When selling a home everyone has the exact same goal in mind… sell it for the most money, in the least amount of time, with the least amount of stress. One thing that can make this process difficult is deciding what you can do to your home to achieve these three things. Initially, you may think about potential renovations, or maybe staging; but all of that adds additional costs, time, and stress. What if we told you that making one simply adjustment to the price would net you more money, in less time, without additional stress? Well, the data is in and that is exactly what you can do!
Have you ever wondered why when you go to a store things are priced at 99 cents rather than the full dollar? As it turns out, this small adjustment of the price actually has a large effect on how much of that product sells. Physiologists have a bunch of theories as to why this may be, but many studies show that when you end the sales price in a “9” it simply sells more than if it were a few cents higher or lower. After a ton of research, this same affect can be used in Real Estate.
On average, if a home is priced with the final digit being a “9”, it will sell for more! Of course, with the prices of homes we aren’t talking about adding 99 cents to the end of hundreds of thousands of dollars. This same affect is proven to work on the final digit before zeros. This has been proven to work no matter which price point you are dealing with, but the degree that this effect works slowly diminishes as the price increases. This naturally makes sense given that this $1,000 change is a greater percentage of $199,000 than it is at $1,999,000. So if you want to sell your home for more money, without any additional effort, ensure that your price ends in a “9” will do just that. This graph below shows the degree to which this pricing strategy works at different price ranges.
So adjusting the price to end in a “9” makes it sell for more money, but that is only 1 of the 3 goals that comes with selling a house. What about selling it faster and with less stress? Unfortunately, there can’t be much said in terms of stress, but this same phenomenon IS shown to make homes sell faster! Research shows that on average, a home that is priced with the final digit before the zeros being a “9” sells 4.2 days, or 3% faster, than those that don’t!
The final question that may come up with this idea comes when your home is priced at the pricing bands of 25 or 75. As we know, people search for homes in increments of $25,000. This means that pricing a home at $25,000 gets more views than it would if it was priced at $26,000. But if you are selling at the 25 or 75 pricing bands, then you wouldn’t be able to change the price by $1,000 and have it end in a “9”. Luckily, research has also shown that if a property is priced at $124,900 rather than $125,000; it still gets a similar effect that altering the price by 1,000 does.
If you would like to know more about the research that goes into these results, or have any questions about he home buying/selling process, let The CAZA Group be your resource for everything Real Estate!