The Psychology of Pricing a Home

By
Real Estate Agent with Keller Williams Realty 0575737

PricesThere's just something about how you price something. With gasoline prices, that little 9/10 of a penny just does make a gallon look a little cheaper doesn't it? With home pricing it turns out now there is a bit of psychology behind that too.

REALTORS and sellers try to offer prices on their homes near market value most of the time with a little 3% wiggle room on the top side. I've heard that realistically homes are selling for 93 to 95% of asking these days.

But what about the FORMAT of the price? A report out by Cornell University says all zeroes at the end of the price does not sell as well as a specific price. Don't set it at $326,000 but rather $325, 425 for a faster sale. Does this make sense? Having three zeroes they say lowered the sales price by 0.73 percent. The house with the more "precise" list price will sell for more the study says. Online firm Redfin said the optimum price was ending in $500, such as $391,500. Try it and see if it helps sell more houses. Who knows in today's wacky market?

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Rainer
35,210
Rob Baldwin
REALTOR, Santa Clarita
US ECO-GREEN REAL ESTATE INC.
Hi Gary, I feel those stats are true. When I priced a few homes in the past I have used 498,895 sold for 495,00 and another I did recently was listed at 298,895 and sold at list. Were as when I use zeros at the end of price, it seems it just does not stand out.
February 21, 2008 09:28 AM
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1,483,341
Gary Woltal
Assoc. Broker Realtor SFR Dallas Ft. Worth
Keller Williams Realty

Lynn: I'll have to try and experiment with the 500 too.

Colleen: 950 is good too.

Julie: Odd numbers are a better deal. Maybe THAT is the secret to selling houses. THANKS!

Judy: I think I need to buy a hybrid vehicle.

Rob: Very cool results for you, I'm glad it worked.

February 21, 2008 02:33 PM
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Norma Toering
Palos Verdes Homes in Los Angeles Area
Charlemagne International Properties
Gary - When I was a new agent I was mystified by a successful agent's pricing technique.  Finally, I asked him if he used a particular formula to arrive at those very odd and unpredictable numbers.  He laughed and said he gives the seller a dice to roll for the last three numbers of every list price.  His listings certainly stood out from all those ending with 000 or 999! 
February 21, 2008 04:33 PM
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Gary Woltal
Assoc. Broker Realtor SFR Dallas Ft. Worth
Keller Williams Realty
Norma: I love that dice roll idea. THAT, goes into my next listing presentation for sure. YOU are a genius!
February 22, 2008 06:48 PM
Anonymous #22
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Anonymous
Great analogy.
February 22, 2008 08:21 PM
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Gary Woltal

Assoc. Broker Realtor SFR Dallas Ft. Worth
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