If you are planning to sell your home, the first question is, how much is my home worth and what is the highest price I can get? If you are in the market to buy a new home, you want to make sure you get the best "deal". In any case, your real estate agent has the tools and resources to give you a professional and accurate opinion of the market value of the property you are trying to sell or buy. In today's low inventory and high demand market, it's more important than ever to price a home correctly. Let's take a closer look at the tools your agent uses to price the property in question.
Your broker will start by evaluating current market supply and demand in your neighborhood and general price points. He will use his market knowledge and the tools provided by the professional organizations, such an REALTOR Property Resource, Chicago Association of Realtors and the Midwest Real Estate Data listing service. Sometimes your broker will consult with a local appraiser to ensure that relevant amenities and city standards are up to date.
The Comparative Market Analysis (CMA)
Even though, a CMA can sometimes appear to be complex and confusing to a consumer, it is the best tool and most accurate tool to determine a fair market value. A CMA benefits both seller and buyer by breaking down properties side by side and explaining their differences and putting a value to them.
The Psychology of Home Pricing
All about Looks
A recent Journal of Consumer Psychology article advises you to leave out commas and decimals - and limit the zeroes - when you display the price. $1500 looks more appealing than $1,500 or $1,500.00. The same applies to higher figures. $10m looks more appealing than $10,000,000.
Leave the 9's behind
The most well-known pricing trick is the rule of 9's. $399 looks significantly cheaper to consumers than $400, and so on, as proven in an MIT and Chicago University study. But properties with prices ending up with 9's often miss out with consumers looking in certain price ranges. Your listing of $399,000 won't show up in a search for homes between $400,000 and $450,000 or a search between $325,000 to $375,000.
The New Number On The Block
For the best chance to fall between a price range, opt for 7's in your price. According to a 2014 study by The Guardian, statistically speaking, the number 7 is the most common "favorite number" and is more likely to excite or interest people than any other number. The number tends to appeal to people on an emotional level; prices that include a 7 "feel right".
Example: A buyer is looking for a house between $400,000 and $450,000. you price your house at $447,000 instead of $449,000. Statistically and psychologically speaking, consumers are more likely to favor the 447 instead of the 449.
Posted by Andreas Holder on