Nevada Real Estate >> Las Vegas Real Estate Specialist: Ditch the 9s When Pricing Your Charlotte Real Estate

I have said this for a long time. $1 could mean a huge amount of lost exposure.

This makes so much sense, but it is hard to get over that psychological boost of the 99 - it is from years of retail brainwash.   

Debe, you've hit on one of my pet peeves.  I found a listing this week that was listed for $129,999.  I thought about sending the agent a dollar to raise it to $130K.  Jeeze!  I can't keep all those 9s straight.

HI Debe- I am with you on price points, but the 9 thing is something I have gone around and around with clients on and I see both sides of this. To me, if the house is flying under the radar of the higher bracket, it loses far less than if it flew under the radar of the lower bracket. I know you can get both by using a round number, but perception is a powerful thing. 

ALTHOUGH... we recently reduced the price of a listing to an even $400,000 and it sold quickly. 

Debe - The 9 thing makes sense to me.  The problem is in the increment between round numbers like your $300,000 example where the seller doesn't want to under price the propery.

Debe,

You are so right!  I have been talking to my Clients about dropping the 9's for a while now and it only make sense.  What seems to be even stranger is the $295,456.21 Doesn't work anymore!  Get with it Agents!

Great point, Debe.  I never understand the odd pricing on properties.  Although the difference between $999,000 and $1,000,000 does psychologically make a difference.  But pricing is an art, and this is a great strategy.

I could not agree more!  

Debe - I like it !!!  So true !  Great reminder for all of us !  We should all look at some of our listing prices now !  AND make adjustments : )  ~ Chris

Debe - sound advice. I wonder, with all the different IDXs and search engines, how much thought buyers put into this, AND how the psychology of it all fits it. And what about range pricing. This seems to be losing it's popularity and most buyers and sellers I have talked with don't like it and think it doesn't make sense.

Jeff

Its become so standard its hard to switch this for a lot of us and sellers.

I really liked this post. I've been opposed to listing homes using charm pricing "9's" since being in real estate. Thank you for applying logic and common-sense to an industry where common sense isn't common!

If you want broad exposure - and who doesn't - listing at the round number is the way to do it.  $300,000 gets you groups who start at that and groups for whom that is the top.  Whatever, it is more exposure for the listing.

This is a theory that's been around for years. The main reason why is that it makes sense ,,, and dollars.

Debe, hte 9s theory makes sense in retail where it is a visual sign you are looking at, but when you realize the way internet searches for homes are structured, ditching the 9s in favor of even numbers wins out. We have been practicing this strategy for a number of years for the reasons you wrote about.

Sharon

Sis, You are one smart cookie :)  As many have stated already, Internet brings about an entirely new way of searching so we must rethink our strategy.  Remember when the "odd pricing" thing was in?  $156,486.58.  Ha ha ha.  Haven't seen that in awhile, thankfully :)

Actually, too many 9's can make a home "look" more expensive than it really is. I see pricing around here like: $353,722. I see those priced homes going under contract more and more quicker than the rounded numbers like: $350,000. It's funny how real estate really IS a numbers game.

I never liked all 9's. One of my sellers wanted to reduce his home to $379,999. I told him let's do $378,000 because there are 23 homes priced at $379,999. Thank God he got it!

All good points, I hate seeing those 999s, too!  And it is the $1.99 retail brainwashing!  Thanks for the post.

This has appeared in several past posts. The reason people do it is because apparently it works much of the time. But even if it didn't, I doubt that anyone is going to reject a home because it is priced at $299,999 rather than $300,000. They may think that the former price is a silly ruse, but if that keeps them from looking at a home that has everything they want, then it is that buyer who is being silly. As independent agents working with sellers, it is up to them to come to an agreement over how best to price the home. In the whole realm of problems in our world and in our business, whether or not an agent uses 9's or not will not likely affect his/her ability to succeed.

Ellie:  That is correct--and that $1 could mean your ONE buyer...period!  

Coral:  I have asked clients as we evaluate final properties in our discussions about their tops--they 100% of the time say, "That one is priced at ___ (the 99 price) so, they must be desperate.  Let's lowball it!" or something to that effect.  

Mike:  TOO funny!  I love that idea!

J Philip:  Oddly enough, the listing that sparked this interest for me was an agent asked me if I would pull comparables and see what my thoughts were on a home that I toured with her a week or so ago.  She had not had one single showing in weeks at $199,999.  I suggested that she get permission from her sellers to RAISE the price to an even $200,000.  Almost immediately she had two calls for showings.  It's amazing how now the buyers think that if it's priced at '999' there MUST be something wrong with it OR that it's been on the market for some time.

Christine:  I always assist them in calculating their carry costs--that nearly always helps them see that they need to do it now or possibly be chasing the market for many months.

Peggy:  I remember those crazy number days.  Some agents said that it worked but, at that time I was representing mostly buyers (95% of my clients) and none of them were impressed--they felt like it was 'WalMart pricing'--I've heard that MANY times and now joke that I think their heavy discounts are 888!!  LOL

Jane:  You're right but, I think those purchasing the $1M properties are wise enough to not take that 'bait'!

The C Team!  Thanks!

Chris:  I have just gone through a bunch of those reductions/changes myself and have several to take care of this week as well.  It's imperative that sellers not go the discount pricing route for their reduction either--sends out those loud signals of desperation! 

Jeff:  True--My sellers are getting it more and more these days.  I believe it to be true and on occasion I will have one that prefers the 9's.  Hey, my job is to market the property...their job is to price it!! (With my advice, of course!)

Chuck:  That's true and I still see some of the older agents pricing like that.  It's certainly their perogative.

Randy:  I love that--applying logic and common sense to an industry where common sense is not common!  I sense a great blog title in that!

Joe:  EXACTLY!  To garner buyers from BOTH search pools...priceless!

John:  I like that "Sense and dollars!"

Sharon:  One of our CRS instructors tipped me off to this and I've found, especially in the last two years, that it seems to work beautifully.  Hey, after all, we ARE trying to capture MORE buyers by spanning the buyer pools!

Sis:  When I started, I had a thing for the number "7"--Every house that I priced that ended in a '7' sold VERY quickly.  Then that practice stopped working for me and I would wonder if I should try that crazy pricing strategy--I realized that when I was sending in my marketing ads to the papers, magazines, etc. if I missed ONE number, then I'd look stupid so, I never did that!  (Thankfully that's one habit I didn't pick up!!)

Jackie:  I suppose it's markets because here, it's the exact opposite--the wildly priced homes linger on until an agent who prices in 'round' numbers gets ahold of the listing, then it sells!  

Susan:  TRUE!  As I said before, when I was representing exclusively buyers, they all made fun of the 'WalMart' pricing and their offers were 100% of the time lowballs because they sensed that the sellers were desperate.

John:  If your seller is priced at $299,999 and my buyer's range is $325,000 to $375,000, I will pull homes for my buyer that are in the range of $300,000 to $375,000.  We're going to completely miss your listing because of ONE dollar!  No, no one is going to 'reject' your listing, you've just lost up to 1/2 of your potential buyer pool with that one dollar difference in pricing.

"might end up w/ multiple offers" by under pricing - only risk there appears to be for the sellers.  Is that a tough one to get sellers to agree to try?  In your example, if $300k is the top end for a buyer, dropping it down to $300k, from $309k, would mean potential buyers would be maxed out already - do they have to ability to pay more?  Wouldn't pricing it at market for the $300-$325k buyer be less risky?

Mel

Mel:  Depends upon the supply and the market absorption trend for that area, product and price range.  They seriously need to consider the days to sell compared to their carry costs.  The second factor would be the length of time that they have been on the market with no sale at $309,000.  So, rather than chasing the market downwards, it's wiser in many cases, to jump that market barrier to be able to sell as opposed to continuing to carry the costs associated with the property.

Debe,

Why something so obvious is so often overlooked. Anything one can do to increase exposure is such a help these days. And to think one can get exposure in two price categories in a great call. Thanks

Hello Debe,

Great post as usual!  I've enjoyed the read very much and all the informative prospectives from the comments.  It's a powerful post with a lot to think about.

Hope you had a wonderful weekend, beautiful weather here in seacoast NH.

Patricia/Seacoast NH & ME

PS....

Debe by the way, I like your new picture, very nice.

Patricia/Seacoast NH & ME

Debe - I've always liked nice round numbers.

Hi Simone,  I manage 5 different IDX's and see first hand what buyers are searching.  In our area, I've never seen one lead search 0 - $450,00!  With the thousands of homes available, that would not be a wise search in our area!  And, as you said, as a buyer, the 999 'fake out' is not doing that seller who has the 999 list price any good.  As I cited in my example above, 'If a seller is priced at $299,999 and my buyer's range is $325,000 to $375,000, I will pull homes for my buyer that are in the range of $300,000 to $375,000.  We're going to completely miss the $299,999 listing because of ONE dollar!'  In our area, the expansion search of just $25K opens up a whole new set of properties and also generally means less quality so, my buyers don't search too far below their price guidelines either.

HI Debe - congrats on the feature, and this is an excellent article. Pricing is key when selling a home. And I would rather price it at market value than over price it.

Happy Mothers Day to you!

RE: Spanning markets: This is genius information! Wowsy, you are really on a roll ... =)

Hi Debe,

Can't get logged in and don't know if AR is going to accept this comment with the tech issues that are going on.

I have some sellers that insist on the 9 strategy and others that don't. 

I think sometimes if a home is $213,245.00  it looks more like there is some basis and justification for the price instead of just throwing out a round number. 

hI Deb, what a great post. I really liked it/ have a great day/

Very Interesting. Something I didn't think about, is that if a buyer is looking from 100,000- 150,000 and your listing is at $99,900, you're missing out on the buyer looking at $100,000 homes. In effect you could be capturing people looking from $75,000 - $100,000, putting the subject property at the top of that "range" which won't look like much of a bargain anyway. Pricing is such an art...

The world has changed and you make a great point about how folks search for properties.  I think it is a difficult habit to break.

I've heard pros and cons of round numbers vs lots of 9's. I don't think it makes that much difference.  If the house is priced well, it will sell.

Hi Debe...Do you find that your buyers often round off the numbers?  Mine do.  If the house is priced at $499,999 they refer to it as the house for $500,000.  Who do we think we're fooling?

Kate

P.S.  Unable to login.

Debe I agree that the way consumers search for home has changed.  Some sellers are still stuck on the 9's and refuse to listen to another point of view.

I prefer the rounded off numbers too. It's hard to give the price of a property over the phone if it is all nines.

Hi Debe - I have taken the "9" issue into account for many years in order to maximize visibility of properties in the MLS.  Many people in market do not consider such issues.

That's a great tip.  I like it and it makes a lot of sense. Thank you!

The 9's is so old school!  I stopped doing this about a year ago.  Sellers love the concept, to be found in 2 search brackets!

I call the 9 thing 'Kmart Pricing.'  I recently had a seller say he wanted to list his home for 189,900.  When I explained the value of the even numbers, and how pricing it at 200K will get more looks online, he went along.  Only a few agents here understand the pricing advantage to the 00000s.  I even brought it up in a sales meeting, and showed them.  None of them listened.

Much ado about nothing! Thant's what I think about this issue . . . if everybody used 5's there would be peole complaining about that!

Perception is reality...the 9's to me is like a blue light special.

Hi Debe,

Great topic! This is something we have talked about between our group. It's definately a numbers game. Thanks for sharing your post.

Cheers from Lake Tahoe,

~Grace

Another great post from you Debe, yes you are right. . .the nines don't work!

Hi Debe, I look at this from a different view, as do many marketing companies and builders. The price ending with 9s or whatever isn't the attaction. It's the fact that the price starts with a lower #.  Since 299,990. starts with a 2, it sounds much  lower than $300,000.00 This has been proven over and over by builders that market new homes. They get much more interst when they advertive " From the high 200s, then what they get when they advertise " From the Low 300s". It's the starting #, not the ending # that generates more interest.

 Also, any agent or buyer that is approved for 300,000. is going to search $350,000 or less which will bring up all listings that end with odd #s, or $250-$350. in case something that has been on market for a while might be due for a price drop.

I recently listed a short sale for 181,668. and got over 20 showings, 3 offers, and a contract in under 30 days. These buyers and agents probably entered 150-200, or 200 or less in thir search criteria, so the ending 668 could have been any #s and it wouldn't matter. Even if someone started their search at 200-225, they would still go back and search 175 to make sure they weren't missing any listing that might interest them.

Hmmm I have done this before and evened the numbers to span two price brackets with success. Right now though it seems home are pricing out somewhere in the middle brackets (169,000 or 310,0000) which is causing me more of a challenge so I have opted for some other strategies that seem to work too! Such fun we have with real estate and numbers. :0)

Debe ditching the 9's must be becoming the new trend.  This is the second post that I've read in about a month or month and a half that suggest putting an end to the nines.  You may have a valid point here, but many people search outside of their range any way and certainly the buyer's agent will search slightly higher for bargains.  This could be an eye opening post.  We'll see what's to come.

Round numbers (at least to me) looks like your serious about selling your house. Thanks for the post.

There was a post writtten similar to this some time back and the perception was the same, a lost opportunity. When the homes are priced fairly, and their condition can support the pricing, they sell, regardless of what number they start with.

Hi Debe, I have heard these theories before and employed them. It makes a lot of sence to capture as many searches as possilble.

I agree Debe. Buyers begin their search on the web. We must know how those tools work for the buyer to maximize our efforts for our sellers. How do they break up the list price fields? How do they let buyers pick their desired search price range? As a listing agent, you certainly need to know this. It's just another faucet of how the Internet is changing how we must think and work.

Debe, this is something I've been attempting to implement for years, although many clients are so ingrained with the retail market pricing techniques that some just won't go along with it.

It sounds like a very logical premise but it's still difficult to sell it to sellers. I see that you seem to be also having trouble selling the concept to a lot of sellers even after doing it for two years.  From your site, it looks like you have convinced almost half of your clients on the concept.  I wonder if you have any comparison data for days on the market between the differently priced homes. There's always going to be a few anecdotal incidences of things selling when you change the price but it would be convincing if you could show a study with large numbers of data points.

495,000,  549,000,  479,900,  225,000,  2,299,000,  226,500,  333,000,  389,500,  350,000,  450,000, 515,000,  479,000,  259,900,  165,000,  235,000,  325,000,  99,900,  150,000

Debe...

This is an interesting idea to consider ... and worth thinking about the battle between technology and psychology!

I have been struggling with this issue for a while.You are correct that you get more exposure on the round numbers these days. At the same time, the old psychological reason of lowering the price to 999 really does work. Someone who wont look at a house for 500,000 will still consider one for 499,999. It's silly but it's true

Debe,

This is one of the first tips I acted on thanks to AR.  A few of my office mates are now doing the same but many still think the old way is preferable.  I haven't done a study on it but perhaps should!

Debe - I think this makes a lot of sense, and I know that most people search the way you suggested, because I see it in my IDX.

Debe, with the way real estate search engines are geared towards even numbers it makes sense to drop the nines. Good Post!

Your explanation makes perfect sense to me.  I will try it going forward.

Debe: I've never heard a buyer think a seller is desperate to price at X99 - that is fascinating to me that you and other commenters have!  Pricing in the 99s It is a very common practice around here.   And especially going from the 900s to over a million, I do think that 999K is way more comfortable that making the big leap to a million.   

We have never been a fan of the 9's for many of the reasons you mentioned. Pricing at certain levels, like at 700K will get you people above and below vs. pricing at 699K. There may be something psychologically more appealing to looking at a home that starts with a 6 vs 7, but if the home is nice, people will still want to see it.

Debe...the nine queen....Those that market salute you....good post and thank you Debe

It's classic PERCEPTION VS REALITY.  If you're discussing prices then $299,900 SOUNDS better than $300,000.

However, the Technology really IS what rules the day.  SO a search of $300,000-$325,000 doesn't pull up $299,900 even though that buyer likely WOULD consider that home.  The problem is this:

Buyer goes and searches $300,000-$325,000 and pulls up 45 homes.  They narrow it down to 12 out of that.  They see the 12, and choose one of those to purchase.  They put the offer in and close and the $299,900 never even had a chance.  HOWEVER, with really picky buyers, they may consider those 45 homes, eliminate 42 of them, see 3 of them, NOT like any of them and move to a variation on their search that MIGHT pick up that $299,000 home.  So it ultimately DOES get seen but only because the "picky" buyer didnt like what they saw initially OR because there was not much available in the bracket they originally searched!

Debe, I was waiting all day (yesterday) to comment on this post.  I wasn't able to log on :-(   Great topic and it's an interesting phenom.  We're so used to that mindset, and it's a  pet peeve for me as well.  Which is why I do a very broad price spread in searching for clients -- don't want to miss out on anything.

Debe,

I agree with you whoheartedly. I recently price a listing at 1 million to capture buyers who want to go to 1M top and others who want to start at 1M. Some other neighbors questioned why I did not price at $999,000 but so far the showings proved that the 1M listing price had attracted buyers in both the upper & lower price range.

Thank you for the great advice to help sellers get more buyer for the "right" price!! :) 

Great post! If you look at how people search for homes in your analytics, it makes 100% sense.

Funny thing is that my wife posted the very same thing several months ago and it was featured as well.  :)

Debe, I wholeheartedly agree...and I think it's especially important to consider pricing around $25k increments as well, since many online home searches are categorized that way. :)

Good thoughts Debe. I have seeing $199,999 for example. Who are you kidding. Really?

Debe

You make an excellent point, we are working in a whole new arena.

Good luck and success.

Lou Ludwig

Debe,

Great tidbits about the 9s.  Hope you had a wonderful weekend.  And I continually pray about your new business success... g

Jeff,  I recently had a seller who was determined to list at $346,999.  I convinced them to go UP to $350,000.  We were the 23rd listing in the complex to go on the market and the first to go off--we were actually a bit above the other properties, price-wise but, when we got to Closing, I asked the buyer what price range they had been searching--$350 - $450K.  The $350K was at the bottom of their price range and they were thrilled to have found their dream home for less than their 'max' in their range.  My sellers boasted that I had told them so and they were glad that they'd listened!  

Marketing other products is different than marketing real estate as buyers are savvy and know are doing most of their searching on IDX sites.  Our ranges in those sites are in $25K incriments.  If my sellers are near one of those cut-offs, then I suggest that they go to the bracked number to be found by two different pools of buyers.  In our area, if you search 00 - $450,000, you'll get thousands of listings and that's not what anyone is doing on any of my IDX searches.

Tim:  Wish I did have that data and that definitely prompts me to see if I can get some pulled in order to convince some of the straggling sellers who want to price at the 'odd' price.  The one at $450K was at $479,000 and moved to $450K at which time, we immediately had several showings and ultimately received an Offer.  

We can't always be at those cut-off numbers--for example, the home comps at $185,000, is $15K away from $200K and $10K away from $175K.  That's alot of movement just to get the price within the search parameters.  We can't really ask that sellers move that much for an initial listing.  $184,999 sounds like WalMart pricing and we're not trying to 'fake out' our buyers or make them think that this is "discount housing!"  So, we leave it at $185,000.

OH, and my $235K just dropped to $225,000 today!  I sent them to this article and it made sense to them so, they priced at the 'mark!'

Thanks everyone for your comments--I do hope this helps you as much as it's helped me!

It can be a lot easier to write an offer for an even number as well.  Congratulations on your featured post.  You make a very good point.

The 9s seem so much like a car lot ad! I agree it is not useful!

Debe, this is such a great post..i ditched mine last year after tousling with sellers ...outcomes were great too!