The Morning Report
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The New York Times wrote an interesting piece this week on the psychology of real estate pricing. The article focused on the New York market, but it applies anywhere and confirms nothing. Some brokers recommend that sellers price below the home’s value to generate excitement. Some price a little above the value marker, say 5 percent, to leave room for negotiating.
And then there’s the business of “break points,” which are the points at which buyers are no longer going to consider your place. Break points are the reason for all the 99s in $499,999. Because who wants to pay a half a million dollars for a one bedroom? The figure is so much more palatable if you say it’s high 400s or under half-a-mil. Then there are the agents who reject 99s completely going instead for round numbers like $678,500. It’s so specific that it seems like it was very carefully calculated. And so why argue?
James Lake, a vice president of Bellmarc Realty, advises readers to run the other way when you see pricing such as $433,779.
“It indicates it’s going to be a difficult transaction from beginning to end,” Lake told the Times.
No one really knows what works and everyone has an anecdote to validate their method. Meanwhile, buyers try to interpret these signals and read between the lines to suss out whether the sellers are completely desperate (why do they keep lowering the price?), crazy (are they going to fight us for the window treatments? See $433,779) or cool (meaning they’re asking a reasonable price for a nice place in good condition). This is all a lot like dating actually.
So what do you think? What’s the craziest pricing you’ve seen in your neighborhood? We’ll be talking real estate all day, unless, of course, something else really interesting pops up.