Is a $299 Smartphone a great deal compared to one that costs $300? No. However, marketers understand that pricing a product just below a round number feels like a deal. Psychologically speaking, $299 feels like a better deal than $300. Understanding these kinds of marketing concepts are key to the right home pricing strategies.
The first step in this process is determining the value of your home. A comparative market analysis might show that your home is worth $250,000. This will be based on:
Once you know the value of your home, you then need to think about the price range for the list price. A home that is worth $250,000 could be listed a bit lower or a bit higher. Once you have the range, then it is time to begin thinking about home pricing strategies.
Here are five home pricing strategies to help you determine the listing price for your home.
People tend to go where other people go and do what other people do. This is called herd mentality. To create this phenomenon in your listing price, you may want to consider pricing it at the lower end of the price range you determined. Once interest is stimulated, more and more people will flock to your home.
Most buyers begin their search on the Internet. They do so by creating parameters such as number of bedrooms, number of baths, a certain area of town, and a price. Then, they or their realtor set up an automated buyer search for properties that meet those specs. So, if a buyer is looking for homes under $250,000, and you list your home at $255,000, you could easily miss out on buyers that could afford your home but never see it.
Look at local database services to see where the cutoffs are. If you are priced close to a cutoff, consider going just below. In this case, selling for $249,999 would get you more interest than $251,000.
Don’t use an odd combination of numbers, such as $248,726 as an asking price. This number calls attention to itself rather than to the house. Buyers will wonder why you decided on such a crazy number and will think about the number more than the features of your house.
You only want the buyer to be curious about the house, not about you as the seller, or your unusual reasons for picking a random listing price. When trying to appeal to the largest number of people, you need to take yourself out of the equation. This goes for paint colors, decorations, and prices!
Before getting started with the sale of your house, you should have already worked out a Plan B with your realtor. This will help save time and make adjustments as needed. For instance, you may decide that if you haven’t gotten an offer in 30 days, then you will reduce your asking price by $5000. Discuss the merits of your Plan B with your agent to be sure that it is a solid plan of action.
Pricing is not a “one and done” proposition. Instead, it should be a continuous conversation with your real estate agent. They know what works and what doesn’t work. So, if the pricing of your home isn’t bringing in the buyers, start talking.
By following these five pricing tips, you’ll be much more likely to see success when selling your home. For further information about pricing your home to sell, give us a call today.