Pricing Your Property to Sell
Coming up with the right price when selling a property is a balancing act. You want to ask for as much as possible, but not so much that you turn off your target buyers. You also don’t want to cheat yourself with a price that’s lower than what your property is worth. The right price is one that’s in tune with what similar properties are selling for in your market.
When it comes to selling a property, the price tag isn’t just a number – it’s a carefully crafted message. Think of it as a handshake that introduces your property to potential buyers. The moment a buyer sees your listing price, they’re not just calculating dollars; they’re forming opinions, imagining possibilities, and even making judgments about the property’s value and appeal. A strategic price can create intrigue and excitement. When done right, your list price can act as a magnet, pulling in the right buyers and framing your property as exactly what they’re looking for.
Pricing a property appropriately from the beginning is critical to getting it sold quickly and at the best price. A property will get the most interest in the first couple of weeks it’s listed for sale. Some sellers may be tempted to ask for more than market value even though they are willing to accept a much lower offer just to see if there are any takers. This strategy will often backfire if sellers price their property out of range of their target buyers.
If a property doesn’t get many showings or gets a lot showings but no offers in the first 2-3 weeks of being listed for sale, it’s a good indication that the property is priced too high. Research shows that overpricing a property and then dropping the price several times while the property sits on the market usually leads to selling it at a lower price than what it would have sold for if it had been listed at the right price from the beginning.
If you offer your property for a fair price, one that’s similar to comparable sales in your neighborhood, buyers may reason that if you’ve done your homework on pricing, you’ve also done your homework on making sure the property is in good condition. It gives buyers a sense of trust.
We provide a comprehensive COMPARABLE MARKET ANALYSIS comparing properties similar to your property based on size, age, and features in the same area that have recently sold to assist you in determining the best list price for your property. You can request a COMPARABLE MARKET ANALYSIS from your under Listing Tools.
THE PSYCHOLOGY OF REAL ESTATE PRICING
With prices all around us going up, who isn’t looking for a good deal these days? The same is true in real estate. There is a concept called the “Left Digit Effect” that can trick your brain into thinking one price, that is pretty much the same amount as another price is a better deal. For example, let’s take a common item at the grocery store, milk. If you think about it have you ever seen a carton of milk for sale at $5.00? More likely you will see the price, $4.99 or $4.79. This is quite common in most grocery store items as well. The $4.99 convinces your brain that it’s a better deal than if it was priced at $5.00. The same goes for pricing a home.
Instead of listing a property at $300,000, a property listed at $299,900 is only a $100 difference but all those nines change how potential buyers view the price. It can assist buyers into thinking they are getting a better deal. As we read from left to right, the brain places more value on the left digit because it was read first.
Buyers typically look for even numbers that fall within their price range. For example, a buyer wants to purchase a property for around $400,000, but they will look at homes between the range of $375,000 and $425,000. Why $425,000 and not $419,000? Because our brains naturally prefer whole, even numbers in consecutive order like 100, 200, 300, or by 5’s like 25, 50, 75. Breaking the pattern can help to get a property noticed by more buyers.
Instead of listing a property for $500,000, $497,000 is a less common number to see on a list price and the buyer’s brain knows it. The unusual number will likely make the property’s price stand out more to buyers.
The goal is to stand out, but not in a negative way. A very unusual price like $394,255 can subconsciously raise red flags to potential buyers. It’s best to stick with a list price that ends in zeros.
