Consumer Psychology and the Too-Precise Price

When you see an oddly-priced “For Sale” home, there are two possible explanations (at least in my experience selling residential real estate):

One. Drawing Attention.

The way to stand out** from homes listed at $389,900, $399,900, etc. is to price at $398,731 or some such (I haven’t seen a home priced in cents . . . yet).

Marketing Gimmicks & Cockroaches

Which leads to reason #2: anecdotal data suggests that consumers may think that a (very) specific asking price is somehow more accurate and “scientifically” arrived at than a round number.

Experienced agents, on the other hand, view a too-precise price for what it is: a marketing gimmick.

Just like cockroaches, however, you seldom see only one, which is why I frown on the practice — and generally have a negative association with such listings (and their agents).

**Admittedly, in today’s inventory-starved, ongoing Seller’s market, it’s hard not to stand out.

Which is why the practice seems less common now . . .

P.S.: What should a Buyer offer for a house listed at $398,731?

My suggestion: $386,529.

See also, “$425,000 vs. $424,975“; and “The Too Precise Price: Exhibit A.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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