$595,385 : Does that price sound right?
February 29th, 2008 Categories: Real Estate News
If you really want to sell your house, pricing it too high, even in Davis’ market, is suicide! In the USA, people who price too high and later drop their price to at/below market end up settling for 88% of the LOWEST price because they are perceived as desperate. (They probably are at that point!).
There was in interesting article in the Wall Street Journal about pricing your home. Here is a summary of the points:
Prestige/Bargain: Round numbers ($595,000) signify prestige, while precise numbers ($595,385) suggest a bargain. We associate precise numbers with lower priced goods - we also think that you have given a lot of thought to arrive at a precise number.
Price Anchor: Buyers anchor off the first digit, so $599,385 seems a lot less expensive than $600,000
Optimal Drop: Drop your price in even 10’s to make it easily calculable to buyers - a drop from $595,385 to $578,495 is not nearly as effective as a drop to $575,385. Also, specify your drop - “price reduced $20,000″.
Expect Less: Unless you have a really desireable house in a town like Davis where we lack inventory in certain price ranges, expect that you will accept less than what you price your home. I usually subtract $15,000 when preparing my seller’s estimated proceeds statement prior to an offer.
