When I 1st got into the Real Estate business twenty four years ago we used to carry around the big bulky MLS books. Back in those days this was how we knew what properties were on the market in Massachusetts. The internet was in it’s infancy and jumping online to look at properties was not an option for a consumer wanting to purchase a home.
For as long as I can remember Realtors have been pricing homes so that the list price ended with 900. As an example, instead of the home being priced at $350,000 it would be $349,900. The majority of the Massachusetts homes on the market are priced this way. In fact, you see this type of pricing strategy for a lot of different products whether is be for a car, gas, or something on late night television.
The reason for this is psychologically the price looks lower in our minds when it is just under a certain price point. Expert marketers know this is the case when trying to sell product.
As consumers we fall for it all the time. Come on admit it, you know you have at least one of those gadgets from late night TV that are supposedly going to give you rock hard abs somewhere in the back of your closet at home! Besides the fact you want abs the price looked pretty good too.
Going back to the days of the MLS book, Realtors would jockey for position and soon instead of pricing the home to end in “900” it became “899” or some other number. We were all trying to position our listings to be seen by more eyes.
Pricing ending in “900” continues in Real Estate to this day but I can tell you it is not always a good idea.
As I am sure you are aware over 90% of all buyers find their homes from doing an online search. The days of newspapers and magazines being an effective medium for finding homes is over.
When people are looking for homes for sale in Massachusetts more often than not they are searching in either $25,000 or $50,000 increments. So let me show you why pricing your home at $349,900 instead of $350,000 is not a good idea.
Lets say I am a home buyer looking for a property between $300,000 – $350,000. Doing a standard search from either an MLS search portal or visiting a site like Realtor.com is going to show all the homes in the selected range. In this search the home priced at $349,900 is going to be seen with no problem as it falls $100 shy of the end of the search range.
What if a buyer is searching for a home between $350,000 and $400,000? Well guess what the home priced at $349,900 is going to be missed by this buyer because it was just under the range.
By pricing the home at $350,000 a lot more eyes are going to be looking at this property! As a seller, you are going to hit both ends of the range.
Obviously when selling Real Estate this is a good thing. We want as many people looking at our properties as possible. Having proper pricing and a marketing plan that delivers outstanding internet visibility is what sells homes today.
If the price of the home does not fall on a quarter increment then pricing it ending in 900 is perfectly fine. You are going to see no difference in a home priced at $364,900 or $365,000 in terms of traffic generated online.
While we are on the subject of marketing, another pricing strategy that you should be aware of is value range pricing. This way way of pricing is essentially a marketing gimmick used by some Real Estate agents. Do your home work and don’t be mislead by these kind of tactics that do little to sell your home!
About the author: The above Real Estate information on Real Estate pricing strategies was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service the following towns in Metrowest MA: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Franklin, Framingham, Grafton, Northbridge, Shrewsbury, Northboro, Bellingham, Uxbridge, and Douglas.