Pricing Strategies and Considerations
The 4 Ps of marketing dictate every aspect of how you will reach potential buyers, and how you will showcase your property to them. Price is obviously a crucial aspect of any marketing strategy.
As with any region of the United States, buyers in North and South Carolina will typically critique the price of a property before considering it a viable option. Many sellers famously price a property at the point where they can make money, failing to do the proper research and number crunching necessary to find the ideal price point for the market.
A foundation of knowledge for pricing a property will go a long way into finding the sweet spot. Your Realtor(r) can work hand-in-hand with you to determine a price point that will work well for all involved.
We will look at 5 things to consider when selling properties in the Charlotte area. These strategies should be incorporated based off of the most important immediate desire of the seller. Your Realtor can help you determine what your most pressing need is, as well as which strategy will give you the best results on your Charlotte area property.
1. The “Herd Mentality”
Pricing a property to appeal to the herd mentality is exactly what it sounds like. Every property has a value range that is figured largely by tax adjustors, Realtors, and more. This pricing calls for a listing price that is in the lower range of stated value.
The concept behind this pricing is to drive interest to a property at a fast pace. When you have multiple interested parties in a property, the chances are high that final selling price will be higher than the listed price. This strategy is ideal for property owners looking to sell fast and efficiently.
2. Avoid the ‘cute’ pricing figures
We have all seen the ‘cute’ figures in a property search. There will be a wide range of values, with 99% of them looking something like $499,999 or $475K so on and so forth. Then there is the property owner who puts out the ‘$643,118’… Huh? What the heck does that even mean?
This raises curiosity in the mind of a potential buyer about the SELLER rather than the PROPERTY. There really isn’t an established reason to price a home with scattered numbering, and you won’t necessarily see an increase in interest. The seller should stay in the background, and your Realtor will ensure that you do, assuming you don’t throw yourself out there in ways such as this.
3. Pricing to stay within search parameters
Now, this strategy is one that should be carefully considered with your Realtor. Most property search parameters have cut-offs at specific round numbers, such as $500,000. So if you price your property at $510,000, you will be omitted from a search due to the extra $10,000.
Is it always ideal to drop your price point to $499,999? Of course not. Depending on your property, however, it may be wise to do so. Other times, you make find a sweet spot that is a bit higher than the $510,000 listed price to ensure that you are on the higher end of value on specific searches. Don’t worry, our team of Realtors will comb through this with you and ensure that your property lights up the correct searches!
4. Post a price below a rounded number
This strategy goes well beyond properties and holds true results in just about every market in the world. There have been hundreds of studies to support putting a price on a property just below a rounded number. If you have a home that is valued at say, $300,000, it is usually advised to put the price at $299,000.
Why is this the case? It is deep within the psychology of a buyer. We are all the same in this regard. If we were to take a trip to Wal-Mart, we won’t commonly see price points at $20, but rather $19.99. We feel like we are getting some massive deal when in reality, it is one silly penny. Crazy, huh? The same concept works when pricing a property. In fact, a study in 2017 showed that properties that were priced using this strategy actually yielded a 2.75 to 3 percent higher selling price!
5. Know the market and price accordingly
The property market can change on a dime. A buyer’s market can quickly become a seller’s market with a small change in population and area employment trends. A rule of thumb is to appeal to the buyer based on the market.
A buyer’s market will lend you to have a lower overall price to meet the demand of the seller. On the contrary, a seller’s market (YAY!) will allow you to raise the price even above market value. Your Realtor will ensure that the market is thoroughly diagnosed and that your property is priced accordingly-knowing that no matter what, an appraisal must be considered.
So are you seeing how pricing is much more complicated than simply throwing a profitable number on your sign? Don’t stress! Our team works with property pricing EACH and EVERY day, and we can help you determine the correct pricing strategy to both appeal to potential buyers, as well as earn you the best number for the market conditions. Give us a call anytime (704-750-5417), and we will walk through a pricing strategy that is unique to your situation.