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

By
Real Estate Agent with www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 228209

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!

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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Roland Woodworth 10/13/2009 04:35 PM
  2. . 4Terra Land Brokers .. 828-776-0779 Asheville NC 10/14/2009 02:06 AM
  3. Patty Mortara REALTOR CRS | Hunterdon County (NJ) 10/14/2009 02:22 AM
  4. Ed Silva 10/14/2009 03:19 AM
  5. Ralph Gorgoglione 10/14/2009 01:39 PM
Topic:
Real Estate Sales and Marketing
Groups:
Active Rain Newbies
Realtors®
The Lounge at Active Rain
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Diary of a Realtor
Tags:
sales tips
seller advice
pricing your home to sell

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Ambassador
890,780
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

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. 

Oct 14, 2009 01:32 PM #159
Anonymous
Anthony LaGalbo
Good post...but as a buyer agent I always look 10k below and 10 k above
Oct 14, 2009 03:02 PM #160
Ambassador
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

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 14, 2009 03:55 PM #161
Rainmaker
1,560,131
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

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. 

Oct 14, 2009 05:47 PM #162
Anonymous
Sue Wettsteim Brazzel

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!

Oct 14, 2009 11:56 PM #163
Ambassador
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

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?!

Oct 15, 2009 02:12 AM #164
Rainer
41,205
Tony Barker
Premiere Home Realty - Tony Barker 832-867-0835 - Houston, TX

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

Oct 15, 2009 02:58 AM #165
Rainmaker
117,024
Jason Burkholder
Weichert, Realtors - Welcome Home - Lancaster, PA
Associate Broker, Realtor, e-Pro, CMS

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!

Oct 15, 2009 03:43 AM #166
Anonymous
Barb Lazzaro

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.

Oct 15, 2009 04:50 AM #167
Rainer
24,283
James Randall
Palm Bay, FL

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 15, 2009 07:31 AM #168
Rainmaker
199,540
Mark Velasco
Sharpstone Realty, Inc - Whittier, CA
Listing Agent-Whittier & Surrounding ciities

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

Oct 15, 2009 06:41 PM #169
Ambassador
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

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...

Oct 15, 2009 07:08 PM #170
Rainer
391,827
Gary Swanson
Century 21 Harris & Taylor - Grants Pass, OR

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.

Oct 16, 2009 05:55 AM #172
Rainer
267,674
Ginger Sala
Wilkinson & Associates, Wilmington NC - Wilmington, NC
Wilmington NC Real Estate & Relocation~

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!

Oct 16, 2009 07:24 AM #173
Rainmaker
1,527,366
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

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

Oct 16, 2009 07:57 AM #174
Anonymous
another goofy blog

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

Oct 18, 2009 03:37 AM #175
Ambassador
3,279,345
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

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!

Oct 18, 2009 04:10 AM #176
Rainmaker
91,893
Dolores "Dee" Mauriello
Keller Willaims - Wayne, NJ
Realtor, Homes For Sale Wayne NJ

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.

Oct 18, 2009 03:57 PM #177
Ambassador
3,279,345
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

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 18, 2009 04:49 PM #178
Rainmaker
644,989
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

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

Thanks for the analysis!

DeeDee

 

Oct 20, 2009 01:21 PM #179
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