Strategy Tip: Left digit in sale price affects home buyers most

green-dollar-sign-clipart-4T9gK5qTEAugust 11, 2016, Builderonline.com

Study says listing a home just below a round number is more effective and nets a higher price.

The best technique for pricing a home when listing it for sale is setting the asking price just below a round number, according to recent research published by the Journal of Housing Research – an official publication of the American Real Estate Society (ARES).

“These findings will help real estate brokers and sellers of homes develop more informed listing and marketing strategies to better suit sellers’ needs,” said Ken Johnson, Ph.D., ARES publication director, real estate economist at Florida Atlantic University’s College of Business and co-developer of the Beracha, Hardin and Johnson Buy vs. Rent Index. “The results of this study take a lot of guess work out of the marketing of homes for real estate brokers.”

The study looked at 1,000 buyers in Virginia considering a pool of more than 370,000 listings. The researchers were able to determine the impact of “rounded pricing” listing strategies versus “just below pricing” listing strategies.

“Our study suggests that by using the just below pricing strategy sellers can price their home slightly higher without driving away potential buyers,” said Eli Beracha, Ph.D., of Florida International University, who conducted the study with Michael J. Seiler, Ph.D., of The College of William & Mary. “As a result, they end up selling their house for more.”

Read the entire article online here.