According to a Washingon Post article, homes priced at an "exact" amount tend to sell for more that homes priced with lots of zeros.
Researchers at Cornell (spending those grant dollars well, I see) conducted lab tests last year on graduate students (?) and examined sale prices in a couple of busy locations in the US. How they accessed MLS data is anyone's guess...
Anyway, the results were that people tended to view the exact price more favorably than the "big number" price.
"The study concluded that because people are used to precise numbers for items that don't cost much and to round numbers for large amounts, consumers generally and home buyers specifically tend to perceive that a price is smaller if there are digits at the end instead of zeros."
Even the researchers thought this was a bit "ridiculous" but asserted that our response to a price was more than just "deliberative reasoning". So, a home priced at $435,500 looks more reasonable to us than $436,000. Even better, $498,750 would look better than $500,000 (that's a lot of zeros!). Their study concluded that a favorably-priced home sold for about $1,400 more.
The Washington Post article also referenced some research done by Redfin where they found that a home priced in an increment of $500 tended to be the most favorable.
While this is nothing new to any of us, I suppose it's an interesting note to remember when discussing price with a seller.
Interesting article....
Now I need to rethink a marketing strategy - what to do when you want to allow more searches to include your price. IE - Price at $350,000 even to include searches of $300 to $350 AND $350 or more..... If you price at $349,500 you miss out on $350K and above searches.... ??
April Hayden-Munson Realtor, SE Wisconsin
April, you're giving me a headache!
The study didn't take the search range issue into account, I think...
Great timing. I was thinking about this today- pricing something at 899,999 or 899,000. Does the extra 999 look more favorable? Or what about 889,999? Thanks for the tip!
Ginger Wilcox, Marin County Realtor
Ginger - thanks for your comment! You could try 777...oops, that's been taken.
Camarillo CA Real Estate Agent/ Mana Tulberg
Mana - have you seen many real estate properties listed in this manner? Just curious.
Nestor & Katerina Gasset, Realtors® Wellington Florida Luxury Homes
Very interesting idea, Katerina. You would definitely notice such a price when scanning the hotsheet...
Adam Waldman - Long Island Real Estate
I thought I would try it on the next opportunity. A test, perhaps!
You are the second person to report on this that I've seen and when I started in the business I was told this by my mentor and it seems to work when I use it. The logic I was told was the fact that people thought it looked more like the number came from an appraisal versus a number pulled out of our...
Todd Clark (Realtor), GRI (Washington Co, Beaverton, Oregon)
Todd, that's a good observation about the perception of an appraised value. Something to remember.