A study at MIT found that the same item sold better when priced at $39 than it did at $34. The art of pricing involves pricing your item where consumers feel it’s a good value: not overpriced and not “cheap”. I’ve seen similar studies that found that new fathers, for example, tend to purchase the most expensive version of an item for their babies with the perception that it is “better” than the other options. Of course, there are time when we see a price for an item and think “they are our of their minds!”. The same is true in real estate.
The art of pricing real estate is pricing a property to get a seller as much as possible without turning off buyers who think you are overpriced. We’ve all seen them… that house in poor condition in a neighborhood where nicely kept homes are going to market at, say, $450,000 and selling for an average of $438,000, that is priced at $460,000. It’s the seller’s favorite home in the neighborhood. He can’t understand why buyers aren’t trampling over each other with offers in hand.
Some keys to pricing your home to sell for top dollar as quickly as possible:
- If your home is worth “about $500,000″, consider listing for $499,000 or $490,000. The power of the 9 will get your home sold more quickly to save you the cost of carrying the home the extra few months.
- Price point is important. A $499,000 home will turn up in searches for those looking up to $550,000 and those looking up to $500,000 whereas a home listed at $505,000 misses all of those buyers who can capped their search at $500,000.
- Make your home match the price. If a clean, “vanilla” home down the street sold for about $500,000 but you have bright colors and lots of furniture, redecorate your home for the market. Staging works because you decorate your home for the widest range of potential buyers, not your unique family.
- Get your buyer’s work done ahead of time. Get a handyman over and get the work done. Buyers don’t want to have to take care of a honey-do list before moving in if they are going to pay top dollar.
Happy pricing! Even in a hot market like ours in Austin, you need to get pricing right to avoid your home being the one that sits and gets a stigma.