Previously, in my post Simple, No-Nonsense Pricing Strategy - Part 1 I made a case for pricing our listings at straightforward, simplified prices like $600,000 rather than what may be thought of as the traditional $599,900. Here, in "Simple, No-Nonsense Pricing Strategy - Part 2" I would like to propose the idea that it is important to price our listings rounded up or down, and given current market conditions most likely down, to a price that is more likely going to be a price that consumers, and agents, will search. Hence, I would not price a home at $580,000. Instead, I would price it at $575,000. Realistically, if the listing is going to sell for $560,000 with a seller contribution of $7,000, does it matter if it's listed for $580,000 or $575,000? Well, no . . . but, yes. If the house is worth $560,000, it's not likely that it will sell it for $565,000 because it is priced at $580,000 instead of $575,000. In fact, it's more likely that it will sell at $565,000 if it's priced at $575,000 then it is if it's priced at $580,000.
Why do I think it is more likely to sell at a higher price, and/or sell more quickly, if, as I stated in this example, the property is priced at $575,000 instead of $580,000? This premise is based again, as I mentioned in Simple, No-Nonsense Pricing Strategy - Part 1 , based on the way consumers and we, as agents, search for properties. We are more likely to be searching for properties priced $525,000 to $575,000 then we are to be searching properties from $525,000 to $580,000. So as I mentioned previously in Simple, No-Nonsense Pricing Strategy - Part 1 we want to take advantage of the way we, as agents, and consumers, search for properties and how we, as agents, price our listings, with this in mind. When someone is searching from $550,000 to $600,000 our property will end up in the results of the search whether it is priced at $575,000 or $580,000. If someone is searching from $575,000 to $625,000 our property will end up in the results of the search whether it is priced at $575,000 or $580,000. But, if our property is priced at $580,000 instead of $575,000 what will happen when the search parameters go to $575,000? Our listing priced at $580,000 is left out. In this example, our listing priced at $575,000 will show up in all three searches where the listing priced at $580,000 will only show up in two of the three searches. Can we afford to exclude 33% of the potential buyers in the market? Well, it's probably not going to be a figure as high as 33%, but it will be some amount of searches and, in this market, can we afford for any potential buyer of our listing not to know that our listing even exists? The basis of this theory is that $575,000 will be the top end of searches more frequently then $580,000 will be the top end of searches. How often is not as important. If it happens once, that is once too many. When we are looking for that one buyer in 100 buyers that would favor our listing, can we afford that that one buyer misses our listing in their search?
We, as agents, can search however we like. If we wanted to we could search from $526,432 to $583,786. Consumers however, don't usually have that ability. Consumers are constrained by the pre-set search parameters of the website they are using to search for properties. It doesn't matter which websites employ which limitations on searching. It doesn't matter how many do, all that matters is that there are websites which will cut searches off in $25,000 increments instead of $10,000 or $5,000 increments to support my claim that inherently there will be more searches which will cap at the $575,000 mark rather than the $580,000 mark.
So, if the name of the game in getting listings sold sooner and for a higher price under more favorable terms for our sellers is getting more showings on our listings, then the name of the game in getting more showings is having our listing first show up in the search results of more of the agents and consumers searching for homes. If your list price is evenly divisible by $5,000 then it will show up more frequently then if it's not. If your list price is evenly divisible by $25,000 it will show up more frequently in searches then if it's not. So, give some thought as to what the real difference is next time your seller wants to price the house at $552,500 instead of $550,000, or at $580,000 instead of $575,000. It will make a difference.
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