When it comes to pricing homes, there are a few schools of thought…
Lucky number theory:
If your favorite number is 27, your list price might be $498,627.
Psychologically sound theory:
In an effort to make the buyers think they aren’t really spending half a million dollars you list the house for $499,900.
But what about pricing the house in a way that makes the most functional sense?
First, let’s assess your goal as a seller. Honestly, that’s the easy part – it’s all about the cheddar. In the immortal words of Tom Cruise, “Show me the money!” But to do that, we need to get your house in front of the most amount of people possible. That’s where functional pricing comes in.
Next, let’s take a look at how people search. If you’re reading this, I’m assuming you’ve gone to realtor.com, homesnap.com, or one of those other online house search tools. Did you search for homes between $495,000 – $500,000? Not a chance. A lot of searches are done in $25,000, $50,000, or even $100,000 increments. So not only do I want to capture people searching between $450,000 – $500,000, I also want to get those between $500,000 – $550,000.
Keep in mind that many search engines aren’t programmed to round up. So if your house is listed for $499,900, it’s not guaranteed to appear in a search from $500,000 – $525,000.
Okay, time to bring it all together. Let’s assume the market value of your house is between $485,000 – $515,000. My argument for functional and effective pricing would be that listing your house for $500,000 would be the magic number. In today’s seller’s market, you can create a bidding war to obtain or even exceed the higher end of your market value as long as you get it in front of the maximal number of online viewers.
In summary – price your house for maximum viewership in an effort to get top dollar. Easy, breezy, beautiful, functional pricing.
