% of homebuyers start their search on the internet?  Well, when they are searching, almost always they are putting in constraints on their home search.  Something like "3+ beds, 2+ baths, 2+ car garage, at least a quarter acre, $300,000 to $350,000".  This is how people search!  And guess what?  If you are priced at $299,000, or even $299,999...THAT BUYER IS NOT GOING TO SEE YOUR HOME!  Over $1000, or even $1 difference.  Make sense?  

Same thing goes to reason that if I say it is worth $300,000 and you want to get a little bit more out of it, say $302,000...again I am going to strongly try to convince you to price it right at that hard and fast number of $300,000.  I have no way of quantifying the level of exposure homes priced right on those big numbers get, but I know it is a ton.  100% due to the way that consumers search for listings.  

Of course, if your home is not valued right at one of those big numbers, then this article really doesn't apply.  But so many homes end up getting priced right around these big numbers and so many of them end in a 9!  It is time to stop the 9 pricing, folks!  

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Ben Blonder

Owner/Managing Broker, Kapital Real Estate Inc

Office: 970-797-2190

Cell: 970-420-6166

ben_blonder@yahoo.com

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Home Selling
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Colorado
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Tags:
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Rainmaker
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Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

I perfer to get an appraisal and price it at that and stick to it

Mar 08, 2014 12:21 PM #1
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