Don’t “99? Your Way Out of a Sale
Real estate agents have used the old $9.99 marketing gimmick forever. Newspapers, magazine ads and flyers theoretically enticed more buyers by listing a $500,000 house at $499,999 or some other similarly insignificant lesser price.
That same home, listed online, is actually losing buyer traffic because of its pricing gimmick. The reason is simple, and it should be an obvious reason to never use the "99″ pricing model again.
Online buyers search in zeros. Buyer A searches for homes from $400,000 to $500,000. Buyer B searches for homes from $500,000 to $600,000. That's the way MLSs, portals and agents' websites have set up the pricing parameters. With a listing priced at $500,000, both Buyer A and Buyer B will see the home. Priced at $499,999, Buyer B won't see it.
It's tempting to believe that you'd miss out on only a small percentage of buyers or that most buyers won't set a "lowest price" in their search, but it's simply wrong. Our company has a database of around 10,000 users, and we track their searches on our websites. While there are a few "bargain hunters," the vast majority of users set a fairly tight price range in their searches. They know what they can afford and don't want to waste time looking in a price range that they know won't fit their needs.
Don't let your listing miss out with a $1 gimmick. Ninety percent of buyers are searching online. Price the home the way buyers search.