Have you ever seen a product at a store and thought, “Whoa. That price is outrageously high. It’s just not worth it!” Conversely, you might have also reacted to another product with, “That’s awfully cheap. The quality must not be good.”
|Welcome to the psychology of pricing!
According to research, people tend to draw conclusions about a product based on its price. If it doesn’t reflect the perceived value of the item, people become hesitant to buy. This occurs whether the item is priced too high or too low.
What does this have to do with selling your property?
When you set the list price, you want it to help attract the right type of buyers... buyers who are looking for your kind of property, in your neighbourhood, and within that price range.
If you set your price too high, you risk having buyers see your listing as too expensive relative to comparable properties.
If you set the price too low, you might attract more buyers. In fact, in some circumstances, that can be a strategy for generating quick interest in your listing. But, you might also cut out otherwise qualified buyers who are searching within a higher price range.
So, when selling your home, consider the importance of pricing psychology.