Four Pricing Tricks to Help Sell Your Home Faster

 

Americans are constantly buying stuff.  But most of us don't do a whole lot of selling — which means we don't have much experience at setting prices.

 

Want to improve your odds of finding a buyer for your home?  As you try to unload your property, consider these four pricing tricks:

 

• Looking slim.  We all know that $1.99 is barely less than $2. Yet retailers continue to use this trick — because there's ample evidence it works.  "When we look at prices, we make judgments in a fraction of a second," explains Manoj Thomas, a marketing professor at Cornell University's Johnson Graduate School of Management. "We read from left to right. We anchor our judgment on the first thing we see."

 

• Stacking up. As buyers check out your house, they'll have in mind a price they are willing to pay. The good news: You can influence that price.  "You should list higher than you're willing to accept," says Alan Cooke, a marketing professor at the University of Florida's Warrington College of Business. "If you ask a high price, people use that as information in setting their reference price.  But there's also evidence that, if you set a price that is implausibly high, the impact will be less than if you set a price that's more reasonable."

 

In addition, you can affect the reference price of buyers by, for instance, sharing the price of competing properties in the neighborhood.  The obvious caveat: Only pass along this information if the comparisons are in your favor.

 

• Sending messages. Imagine you're selling your house, which you figure might fetch a little under $600,000.  A round number, such as $595,000, will convey quality, while a precise number, like $595,385, will indicate a bargain.  The reason: We associate precise numbers with lower-priced goods.  A precise number may also signal that you have given a ton of thought to the price and you aren't inclined to negotiate.  Trying to settle on an asking price for your home?  "If it's a new development and you're trying to give the impression of prestige, you would want to go for the round number," advises Vicki Morwitz, a marketing professor at New York University's Stern School of Business.  "But if you're going for the quick sale and you want to give the impression of a bargain, you would want to go for the precise number."

 

• Cutting prices. In today's housing market, many homeowners are struggling to find a buyer.  Thinking of dropping your asking price?  Suppose that, as in the above example, you initially asked $595,385.  If you lower the price to, say, $578,495, potential buyers may perceive the price drop as relatively modest.  "You want to make the computation as easy as possible," Cornell's Prof. Thomas says.  "If you use digits that make computation difficult, it will lead to a perception of a small difference." 

 

What to do?  You might specify the dollar discount — or, alternatively, lower the price from $595,385 to maybe $580,385 or $575,385.  That way, it will be easy for buyers to calculate the price drop.

 

 

 

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Why Use A Real Estate Agent?

 

In an effort to avoid paying commissions to a real estate agent, many people opt for the for sale by owner (FSBO) route.  While this may seem like an enticing option for most homeowners, the reality can be much darker.

 

Real estate is fraught with legal complications.  Buying and selling can be quite stressful, especially if you don't know exactly what you are doing.

 

First of all, real etate agents are trained in all legal matters involved in the sale of real estate.  Sometimes, these sales go smoothly, but sometimes, clauses, liens, and contingency contracts can make them very complicated.  It is hard to know when life is going to throw you curve-balls.  The best thing to do is be prepared, and a real estate agent comes not only trained in theoretical real estate cases, but, ideally, with a whole history of experiences from which to draw from.  This makes them extremely helpful when negotiating the legal aspects of buying or selling.

 

Even if your home sale goes off without a hitch, all the paperwork involved can be overwhelming.  What are you signing?  Sometimes it's hard to tell when the language is full of legal and industry terms that the average person just isn't familiar with.  Your agent can translate these forms, helping you understand what each step in the transaction is all about.

 

An agent is connected to a whole network of other agents.  This means that weather you are buying or selling, an agent or broker can help.  They have a network of other professionals to market your home to.  They have clients waiting to buy homes, and colleagues with more clients, waiting to buy more homes.  Some homes barely need to be marketed because there are buyers already waiting to purchase just that type of home.

 

Many people think they can only find what they need themselves, but a good real estate agent will be able to listen to your needs.  A good agent knows the market, and knows the area, and may be able to suggest places you didn't even know existed.  They are also familiar with local services, and can recommend lawyers, notaries, inspectors or even contractors they personally know do good work.

 

Overall, an experienced real estatet agent or broker may cost a little in commission, but the service they provide is worth while.  If someone can help you not lose money, or save you a lot of time, aren't they worth what you paid them?

 

 

 

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Opportunities Abound to Profit in 2008

 

Tumbling home values.  Soaring energy prices.  A topsy-turvy stock market and a gazillion other financial worries, not the least of which is whether we'll spend the coming year mired in recession.

 

Considering all the black clouds hanging over the economy, you probably think there's no way you can really expect to prosper in 2008.  It will be all you can do just to hang in there, right?  WRONG!

 

We firmly believe there will be plenty of opportunities to make money this year - yes, even in real estate - as well as ways to insulate your finances from the most serious economic challenges ahead.

 

The real estate slump isn't going away soon, so whether you're buying, selling or staying put, deal with it.

 

For sellers:

Forget what the ugly house next door sold for last year or even what comparable homes are listed for today.  Instead, use the going price of houses that have recently sold as a guide - then price your home even lower so it looks like a great deal.

Best case: Your aggressive pricing attracts more than one bid, pitting buyers against one another and ultimately lifting the final sale price.

 

For buyers:

If ever there was a time to drive a hard bargain, this is it.  Don't be distracted by small stuff like whether the current owners will leave behind their appliances and window treatments.

 

Focus instead on what's really important: getting the lowest price.  Do a little homework and find out what comparable houses have sold for lately.  Then start the bidding at 10% to 15% below that recent sale price.

 

Note: This strategy works best if there are several homes on the market in your area around the same price.

 

There are many other tips throughout this weblog for buyers and sellers.  We encourage you to spend a few minutes and look through them.  It could be worth a minor fortune if you pick up a tip here or there that could add dollars to your home buying or home selling strategy.

 

 

 

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