Pricing is an art, not a science, according to real estate professionals. But here are two proven techniques so effective that they may as well be a rule of physics.
If you want to make your house price look authoritative to first-time buyers, price it to the penny. For instance, set the asking price as $205,635.41,”
An unexpectedly specific price is persuasive to inexperienced buyers precisely because it is so detailed, according to a recent article published by the Association for Psychological Science. After all, how could you calculate value to the penny if you hadn’t done your homework?
Experienced buyers, on the other hand, aren’t impressed by precision pricing. Here’s a quote from the article:
“Our research shows that more precise opening prices can yield you a significant negotiation advantage, but you have to know whom you’re negotiating with,” says David D. Loschelder of Leuphana University Lüneberg in Germany. “With amateurs, this number should be very precise; with experts, however, negotiators should either choose a moderate level of precision or back up their highly precise number with a compelling reason.”
The second proven pricing technique is to list your house for just under a major round number – say, instead of asking “$250,000,”, list for “$249,000.” That’s because househunters tend to look in ranges. Someone looking for houses in the $225,000 to $250,000” range might not catch the $250,000 houses in the range, but $249,000 definitely will be within the search parameters.
The bottom line: Once you have a good idea of your asking price, scan current listings to see how precisely other homeowners are pinpointing the number and how similar houses are clustered by price point. That’s how to convert your asking price to marketing tool.