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24 OCT

Rhymes & Reasons to Pricing in Residential Real Estate

By Jeff Lichtenstein

From: Edward

To: Jeff Lichtenstein

Jeff,

Do you think it’s even worth trying $300? I was thinking $290. I wouldn’t want to go any lower than $280.

Thank you

Edward

——————————————————————————————————————–

From: Jeff Lichtenstein

To: Edward

Edward:

Here is a long answer as to why to price your North Palm Beach condo exactly at $275,000 for sale.

Think about your Uncle who is looking to purchase a townhome. He wants to stay under $200 which is unrealistic for his 1-car garage home purchase.

I said can we go to $225? He said yes. Then I said $250? He said ok. I got the feeling to stop there until I knew him and his situation better. I think he felt what he saw needed too much work. So, once your Aunt (the decision maker) comes down, that limit might be raised to $275 or $300 if that’s affordable and they want something nicer.

So, now back to your home.

The problem with pricing it at $280 is that the Buyer who looks for homes up to $275 misses it because the computer doesn’t spit it out. Buyers looking directly on the web either type in multiples of $25,000 or choose from a drop-down in multiples of $25. If it’s a direct conversation with a Realtor, they still talk in multiples of $2k.

That’s why $278k or $280k or $282k makes no sense.

Once you get up to $350,000, the conversation shifts to multiples of $50. At $800, it starts to shift to multiples of $100. Then $250, $500, and a million once you are at $5 million level.

Also, you need less negotiation that you think. This is a huge point. It’s easier to have your Aunt come to see it because it’s under the price threshold and have her fall in love than never come to see it. If she misses it, there is nothing to fall in love with and negotiate.

Home purchases have emotion attached to them and husbands like to make their wives happy.

$275 is probably the right price with a hair of wiggle room because at $300 you are competing with more prestigious neighborhoods that have more to offer. $300k or $299 is pushing it.

Hope that helps.

JEFF LICHTENSTEIN
jeff@JeffRealty.com
561.346.8383

JEFF & CARY LICHTENSTEIN
We Make Your Home Our Business

7100 FAIRWAY DRIVE, SUITE 44
PALM BEACH GARDENS, FL 33418
F: 561.277.2500

JEFFREALTY.COM
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