Friday Facts: THE PSYCHOLOGY OF PRICING A REAL ESTATE PROPERTY

FRIDAY FACTS
June 3, 2016

THE PSYCHOLOGY OF PRICING A REAL ESTATE PROPERTY
Snippets from an article by Robert McTague in Inman News 

The $19.99 syndrome

  • Consumers start their real estate search online. A property priced at $199,900 misses those looking between $200,000 and $225,000. A property priced at $200,000 hits those looking between $175,000 and $200,000 as well as between $200,000 and $225,000.
  • Discounters use .99, but luxury brands don’t.

The power of 4 and 7

  • A price of $247,000 or $244,000 is precisely priced and it makes it appear that cost has been scrutinized suggesting less negotiating room
  • The price is unique and stands out.

How price is written matters

  • The Journal of Consumer Psychology found that when people have to spell it out in their heads, it sounds higher. Of the following: $1,400.00, $1,400, or $1400, the last one, $1400 seems lower to the consumer. Advertise $177000, not $177,000.

Zeros

  • A study from Cornell found that 5.00 and five dollars sold more, and $5.00 sold less.
  • Advertise one hundred thousand or 100000, not $100,000.

For discounts or price adjustments

  • Word the reduction $50,000.00 not $50,000.
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