Browse
Log in / Register
Share
Listing your home with a price ending in "-500" (e.g., $499,500) can result in a higher final sale price compared to a rounded "-000" ending, according to an analysis of King County, Washington home sales. This data-driven approach to pricing suggests that specific price endings can influence buyer perception and negotiation outcomes. While market conditions are always the primary factor, this statistical insight provides a tangible strategy for sellers seeking to maximize their return.
An analysis of home sales data from King County, Washington, grouped properties by the last three digits of their list price. The study focused on the four most common price endings: "-000," "-500," "-900," and "-950." These endings accounted for over 93% of all listings, indicating a strong industry preference. The metric used to measure effectiveness was the final/list price ratio, which compares the final sale price to the original list price. A higher ratio indicates the home sold for a amount closer to, or even above, the asking price.
The results showed a clear trend. While a rounded price like $490,000 might seem straightforward, it often correlated with the lowest final/list price ratio. In contrast, listings ending in "-500" (e.g., $489,500) consistently achieved a higher sale price relative to their list price.
The difference is statistically significant and financially meaningful. The analysis found that choosing a "-500" ending over a "-000" ending could translate to thousands of dollars in additional sale proceeds.
For a home with a hypothetical final sale price of $600,000, the data suggested that listing with a "-500" ending instead of a "-000" ending could result in approximately $3,000 more for the seller. This strategy effectively involves listing for $500 less to potentially gain $3,000 more. The same principle applied to condominiums, where a "-950" ending (e.g., $399,950) outperformed a rounded "-000" price.
The psychology behind pricing is complex, but the data points to a few logical explanations. A rounded, even number like $500,000 may subconsciously signal to buyers that there is significant room for negotiation. It can appear less precise, as if the seller picked a nice, round figure.
Conversely, a precise price like $499,500 suggests that the seller has conducted careful research and arrived at a specific, justified valuation. It appears more deliberate and firm, yet doesn't employ the overtly gimmicky perception often associated with "-999" endings, which can feel like a retail sales tactic. Based on our experience assessment, this approach can lead to stronger initial offers and less aggressive negotiation downward from the list price.
While this data provides a compelling insight, it is not a standalone strategy. The most critical factor in pricing a home is an accurate assessment of its current market value, typically determined by a comparative market analysis (CMA) of recently sold similar homes.
However, once you and your real estate agent have determined the correct price range, consider applying this data to your final list price. Opt for a "-500" ending rather than a rounded "-000" figure. This small adjustment leverages buyer psychology and historical data to your advantage.
It is crucial to note that this analysis was based on 2006 data, and local market dynamics can change. Always consult with a real estate professional who understands the nuances of your specific area and current market conditions. The core principle remains: a strategically chosen, precise list price can be a powerful tool in achieving your ultimate sales goals.
