Pricing Points Help to Sell Your House Quickly
Posted on August 25, 2010
Filed Under Real Estate Sales Tips | Leave a Comment
Pricing points and price limits are used by house buyers to simplify their house shopping. Such pricing points are traditionally chosen as nice round numbers, like $250,000 or $125,000. According to Kendrick Kapuna of Aspen Dance Realty, it is absolutely vital that you understand how buyers understand and relate to pricing points if your intention is to sell your house quickly.
A buyer first calculates how much of a loan he or she can afford. That loan amount usually defines an upper limit for the price range of the house. So if a buyer’s maximum price range is $200,000, then most of the house hunting will happen in the $175,000-$200,000 range. Every so often a buyer might dip down into the next price level below their maximum, however they rarely spend much time looking above the maximum because that price range is higher than they can afford.
One thing you don’t want to do is set your asking price in the next higher price level in order to give yourself some negotiating room. Here are some reasons why:
MLS Listings
The MLS is a computer-based multiple listing service that real estate agents use to search for properties. A buyer might specify search requirements of a house with three bedrooms, three baths and a garage, priced at $300,000 or lower. The computer then prints out a list of houses that exactly match that criteria. The computer is not intelligent enough to know if you have priced your house with a built-in cushion for negotiation. If your house were priced at $310,000, or even $300,500, then it would not appear in the above search results and the buyer would miss an opportunity to view your house.
Price Conditioning
It may be a bit of a cliché, but the “$9.95 advertising trick” is very effective. Most buyers are very well conditioned to think that $9.95 is a much lower price than $10.00. If you are wondering, “How can I sell my house quick?”, then remember that a price of $169,500 is much more attractive than a price of $170,000. You can use this buyer tendency to your advantage by always pricing your house $500 less than the next highest pricing point on the market.
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