When it comes to selling homes, the price is very often the “hot topic” whether you are the seller or buyer. The process involved in determining the appropriate listing price isn’t always what one might think, though.
In fact, it ultimately comes down to a position within the existing competition. Let’s take a moment to delve into some common misconceptions about pricing…
Have you ever walked into a store like Walmart and wondered why just about everything is priced ending in .99 instead of rounding up to the nearest dollar?
Of course, you have. It’s a strategy known as psychological pricing.
To most consumers, an item priced at $2.99 is more appealing than an item priced at $3.00. Even though there’s just a one cent difference, the brain processes them as much different values, and perceives $2.99 as the better deal.
A similar strategy has been used in the real estate industry for decades.
Why price a home at $500,000 when you can price it at a more attractive number like $499,900, or even $499,999, and potentially generate more interest from buyers?