If you're selling a house, ask your realtor to list it as a range

Says Psychology Today.

One advantage is obvious: Buyers scanning listings online usually set a minimum and maximum price. These are round numbers (often chosen from a menu on the listing site). In the example above, a buyer whose maximum price was $1 million would see a house listed at “$999,000 to $1,194,876,” but not a house listed at a single price higher than a million. (Of course, this depends on listing sites being able to handle price ranges.)

Another advantage of this trick is simple confusion. Just about everyone knows that a listing price of $X typically signals that the seller is willing to accept a good deal less than $X. In this market, few sane buyers are going to offer list price. Having two prices upsets this comfortable strategy. Do you offer the low price of the range? Less than the low price? Or do you make an offer somewhere in the range? Maybe you really, really want the house and want to make a preemptive offer. Do you offer the high price?

This suggestion still doesn’t get around the problem inherent in the behavioral economics diagnosis of the current housing market. Loss averse sellers don’t want to sell a property for less than they paid for it, or less than what they think it’s worth based on peak bubble prices. Whether she picks a range or a single price, the seller has to overcome the psychological hurdle or realizing that the value today isn’t the value yesterday.

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  • 3007

    As someone who recently purchased a house, I found the listings that had a price range incredibly annoying. Our realtor informed us that typically the low end of the range is only there to trick the online listing sites and that the seller’s desired price is typically the top end of the range, i.e. no one who wants 100 is going to list their house as 100 to 115. As a buyer there was no way I was going to pay over the lower bound of the range. “I know you said you’d take 90 but please, oh pretty please, let me pay you 97…” So as a result I skipped over any listings that were listed with a price range. In an uncertain market where people are already rather nervous, do you really want to add confusion?

    A real tip for sellers: Take a lot of good pictures of your house. Maybe even include a floor plan. Viewing homes takes a lot of time and the home with the most information gets my visit over the cryptic listing.

  • http://krypton.mnsu.edu/~pkbrando/ Paul Brandon

    In other words, people are more aversive to losing a small amount of money now than a larger amount of money later.

    Another example of delay discounting.

  • http://www.stevesellsbigbear.com Steve

    I agree with 3007. I have not found a buyer yet that will offer the top range of a property listed with range pricing. What buyer is going to offer above the bottom range. Pricing is by far the most important advice your Realtor can give you. Price your home to be the best value, and it will sell. I sold over 40 homes in 2009 and not one of them was priced with range pricing. You are on the money about taking lots of good photos. The internet is a good place to start your search as a buyer, but nothing replaces getting out and actually visiting the homes.