No matter how great a commodity is, it will sell only if the price is right. You could unknowingly reject your target market if you push the price too high. Customers may think that the product is defective or not worth buying if you rate it too low. Therefore, you need to find a favourable balance.
Let’s take a look at a few ways you can get the right pricing strategy for a property without understating the asset.
· Use Comparable Sales as a Product Pricing Strategy
A product is worth what somebody is prepared to pay for it in the free market. Hence, if you’re certain a three-bedroom house next to the one you are trying to sell has just sold for $500,000, you can conclude that for your three-bedroom home as well, the price is around $500,000. However, if the house you are planning to sell has a new kitchen or has gotten a new roof, to assess those repairs, you may want to list it a bit higher. It can be efficient to use this tactic because nobody really wants to pay too much for a house.
· End Your Price With a Nine
Ending an amount with a nine is a widely recognized pricing strategy in business. Instead of pricing a house at $600,000, for instance, you can price it at $599,999. This works because, despite there being only a dollar difference between the two prices, the brain presumes that the price is closer to $500,000 than $600,000. Make it an odd number irrespective of what you price your house for (e.g., using $599,995). The buyer can give the house a look more out of curiosity than an intention to actually purchase the house if the price stands out too much.
· Offer a Discount Per Square Foot
A real estate agent will consider pricing a new house per square foot in some instances. You may be able to ask more in general, depending on the size of the houses and the market cost per square foot for comparable sales, while still offering discounts based on the size of the home.
· Know Your Target Market
Presumably, you should know what your potential customers are willing to spend and what their original budgets are. If your target buyer spends $200,000 on the type of property you advertise, you should list the property for $200,000, even if it is worth a little more. This is because, in web searches or other enquiries concerning properties for $200,000 or less, the property is more likely to be found. You may get multiple bids using this strategy where the property sells for its desired price eventually.
· Create a Herd Mentality
It is advisable to have more than one deal on a house before selling it because a buyer will not feel comfortable being the only one putting in an offer, especially if the property seems to be in good condition.
In determining whether or not a deal is made or approved, market conditions will play a pivotal role. You can devise the right price strategy and get a property off the market faster by taking that and consumer psychology into account.