Pricing your property at $499,999 instead of $500,000 seems like a good idea, and used to work decades ago. But now the way buyers search for homes has changed, and it actually decreases the number of buyers who will see your property for sale because searches are done in RANGE PRICING and none of the buyers with searches that have $500,000 as a minimum price (For example, $500k-600k) will even get the chance to see that it's for sale!
To sell a home for top dollar, you have to think about how to maximize exposure so that the most amount of buyers will see it. More exposure = more buyers = more offers = more negotiating power = more money in your pocket!
When the market analysis suggests a price near a multiple of $25,000, it is in your favor to price it on that round number. For example $349,500 should be priced at $350,000... $703,421 should be $700,000, etc.
Hey, it’s Emil Ayoub here, your trusted Realtor in San Diego, helping you make moves with confidence.
Wanted to shoot a very quick video about a question I get asked a lot and that is about… pricing strategy.
I’m seeing a lot of agents out there making the same mistake over and over again, and it is costing their sellers thousands of dollars. What is the mistake?
So let’s say you and your realtor review the recent sales in your area, and the market is telling you that the value of your home is $500,000. What a lot of agents think is hey let’s using the same pricing strategy that a lot of retailers use and price it at $499,000 or $499,999 or $499,900 because there is a psychological effect that takes place when buyers see the number start with a 4 rather than a 5.
And that used to make sense when people were selling real estate 20 years ago, but we are in a vastly different world today, and it is extremely important to adapt your pricing strategy to the way that Buyers search for homes in present times.
Let me explain… When a realtor is creating a search for their buyer in the Multiple Listing Service OR when a buyer is searching for homes on one of the major home search websites, the main criteria that they are asked after location is price. And how do people enter the price?
It’s in a range. There is a minimum price and a maximum price. This is a very crucial point… because by pricing your home at $499,999… now NONE of the buyers that are searching for homes between $500,000 and $600,000 are going to see your home.
And that could very well be the buyer that would pay the most for your property and you just lost them because of $1.
And you could lose out on having multiple offers that give you more leverage in negotiations.
So the point is if the comps are suggesting a sales price that is close to a multiple of $25,000, you always want to price it AT the round number because it allows more buyers to see your home, which will allow it to sell faster and for more money.
Just by watching this, you are now more knowledgeable on pricing strategy than a lot of agents out there who keep making this mistake.
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Until next time, this is Emil Ayoub, helping you make moves with confidence.