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by Donna Bulika, BBA, MCNE
There is a fair amount of psychology involved when choosing the strategy and determining the selling price of your property.
If you are a seller, first you want to know an approximate value of your property. Your agent should provide you with the numbers, like recent sales of similar condos, how many days they were on the market, how many condos were sold in the past 6 months, what is the inventory at the moment in the building and in the area. What upgrades have been done to your place, etc. Once you know the value, then you need to decide on a strategy.
…we, in Toronto, have a lot of foreign buyers… Before jumping into the strategies, let’s talk about numbers. Have you noticed lately there are many properties for sale with a lot of ‘88’ at the end? This actually started to happen recently more than ever. We used to see ‘99’s at the end. Pricing with 9 came from the retail industry by reducing the left number by1. The buyer would think the product is less expensive. The human mind encodes numbers so quickly that only the first number matters. If the last digits are 88 or 99, it matters less. So why do we see a lot of 88 lately?
We, in Toronto, have a lot of foreign buyers, especially from Asia. So the sellers of course want to take advantage of their deep pockets and make the price more attractive to them. We know how much the Chinese believe in Feng Shui and numerology. Other cultures started to adopt these beliefs as well. 8 is a very lucky number and the pronunciation of 8 in Chinese means ‘wealth’ or ‘fortune’.
When people see the positive results and sold prices, they start adapting these strategies and choose to price their property with 99 or 88 at the end. However, there is another aspect to think about.
Buyers, whether they have an agent or not, whether they receive daily new MLS listings or not, like to go on Realtor.ca and search for themselves. The search criteria gives you an option to choose your high and low price limits. The limits are 200,000; 225,000; 250,000 etc., then after 500,000 is every 50,000. So if you are pricing your condo at 499,000 and someone with a great budget of $600,000 is searching for condos, that person may set the low limit at 500,000. Why? Because he or she doesn’t want to crowd their search with less appealing places.
Now let’s talk about 3 Pricing Strategies:
In the end, choose the strategy you feel most comfortable with. Discuss all options with your agent and always have a plan B.
Donna Bulika is an award winning Realtor with Sutton Group Realty Systems, specializing in Central and West Toronto areas. She has a Master Certified negotiation expert designation, a Bachelor’s degree in International Business Administration and extensive educational background. Her experience in Property Management and Luxury Products Management benefits her clients, whether they are investors or luxury property sellers. Thinking of selling, buying or investing? You can reach Donna at www.YourRealEstateAgent.ca.