How Pricing Your Home For Sale is a Marketing Strategy
When you’re selling your home, it’s the small details that matter the most. One of the most overlooked ways to generate excitement about your home is actually with pricing. Think about it this way: you never hear about the home for sale with the crazy-high asking price, do you?
On the other hand, you’ve probably heard some buzz about a home priced competitively. These are the things that get the word out and that drive home buyers to take action.
When marketing your home, you need to consider the facts. You need to think seasonally, understand your home’s unique characteristics, and take a close look at local marketing conditions. Only then can you think of how pricing your home for sale is a marketing strategy in itself. In this guide, we’ll talk about how to leverage your home’s selling price as a marketing tool as well as the best strategies for naming your price.
Consumer Psychology and Mindset
One of the biggest factors in understanding how home pricing works is to think about consumer psychology. This is the psychology that plays a role in everything we purchase. It’s how we interact with stores and products, and it’s also at play when buying a home.
Any time you make a purchase, you most likely look into the price. For buying a home, most buyers are shopping online. They usually use price to guide their search, and we can use this knowledge to price our property accordingly.
There are 3 key ways psychology influences price:
- $19.99 Syndrome
- The Power of 4 and 7
- Utilizing Zeros
While these might seem a bit out there, they’re based in research and fact. Let’s break each of them down in greater detail.
1. $19.99 Syndrome
According to Robert Mctague, $19.99 Syndrome is a common belief in marketing that by pricing something at $19.99 rather than $20, you’ll make it seem like a better deal. You see this with any number of homes priced $199,999 for instance.
This actually hurts your listing since the people searching in the $200,000+ range aren’t likely to see your listing online in a refined search. That means you’re actually not attracting the right buyers with this mentality. You need to understand how people search for homes.
2. The Power of 4 and 7
Why are the numbers 4 and 7 so powerful in pricing? It’s because a home priced at $334,000 will seem much more precisely priced than one priced at $330,000. This makes a point to the buyer that the seller knows what he or she is doing.
Another reason this is so valuable is the Right Digit Rule. This rule states that consumers look to the right digits first, meaning that the price of $227,000 looks better than $229,999.
3. Utilizing Commas
Finally, the way you use commas matters as well. The more zeros you add to your price, specifically a promotion, the more significant of a deal it seems to be. If you’ve discounted your property by $10,000, for example, listing it as a $10,000.00 price cut looks more significant.
How You Price Your Home Matters
So how do you actually price your home now that you understand how this number can be used as a marketing strategy? While these ideas about consumer psychology are important to keep in mind, you’ll still need to consider your particular home and the competition in your local area.
Your home’s price is often the first thing buyers see when they’re browsing for properties. Make sure your price stands out, whether you choose to price it below the competition to start a bidding war or you choose to rely on the rule of 4 and 7.
There’s most definitely a psychology behind pricing homes. Price can be one of the largest motivators for selling any product, including property. You need any edge you can get over the competition, so why not be smart with pricing? This is a free marketing tool. Why not take advantage of it?