Should You Price Your Home Like a Bag of Potato Chips?

I use an even number, no "99s". For exactly the reason you mention - I want everyone to see it.

I remember in my NY MLS there was an agent who priced her homes in a palindrome (aside note, why isn't the word palindrome spelled as a palindrome?). Anyway, she would price it something like 814418 or 137731. They seemed to stay on the market a long time.

Couldn't agree with you more Craig!  I've been explaining this to agents and Sellers for years.  I say "we're not selling socks at Walmart". 

Craig,

I could not agree more and I have written about this several times myself and train agents on properly marketing their homes (Retail Pricing .99 vs Real estate Pricing 100) .

Here is the biggest reason for not using retail pricing - (snipped from my agent training manual)

It not only keeps those buyers from ever seeing it, but the buyers that do see it will typically offer less because it is at the top of their price range, they are searching $450-500K so they will try to get the price down a little, however those that might find it if it is listed at $500K and are searching $500-550K, they are more likely to pay the full asking price because it is at the bottom of their price range. 

I fully agree and have taken this approach myself. Retail pricing strategies work in a store, but use of a search engine requires a different approach. I am amazed at how few agents recognize this. So many agents are conditioned to think in conventional terms- but it's time to upend this practice.

Good morning Craig,

I agree with you! Taking in consideration the search functions buyers use only makes sense to list a home at the even price on $500,000, $600,000, $550,000, $650,000 but the law of the 9's can come into play at $559,900, $569,900, $579,900 or $589,900 just NOT on $599,900.

In my market, I see a LOT of $X,XXX,888 - because those 8's are supposed to be lucky.

I understand the computer algorithm yet in some markets and some minds people will search higher to find what they are looking for.

In my market, homes are selling for $400,000 to $800,000 over the list (not listed low) so those trailing numbers do not matter. 

Used to use the 9's, no longer. Makes better sense, as Dorie states, to list at even numbers. 

Good points for sure. Right now here in North Texas, we don't even have time to really think through much as it seems no matter what, everything is selling very quickly.

Interesting to know... I haven’t tough about that on Realtor.com . Thank you

I agree. Pricing with a "99" will cause you to miss a lot of "eyes."

Hey there Craig. You may very well be right, I used that strategy to my advantage when we used MLS books, but perhaps these days a different twist is in order

The answer is "no" Craig :)

I most definitely agree, sellers shouldn't price their homes like a bag of potatoe chips. More and more of my sellers are also questioning this strategy: what's the point? Do buyers actually think that $499,999 is much less than $500,000? and prefer to have a nice, clean number. 

You also make an excellent argument. We don't usually search in a 399,999 to 499,999 price range! 

Craig I always have to smile  this is such an American tradition about .99 the rest of the world always laughs about this phenomenon but let's be clear we live in the US of A so let's do what is good for us... on the other hand I have many Asian clients and they like the number 8888 since that is lucky for them so what do you suggest?:) my take is go with the flow thanks to Redfin and Zillow they see everything anyway. Endre

This is a great perspective to share.

Many listing agents limit the exposure of their listings.

Dear Craig,

So true for the past ten plus years for sure. Kinda silly to price it a dollar less for the psychology of it, because hardly anyone is fooled by it anymore, if they ever were.

Interesting and well said at the same time Craig.   I like your below quote.

Why would you want to reduce the eyeballs to your listing? Why not put your price on the EVEN dollarso that it shows for both the higher and lower bracket searches.

One of my brokers and I just had this conversation and he pointed out the same thing.  Even though I like potato chips I will price at even numbers.  If I represent buyers and they tell me a range of $600k to $700k, I try to set the range from $575k to $725k to catch homes that are on the fringe that may work for them as well.  Maybe that $725k home has been on the market 60 days and is just about ready to drop the price.  Who knows?  Thank you for the thoughtful post.

Having worked in retail a long time ago, we had our loss leaders in every ad. Just get 'em into the store. With business models so different now than in the golden brick and mortar days, the 99'er pricing mentality makes no sense at all. 

Hi Craig,

This is a great discussion.  It does require being savvy of how the algorithms work.  I try to stay away from using the term pricing and prefer to use the term positioning.  It also helps when discussing "repositioning" the property if it is not getting offers.  I completely agree that one should consider positioning the home using even numbers in the price point you think the property will sell.  If the property does not get offers in that price point, it is time to reposition it in a different bracket at an even number to take advantage of buyers in that bracket.  

Good information here.  I have long used the 'zero's'.  You get picked up in both searches.  600 to 700 and 700 to 800.   Most don't appreciate the fact.  Thank you for the post.  Mark