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.
- 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.