The Art of Pricing

Yes, there is an art, but it is the book I am talking about here. One of my biggest pleasures is the buying and reading of books. So, I have decided that when I have found a good book (or a tidbit from a good book) I will include it here if it is particularly useful to understanding real estate. The Art of Pricing is not a real estate book, but its topic is important for any business and its tips useful for anybody when establishing pricing.

There are a number of tips in the book, one of which is that studies have shown that the number 9 connotes "cheap" and the number 0 connotes "quality". In other words we assume that something priced $60.00 is of higher quality than something priced $59.99. This is certainly true when it comes to establishing a price for housing.

What do you think? Would you react differently to a house that is priced at $355,000 or $354,999? I believe the answer is clear. Even if your perception of quality isn't completely different, at least you assume that the seller or seller's agent is trying to get one over on you. As if you don't know that the two numbers are essentially the same. Could you imagine saying, "but, honey, this home is $1 cheaper!"

I want to know what you think. Please comment and tell me if pricing like this makes a difference to how you react (to the house, seller, agent, whatever!).