In the retail world, pricing an item at $2.99 — rather than $3— will boost its sales. However, if you’re a seller using the same tactic when pricing your home, you may want to reconsider. When it comes to real estate, pricing at certain price points holds a clear advantage. Let’s dig into a recent study to see how and why.
The round number advantage
After hearing from agents that homes priced at certain round number price points tend to sell faster than homes priced slightly below, Edina Realty decided to dig into the data. The Regional Multiple Listing Service, Inc. provided sales data for:
- Single family homes
- Sold between 2005-2015
- Within the 13-county Twin Cities metro area
The results were clear. When a home is priced at preferred round number price points — say, $250,000 or $400,000 — it sells 18 percent faster, on average, than a home listed slightly below like $249,000 or $399,000.
Homes priced at preferred round number price points sell 18 percent faster
Why do homes priced at certain round number price points sell faster?
The next logical question is, why do preferred round number price points make such a distinct difference? In retail, the “discounted” price draws attention even in the most cluttered, frenetic stores. If homes were still listed in newspaper ads, similarly priced homes may have the same effect.
But today’s real estate buyers start online, and they search and filter oftentimes based on pre-defined price parameters. By pricing your home at $249,000, you may draw attention from buyers with a budget limit of $250,000. But what about the buyer whose budget starts at $250,000? You’ll miss them completely.
Our research agrees. We looked at millions of page views for homes listed on edinarealty.com from 2005-2015 and found that:
- Using preferred round number price points delivers 58 percent more search results than “discounted” pricing
- How you price a home can greatly affect how often it’s returned in search results, and how many buyers view the home online
Your home appears in search results 58 percent more frequently when listing at a preferred round number price point.
The lesson here is clear. When pricing your home, don’t replicate the sales tactics of big box stores. To get the most views online and in person, work with your REALTOR® to find a listing price that is competitive, fair and priced strategically. You’ll thank us when you’re at the closing table weeks before your odd (priced) neighbor!
Ready to sell?
Selling your home is a big decision, and it helps to work with an expert. To get in touch with a local specialist who can help you prep and price your home using insights like these, call, email or chat today.
For more tips on selling your home, follow #SellerInsights on Facebook, Twitter, Instagram and YouTube.