How To Price Your House

For a long time, marketers have prices products just below a round number because it has proven to have a psychological appeal. $999 sounds like a better deal then $1000, even thought there is a difference of only $1. 

In real estate, the “99″ strategy is nearly always employed. For instance, if a seller prices their home at $499K instead of $500K, the $1K they lose will cover some of the buyer’s closing costs, but in the buyer’s mind, they are paying $500K. In most cases, though, knocking off $1K to bring the price below a rounded figure doesn’t make that much difference to a buyer or seller.
Nonetheless, there’s a fair amount of psychology — and strategy — that goes into determining a home’s asking price. Once you know your home’s value and have a price range in mind, it’s time nail down the final “list” price. 

Here are 5 strategies to price your house: 

1. Appeal to the “herd mentality”
Buyers never want to be the only ones interested in a property. They always want to know if others are shopping for the same property, and if theyre not, why not? Price your property on the lower end of the value range will attract more buyers, and create a herd mentality. 

2. Price it to be found in real estate searches
many buyers have ranges which they filter their search by. So if they’re willing to pay $500K for a house, (plus/minus $10K), then pricing your house at, say, $510K will filter out your house when the search for properties under $500K. its better to price your house at $500K, or even better $499K! 

3. Don’t get ‘creative’ with your asking price
try setting a price for your property that buyers can remember. If you price it at $351,678, for instance, its likely that buyers will think it’s a strange price and get curious, and probably lose interest. 

4. Work out a pricing contingency plan before you put your home on the market
Sometimes, sellers have high expectations about their property’s appeal and they want to ask top dollar for it, even if their agent doesn’t believe they’ll get it. Or perhaps another agent they talked to planted a high price tag in their mind. Angents try to sell the home at the higher price. But before the “For Sale” sign goes up, try to work out a contingency in case the property doesn’t go for the desired price. By having everything on the table from the get-go, you’ll have a plan B should the first plan fail. This saves time and helps set the appropriate expectations in the seller’s mind, so there are no unpleasant surprises down the road. 

5. Pricing is an ongoing discussion
Eessentially, be open to your agents pricing strategies. It’s their job to know what works and doesn’t. And as with any strategy, be prepared to have an ongoing discussion about pricing with your real estate agent. The price for your property is never set ins stone. A lot of factors can come into play when selling or buying a home, and not all of them can be anticipated. If you can be flexible and react quickly to changing conditions or new information, you’re more likely to get the best price with the least aggravation.