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Pricing for the Web

By
Education & Training with Sparta Success Systems

Remembering The Past
There's a pricing convention we all have that few realize where it comes from.  Being old, and having been in the business forever (since 1993), I remember.  You see many years ago, there was something called at "listing book".  It was a printed version of the MLS.  Most agents didn't go online to look up properties, they looked in the book.  Subsequently, agents started listing their houses at $499,999 instead of $500,000 so that they would be the first house the agent found to show. 

But All That Has Changed
In the intervening years, most (if not all) MLS services have discontinued the listing book in favor of online searches.  But, we didn' change our pricing conventions because agents knew that prices would be listed just below the even dollar mark, so we adjusted our searches to compensate. 

Here's The Problem
Buyer's just aren't (necessarily) that smart.  Today, most buyers are starting their own searches online.  They are using search engines that prompt them to choose even dollar numbers.  Therefore, your listing which would be at he bottom of the price range (and therefore most desirable) for the $500-$525K price search is now invisible because you priced it at $499,999 - oh what a difference a dollar makes.

Price On Even Dollar Amounts
This is why it's more important than ever to get your pricing right.  In his highly competitive market, you want people to find your listings.  Make sure they do by pricing them at the price points they are searching for.

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Kelle Sparta
Thought Alchemist

Richard Dolbeare
Inactive - Wailuku, HI
Living the Hawaii Lifestyle

Yes but that home for $499,999 sounds so much less expensive than the neighbor home for $500,000.  Why else would our retailers insist on pricing things just below a whole dollar amount.

Jul 15, 2009 05:24 AM
Kelle Sparta
Sparta Success Systems - Somerville, MA
Real Estate Trainer and Coach

Retailers are pricing for the penny-pinching purchaser.  Our buyers are spending hundreds of thousands of dollars.  They KNOW it's expensive.  They are smart enough when faced with two houses one dollar apart in price to know that the $1 doesn't matter.  What they don't seem smart enough for is to realize up front that they are missing out on a whole host of listings just below their price point in the search function.  Worry about the negotiation details later - you need to get seen first.

Jul 15, 2009 08:36 AM
Troy Erickson AZ Realtor (602) 295-6807
HomeSmart - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Kelle - Why wouldn't a buyer search for a home less than $500k if their price range was $500-520k?  If I were their agent, I would be showing them all the $499,999 homes I could.  I do see your point, but still think it depends on how the searches are set up.

Jul 17, 2009 06:45 PM
Kelle Sparta
Sparta Success Systems - Somerville, MA
Real Estate Trainer and Coach

Hey Troy,

It's not what an agent would set up, it's what a buyer searches on their own.  84% of buyers start their search on the web - meaning before they have an agent.  If they are calling listing agents about seeing properties, then they aren't calling you if your listing is below the 500K mark, so you're not only missing out on the sale of your listiing, you're also missing out on the buyer prospect.

Jul 18, 2009 01:53 AM
Suzanne McLaughlin
Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN
Sabinske & Associates, Realtor

I see the point, but...I'm just not convinced.  I'll try it on my next listing and email you the results. 

Jul 20, 2009 04:20 AM