Does Pricing Matter? It’s critical, but, maybe not in the way you think….
April 28, 2010
Does Pricing Matter?
April12, by Rhonda Duffy, Duffy Realty of Atlanta
Search the Internet right now in any price range and then ask yourself, are you expecting to see every home in your price range? Of course you do, why else would you be searching? So why is it that many marketing geniuses are still pricing homes for example at $299,900? Let’s run a quick scenario. You are a buyer looking from 300K to 400K. You use the search engine pull down menu on any major real estate website and pull 300K to 400K. Do you think to then look at 250K to 300K to see what is priced at $299,900? No probably not. So the agent of the sellers who have priced these homes to attract buyers at the 300K range have skipped those buyers all together even though they sold the idea to the seller that this would be the best marketing for them as their marketing expert.
Okay, let’s skip over all the buyers out there that determine what they want to see and tell their agent such. What about the agents who are told by their buyers that their top range is 350K and told to search for homes in that price range and to show them those homes? The buyer’s agent typically makes the choice to pull 300K to 350K, just by habit. Don’t even fool yourself into thinking that the buyer’s agent thought to pull $299,900 to $350,000. Forget it, it did not happen. So, again why are the marketing gurus and I am talking about top agents around the country still pricing homes ending in 900 when it is obvious tin this market hat every buyer searches the Internet to see all the homes that are listed in their price range. Is it that the agents have never searched the sites themselves? I think we have hit on something here. It has always been the legacy in real estate to follow our forefathers. And our forefathers have always listed homes ending in 900.
Agents use the MLS; we don’t use the public real estate sites. I would guess that many agents have never searched as a buyer on Realtor.com or other major real estate websites that the public is using routinely. So, the prevailing psychology of being under the price range is just the musicology that we have always used. However, even if the musicology of the buyer is best expressed in the 900 pricing methodology, any agent would have to argue that the Internet is more powerful in producing buyers than the old pricing musicology ever was. Some sites search in the 25K ranges some in the 50K range and all in the 100K range. Any house currently on the market with anything less than round numbers is missing extra exposure and ultimately buyers.
Even houses that are listed in anything less than 5K increments are missing the boat from the searching of agents. In other words, let’s say that I am searching for a client from 145K to 200K. Anything listed at 144,900 will be missed by my search when in fact if they had been listed at 145K they would have met the same search criteria. So much emphasis is put on getting the right price on the home and yet many or I should say most agents are missing the right price all together. I guess this is a time when we must ask, why do we do the things we do?
