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Why Are You Pricing Your HOME Like Clothing at the Mall?

Why Are You Pricing Your Home Like Clothing at the Mall?

Pricing Property Like Clothing? Sellers who really want to sell their property NOW so that they can move on, are more involved with analyzing their price point than ever before. It seems that most sellers want to price their property with something that ends in '99'--$599,000 or $599,900, etc. Here's what I ask them:

"You're about to move to Raleigh and your Realtor® has set up a search for you through his/her MLS. Can you tell me what your price parameters are for that search? When you're searching online at night for homes in the Raleigh (or destination city of choice), what price points do you use in your own search?"

They'll say, "We're moving up a bit so, we enter $600,000 - $700,000."

"What if you were searching from $600,000 to $700,000 here in Charlotte? You would completely MISS this home in your search! Had you priced it at an even $600,000, you would capture buyers from both the $500,000 - $600,000 AND the $600,000 - $700,000 ranges. Setting the price at $599,000, will cause you to lose an entire group of buyers for your home!"

pricing property as it should be priced!

They look at me for a minute and my analytical-minded clients have an ah-ha moment! Then, they competely agree with me!

Try it, it WORKS! I recently listed a townhome in a complex that had 23 townhomes on the market when we listed. We priced the property at an "even" price and we were under contract in 10 days--last one on the market, first one off! If you searched MLS for the even number, either way (least price or highest price) you would catch this listing! When you look at the others, every one of them were 'off-beat' numbers and were missed by 1/2 of their prospective buyers.

Stop pricing your homes as though they were sale-price clothing at the mall! Use those 'round' numbers and see how it works for you. You'll instantly expand your pool of buyers!

Your sellers will love you!

Posted by Debe Maxwell, Realtor® - Charlotte NC MLS - Charlotte NC Neighborhoods on 10/13/2009 06:38 PM

Comments (179)

Sales Tips and Tactics in the Sales Strategies / Tactics Channel

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Originally posted at: Charlotte NC Luxury Home Source: Why Are You Pricing Your HOME Like Clothing at the Mall?

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179 Comments on Why Are You Pricing Your HOME Like Clothing at the Mall?

OCT

Debe, Could you price the property at $600,000.99? That way they could have the best of both worlds. I know - smart a$$ but I am in just one of those moods this evening ☺☺☺

Here is the reason we do this in our MLS...

The top value in our search criteria is not an EQUAL TO, it is a LESS THAN. So, to search for $600,000 to $700,000 would only give us properties from $600,001 to $699,999.

Good job on the blogging! I am going to use you as an example of how to do a better job on my own. I agree about the pricing thing, but as Christianne points out, different for all of us.

Darn it Debe. Now I've got to go see if this works here and get price adjustments for all my listings if it does. You've given me work to do. Drats!

Hi Debe...Now why didn't I write this post. I just went through this discussion (by e-mail) with one of my clients.

Our mls requires us to enter the search amount and I always round off the numbers. That is exactly what we are going to do when we decide on the list price (staging is being seriously considered, I hope).

Thanks for bringing this subject up.

Kate

A top agent in our office has been preaching this to newbies for years. Wise words!

Hi Michael! You ARE trying to mix-it-up a bit, aren't you?! No, we can only enter whole dollar amounts here in our MLS!

Christianne: Well, that won't work for you but, agents across the country who have tried this must not have that type of search criteria. However, when people are searching on Trulia, Zillow and Realtor.com, they are true searches ($600K IS $600K)! I guess you have to see where your biggest source of buyers is coming from and decide from there.

Hi Debe, You've given me something to think about. I may have reconsider the list prices I suggest.

hi Debe, if you change "Why Are You Pricing Your Listings Like Clothing at the Mall?" to "Why Are You Pricing Your Home Like Clothing at the Mall?"... You'd have the perfect title for a book every home owner should read. ;-) Just sayin!

Debe - excellent post, and I too have used the same lingo with my clients - missing the next group of buyers. I explain that is how I search the MLS - I don't search from 599K to 699K. Maybe 550K to 700K. Excellent post as always!

Kimberley: That's true! However, the major real estate sites use true numbers--I went out and checked them out before I tried this technique. As I told Christianne, I guess you have to research your buyers and see where they, indeed, located the property.

Marian: LOL, I just listed one that wanted to list at $449K to be 'under' the $450K mark and we went with the even number as some will search between $350 - $450 and $450 - $500, for example. Hey, I'm ALL about getting my listings SOLD and if it works, then I'm going to make sure they implement it!

Kate & Linda: You're right--it DOES work and it took me awhile to figure this one out!! I took a seminar where the speaker did that and I KNEW right then that I had to get my pricing in line for every listing that I had! It worked!

Barb: Good luck with it! Let me know how it works out!

Marti: DONE! Excellent idea and hmmm...what about that book?!!

Hi Sharon! Thanks so much! Hey, did you have a chance to check out the notes I sent you?! Good stuff, dahling! HI to Chritine for me!

Debe, you are so smart. What a difference a dollar makes!!

Yes, and that $1 could have cost a seller $1000s. Thanks for the post, Debe! It's always great when we can let sellers (or anyone) self-discover.

Great point, Debe. For some reason the common wisdom is that is sounds so much less with a 5 in front of it than a 6.

Debe- Our MLS is the biggest source for buyers here in our market. We do use odd numbers but not 999's. Everyone does 9's so we do another #, can you guess what it is? You most likely know because ALL of our listings end in those #s. :) It is a way to market who has the listing also. That benefits agents who know we know how to close short sales:) Katerina

Debe,

Thank you ma'am for the suggestion and the point about loosing a whole group of buyers.

Debe - I have used both techniques. Sometimes, the Wal-Mart psychology seems to work, other times I just think about those who are using round numbers for their search. Great point!

Debe, you are EXACTLY right. I have been having this discussion with other agents in my market area -- though many times you would hope agents would go down to $575K or so, and up to $725K, but you never know!!!!

Debe, this is a great suggestion for people who don't know about it. We also have explained to Sellers why pricing at an even number makes sense and they agree every time.

Debe - I know a number of agents who preach this principal. It does depend on where you are searching, it seems, since some sites allow you to put in the numebrs while others privide categories. And of course when you are dealing with variable range prices it gets more confusing since they overalap categories, although I suspect it depends on how the MLS treats VRM.But then that's the ratioanl behind it...to reach a broader ranges of buyers looking in different categories.

Jeff

Debe,

I do not know about it. The way we see it her, and maybe this is simply that we work with way lower priced properties, is that people, when searching, set the limit. Let's say not more than 150K, or not more than 200K.

If we do the search, we would be go to $225k in a decent market and to $250K in a market like today, but day to day life shows that most agents put the limit the way they are told.

If I see a $209K price, I think that agent is a newbie or does not think clearly. This property will not show on the radar of those searching for under $200K, and the Seller might be thrilled to sell for $195K or even less.

What we do, however, is advise Seller to get under the even number but for buyers to offer even numbers.

On a $200K home I would suggest the Seller to put $199,900, which will show in all searches of properties for under $200K, and for the Buyer I would suggest offering $200K.

Psychologically $199,900 is not $200,000, or, better say, $200K is more than $199,900 by way more than $100.

This is a very unexpected angle... i would love to reconsider this if I move to a class where buyer would not mind a couple of hundred thousand up or down. Until i am in the market where $10K would be a big difference, I would stay to playing with pennies (LOL)

Gary: I love it--should have used that for my title, huh?! :-)

Barb: EXCELLENT point! It's about getting the listing SOLD and not playing 'discount' home for sale!

Jane: True but, if you're searching, you're not going to search just to $599--the thought that buyers can get a deal seems to be the prevailing one these days so, price really doesn't have an effect on what they'll offer but, you want to capture BOTH groups of buyers!

Katerina: I get so many inquiries from internet sites that only allow for even numbered searches so, I make sure that they fall into BOTH categories of buyers so that I don't lose one half of my buyers by using an 'odd' number. I used to use the number 7 for everything because the first two homes that I listed sold with that number. Then, when I realized that people werent' searching for odd numbers, I didn't want to lose half of the buyers any longer. It really does work!

Hi Debe - I've used this same pricing model before. How do you handle price reductions? Do you move to the next breakpoint, step down in $10,000 increments, or something else?

Debe.......been preaching this for about three years... http://jmacsays.blogspot.com/2006_04_01_archive.html it just makes sense to me. thanks for the timely reminder

haha- I make em sign a "I told you your home wasnt worth that dummy" form. Works everytime!

Don: Hey, hope it helps! I decided to finally try it when one of the NINJA coaches from one of the most successful brokerages in the country confirmed my theory. The very next home I tried was that townhome that I referred to in the post and it worked beautifully! If you think about it, it makes perfect sense!

Jason: Thanks! As I said, I've already proven it to work as have others--it's worth a shot!

Marney: You know, you're right, you just NEVER know--but, it does make all the sense in the world!

Sharon: I use this now with every listing and the analytical seller always recognizes the point! The drawback, when it's time to reduce if we haven't had a sale--they don't want to come off of that number for fear of losing potential buyers!!

Jeff: You're right! As Christianne said above, her MLS does not take the whole numbers--it goes to the last number--ie, if she enters 600K, she'll only get up to 599K.

Hi Debe, That's so simplre I never thought of it that way.

Linda Metallo, Re/max Impact, Lockport, Il.

Hi Jon! I had a seller in the $150K range who did this too--she wanted to list at $145K to get it sold quickly. I asked her if we could give $150K a try and she agreed to it for a week. The first showing--we sold it! We wound up at $147K and she was absolutely thrilled--she had $2K more than she was even going to list and she was the first one to sell in her condo complex in over 3 months! I have another one right now that wanted to list at $189K for a quick sell. We put it up at $200K and received multiple offers. So, the lower priced properties tend to work just as well as the higher priced ones!

Hi John! Funny you should ask--NINJA coaching tells you to ALWAYS let the seller price their home--you're in charge of the marketing, they're in charge of the pricing. However, I do recommend this technique and if we have to reduce the price, I let them manage it from there. If they are talking about going from, say, $500K to $460, I suggest trying either $475 or $450K--those are logical, searchable ranges. But, I do feel that any of the numbers, including what they are suggesting is going to be positioned right in the middle of most searches anyway--most will search by the $100K's--$400 - $500, etc. So, their number will be just as effective as mine in that instance.

John Mac: I quickly looked to see if you were from the firm that did all of the research on this technique--I had pondered it for a long time but, when this firm provided the statistics to show that this was highly effective, I had the affirmation that I needed!

Larry: LMAO--I love it! I'll have to remember that when I find myself in that position!

What a great point! Debe.. this is awesome

Linda: I'm trying to locate the data that proves this--like I said, I used to be hung up on using sevens ($550,700, etc) and when I saw this data, then tried it and it worked, I was hooked!

Thanks, Judy! Give it a try and let me know how it works for your sellers!

I can't believe what dinosaurs some agents are. My husband was looking at the Sunday paper real estate section and said what is with the 295,900 or the 299,000 ... This would seem like a no brainer, but so many are just so stuck in their habits, even to their detriment.

Debe, another great post with another great piece of advice. Checked it out and indeed my MLS does work like yours.

Hi Debe ~ I've always the round numbers myself. I agree with you about the search criteria, but would take it one step further...When a buyer comes to make an offer on one of those homes with 900 at the back, in my experience they simply ignore it. In other words, if a home is listed for $149,900 the buyer thinks of it as $149,000 and works from there when making an offer.

Sis, I learned this technique a few years ago at a "Ninja" seminar, and forgot all about it! They had statistics to back it up, which made a believer out of me. Then, I moved and focused on buyers... I will have to implement this new strategy, especially since I am going to focus on listings as soon as my office is up and running :) Thanks for the reminder. YOU are the best my friend!

Joan: I know--really! Why keep doing something that does not make sense--more importantly, is keeping a great group of buyers from EVER seeing your property!? Keep making the same mistakes and WONDER why you keep getting the same results! Oh, well, they live and learn, right?!

Leah: Thanks so much! I think most do so, it definitely is, as Joan says, a 'no-brainer!'

Denise: EXACTLY! Now, it doesn't even matter what the price is at all sometimes, when it comes to making the offer--some are going to low-ball no matter WHAT! With the $1M+ listings, they'll offer hundreds of thousands off the price, regardless of the list price. More importantly, regardless of the fact that we've priced the home to SELL already--we've already factored in the 'discounts!' Makes my sellers and I just crazy!

Hey Sis! So, am I going to see in in RDU on the 5th? I've got to make my reservations yet but, can't WAIT to see everyone! This was a NINJA seminar as well--thought that it made sense before but, when they shared the data, I was SOLD! (pun intended!) Hope you're doing great and how IS the office coming? Did you ever get Ricardo to set you up with a RET site? Mine is ALMOST ready--can't wait to get it up and running for my partner who is specializing in short sales. Hopefully it will garner her some business!

Take care and have a wonderful Wednesday!

As the internet searches became more and more popular, I have tried to do this as a practice....

I've even given it a name... I call it "Node Pricing". Basically, concentrating on pricing at nodes where various searches come together.

Hi Debe -- You are so right to catch the interactive website searches. I have found that many of my buyers are also manually searching both a bit above and below what their actual range is so they don't miss anything, but each buyer is different.

I have been doing this for about a year now.....when I can. Some sellers are still a lot smarter than me.

Deb - My mother talked to me about this awhile back, but I have just never implemented it. Great advice! I'll give it a try!

Hey Debe -

I too have been doing this forever as it just makes perfect sense in the Internet/Computer world that we are in (hence my listing in Heydon Hall that you've shown that was priced at an even $1,000,000). Whenever I explain this to my Seller clients who want to list on the "9s", they almost always get that "AH-HA Moment".

However, I wish there was a way for the Internet to search on the even number (i.e. $600,000) while the buyer sees the lower number (i.e. $599,900). Psychologically there is a difference that is larger than $100 between my two examples. Since many agents still subscribe to the "9" philosophy, I still get clients who insist on the lower number and I go with their wishes.

Whenever a price reduction is needed, I also try to find the next logical price break to capture the most potential buyers for my clients and list it on that major even number.

Debe, great post....sound shallow? It shouldn't . I have just begun a follow up post based upon your thoughts. You're brilliant my friend! yeee haaa! Deb

Oh by the way....look for it. You're in there.

Deb

Debi very interesting. I've never really thought about it that way but I'm an oddball anyway :) I love HUD REO prices that come across my desk. I closed on on a $100 down loan about 6 months ago and the sales price, kid you not, was $164,233.

Our top Broker has been preaching this to all new agents for years.

Pat & Lane: SMART, very smart! ;-)

Chris: You're right--that's exactly what they do! If they don't want to go higher than, say, $550K, they'll move it up to $600K thinking they can negoiate down to $550!

Damon: LOL, sometimes you can't convince them but, it does work nicely when you can!

Lina: Your mama is always right!! LOL

Don: Same here! I try to always let them set the price but, give them gentle guidance when they'll take it! And, I DID notice your HH listing at $1M and thought just how SMART you are!! :-)

Debe... What a great point... I have heard the discussion both ways and have actually tried it along with the odd pricing such as $599,897. This never really worked. I agree to use the K.I.S.S method and stay with the even numbers as in this post.

Congratulations on the feature !

Debe,

I've heard this argument before, and I think it makes sense when considering how people usually search for homes.

Deb: YOU, shallow? NEVER! I look forward to your post!

Ken: I always crack up when I see those HUD prices! Funny but, I've never said that to anyone and you notice that too!

Megan: I have to say that I agree wholeheartedly with your top broker!! Sound advice!

Roland: Thanks! The theory is that you cut your prospective buyers in HALF when you use those 99 numbers. Now, more than ever before, it's crucial to get each and every qualified buyer to our listings so, I think this is an important step in getting them in the homes.

Christine: I had this number 7 theory as being my 'lucky' number and found that it really wasn't my number that was working, it was the homes that were selling themselves! Now, price is imperative and I'm going with the no-nonsense method for my sellers when they can!

Oh man, now I need to fix my listings ( I have 2 at $999,999)

I never really looked closly at it. Thanks for breaking it down!

OCT

Debe - I often recommend this technique myself for the reasons you listed.

However, when putting in offers, I sometimes recommend ending the offer in one or more "8"s.

Exactly right -- but sometimes the sellers insist on the "mall prices".

Debe, I have done the same thing...not all the time but some of the time for the reasons you mentioned.

On the major Big sites, R do com, trulia, zillow that is how the consumers put in their criteria.

If you do the 99,900 thing you miss all those putting in 50-100 and 100 to 200K

Glad you posted this and it confirms my thoughts, I need to do it all the time.

Debe - Great post! I have this same conversation all the time with my sellers. I tell them that we don't sell tomatoes by the pound! We sell houses! And. you're so right about search criteria. I try to bracket homes to hit both a buyer's high end of a search and a low end of another buyer's search.

Now about that client that's moving to the Raleigh area.....!!!!

Debe:

I sometimes wonder about the strange prices on some homes, not just the 99's but prices like $595,500 and 595,555. I always think that this must have been some sort of compromise to make the seller happy but I don't think it accomplishes very much. I would tend to agree with your even number policy. It just makes more sense.

Your absolutely correct about price points and internet listing searches !!! We been using this principal since somewhere in 2007 and have been able to drve better traffic to Seller's homes(who get it).

I live in a market with a lot of Asian buyers and sellers. Since the number 8 is a lucky number in several Asian cultures, many listed homes have several 8's in the list price, like $679,088.

Your point makes sense, but sometimes people feel compelled to price their home a certain way because "$699,999 sounds better than $700,000" or "7 is my lucky number so I'm pricing the house at $777,000". Its not always logical or sensible.

Everyone likes those numbers with 9999s in them. They think the 9s bring luck, Debe...

Maybe we should buck the trend and go with the 0000s....

Great post Debe and so true. I have used the same reasoning with my sellers. Sometimes they are just not reasonable and you have to walk from the listing. THere are times when an overpriced listing can hurt you more than help you.

I haven't read all the comments so I bet this has been addressed: Most agents know how to search other than the numbers. I don't know that I have ever 'missed' a perfect property just b/c of a buck. The listing should be based on what the market is indicating anyway. cw

Great Point. You want to get your listing in front of as many people as possible.

Great post!... I personally have made it a habit to search for homes that are 10-15% under and over my clients price range. Mainly because of the way agent price their listings. I hope agents kept pricing their listings this way. It makes me look like a super hero when I can find my clients a listing that they have not found yet on the internet. ;)

Simple, but true...However, Sellers in my market need to worry far more about pricing in the range of recents sales which is considerably less than the 999 range....

Hi Debe, makes sense - although when I'm doing the searching I always search lower and a little higher than what the buyer is looking for - that way all bases are covered.

I had a lot listed with a nice even number for months. We reduced the price to what my seller chose- $39999. and had 3 offers within 10 days. Sometimes people love a sale. :-)

I agree with the "even" or "node" pricing. This has been my area of focus for thirty years and this is a good idea. When I started in 1972, buyers would look a few "pages" over their price range. Now with the precision of database searches, you must not only be priced right, but at a number that may be included in two searches.

Whenever you talk to buyers, ask them what their search parameters were and start to get a feel. Some databases have pre-filled ranges so be aware of those. Realtor.com is freeform entry.

But bottom line, being ON the node won't solve being OFF market value.

Hey Debe....Yes, good point! Pricing at $600k would capture both markets....DUH! Great blog--Super Helpful on a very important strategy!!

Interesting spin on property pricing, Debe. I'll have to see if that works. Our MLS does allow us to end our seraches within that range, so it shouldn't be a problem. Thanks!

Debe,

Great advice. I often suggest that people reprice their homes a little to put them in a different pricing strata. :)

Steve

Debe, I agree with you 100% and have been doing that for a long time. When I teach classes to other Realtors the argue that $599,999 sounds cheaper than $600,000 so is much better. I also have seller's who also say that.

My argument is always the same.

First, it used to be that many to most websites had price range drop downs such as minimum price which would say $500,000, $550,000 and so on. The maximum prices would be $549,999 and $599,999. Today however most websites including Realtor.com allows you to type in the figures. Many will put in $500,000 to $600,000 while others may search for homes from $600,000 to $700,000.

I then tell them that if you price at $599,999 or similar number you are catching those searching for homes up to $600K but not in the group of $600K - $700K. I tell them by pricing at $600K you are included in two searches compared to just one.

Also when results come up, they are often sorted high price to low price or low price to high depending on the search protocol of the website. Now imagine it is high to low. The $600K properties would show up before the $599,999 homes. I would rather have my listing seen first rather than tenth or twentieth. And of course if the prices show up in low to high sorting, then it will not make much difference in the $500K - $600K search, but then again in the $600K - $700K price range will come up first.

I believe this is a much better way to setup pricing, but the majority of agents and sellers disagree with this.

It all depends on where the true market value really is...A very smart and engaging manager once shared the strategy that you suggested. Fundamentally, it makes sense to reach the broadest target but unfortunately, by bumping the price up to the next range, the Seller loses all those buyers who would stretch up for the property or feel they are getting great value. Instead, the new price range is targeting buyers who feel they are 'settling' if they can afford more or perceive the property as over-priced depending of course upon the competition.

Great point Debe. I like your thinking and that's how I have been doing it for about 3 years.

Working this pricing strategy into a listing appointment when your competeting againist other agents can show the seller that you understand marketing and how they buyers are thinking. Something every seller needs.

This is a great post! Such a simple detail makes a HUGE difference! Thanks again...

"On a $200K home I would suggest the Seller to put $199,900, which will show in all searches of properties for under $200K, and for the Buyer I would suggest offering $200K.

Psychologically $199,900 is not $200,000, or, better say, $200K is more than $199,900 by way more than $100." I liked this idea too when making an offer in a competitive market a seller would jump at the round number that was $100 more than their list price at $x99,000

Simple wisdom folks. There is still some realtors pricing with crazy numbers like $387,437. Their explanation is that an unusual number sticks in the minds of buyers and agents alike...

Debe~

I say take Marti's advice and write that book...I'll buy it as a gift for listing clients, that's for sure ..

Super post, BTW. THX.

Thanks Debe! What great advice. I am going to look in to it.

Debe, great post. This is a tactic I've been using for some time with my sellers. It does depend on the price range though. When you're up in the 900's and up, probably doesn't make that much difference. Also, down in the really low price ranges below 150 or so.

Fabulous post, Debe! To quote Gary Keller in SHIFT! - "Pricing gets you in the game - Staging gets you the offer."

Interesting to see everybody's comments on this subject. It is definitely easier to list something in the 50,000's to capture buyers on both sides of the number, but I agree, there is just something built into our minds that $599,900 is much, much less than paying $600,000.

I love it! I've just starting using this theory and I believe it works! I finally got a house under contract when it dropped to $400,000 -- EVEN!

Debe,

I have been doing this for years! I had that a-ha moment in a Keller Williams Listing Clinic with Gene Rivers from Florida before I even became a Keller Williams family member. It totally made sense then as it does now and I'm truly amazed that ANYONE still prices things the old fashioned way. It's all about maximizing the exposure and this certainly helps to do that! Great post!

And...if your sellers are moving to the Raleigh/Durham/Chapel Hill area, please remember The RTP Home Finder...Susan Crawford! :) I'll take EXCELLENT care of them!

Enjoy this rainy day in Carolina!

Susan

Great blog Debe, I learn something everyday!

Hi All! I think the majority 'get' the strategy but, for a couple of commentors, I'd like to add--

Suppose your seller is priced at $199,999 and a fellow agent or individual buyer is searching $200,000 - $250,000. They are never going to see your $199,999 listing! You've missed a good chunk of buyers by pricing $1. under their search! The psychology of getting a 'deal' with something that ends in '9' is not applicable to property--it is, however, applicable to Wal-Mart items!

Case in point, how many offers have you ever received that end in '99'?! Studies have shown that the analytical buyer prefers even numbers--they can wrap their heads around them--if it's priced at $199,999, they THINK "$200K."

Just food for thought!

Debe - We agree exactly with you! You have to position homes so that they can be found by perspective buyers on the various websites and by the agents creating searches for them. We used to do it the other way, but after a CRS class in Las Vegas with Jackie Leavenworth, we realized that with the $xxxx9.99 strategy we were effectively losing half of the buyers out there.

Debe, I had retail stores for 16 years before I got into real estate. This is a hard habit to break for me. I still remember the old Earl Scheib commerical, I can paint that car for $99.95!

Great Post!

I read something about this before and TOTALLY agree with you and have made changes to my pricing structures. For my MLS, this is important.

Definitely makes sense and has proved beneficial for me. I explained my pricing strategy to capture both sides of a standard price point just last night - sellers hopped on board and I have a new listing.

"NINJA coaching tells you to ALWAYS let the seller price their home--you're in charge of the marketing, they're in charge of the pricing." That is such a great way to take a listing-as long as the seller really takes esponsibility for the pricing.

Great advice. I went and checked our MLS and used a variety of search methods. A search of $600-700K will result in that exact range. Often I think of what the potential buyer will use as a price range when searching for property but from now on I'll implement much more care. Thanks!

I know it works with higher end homes, a house priced at $1,200,000 will get many more hits than a house priced at $1,199,900. Thanks for the reminder, time to take a look at all my listing prices :-)

Good point Debe, I always talk to my clients about the correlation between the price and the way buyers search for homes online. If youget any of those Charlotte people looking to move to Wilmington, I can help them find the good deals, even if the prices are odd.

Debe,

I have never understood why agents do this after reading some of the comments it would appear I am not the only one!

Good post and a very worthy feature.

The thing I've noticed about pricing in the "9s" is that buyers just lop off the last three digits of the list price when it comes to making an offer...assuming, I guess, that the seller wasn't really serious about that $999 part of the price! With round numbers they understand that they are offering $1000 less than asking! Great post!

I guess that's what makes the world go round.

Very good point. I will have to give this a try. I had used for a while $XXX,875 as we had read that buyers associated the number "875" as good deals.

Those houses did sell quick and the number seemed to stick out in Buyers heads, however it is so hard to know if it was just the number, the house, or our amazing marketing :)

I had not thought of the pricing in those reasons. Light bulb moment!

Nice Blog, Debe. I've found that it helps clients think more clearly about the bottom line & doesn't convelute the #'s for them. It's simple math! The more and more we can help clients to get on the same page, think and communicate on the same level.. The better the transaction!

Well put! That's how I price my listings, too, and both Sellers and Buyers appreciate it. Seems the right thing to do for all of the reasons you stated.

I have been using these whole no. incruments with my Buyers when asked to find homes for them to view. If they say they are searching for a home that is priced at $300,000 ,then I search for homes between $300,000 and $350,000. I do incruments of 50k here rather then 100k because of our market. You also need to know your buyer and what will be acceptable home buying for them. However, if we find something a little over their price range, we just lower the offer and negociate with the seller. But you do need to know you buyers financial ability and taste. Rounded nos. definately work better for me. Thanks for the confirmation, Susan

Good idea. Even if the MLS or other sites have different ways of searching, you can show sellers that you are thinking and trying ALL ways of getting the word out about their property.

Debe, this is a great idea, I will use it the next time I am listing a property!

Debe, Thank you for the information. I have telling my Sellers this...but they are stuck in the "retail" world. I will start doing this. Thanks Cheri

Hi Debe, interesting post, the simple logic that makes things happen. Thanks for sharing.

Hmm. I have been using "exact pricing" for about a year with much success. Now I'm trying to remember where I got the idea from - I think it was Rick DeLuca. The studies showed that consumers perceived round numbers as a guesstimate (and therefore highly negotiable) but exact prices were perceived as being an appraised value or something similar (not ending in 999 though, BTW). The result was that the exact prices sold for 5% higher prices on average. When I went to exact prices it seemed to work well. Of course, whether the homes would have sold for round numbers just as well I'll never know... I tend to think that buyers for the majority would be smart enough to select the search range above and below - certainly buyers are taking their time and looking around more than ever!

Great thought-provoking post, Debe.

Well, I'm not sure I agree with you. But, I like to consider all angles - and that's the reason I keep coming back to Active Rain. Thanks for sharing.

It does depend on the MLS data fields, but I'm inclined to agree.

I think sellers want it because they SEE it so much -- AND/OR because at some point an agent suggested it.

I've done it in the past and am also moving away from it.

For the reason you stated AND because people don't seem to consciously notice all those 9s at the end anyway. :) Rock on Debe!

Now Greg THAT is a cool pic of you! :)

Debe, Thanks for sharing. I agree with the concept of doubling your access to buyer's searches. I think your advice has even greater value in markets where inventories are high.

Hi Debe,

I read this while not being signed into Active Rain. I agree with your pricing technique. However, that wouldn't apply to my listing priced at $549,000. Or should it be 550,000? : )

PS- I emailed you about a referral today.

Here in the Pacific Northwest, hardly anyone ever prices a home in even money like $400k because a search up to $400k will not yield a home that is priced at $400k, only just under. In addition, I have hadly ever had a client ask me to put a bottom price on a home search, only an upper limit. So, your technique looks good for there, but probably would not help here very much. It does sound like most of the agents that replied would benefit from your strategy, however.

I started a new thing this year and I end all my listing prices in the number 37 which I picked because I wanted something off the wall that would stand out on a list of 000's. That is the year of my mom's birth...so I can remember it! :o))) It gets people talking and I always get questions about it. I agree with you for sure...I do think more agents should be aware of the search protocol for their MLS before they price.

Debe. I agree with you. I have been teaching this to our new agents for several years. Most popular search sites use this search method. Thanks

Debe - Well said. Of course, I don't get that many direct buyers. Most have agents, so that is why we price the way we do. That was also the same with the MRIS system that covered Maryland, DC and Virginia while I was there. And therein lies the rub. People who are NOT in real estate are developing the software that we use, and we must adapt to their constraints. Definitely a peeve of mine!

Most agent were trained to do 599K, etc because it gave the perception of being less than 600K. However, most of us I thought had changed to the model you discussed because of the prevalence of the internet. We have to price the way a buyer searches to get the most exposure for the property...and hopefully attract that right buyer who's putting pen to paper. Totally agree for my area.

Great idea and information today Debe.... i'm going to try it today! Just got a new listing.

Thanks so much....

Patricia/Seacoast NH

I completely agree Debe. If the price close to one of those top or bottom borders, it pays to price it so the most buyers possible will see it. Get it on their Radar ;)

Bernice Dubon in Calgary Alberta, Royal LePage Solutions

www.YourHomeinCalgary.com

Hi Debe,

I also like pricing with whole dollars because it gives a sense of confidence in the selling price to those who come across our listing. The "99" factor just looks like I am trying way to hard to get folks attention and in this day & age of REO & Short Sale madness, a more straight forward honest approach to marketing a home is refreshing I think. Cheers to you for putting this great point out there for discussion.

The "99" factor with the software search issue of "less than" of the high dollar amount in a search range, and not equal to, is a major glitch to this approach though -- well pointed out by many member replies here.

Paul Weir
United Country - Town & Country Realty
Grass Valley, CA

Debe.. I agree with you a 100% - I have been using this system for a long time. Great post!

Darn You. You just gave away one of my 'secrets'.

I always tell my clients that we are pricing on the 'even' number, and why. Always an AHA moment for them.

Oh well, I guess everyone deserves to hear this little tidbit. At least the good agents who are reading this blog.

-Jim

Jim@DenverBoulderRealty.com

Residential, Commercial and Investment Real Estate

If the most I could afford was 700k, I would then put my search for homes under 700k. I wouldnt limit it to 600k as I might miss out on a great deal on a home in the 500k range. I would use a broader search on the price search and include number of bedrooms and bathrooms. I do like all those grahics you had. Do you create your own graphics?

www.rocklinsacramento.com

There is a big part of me that agrees with you, but on the other hand Clothes at the Mall cost more than homes these days :) Seriously I have Posted on this before.

There are some good reasons to price at odd figures. Some cultures have superstitions about certain numbers. You see a lot of homes priced with 8's in the price for that reason (Chinese Good Luck). Also you can hit psychological barriers with certain prices. $995,000.00 looks so much better than $1,000,000.00.

When I search for homes I search above and below ranges given me by clients to keep from missing something just under or just over.

I agree to price the property within the search parameters of whatever mls system you use, or your area uses (and not all of them round off the number), but on the other hand, some cultures don't like those figures, or they think they are bad luck. Some cultures want specific numbers to be part of the asking price, etc.

I guess we can call it 848,888 as long as it falls under the right search. :)
Good information, definitely.

If the house falls close enough to one of the round numbers, that's great advice.

This is a mute point. Go based on comps in the area, whatever the price is, the price is. Don't go by price points and make up an arbitrary number based on what your client thinks their property is worth. The client in most cases has no idea what the value of his/her property is. That is why they hired you. Do your homework and provide a service; proper pricig through market research.

great advice. never thought about it. seems like we should be going a few thousand down and a few thousand high on your search in order to get all properties.

Thank you.... It's a great Idea, I've got a listing presentation coming up, I'll try (wrong) I'll use it then.

Debe,

I read something similar to this about a month or two ago. I went on my next listing appointment with this in mind and the seller had the same HA AHH moment! I have been using this "pricing philosophy"ever since.

We market on the Internet now and therefore we must market like we are on the Internet. Great post!

Bill

Excellent advice....and right on the money at a time when the vast majority of buyers are looking for what they want online before THEY show the property to their agent or broker. Most people looking for property do search using zeros.

Zeros are easier on the brain than"95" or "99" and they make calculations of downpayments and financing less complicated, too. I believe today's smaller pool of buyers appreciates simplicity and sellers, therefore, benefit, too.

Hi Debe:

Great information. Sometimes it's easy to miss the most obvious things.

Great post and great advice to help move some of those stuck minds out of the norm and into thinking mode.

Knowing this, buyer's reps should expand their search for homes "just beyond" their client's parameters to capture those "$xx9,999 priced" listings. When their clients are searching for homes in the $500,000 to $600,000 range. The buyer's rep agent can expand the search just beyond those parameters and may find a property priced at $499,900 that their client have missed in their own internet search.

BTW, Michelle: in post #61 and Cathy in post #62. To some Asians, 9s and 4s are unlucky numbers.

-Mako

Makes sense to me....pricing at $600,000 means you capture $600-700,000 and the 500-600,000 lookers.

I recently explained this to a client who happens to work in high tech. He had an ah-ha moment, and the suggestion further strengthened our relationship. Thanks for the great blog!

Wow. What you wrote makes a lot of sense.

Debe,

Great selling point!!! Who knew?

Kathy Opatka

Debe, such a great post and makes a lot of sense. We have used this philosophy when pricing at the mid level as well, say $250,000 instead of $249,999.

I just presented an offer (which was accepted!) on a condo for $120,388. It was the exact amount of the average sold price per square foot of the units in that development, x the number of square feet in the listed unit. It was what my buyers wanted me to present, so I did! I did, however, drop off the 41 cents and round up. I chuckle about that $120,388 every time I think about it!

I definitely get what you are saying, and always take into account price points for my listings, But I am like Jon and I expand all my clients searches. $100k price limit results in a $125k search limit. Although in my area the aver LP/SP is ~90% in august it went as low as 51% and as high as 162%,

Hi Debe, great post. A lot of us at my brokerage have figured this out. However, some of our long time realtors, just won't budge off that good old 99 number. And we've really talked about this to him. Oh, he's still selling, so he doesn't believe us newer agents. Great post. Thanks.

Simple advice that works Debe, and doesn't cost one cent of your hard earned marketing dollars!

Hey Debe I love it - for years my husband has handled the listings and used the 99 even started using the 88 which was great in the days of MLS books. But I agree today with the web we need to rethink how we price. Good advice can't wait to share it with my office.

Debe! Great Post. It's such a good point I will definitely keep in mind. Thank you!

My favorite is the listings who are priced at something funny like $545,454 or $654,321. Or the agent who has all their listings end in 777, like $199,777. Thats their signature move.

Hi Debe~ I always put in higher and lower limits of a price range for my buyer clients that are looking to buy, so that we do not miss out on any homes. Your idea is something to think about for listings....

Hi Debe,

I have a lisitng currently at 422,800, should I move it up to $425,000?

Like Vickie, I also search as much as 10% over the pre-approved price, and I don't put a bottom range on most of my searches.

Thanks for the good explanation.

Dan

Not only that, but BUYERS get the impression that someone selling a house for $599,000 is trying to nickle and dime the deal. Make it LOOK like it's less than $600,000. Bad for the searches, bad impression on the buyer.

Hi Debe...Excellent point...The price might fit better for fast sale.

Jerry Gray CRB,CRS,GRI / Prudential Carolinas Realty / Winston Salem, NC

Hi Debe:

You're so right...

Congrats on the feature!

But it's the all retail thing, that 99 cents sounds so much cheaper than a dollar.

Such a catchy title! And I saw another post on this as well - list directly on the "0" and so your listing will show up in TWO different price ranges (500-600 and 600-700). Great ideas!

This is a post script Debe.....I used this this afteronn with sellers, after reading your post tthis morning. Yes!! It worked!! they went with the $400K insteadt of $399,900. So now I'm anxious to see how this unfolds.

Thanks so much for the timely post today.

Best,

Patricia /Seacoast NH

Thanks for the great pricing advice. You are so right - why leave out half of your would be buyers.

Thanks Deb! Great Tip.

Debe,

I am going to have to consider your post and consider what our MLS does for pricing. Two things I currently don't know. Thanks!

I have been doing this on some too. Let's hope for the best and Thanks for the post!

Responding to Ken, I have read that oddball pricing IS actually effective. It is a perception that $154,233 is based on something (maybe percieved as being based on appraisal or similar) while $150,000 or $149,999 is just a marketing price. The point of the article was that oddball prices aren't offered under as much.

Good post...but as a buyer agent I always look 10k below and 10 k above

Hi Everyone! So, THIS is what sent my Blackberry into email shock today!! I have been out most of the day and then, to an event this evening. I've read your comments and thank you all for them. I do believe this works as I've had it proven several times over but, I understand the logic f the 'odd' pricing as well.

I recently had a buyer offer $917K on a $950K home--guess what the motivation was? THE STREET ADDRESS!

Getting into the heads of buyers and what they search for with regards to price as wel as how they offer is a job, in and of, itself! Thankfully there are others who can compile this data for us--we don't have to do it! I'm relying on data presented to me by one of the top firms in the nation PLUS my own experiences representing sellers.

Thank you all for reading and for your comments--great dialogue here!

OCT

WOW Debe -- so many comments! I do the clients' prefered spread, then I always go a little lower to see what might be on the market that would work just as well -- less then what they wanted. And sometimes, I go up a little just to see what's a tad above.

How about having your seller clients sign a listing agreement with two prices ... one for advertisments and one for the MLS. So, the price is $624,999 for ads and $625,000 on the internet. Covers both ends of the conundrum!

Patricia: Congratulations--now let us know how the sale pans out!

Tony: As NINJA teaches, you want to present the sellers with all of the information that they need, including a 'suggested' price but, the seller is responsible for pricing, we are responsible for the marketing! That said, if I present a range, based on two forms of cost comparison, and that range is $146,500 - $151,300. Why wouldn't you use the $150K number? Capture the buyers looking in the $100 - $150K AND the $150 - $200K ranges!

One form of objection, when I presented this strategy to a financial 'guru' here in Charlotte who was listing his home, was that if he used the 'discount/oddball' number, buyers would think that he was desperate to sell and would low-ball him because that is how HE would look at the pricing. We listed at a round number, in the middle of the proposed range and got excellent results. He received a good, solid offer and he felt good about his pricing.

John: Sorry to give away your secret!! :-)

Janna: LOL at your price! See my comment above about the $917K offer!

Carla: Don't you LOVE it?!

Debe,

Perfect!!! I start with that on pricing with my clients. What high range would you like to find a home. They always say something like 450,000 not 449K or 451K. I say exactly. Buyers think in 5K increments. So a dollar above $450,001 is REALLY the same as $455,000.

Well done!

I hope that help!

Tony

Interesting thoughts here, but I always search a little higher than buyer ask and a bit lower and although I do agree there is a "sale price" theme by ending in a 99, it seems to be what society has conditioned people to, so I'm not sure it is a negative. i'll try out your method and see what happens!

As a stager this is ALL important. A well staged home can lose many potential buyers with wrong pricing. I learned this concept in my training to become a stager (Staging Diva) and I hope to see more realtors use this pricing strategy with their clients.

It seems like real estate 101. In your example I would search for everything under $720,000 or in a range between $500k and $750k. I simply put in the things that the clients want such as a pool, water view, golf course, three car garage, five bedroom etc. etc.

OCT

Wow Debe. Very common sense thing. Yet, I had not thought about this. Great point

James: In our MLS, we are only allowed a certain number of returned properties with a search--with the market as saturated as it is right now, we could not use a range that wide. Also, don't forget that the buyers are doing their OWN searches and statistics show that they're doing more snug searches than we do--they'll search 450K to 500K or 400K - 500K--rarely do they want to include the $50K shacks that come up in the search when there is no minimal search.

Tony, Jason, Barb & Mark: Thanks! This is not a 'new' idea--it's been proven to work time and time again. When I decided to try it myself, the very first trial worked like a dream and I've been sold on this method ever since! All of my sellers don't want to do it and I let them set their price, based upon my two cost analysis comparables that I present to them. But, for the most part, they love the idea and realize the benefits when they DO go under Contract!

Have a fabulous Friday everyone...

Great suggestion. You are so right. It seems that pricing strategies with houses are a lot like they are in the car business, of course we are dealing with the same consumers, so they seem to be motivated by the discount pricing, but I couldn't agree more with what you say because all of our search parameters in this business are set up on even numbers. The consumer has no choice but to pick even numbers and they do miss a lot of opportunities. Once they are working with a Realtor however, I would hope that the agent would have read your blog because I find that most searches are set up by real estate agents and therefore they are incorrectly guiding the customers. Thank you.

Hi Debe, Our first BIC preached this strategy & we have adopted it ever since. Once explained, Sellers "get it" & potential Buyers find it! No downside! It works!

Love your post title!

Deb, I'm still not sold on the idea. Hope you're feeling better.

OCT

does it really matter? im mean....really?

Hi Gary! Thanks and you're right--it DOES work and some get it and some just don't!

Hi Ginger! Yes, it does! And, your exactly right, what IS the downside?!

Hi Lyn! That's okay--maybe try it once and see what happens with it! Like me, you may become a believer too. And, I'm doing so much better--just don't have my motion back but, the process is going to take a very long time. Physical therapy continues 3X/week and I've got a ROCKIN' therapist that has gotten me farther than I ever imagined I would be at this time. Thanks for asking!

This post brings up such an important point. Using round numbers would double the chance of your property coming up on a search. Lets say it is priced at $200,000 well it would come up in 150K - 200K search and a 200k - 250k search. Round numbers also appear to be more straight forward. Using a lucky number my give the impression your rely on luck to sell it and not your marketing efforts.

Dee: EXACTLY! And, that's just what I did when I started in the business--I used my lucky number 7 in all of my pricing--my first mistake, I thought that I was the one that was supposed to price the property and the second one, going on pure LUCK! LOL

OCT

So true Debe. It makes total sense but homes are priced like that all the time!

Thanks for the analysis!

DeeDee

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