Why are listings priced like grapefruit?
Real estate agents price homes like produce in a super market. They go into a listing presentation and they close the deal. Everyone agrees the home is worth $300,000 so the agent suggests that they put it on the market for $299,900. Everyone knows the psychological advantage of slipping under a price point by a penny or a dollar or a hundred dollars or even one thousand dollars. It just makes the price look like a bargin.
You are not selling grapefruit. You don’t put a big sign in the yard “For Sale, ABC Realty, $299,900.”
You put the home into the multiple listing service. I have never met an agent that pulled up listings and highlighted all of the “almost” numbers. Agents representing buyers, usually do a search based on what the buyer is qualified to spend. Does anyone ever get an approval letter that states the buyer is approved for $299,900? Does anyone ever get an approval letter that is not in round numbers that always end in 000? I don’t think so.
I think you have someone in your office that can spend up to $325,000 and you enter a search with the list price range $300,000 to $325,000. And I know (even with my limited understanding of search engines and bells and whistles in computers), the home that is listed at $299,900 will never appear in that search.
What does this mean JMac?
It means that by listing the home at $299,900 you have precluded a large segment of the buying population from ever seeing your listing. It means that the buyers that would find your property a true bargin (remember $300,000 is at the bottom of their search) will never see your listing. Anyone looking between X and $300,000 will find your listing but it will be at the top rung of their search, and your listing will be competing with what they may deem more affordable homes.
They are not buying grapefruit and their purchase will not initially be swayed by the difference you create using the 999 or 900 in your price. You are just using yesterday’s produce pricing mentality and losing traffic to an archaic way of marketing.
Maybe it is time we understood the tools we use and dropped the 9’s.
Just a thought.