The Psychology of Numbers
Much of real estate revolves around negotiating between sellers and buyers. This is something I count as one of my skills and I am really happy to provide it to my clients in the Leavenworth real estate market. Much of negotiating revolves around what I call the “pychology of numbers.”
We all know that a house listed at $199,950 is a $200,000 house. It still looks a little more affordable if we price it at $199,950. (Not that there are many $200,000 houses in Leavenworth.)
However, let’s imagine a house that is listed at $225,000. If we want to get a deal for the buyers do we offer $199,950? Of course not! We offer $200,000 because it looks bigger.
Buyers want their offers to look big and sellers want their listings to look affordable.
Another thing to remember when pricing a home as a seller is how agents and buyers search for homes. Mostly these days it’s by computer- either on the MLS or on the internet. Buyers search by price range – often in multiples of $25,000 or $50,000.
What’s the worst price for a home? $205,000. You are missing all the buyers who are looking at $200,000 and under. You probably would have better luck at $215,000 or more. You look like a bargain compared to the $250,000 houses.
Zillow may be working on their algorithims day and night, but as long as humans are the ones buying and selling, pyschology will be an important part of the equation.