Why are RE Sale Prices Always Whole Numbers

31 Replies

@Brandon Sturgill  

this is done frequently it follows the auto industry... In markets and or pockets of markets were your actually selling to homeowners and not markets that are saturated with investors buying SFR's for rentals.. many times people will set up search's on MLS for say 400k and under.. So yes we write our listing at 399,950.00 to catch top dollar but also be included in the buyers 400k search parameters.... I personally have done this for 40 years I like it.

I'm not sure what you are hoping to accomplish with that price.  Pennies are not going to make or break a deal.  If I wrote an offer on a house with a price like that I would use whole numbers.

Originally posted by @Jay Hinrichs:

@Brandon Sturgill 

this is done frequently it follows the auto industry... In markets and or pockets of markets were your actually selling to homeowners and not markets that are saturated with investors buying SFR's for rentals.. many times people will set up search's on MLS for say 400k and under.. So yes we write our listing at 399,950.00 to catch top dollar but also be included in the buyers 400k search parameters.... I personally have done this for 40 years I like it.

 Thanks, Jay

Brandon Sturgill, Real Estate Agent in OH (#2015001666)
614-379-2017
Originally posted by @Troy Owen:

I'm not sure what you are hoping to accomplish with that price.  Pennies are not going to make or break a deal.  If I wrote an offer on a house with a price like that I would use whole numbers.

 Thanks, Troy...I guess I want to be the only house on the market with a crazy price...I am a non-conformist...

Brandon Sturgill, Real Estate Agent in OH (#2015001666)
614-379-2017

To me, the extra digits after the period make it look like a lot bigger price. $132,340.12 looks a lot more expensive than $132,000 at a glance.

Originally posted by @Mark Ferguson:

I will make offers on highest and best deals with weird numbers. $72,421 just incase someone offers $72,400 or something. I think using pennies is silly and the MLS probably will not even let you input pennies.

 Thanks, Mark. I like the offer strategy.

Brandon Sturgill, Real Estate Agent in OH (#2015001666)
614-379-2017

Originally posted by @Brandon Sturgill:

I am considering listing my property at $179, 352. 29...

Banks are notorious for increasing the bid by exactly $1 during auctions... sounds like you are really pro-penny. :-)

Kudos,

Mary

Originally posted by @David R.:

Dave you are BP's gif king...or is it jpeg? Whatever, you got it! :-)

Kudos,

Mary

Originally posted by @Brandon Sturgill:

I am considering listing my property at $179, 352. 29...

 Why round it off to the nearest penny? Price it like gasoline at $179,352.28 9/10. Clearly it works well for the oil companies.

For many years, Harvard University would have all contract prices end with 1636.  Whether you asked for it or not.  Your $100k contract would paid with a check for $100,016.36.  To honor the year of the university's founding.

Originally posted by @Brandon Sturgill:

I am considering listing my property at $179, 352. 29...

 First, thanks for the chuckle!  I'm still smiling as I write this.

To add to what Jay said, there are certain breaking points in real estate.  People will look for houses, say, $150 to $175K range or the $175K to $225K range.  (Those are 4 breaking points there.)   If you want people in the former range to look at your house you may want to price it just under $175K.  For the people in the latter range, they may miss your house if you price it at $174,900, but it may not compete well with other houses in that range.

As for adding weird numbers, I dunno, let us know how it goes.

If you wiki psychological pricing, you'll discover what retailers use and why. That may help you too. Some real estate pundits swear by 7 rather than 9. I have tested several approaches and haven't found that 7vs 9 or round versus exact numbers work better. However, price does matter...it needs to be the amount you'd be willing to sell for. Don't start high and drop.  A high days on market is the kiss of death for a listing. Start low and sell fast.

I too, use the odd number for my offers just to make them potentially a smidge higher than another offer.  Not sure the odd number on the pricing of the listing would make a big splash though. 

Crazy odd numbers wouldn't make any difference to me.

Somewhat odd numbers (Like $162,700, say) make me think that the property is an REO and the price is marking down according to some algorithm.

After losing a few properties to very minor higher bids, I now always give a strange highest and best offer - like @Brandon Sturgill  I will give an offer that is $101,127 - just in case the other guy only gives $101,100. One thing to consider, is if you are using traditional financing, the loan may be for a weird amount like $80,017.50. I'm in the process of getting a loan right now that has that. You need to be meticulous when reviewing the price information (as well as everything else) - as it is often listed wrong. My learning is that when financing, weird offer numbers make for difficult math. 

Good Luck!

@Mark Ferguson 

  I have often used odd numbers when offering on properties.. Seller thinks your really looking into the deal in detail.

When I bought at auction or court house steps I bought a crap load of properties were I was willing to go 57 dollars more .. as in my completion had a whole number in mind and quit bidding.

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