Whole Number Pricing--A Smart Way to Reach the Right Buyers

$199,900. $299,900. $399,900. $499,900. Why do we do it? Why do we place prices on houses the way we price a pair of pants? Well, because we always have. The most likely explanation, other than "I don't know" is that the price sounds like less money and looks like less money than $200,000, $300,000, $400,0000, etc... That's old school marketing and the result is we are missing large numbers of consumers because we aren't pricing the way the consumer searches.

Almost every consumer of real estate uses the internet to search for homes they want to see. Even if the realtor is searching, the consumer is doing their own search day and night. While I would drop the customer's bottom number several thousand dollars lower and raise it several thousand dollars higher to make sure we don't miss underpriced or overpriced matches, the typical buyer searches in whole numbers such as $100,000 to $150,000; $250,000 to $300,000. $400,000 to $500,000. They do this because of one or two reasons: By choice or by restriction. Some web site search sytems don't allow the user to enter their own numbers. The numbers are chosen from a drop down box. (See www.Firstweber.com and www.Starkhomes.com) Other search sytems allow a person to enter any whole number (www.Restainohomes.com and www.Realtor.com).

Homes I had priced at $299,900 were definitely being missed by the person who searched $300,000 and up. Yikes!! I was missing my most likely buyer by a hundred bucks!

This seems like such a simple concept yet it eluded me until I heard it explained by a sharp Realtor, Randy Tews. See www.TewsTeam.com Randy has a long track record of working with home owners who had tried to sell on their own or with other realtors. Knowing how the consumer searches the internet, Randy has been helping people reach the consumer by this simple pricing idea for years. In mant cases Randy actually has the owner INCREASE their price---granted it's only a $100.00 but that little increase brings more buyers which equals more competition and the result is usually an offer the owner can work with.

No assurance the pricing will mean more money to the owner, but it should result in reaching more viewers. The home still has to be worth the price. Retail pricing has its place in a retail environment. Be smart---price the way the consumer searches. Whole numbers.



Let's call the $99,900 pricing Old School, and the whole number pricing $100,000 New School.