Pricing your home is critical when Buyers are searching on-line.

Statistics report that (depending on the source) 80-93% of home buyers start their search on the Internet, before they ever contact a Realtor.  This is interesting, and I think it cuts both ways.  Buyers do a lot of the "leg work" ahead of time, but they are still not quite sure what they want, nor if the listings are good deals.  Furthermore, is this home a good deal because of a bad school district?  Backs to power lines?  Some other underlying malady that is not advertised online?  There are a multitude of reasons that Realtors are still invaluable to the process.  But, home buyers are becoming more and more savvy with every mouse click.

 

So here is my dilemma.  I understand why Walmart prices items at $4.99 instead of $5.00.  $4.99 is less than $5.00, and psychologically, it just appears to be a better deal.  $9.99 is far better than $10.00.  Good Lord, $10?  I can't pay double-digits.  $9.99?  I can swing that. 

 

I also understand why grocery stores place the milk in the far back corner of the store.  They are going to force the irresponsible husband, who forgot to pick up a gallon of milk, to walk through the treasure trove of other goodies in order to get the one item he needs.  Thus, he will probably end up grabbing a few other items on his ADHD trek to the, "what was I here to get?  Oh year, milk.  2% or whole?  Darn.  I left my phone in the car.  I'll get both, just to be sure.  And these Twizzlers, that shaving cream, and some toilet paper.  Do I have that issue of HOT ROD?"

 

You get the point.

 

So let's look at the psychology of an online buyer.  They are bypassing the rules of "items they don't need", and are going straight for the milk.  They are at the store for one gallon, and they know what it should cost.  So why do some insist on hiding their milk in another part of the store?

 

Disclaimer:  This is an opinion, and I am not chastising other Realtors who employ the tactics I am analyzing.

 

So here is Peter Pryor the online buyer.  He wants to spend around $265,000.  With that range in mind, he knows that there may be something closer to $250,000 that works, but there also may be something at $290,000 that can be negotiated down, and if he likes it enough, can stomach paying $275,000.

 

Lillie the Listing Agent has "strategically" priced her client's listing at $249,999.  It is not listed at Walmart.  Does anyone see a fundamental problem yet with this pricing strategy?  Does $249,999 sound that much better a deal than $250,000?  Will Peter Pryor the online buyer see it?  Nope.  Peter, psychologically, knows he will most likely get a better home relative to the price.  If he can spend $265,000, why bother with the sub-$250,000 stuff?  He is playing in a different league, or so he thinks.

 

Reference the illustration below:

So when you are pricing your home, keep in mind that, according to the statistics, at least 4 out of every 5 online shoppers are searching in $25,000 to $50,000 increments.  NOT $1 increments.  For the sake of a dollar, I would hate to think you missed a potential looker.  As we all know, it only takes one. 

Why take the risk that Peter Pryor was "the one",

yet you were a dollar short, and a click late?

 

Realtor, GRI

Blackburn Properties

Austin, TX

(512) 917-0834   AlexMorrisRealtor@gmail.com

"Waving People Home Since 2005"