We have seen this pricing method in almost every aspect of marketing. Product pricing ending in 99 cents, gasoline ending in 9/10ths, and housing at $ XXX,900. All of this in an effort to make the price “look” more affordable. Is it fooling anyone? Well, yes. Maybe you!
Let’s take a moment to think about this. There are real estate price points where this method can hurt your marketing. One of the biggest is $199,900. How do we perform our searches when looking for a property to suit a Buyer Client? We search in price ranges, some dollar amount to another. Here is just one example scenario. (There are certain price points that this will matter more than others.)
Agent A has a property listed at $199,900. The agent explains to the Seller that their $200,000 home will look better to buyers priced this way. One Hundred Thousand dollars sounds a lot less expensive than Two Hundred Thousand, doesn’t it?
Agent B has a Buyer that is looking for a property and has a $215,000 approval and target price. Agent B begins the search. The Agent will most likely perform a search from 200k to 225k. Guess what? $199,900 will not be in that search. All for what, $100? Agent A has missed out on a showing and a possible sale.
Why not price the property right at $200,000? Then it would be in searches up to 200k AND in searches starting at 200k. BOTH searches! This could be true for the 25k, 50k & 75k marks as well. Also note that many online Real Estate Search Sites have pull-down price-range menus. These are usually in set increments of either 25k or 50k. This is yet another way your listing might not “make the cut!”
Personally, I do my searches that are 100k to 200k in Ten Thousand dollar increments. The 200k to 300k searches in 25k increments and so on. I do round those down to encompass the $XXX,900 properties, but I know that many do not. So why risk it? Why not consider pricing the properties at the round amounts and get in more search results by agents and online shoppers as well?