Charleston, SC Posts

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You are losing buyers if you don't Price it at the break!

There are many pricing strategies, but after reading Why list with the #8?, I thought I'd throw it my 2 price soupcents?

The common philosophy is to price a listing below a break because it sounds or looks better psychologically. For example instead of $270,000, price it at $269,900 or instead of $200,000, price it at $199,900.   

When it comes to pricing and you are close to a price break ($25,000, $50,000, $75,000 or $100,000), the price should be strategically placed at the break (at least initially). Hear me out on this. 

When I do a reverse prospect search for my listing, here's how the numbers break down:

price break

At $419,900, we lose 21 prospects and at $434,900, we lose 27 prospects. By pricing the home at $425,000, we get the greatest exposure to the maximum number of prospects...in this case 114 prospects.  Here's why: First, when agents set up criteria on MLS for a buyer search, they set up brackets.  Second, when buyers search online at most major real estate websites, they are given the option of searching at $25,000 breaks.  By pricing the home at $425,000, you will capture buyers searching between $400,000-$425,000 AND buyers searching from $425,000-$450,000. Pricing it lower than $425,000 means you actually lose Buyer Prospects. We don't need to lose any prospects!!! So price it at the break if you can! Where are you going to price your next listing?

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Michele Reneau - Military Relocation Specialist with Carolina One Real Estate in Charleston, SC.

Rated number #1 featured Summerville, SC Realtor on Activerain.com. As Featured on HGTV's House Hunters. Publisher/Author for Charleston Real Estate Update  including featured listings and sold properties, and monthly statistics on Charleston Real Estate MarketThe Charleston Relocation Expert specializes in military relocation, first time homebuyers and creating marketing exposure to sell your home in Charleston, Goose Creek, Summerville, North Charleston, Hanahan, Mount Pleasant and the surrounding areas in Charleston County, Berkeley County or Dorchester County, South Carolina..  I can also be contacted by email at mreneau@carolinaone.com. To view all Charleston Metro area Homes for Sale Click Here and then click on Search for Homes.  With over 25 years of Lowcountry Living, I know the Charleston Metro area.

Michele Reneau, ABR, GRI, CRS

www.CharlestonRelocationExperts.com

Follow us on Facebook at www.facebook.com/CRETeam

Comment balloon 18 commentsMichele Reneau • October 05 2008 01:00PM

Comments

Great post! You also made it to the top of the blog lists. Way to go!

Posted by Melissa Breeland (Residential Mortgage of SC) over 9 years ago

This has long been my philosophy!  I never have understood the "$199,900" etc. pricing!  Duh! 

Thanks for the post explaining it so well. 

Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) over 9 years ago

Michele, you are right. I use the price point breaks that realtor.com site has when helping my clients setting the price.  It gets the listing the most exposure.

Posted by Rich Mielke, REALTOR, Frederick Maryland Real Estate (REMAX Results, Frederick MD) over 9 years ago

Great Post!  I subscribe to the same theory. 

Posted by Carol Swain, Realtor, -www.swainsells.com- Bucks County, Pa (Keller Williams Real Estate) over 9 years ago

Michele, I like your system because Ido the same evaluation when I list a property... great post

Posted by Paul S. Henderson, REALTORĀ®,CRS,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) over 9 years ago

Great Post.  Nice explanation for there is more to pricing than dropping one digit below an even number.

Posted by Bill Ladewig, Experience Is Your Advantage (LoanOfficerSchool.com) over 9 years ago

Guilty as described, Thank you for opening my eye, I didn't realize that the bracket would actually loose people out of the prospect count at any specific number, and still doesn't make logical sense to me, so i will investigate. Thank you for bringing to my attention.

Posted by Sheila Santini, GRI (Waterfront and Boaters paradise Realtor! ) over 9 years ago

I'm with Sheila on this - I need to do a little more investigating. In theory, pricing just below the break should still show the prospect.... Katerina where are you? She prices below the break and with an odd number such as $xxx,777 to boot.

Posted by Debbie DiFonzo, Lebanon MO and Buffalo Missouri Real Estate (Debbie DiFonzo - United Country VIP Realty, SW Missouri) over 9 years ago

Sheila & Debbie-I don't know if your MLS has a Reverse Prospect system where you can see how many agents have buyers that match the criteria of your home. Our MLS does and we can change the price to see how many prospects will change if the price goes up or down. Worth the look. 

If a buyer is using ex. Realtor.com and is only looking from $225-$250K, you'd loose this prospect at $224,900.  If the home isn't close to the break, then it's fair to use an off number to draw attention or use a lucky number.  But at $225K, you catch the wider spectrum.

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) over 9 years ago

Thanks for the post and the info you provided.  I am bad about falling into that out of habit.

Posted by Team Honeycutt (Allen Tate) over 9 years ago

Very cool M....I love it.  Your thought processes work well and make sense.  I'm passing this on to my realtor referral partner.

Posted by Larry Bettag, Regional Vice-President (Larry Bettag - Cherry Creek Mortgage) over 9 years ago

I'm with you on this.  Those who have been in the business 10 or more years don't get how important this is to the internet generation, in particular those who search realtor.com

Posted by Michael Johnson, Metro Charleston SC (Carolina One Real Estate) over 9 years ago

Michelle, this is a great point.  I've read the pyschological arguments, but I just don't think they hold water and I certainly don't think they outweigh the benefits of picking up additional customers.  People using the internet search ranges.  If your house is on a break, you get included on the high-end of some searches and the low-end others.  If you price $200 lower, you miss that 2nd group entirely.  Realtor.com and several other places I checked do included the break price in the search results.

Posted by Erik Hitzelberger, Louisville - Middletown Real Estate (RE/MAX Alliance - Louisville REALTOR-Luxury Homes) over 9 years ago

This is a great piece and also a great point. I have never done this approach myself, but I see other agents doing it. Thanks for providing the graphs- I see the value in pricing at the breaks. I will call my sellers right now to discuss it!

Kind Regards, Nicole Weidauer

The Egerer & Weidauer Team, Keller Williams Realty North Seattle

Posted by Nicole Weidauer (Keller Williams Greater Seattle) over 9 years ago

Sometimes it's a tough call.  Our internal mls system (our Board's system) and Realtor.ca, don't have the same cut off (pull down menu ends at a specific price point).  It would be so much easier, if everything was consistent, so that when buyers are looking, we can price it internally with the Board, the same way that it shows up on the public site.  Sometimes we have to decide whether to price it for agents who are looking on behalf of their clients, or price it for the general public (in which case we may lose some real buyers, whose agents are looking internally, for good listings to show them).  One penny sometimes makes a difference. 

Having AR and our outside blogs and even some newspaper exposure, helps to market the property so that it's not missed by anyone. :)

Posted by Sylvie Conde, Broker, Toronto Real Estate (Sutton Group-Associates Realty Inc., Brokerage) over 9 years ago

Hi Michele. . .  I'm with you.  Wrong Pricing is a Liability to everyone.  There is a market out there. We're seeing Buyers regularly.  Smart ones !! Great post.  Hey what's the market like where you are ??

Thanks for the good post

Aloha

Jim

Posted by James G. Pycha, (R), REMAX Kauai Broker (James Pycha (R) - REMAX KAUAI) over 9 years ago

Thanks for the tip, did not think of it that way.  The way you put it was easy for me to understand

Posted by Adam Chinn (Berkshire Hathaway Realty) over 9 years ago

Michele,

Thanks for the great explanation. Getting your listing found is the first step to selling it, and being able to explain that to the homeowner is key.

Posted by Chris & Karen Highland, Integrity, Experience, Enthusiasm! (eXp Realty) over 9 years ago

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