In responding to a client's e-mail regarding a price reduction on their listing, I had recommended a price of $800,000 rather than $795,000. The response asked whether the $800,000 would be a SELLING price. I started my response by commenting that in this buyer's market (a 2 year supply of homes) it was very unlikely to get a full price offer. Then I decided to check the MLS for statistics before sending the response. It surprised me.
Since the first of the year, more than five months, 12 waterfront properties listed between $775,000 and $825,000 had sold.
Two were listed at $800,000. Both sold full price at $800,000. One was listed at $810,000. It also sold full price.
- Three out of three sold at 100% of list price
Five were listed in the $799s:
- $799,999 sold at $780,000 - 97.5% of list price
- $799,945 sold at $770,000 - 96.3% of list price
- $799,900 sold at $700,000 - 87.5% of list price
- $799,500 sold at $710,000 - 88.8% of list price
- $799,000 sold at $715,000 - 89.5% of list price
Four were listed below that:
- $798,463 sold at $700,000 - 87.7% of list price
- $795,000 sold at $715,000 - 89.9% of list price
- $795,000 sold at $650,000 - 81.8% of list price
- $789,000 sold at $700,000 - 88.7% of list price
The round numbered listings sold at 100% - the others averaged 89.7%.
Once again - you don't always KNOW what you think you know. Research pays for itself.
Sharon, this really works. I forgot about this but a few years ago I ended ALL of my listings with 276. Just a number that I pulled out of the air. I got sign calls like you wouldn't believe, and they sold.
I took some time off when I had my baby, I think I need to change my listing prices. Thanks for reminding me.
Now that is some good data querying... Good investigation and post!
Matt Locke
1-877-MattLocke
http://www.georgiahomeinsurance.com/
http://www.georgiainvestorinsurance.com/
I usually let my sellers pick a birthday and come up with 289,327 so it will stand out in the field. I have a number of condo listing and do $259,349 because its unit #349. It stands out and makes it more fun. the unit works great as I can tehn remember it.
920 Poeyfarre #406
Cotton Mill Condos
$204,406 Fully Furnished
New Orleans, La. 70130
Very interesting Sharon,
I hadn't thought to research my mls. I usually price under the even number.
Interesting.
I list at even numbers because it attracts MLS searches for that figure and above and for that figure and below. Agents search UP to a certain even number and that's where I want to be. But, the lising will produce if the agent searches FROM that number also.
I did NOT know about the sales stats. THAT is very interesting
Deborah - I understand.
Brad - we're alike in liking statistics, research, and what makes things work. I'll look forward to hearing what your research shows.
Stephanie - it will be interesting to hear your current experience vs your past experience.
Matt - thanks.
Eric - whatever works, works.
Roger - it is psychological. A buyer thinks a home is priced at $900,000 when it's $899,900 - it's easier to say. When making an offer, it's better to offer $900,000 than $899,900 because it has a different feeling to the seller.
Endea - why do you price under the even number?
Roberta - do you have a lot of range pricing in your area? Years ago, when we were Prudential, we had range pricing, but because other agents didn't price the same, it never made sense here.
Randy - sometimes we do something without really knowing why. This was one of those cases.
Danny - I'd still stick to round prices when I reduce. I don't think any more people will check out a house at $795,000 than at $800,000 - if they reduce to $775,000 they may attract new prospects.
Lenn - you're using the same assumption I've used for years. I just hadn't run the stats before.
Neal - maybe so. I just think people take the easy route - it's easier to type 500 as a top than 499,999.
Bryant - 000s as in $899,000 vs $900,000 - then go ahead and add the extra 00s.
Randy - I'll be interested to hear the result of your appointment this morning.